Disciplinary Proceedings Against Dann, Matter of

• Decision Date: 13 August 1998
• Docket Number: No. 7552,7552
• Citation: 136 Wn.2d 67,960 P.2d 416
• Parties: In the Matter of the DISCIPLINARY PROCEEDINGS AGAINST Wade R. DANN, Attorney at Law.
• Court: Washington Supreme Court

Page 67

136 Wn.2d 67

960 P.2d 416

In the Matter of the DISCIPLINARY PROCEEDINGS AGAINST Wade

R. DANN, Attorney at Law.

No. 7552.

Supreme Court of Washington,

En Banc.

Argued June 16, 1998.

Decided Aug. 13, 1998.

Joanna Abelson, Kurt Bulmer, Seattle, for Washington State Bar Ass'n.

David Swartling, Mills, Meyers & Swartling, Seattle, for Wade R. Dann.

ALEXANDER, Justice.

Attorney Wade R. Dann appeals to this court the recommendation of the Washington State Bar Association Disciplinary Board that he receive a year-long suspension from the practice of law due to four counts of misconduct. The misconduct involved Dann's misrepresentations to clients, at two different law firms, concerning which attorneys and firm employees worked on four cases. We adopt the Disciplinary Board's recommended sanction.

I. FACTS

Wade R. Dann was admitted to the practice of law in Washington in 1973. Prior to March 1991, Dann was a partner in a law firm called Ulin, Dann and Lambe (UDL). In March 1991, Dann and two associate attorneys left UDL and formed a new law firm, Dann Greenberg Radder (DGR). Dann's new partners had considerably less experience as attorneys than Dann did. John Radder, the managing partner of DGR, and Charles Greenberg had begun their legal careers as associates with UDL in 1986 and 1988 respectively. For both Radder and Greenberg the founding of DGR represented their inaugural experience as partners in a law firm.

Dann's specialty had long been construction law. DGR employed two non-attorney construction claims analysts, David Graham and William Werner, during 1991 and 1992. Graham had also worked for Dann at UDL. Attorneys and construction analysts at UDL and DGR used a computer billing system to record the time they spent on client matters. Billings were prepared at both firms in essentially the same way. The billing data for Dann was dictated to, and entered into the system by, a staff member. A bookkeeper would use this computer data to generate pre-billing, or "work in progress" (WIP), statements. A WIP would identify alphabetically by client the number of hours billed by each timekeeper, coupled with a brief description of the services performed for the client. The initials of the person billing the time would be recorded on the WIP. The WIPs would then be reviewed by the attorneys billing the hours. At DGR, Radder was generally responsible for initially reviewing Dann's WIPs. That firm's bookkeeper would take the edited WIPs and prepare final billing statements for the clients.

On a daily basis Dann would record the names of clients for whom he had done work. He did not, however, keep time records contemporaneously. He would often write billing information on pieces of paper and then put them in his time book so that he could later remember what work he had done. At the end of the month Dann would reconstruct the time that he had worked from these pieces of paper and dictate it for entry into the WIP format. He would also jog his memory concerning his billable hours by reviewing the WIPs for his associates.

While a partner at both UDL and at DGR Dann switched initials on a number of WIPs, giving one person credit for work performed by another. At DGR the practice of initial-switching was openly discussed at partnership meetings that included the office administrator, Linda Crawford. In July 1992, Radder, Greenberg, and Crawford held an informal meeting where they decided to end the initial-switching practice. On July 15, 1992, Radder issued an e-mail to his other partners, Crawford, and the bookkeeper warning of "major league trouble" if the initial-switching practice continued and was discovered. Ex. 2C. The practice was discontinued.

A. Brutoco Account

Dann represented Brutoco Construction and Len Brutoco over a number of years beginning in the late 1980s. Tom Salata was Brutoco's "right-hand man," and handled bills and claims. Transcript of Proceedings (TP) at 376. One claim that Dann was involved with for Brutoco arose during 1992 and was referred to as the "Cerritos claim." Salata specified that he did not want Dave Graham to work on the Cerritos claim. Dann and Salata agreed that Radder would work on the claim instead. Nevertheless, Dann and Radder agreed that Graham would work on the claim also, but that Graham's initials would not be shown on the bill. On a WIP for hours billed in February 1992, there is a notation in Dann's handwriting: "Change DG's [Dave Graham's] time to JR's [John Radder's] time--but pay Dave for his time." Ex. 2D. From that point forward Graham's initials were removed from WIPs and replaced with those of Radder for purposes of the final billing, in addition to the record for the work that Radder actually did. Radder's billing rate was higher than Graham's, so Radder wrote off time in an amount that exceeded the aggregate amount of overbilling and the client was, thus, not overbilled. Dann admits that Graham actually worked hours attributed to Radder.

