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Andrew R. Gala (WSBA No. 17151, admitted 1987), of Seattle, was disbarred, effective April 20, 2006, by order of the Washington State Supreme Court following a hearing. This discipline was based on his conduct between 2000 and 2003 involving misappropriation of law-firm funds, entering into loan transactions with a client without adequate disclosure or written consent, and other conduct involving dishonesty, fraud, deceit, or misrepresentation.
Mr. Gala worked at the Seattle branch of a law firm based in Portland, Oregon. By 2002, Mr. Gala managed the firm’s Seattle office and was able to approve certain expenditures without further authorization. The firm’s Shareholder Compensation Plan in effect during Mr. Gala’s association with it specified that “each Shareholder shall devote his or her entire time and attention to the practice of law for the benefit and account of the Corporation. No Shareholder shall engage in the practice of law other than for the benefit and account of the Corporation.” Mr. Gala was the primary billing attorney assigned to all matters involving Client A. Mr. Gala also represented multiple clients in a matter known as the consolidated claims litigation, which had generated large fees over several years.
Matter 1: At intervals in 2002 and 2003, Mr. Gala asked his secretary to obtain three checks (totaling $12,300) for payments to a purported expert witness. Mr. Gala denominated the checks as cost items related to the consolidated claims litigation. The checks, signed by Mr. Gala, were actually made out to Mr. Gala’s personal creditor and used to pay a debt owed following Mr. Gala’s purchase of a residence on Mercer Island. To explain to the creditor why the check had been drawn on a firm account, Mr. Gala claimed that his firm had set up an escrow account for him. When the firm’s accounting department asked for the expert’s tax identification number (TIN), Mr. Gala concealed the fact that he was using firm funds to discharge a personal debt by providing the accounting department with an unwitting third party’s Social Security number. At the end of 2002, the firm completed an IRS 1099 form listing the $12,300 as income to the “expert witness” paid by the firm. Sometime in 2003, the firm received notice from the IRS that the TIN it had provided for the “expert witness” did not match IRS records. Consequently, the firm sent a notice to Mr. Gala’s creditor requesting that he complete a form with his correct TIN. Upon receipt of the notice, an assistant in the creditor’s office contacted the firm and explained that their only connection with Mr. Gala was through a purely personal debt for the purchase of his home. The firm’s accounting department gathered information about the three checks and learned that Social Security number for the TIN did not in fact belong to an “expert witness.” The accounting department determined that firm clients had contributed $10,455 towards Mr. Gala’s house payment, while Mr. Gala had caused the firm to absorb the remaining $1,845 as part of a write-off. The firm’s president immediately communicated with the affected clients and sent checks to reimburse those clients for the “expert fees.”
Matter 2: In April 2003, Mr. Gala applied to rent an apartment for himself. He listed the firm name as well as his own as the “applicant.” He directed his paralegal to request a check for $3,825, payable to the entity renting the property, to be drawn on the firm’s client advance account and chargeable to Client A for a “property purchase” matter. Mr. Gala identified the reason for the “client advance” as a “co-brokerage fee.” The firm’s accounting department prepared the check drawn on the firm’s Seattle client advance account. Mr. Gala signed the check and used it to prepay rent on the apartment. Mr. Gala listed the check as a cost item on a Client A matter. He asked the firm’s accounting department to transfer fees and costs in that matter to a new probate file, which would not be subject to the firm’s 60-day billing requirement.
Matter 3: In June 2000, Mr. Gala signed a $100,000 promissory note to Client A for money that Client A had loaned to Mr. Gala. In approximately February 2002, Client A loaned Mr. Gala an additional $25,000. Mr. Gala did not provide written disclosure to, and did not obtain written waivers or consents from, Client A regarding potential conflicts of interest. After signing the promissory note, Mr. Gala provided over 200 hours of legal services to Client A for which he did not bill Client A in order to retire all or part of his debt. Under the terms of the firm’s shareholder agreement, the firm, not Mr. Gala, was entitled to receive the value of the legal services provided by Mr. Gala to Client A. Mr. Gala also charged expenses for trips to California and Arizona on Client A matters to the firm, but did not bill Client A for those expenses. After discovering the situation and investigating further, the firm took prompt action to terminate its relationship with Mr. Gala.
Mr. Gala’s conduct violated RPC 1.7(b), prohibiting a lawyer from representing a client if the representation of that client may be materially limited by the lawyer’s responsibilities to another client or to a third person or by the lawyer’s own interests, unless the lawyer reasonably believes the representation will not be adversely affected and the client consents in writing after a full disclosure of material facts; RPC 1.8(a), prohibiting a lawyer from entering into a business transaction with a client or knowingly acquiring an ownership, possessory, security, or other pecuniary interest adverse to a client unless the transaction and its terms are fair and reasonable and fully disclosed and transmitted in writing to the client, the client is given opportunity to seek the advice of independent counsel, and the client consents; RPC 8.4(b), prohibiting a lawyer from committing a criminal act (here, theft) that reflects adversely on the lawyer’s honesty, trustworthiness, or fitness as a lawyer in other respects; RPC 8.4(c), prohibiting a lawyer from engaging in conduct involving dishonesty, fraud, deceit, or misrepresentation; RPC 8.4(i), prohibiting a lawyer from committing any act involving moral turpitude, corruption, or any unjustified act of assault or other act which reflects disregard for the rule of law, whether the same be committed in the course of his or her conduct as a lawyer, or otherwise; and former RLD 1.1(a), prohibiting acts involving moral turpitude and acts reflecting disregard for the rule of law.
Linda B. Eide and Scott G. Busby represented the Bar Association. Mr. Gala represented himself. Susan H. Amini was the hearing officer. |