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Robert C. Brungardt (WSBA No. 8214, admitted 1978), of Shelton, was suspended for 30 days, effective February 20, 2008, by order of the Washington State Supreme Court following approval of a stipulation. This discipline was based on conduct involving failure to timely report and pay workers’ compensation premiums.
In June 2004, Mr. Brungardt discovered that his bookkeeper (a long-time employee and relative) had embezzled approximately $50,000 from his operating account. Mr. Brungardt fired the bookkeeper, but did not report the theft to the authorities because she was a member of his family. The embezzlement severely impacted Mr. Brungardt’s personal and business life. As a result, he decided to retire and close his practice. Mr. Brungardt did not know how to do payroll for his law office. He asked his secretary/legal assistant (secretary) if she could do his payroll, but she declined since she had no training in bookkeeping or accounting. Instead of hiring a temporary bookkeeper to do his payroll, Mr. Brungardt asked his secretary if he could pay her in cash for the few months it would take him to close his practice. His secretary had been working for him on a full-time basis since the late 1990s. She agreed, because she thought it would be for a short time and knew that Mr. Brungardt had been severely impacted by his bookkeeper’s embezzlement. Mr. Brungardt did not close his practice and did not pay the Department of Labor and Industries (L&I) any workers’ compensation premium for the second quarter of 2004 through the third quarter of 2006.
In 2006, L&I received an anonymous tip that Mr. Brungardt had been paying three employees in cash for the past two years. L&I audited Mr. Brungardt for the time period October 1, 2003, through September 20, 2006, and concluded that he had employed seven persons during that time. Because of the lack of documentation, L&I estimated Mr. Brungardt’s unreported workers’ compensation premiums. Three of the persons identified by L&I as Mr. Brungardt’s employees were relatives. In order to arrive at the number of hours they had been employed by him, L&I divided Mr. Brungardt’s gross payments to them by an average hourly wage. Mr. Brungardt denies that the relatives were his employees. Instead, he states that he gave them money for other reasons.
The other four persons identified as employees by L&I had been paid in cash or by check drawn on Mr. Brungardt’s operating account. As Mr. Brungardt kept no records, L&I assumed that each person was a full-time employee, employed at a rate of 520 hours per quarter. Two of the employees were JG and his wife. In addition to his own law practice, JG shared space with and worked as a contract lawyer for Mr. Brungardt. JG’s wife assisted JG with his law practice. She occasionally filled in as Mr. Brungardt’s receptionist and did some bookkeeping for Mr. Brungardt’s firm. Mr. Brungardt treated JG as an independent contractor, and did not believe he owed workers’ compensation premiums for the work JG did in his office. Mr. Brungardt has since been informed by the L&I auditor that JG was deemed his employee, among other reasons, because JG provided services for Mr. Brungardt at Mr. Brungardt’s office and did not obtain his own business license until June 2005.
Mr. Brungardt employed his secretary as a salaried, and later hourly, employee during the audited period. She left his employ in August 2006. Mr. Brungardt also employed an individual in 2003, at a time when he had a bookkeeper and was reporting and paying workers’ compensation premiums to L&I. Mr. Brungardt asserts that the auditor orally told his office that he owed $1,158.23 in overdue workers’ compensation premiums, which he paid by check in December 2006. Mr. Brungardt admits the check was returned for insufficient funds. In January 2007, L&I sent Mr. Brungardt a legal notice that it was assessing him $2,871.94, plus $1,400 penalty for failure to keep records. Mr. Brungardt agreed that he owed L&I $1,158.23 for past due workers’ compensation premiums, but believed that the balance of L&I’s assessment was unjustified. In May 2007, to resolve the issue, Mr. Brungardt paid L&I the entire assessment.
Mr. Brungardt’s conduct violated RPC 8.4(b), prohibiting a lawyer from committing a criminal act (here, violating RCW 50.36.020) that reflects adversely on the lawyer’s honest, trustworthiness, or fitness as a lawyer in other respects.
Leslie C. Allen represented the Bar Association. Mr. Brungardt represented himself. |