Disciplinary Proceeding against Marshall

• Decision Date: 10 May 2007
• Docket Number: No. 200,302-8.,200,302-8.
• Citation: 157 P.3d 859,160 Wn.2d 317
• Court: Washington Supreme Court
• Parties: In the Matter of the DISCIPLINARY PROCEEDING AGAINST Bradley R. MARSHALL, Attorney at Law.

157 P.3d 859

160 Wn.2d 317

In the Matter of the DISCIPLINARY PROCEEDING AGAINST Bradley R. MARSHALL, Attorney at Law.

No. 200,302-8.

Supreme Court of Washington, En Banc.

Argued September 14, 2006.

Decided May 10, 2007.

Philip Albert Talmadge, Talmadge Law Group PLLC, Tukwila, WA, for Petitioner.

Scott G. Busby, Seattle, WA, for Respondent.

BRIDGE, J.

¶ 1 This attorney discipline case arose out of Bradley R. Marshall's representation of several longshoremen in a workplace racial discrimination case. The Washington State Bar Association's (Association) hearing officer and the Association's Disciplinary Board (Board) found that Marshall improperly shared his fees with Wayne Perryman, a nonlawyer, and then took steps to conceal the fee sharing arrangement. They also found that Marshall inflated his costs and failed to provide an adequate settlement accounting to his clients. In addition, Marshall failed to properly advise his clients of the risks of multiple representation and failed to get their written consent where there was potential conflict of interest. Finally, the hearing officer and Board found that Marshall filed an appeal in the Ninth Circuit Court of Appeals without proper consultation with his clients and without their authorization. The hearing officer found that Marshall acted knowingly with regard to all counts and recommended restitution and a two-year suspension. The Board found that Marshall acted intentionally with regard to some counts and recommended disbarment.

¶ 2 Marshall challenges several findings of fact, as well as the Board's recommendation that he be disbarred. Marshall also argues that he was not given adequate notice of the charges against him or the possible sanctions involved. In addition, he asserts that the hearing officer abused his discretion in an evidentiary ruling.

¶ 3 We uphold the hearing officer's findings of fact for the most part. However, because Perryman had a preexisting agreement with the clients that they would pay him 10 percent of the settlement, we are not convinced that Marshall technically split his fees with Perryman. Even so, Marshall acted dishonestly when he asked Perryman to create an hourly invoice in order to hide a fee arrangement that appeared to be fee splitting. We also conclude that Marshall acted intentionally when he retained several thousand dollars of his clients' settlement money even after he had notice that he had improperly overcharged costs. We hold that the amended formal complaint stated Marshall's acts or omissions in sufficient detail to inform Marshall of the nature of the allegations of misconduct and we find that the trial court did not abuse its discretion on the contested evidentiary ruling. We agree with the Board that Marshall acted intentionally with regard to two counts, but because we find no fee splitting technically occurred, the presumptive sanction in this case is now suspension. After considering the new presumptive sanction, the lack of unanimity supporting the Board's disbarment recommendation, and sanctions imposed in similar cases, we conclude that the appropriate sanction is an 18-month suspension and restitution in the amount of $44,473.75.

I Facts and Procedural History

¶ 4 Marshall was admitted to the practice of law in Washington in 1986. The charges at issue here arose out of Marshall's representation of 15 African-American and Hispanic longshoremen in an action involving racial discrimination in the workplace. This litigation is referred to throughout as the Jefferies case.

¶ 5 The Jefferies case began in 1995 when several longshoremen approached Perryman and his company, Consultants Confidential. Most of the eventual Jefferies plaintiffs signed an agreement with Perryman under which they would pay his company $5,000 to prepare a racial discrimination lawsuit for presentation to the United States Department of Justice. The longshoremen also agreed that Perryman would act as their representative throughout the case, and in return they would pay Perryman and his company "10% of the total final settlement" plus preapproved travel expenses. Association Ex. 36, at 1; Finding of Fact (FOF) 2.

¶ 6 The Jefferies plaintiffs were members of different local unions whose practices varied. Some of the Jefferies plaintiffs worked in Seattle and some in Tacoma, and the plaintiffs were registered at different levels and they held different jobs. While they shared broad goals, their individual issues, needs, and claims were different.

¶ 7 In December 1996, Mark Wheeler maintained workspace in Marshall's law offices.¹ Perryman approached Wheeler and asked him to look into the longshoremen's case. Wheeler referred the case to Marshall, who became the lead attorney, but Wheeler also continued to work on the case. Marshall's firm filed the Jefferies case in federal district court in December 1996.

