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David R. Hellenthal (WSBA No. 18311, admitted 1988), of Spokane, was suspended for 18 months, effective September 6, 2007, by order of the Washington State Supreme Court following approval of a stipulation by the Disciplinary Board. Upon meeting conditions for reinstatement, the suspension is to be followed by a three-year period of probation. This discipline was based on conduct in three matters involving failure to abide by a client's objectives for representation; lack of communication; charging unreasonable fees; conflicts of interest; prohibited transactions; improper conduct with a disabled client; and conduct involving dishonesty, fraud, deceit, or misrepresentation.
Matter 1: In October 2004, Mr. Hellenthal was hired by a client with a disability who was concerned about the potential effect of a recent inheritance on his continued eligibility for government benefits. Mr. Hellenthal deposited the client's inheritance proceeds into his trust account. Between November 2004 and January 2005, Mr. Hellenthal transferred a total of $33,000 out of trust as legal fees. Mr. Hellenthal prepared a trust instrument by which he would inherit the client's trust assets if the client died without a will. Mr. Hellenthal knew the client did not have a will and did not consult with the client about any conflicts of interest. The trust prepared by Mr. Hellenthal did not comply with the Medicaid regulations for a qualified special needs trust, and could have subjected the client to several years of ineligibility for Medicaid benefits as a penalty or been rejected by the Department of Social and Health Services (DSHS). The client did not understand the trust nor its potential negative ramifications and risks for him. In January 2005, the client hired a new lawyer who removed Mr. Hellenthal as trustee, hired a professional trustee, drafted a will for the client, and sought court approval for the trust. The client's new lawyer requested that Mr. Hellenthal reduce the $33,000 in attorney's fees. Mr. Hellenthal refunded a portion of the fees, retaining $7,130.87 for his services. Other Spokane-area lawyers charge $1,000 to $3,500 for the creation of a special needs trust.
Matter 2: In March 2004, Mr. Hellenthal was hired to assist a married couple in qualifying the husband for Medicaid. The couple had been in a serious automobile accident in July 2003, which left the husband with a traumatic brain injury and physical impairments. Mr. Hellenthal did not meet with either client and never spoke to the husband. Mr. Hellenthal advised that the husband and wife should legally separate before applying for Medicaid. The wife agreed to have Mr. Hellenthal represent both herself and her husband. Mr. Hellenthal was aware of the client husband's extreme disabilities due to the accident. All communication with the clients was by telephone with either the wife or the wife's mother, who ran an adult-care home in which the husband resided. Mr. Hellenthal did not consult with the couple about any potential conflicts of interest, or the implications of common representation, and did not obtain any written conflict waivers. He prepared and filed for the couple legal documents that awarded the wife all of her husband's assets and all rights for any claims of damages from third parties as a result of the accident. The legal documents included a durable power of attorney which made the wife and her mother the attorneys-in-fact for the husband. Mr. Hellenthal did not inform the court in the pleadings of the husband's mental status. In June 2004, Mr. Hellenthal disbursed to the wife approximately $78,000 of funds obtained in recovery with respect to the couple's automobile accident. Meanwhile, marital difficulties arose between the husband and wife. The children of the husband subsequently retrieved him from the adult-care home and took him to see a new lawyer, who revoked the durable power of attorney. The husband eventually hired another lawyer to set aside the legal separation, recoup the husband's money, and begin dissolution proceedings.
Matter 3: Mr. Hellenthal provided estate-planning services for a couple in 1994 and again in 2002. Among other things, he prepared a power of attorney making the wife the attorney-in-fact for her husband. In 2003, the husband suffered a stroke and was hospitalized. Mr. Hellenthal never spoke to the husband after his stroke. Mr. Hellenthal was informed that they were considering a nursing home for the husband. He suggested to the wife that the couple obtain a legal separation to qualify for Medicaid, even though the couple had substantial assets to pay for his care. The wife did not understand why Mr. Hellenthal wanted her to separate from her husband, but signed for her and her husband all the legal separation documents sent to her by Mr. Hellenthal. These documents awarded the wife all the couple's assets. In July 2003, the husband was found to be "gravely disabled" based on a diagnosis of longstanding dementia that had been worsened by the stroke, and was involuntarily transferred to a psychiatric ward. At about the same time the wife informed Mr. Hellenthal that her husband was in a psychiatric ward, she received a fee agreement stating that Mr. Hellenthal had "explained to their satisfaction the advantages and disadvantages of common representation…." Mr. Hellenthal had never explained the fee agreement to the wife and never told her there might be a conflict with his representing both her and her husband. Mr. Hellenthal filed the legal separation papers in Superior Court. The pleadings did not inform the court of the husband's mental status. Mr. Hellenthal had the wife sign quit claim deeds on various properties and began transferring assets into the wife's name. Approximately $1.6 million of assets were transferred, all while the husband was involuntarily detained in a psychiatric ward. The husband died shortly thereafter.
Mr. Hellenthal's conduct violated RPC 1.2(a), requiring a lawyer to abide by a client's decisions concerning the objectives of representation and consult with the client as to the means by which they are to be pursued; RPC 1.4, requiring a lawyer to keep a client reasonably informed about the status of a matter, promptly comply with reasonable requests for information, and explain a matter to the extent reasonably necessary to permit the client to make informed decisions regarding the representation; RPC 1.5(a), requiring a lawyer's fee to be reasonable; RPC 1.7(a) and (b), prohibiting a lawyer from representing a client if the representation of that client is directly adverse to another client, or materially limited by the lawyer's responsibilities to another client or to a third person, unless the lawyer reasonably believes the representation will not adversely affect the relationship with the other client and each client consents in writing after consultation and a full disclosure of the material facts; RPC 1.8(c), prohibiting a lawyer, in representing a client in a matter, from preparing an instrument giving the lawyer or a person related to the lawyer as parent, child, sibling, or spouse, any substantial gift from a client, including a testamentary gift, except where the client is related to the donee; former RPC 1.13, requiring a lawyer to determine whether a client's ability to make adequately considered decisions in connection with the representation is impaired because of minority, mental disability, or for some other reason; and RPC 8.4(c), prohibiting a lawyer from engaging in conduct involving dishonesty, fraud, deceit, or misrepresentation.
Joanne S. Abelson and Natalea Skvir represented the Bar Association. Mr. Hellenthal represented himself. |