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Christopher C. Meleney (WSBA No. 11123, admitted 1980), of Everett, was suspended for six months, effective April 13, 2007, by order of the Washington State Supreme Court following a stipulation approved by the Disciplinary Board. This discipline was based on his conduct in 2004 involving failure to communicate with clients, taking action without client authority, conflict of interest, and filing a bankruptcy petition in violation of the federal bankruptcy rules.
In July 2004, Mr. Meleney met with two principals of a company that operated a casino, restaurant, and inn (hereinafter “Company A”) and that was an operating subsidiary of an LLC. Company A was experiencing serious financial difficulties and a hearing concerning the revocation of its business license was scheduled to take place the following day.
Mr. Meleney advised the principals that if Company A filed a voluntary bankruptcy petition, or if an involuntary petition was filed against it, the automatic bankruptcy stay would stop the license revocation hearing from taking place and give Company A the time it needed to obtain an infusion of funds. Mr. Meleney advised the principals that he would not represent Company A in filing a voluntary petition. Furthermore, it was unlikely that the consent of all of the owners could be obtained in time to stop the license revocation hearing. One of the principals agreed to make contact with Company A’s creditors regarding filing an involuntary petition.
On the morning of the license revocation hearing, Mr. Meleney met with the two principals, and they decided to pursue the filing of an involuntary bankruptcy petition. One of the principals paid Mr. Meleney $2,500 as attorney’s fees and costs to file the involuntary petition.
Representatives from three of Company A’s creditors telephoned Mr. Meleney. He did not adequately explain to these creditors that they would be the petitioning creditors initiating bankruptcy proceedings against Company A. In July 2004, Mr. Meleney filed an involuntary bankruptcy petition against Company A on behalf of these three creditors. In the petition, and later in an amended petition, Mr. Meleney stated that he was attorney for the petitioning creditors. In September 2004, Mr. Meleney filed a motion for an order of default and default judgment against the debtor, Company A, for failure to file schedules. In the motion, Mr. Meleney again indicated that he was the attorney for the petitioning creditors. The company’s bankruptcy case was dismissed in October 2004 for failure to file schedules. Other than the telephone conversation that took place before the bankruptcy petition was filed, Mr. Meleney had no contact with the petitioning creditors until he sent them a letter in November 2004 advising them that the bankruptcy had been dismissed.
In January 2005, in response to a United States trustee’s motion for sanctions, Mr. Meleney stipulated, in order to settle pending hearings, that he had violated Bankruptcy Rule 9011 by filing the bankruptcy petition. Rule 9011 provides that by presenting a petition to the court, an attorney certifies that to the best of his knowledge, formed after reasonable inquiry, the petition is not being presented for any improper purpose, such as to harass or cause unnecessary delay or needless increase in the cost of litigation. Mr. Meleney also agreed to pay $2,161 to the State of Washington, to be distributed to former employees of Company A whose ability to collect owed wages was negatively impacted by the filing of the bankruptcy petition.
Mr. Meleney’s conduct violated RPC 1.2(a), requiring a lawyer to abide by a client’s decisions concerning the objectives of representation and to consult with the client as to the means by which they are to be pursued; RPC 1.2(d), prohibiting a lawyer from counseling a client to engage, or assisting a client, in conduct that the lawyer knows is criminal or fraudulent; former RPC 1.2(f), prohibiting a lawyer from willfully purporting to act as a lawyer for any person without the authority of that person; RPC 1.4(a), requiring a lawyer to keep a client reasonably informed about the status of a matter and promptly comply with reasonable requests for information; RPC 1.4(b), requiring a lawyer to explain a matter to the extent reasonably necessary to permit the client to make informed decisions regarding the representation; RPC 1.8(f), prohibiting a lawyer from accepting compensation for representing the client from one other than the client unless the client consents after consultation and there is no interference with the lawyer’s independence of professional judgment or with the client-lawyer relationship, and information relating to the representation of a client is protected as required by RPC 1.6; and RPC 8.4(d), prohibiting a lawyer from engaging in conduct that is prejudicial to the administration of justice.
Debra Slater represented the Bar Association. Leland G. Ripley represented Mr. Meleney. James C. Lawrie was the hearing officer. |