¶ 8 Around the same time, Marshall, Wheeler, and Perryman met to discuss Perryman's fee. Perryman testified that he suggested that he void the 10 percent agreement with the plaintiffs and instead work for Marshall on the case for $200 per hour. Perryman claims Marshall rejected this offer and instead agreed to charge the clients a contingency fee of 40 percent. Marshall would then give Perryman 10 percent of any recovery. At a January 1997 meeting with the plaintiffs,² Marshall distributed a "`Contingency Fee Agreement'" form. FOF 10. The form stated, in part:

Attorneys will receive an attorney fee of thirty three and one third percent (33 1/3%) [f]orty percent (40%) of all sums recovered by settlement or trial.... The attorney fee will be calculated before deduction of costs. If there is no recovery, no attorney fee will be paid.

Association Ex. 19, at 1; see also FOF 10-11.

¶ 9 In 1998, the Jefferies case went to trial. Several of the plaintiffs' claims were dismissed, including one against the International Longshoremen's and Warehousemen's Union, Local 98 (Local 98). After 10 days of testimony, the trial judge strongly encouraged the parties to settle. The parties began mediation with a different federal judge. After several days, the parties came to an agreement and 14 of the 15 plaintiffs settled. The remaining plaintiff opted out and eventually recovered nothing. Two of the other 14 plaintiffs elected to have the trial judge resolve promotion issues outside of the settlement.

¶ 10 The plaintiffs agreed to waive claims and dismiss pending appeals against the remaining defendants (not including Local 98, which had been dismissed), in exchange for $800,000. Marshall retained slightly less than 30 percent of the settlement for attorney fees, and he charged the plaintiffs over $100,000 in costs. Perryman initially asked Marshall to pay him $80,000 or 10 percent of the settlement, but at Marshall's urging, Perryman reduced his fee to $70,000 plus $1,459 in costs he had incurred. Perryman and several Jefferies plaintiffs assert that Marshall attempted to cover up this fee sharing by directing Perryman to create an hourly invoice and by telling the plaintiffs not to discuss the arrangement.

¶ 11 Marshall later appealed the district court's dismissal of some of the claims, including the claims against Local 98. In November 1999, the Ninth Circuit reversed the federal district court's dismissal of Local 98 from the Jefferies case. This appeal reinstated claims of four Jefferies plaintiffs. Local 98 offered to settle this portion of the case for $10,000. Marshall explained that he tried to contact the four affected plaintiffs, but some did not respond. Marshall did talk with one plaintiff who expressed surprise and explained that he was now working within the union, and he did not want to go forward with his remaining claim. None of the affected plaintiffs pursued their revived claim against the Local 98. Marshall eventually sued these clients to recover fees under the theory that had they pursued their remaining claim, Marshall would have recovered under the contingency fee agreement. These plaintiffs settled with Marshall, collectively paying him $8,000.

¶ 12 Marshall has explained that during the course of the Jefferies case and in the years immediately after, he moved his offices several times. He asserts that during one of the moves, a young intern accidentally disposed of some Jefferies file boxes, rather than moving them to storage for safekeeping. Marshall claims that he is now missing correspondence, client waivers, and accounting records from the Jefferies file.

¶ 13 In December 2001, three Jefferies plaintiffs filed a grievance against Marshall. In 2002, the Association charged Marshall with 10 counts of misconduct, most of which arose out of Marshall's handling of the Jefferies case. The Association charged Marshall with violating the Rules of Professional Conduct (RPCs) by fee sharing, dishonestly concealing the fee sharing agreement, improperly inflating costs by more than $50,000, failing to maintain complete records or provide an accurate settlement accounting, failing to discuss with his clients the benefits and risks of multiple representation, failing to secure his clients' written consent to multiple representation, and filing an appeal without proper consultation with his clients and without their approval.³ After a 10-day hearing, the hearing officer found that the Association proved these violations by a clear preponderance of the evidence and that Marshall acted knowingly with regard to all proven counts. The hearing officer found five aggravating factors but no mitigating factors, and he recommended a two-year suspension followed by a one-year probationary period. He also recommended that Marshall be ordered to pay restitution in the amount of $82,487.98.

¶ 14 The Board modified some of the hearing officer's findings of fact, most significantly by finding that Marshall acted intentionally when he entered into the fee arrangement with Perryman and then directed Perryman to create an...