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Priscilla A. Vaagen (WSBA No. 23016, admitted 1993), of Spokane, was ordered to receive a reprimand on November 29, 2005, following a stipulation approved by a hearing officer. This discipline was based on her conduct between 2003 and 2005 involving trust-account irregularities.
In 2002, Ms. Vaagen stipulated to having negligently failed to maintain complete and accurate records of her trust account, depositing earned fees into the account, and failing to properly supervise her staff regarding her trust account. Ms. Vaagen received an admonition and was placed on probation requiring reexamination of her trust account by a WSBA auditor. Although Ms. Vaagen made efforts to correct her trust-account records, these efforts were unsuccessful in alleviating the chronically inadequate state of her records. Ms. Vaagen cooperated with a further examination of her trust-account records for 2005. The examination disclosed that at various points in 2003, 2004, and 2005, inadequate trust-account records were maintained, funds held on behalf of clients were advanced on behalf of other clients, funds were disbursed from the trust account before the underlying deposits had cleared the banking system, inactive and unclaimed funds were held in the accounts, and the account was not properly reconciled. As a result of these errors, a July 2005 reconciliation of the client ledgers resulted in a negative balance of $1,528.65. Although no evidence was found of clients losing money or any intentional misappropriation of funds, chronic errors in Ms. Vaagen's trust account records subjected clients to potential harm.
Since June 2005, Ms. Vaagen has worked with a WSBA auditor to identify all funds in the trust account and has resolved all negative balance items in the account. In October 2005, Ms. Vaagen retained the services of an accountant to supervise the maintenance of her trust-account records and to perform on a monthly basis a reconciliation of the check register and the bank balance and a reconciliation of the client ledgers to the reconciled balance. Ms. Vaagen stipulated to a two-year period of probation, which includes periodic monitoring of her trust-account records by a WSBA auditor.
Ms. Vaagen's conduct violated RPC 1.14(a), requiring that all funds of clients paid to a lawyer or a law firm be deposited into an interest-bearing trust account and that no funds belonging to the lawyer or law firm be deposited therein; and RPC 1.14(b)(3), requiring a lawyer to maintain complete records of all funds, securities, and other properties of a client coming into the possession of the lawyer and render appropriate accounts to the client regarding them.
Randy V. Beitel represented the Bar Association. Michael J. Beyer represented Ms. Vaagen. James M. Danielson was the hearing officer.
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