B. Henderson Account

William Henderson, a building contractor, had been a client of Dann's since early 1990. In 1992, Dann worked on a claim involving the "North Cascades Visitor Center" project. Henderson specifically requested that just one attorney, Dann, and one claims analyst, Graham (who Henderson considered to be "extremely competent"), work on the case. TP at 167. During the course of the work Henderson believed that Graham was working on the claim because he met with Graham and Dann at the project site in June 1992 and was told by Dann that Graham was working on the claim for months after that. In fact, Graham had discontinued his work on the project following the death of his parents shortly after meeting with Henderson. The law firm's other claims analyst, William Werner, took over Graham's work.

Billing statements sent to Henderson in July and August showed that Graham was still working on the claim, when in fact Werner was. This misrepresentation began with the WIPs. On one WIP, for example, Dann crossed out Werner's initials and substituted Graham's--instructing, though, that Werner should get "credit for hours." Ex. 3E. On another WIP, the bookkeeper wrote as follows: "Per Wade [Dann] reenter DG. WJW [William J. Werner] gets credit. No credit to DG." Ex. 3B. On a third WIP, the bookkeeper made the following notation: "Per WRD [Wade R. Dann] delete WJW. Replace DG." Ex. 3C.

On a number of occasions Dann also told Henderson that Graham was working on the claim when, in fact, Graham was not and had actually left DGR. DGR wrote off time so that Henderson would not be overbilled, resulting in a slight underbilling in the aggregate. However, Henderson felt that his construction claim was so damaged by Werner's involvement that no work should have been billed in the first place. He indicated, "[H]ow can you give me money back when you didn't do anything?" TP at 179. Of Werner, he said that "I came to the conclusion that he couldn't tell the inside of the building from the outside of the building. He knew nothing about construction." TP at 172. In contrast, he felt that "Graham was one of the best construction people that I'd ever met." TP at 172. Henderson subsequently sued Dann and DGR. The matter was settled in mediation, and Dann's firm paid a $20,000 malpractice insurance deductible. Dann has expressed remorse over this matter.

C. Vertecs Account

Vertecs Corporation had been a client of Dann's since the late 1970s. In 1990, a lawsuit was brought against Vertecs as a result of work it had done on the Kingdome roof. Handling the case with Dann was a UDL associate named Philip Hickey. Hickey was actually the attorney actively managing the case, and Dann reviewed his WIPs. On WIPs that reflected hours that were billed in October, November, and December 1990, Dann substituted his initials for Hickey's. Accordingly, the billing statements sent to clients showed that Dann performed work that was done by Hickey. Notations in Dann's handwriting on the WIPs request that this initial-switching occur, with Hickey getting credit within the firm for hours worked. Dann admits this initial-switching, and explains that he had worked the number of hours that he billed, and that the activities that Hickey had performed for which Dann had taken credit were "similar work." Clerk's Papers (CP) at 25. However, Dann admits that his hourly billing rate at this time was $175 and Hickey's was $140, although he denies that overbilling occurred as a result. Vertecs paid these bills in full.

D. Restec Account

Restec was Vertecs' subsidiary. Dann and Hickey handled a sexual harassment claim against Restec brought by a former employee. Hickey had primary responsibility for the case. Moreover, as was true in the Vertecs' case, Dann substituted his initials for those of Hickey on WIPs reflecting hours worked in August 1990 and October through December 1990. For example, on one WIP there is the following notation from Dann: "Put my initials here but give Phil [Hickey] credit for hours." Ex. 5C. Thus the bills that Restec received showed Dann working hours actually worked by Hickey. Again, Dann admits initial-switching but claims that this was a result of his desire "to avoid double billing the client for work on the same matter performed by two members of the firm." CP at 27. Dann admits the same differential in hourly billing rates during the October through December 1990 period as in the Vertecs case, and admits that in August 1990 Hickey billed at $125 hourly and Dann at $150. He denies, however, that overbilling occurred--even though he admits that Restec paid its account in full.

In January 1993, a former DGR associate mailed letters to all DGR clients indicating that the firm was under investigation for its billing practices by the Washington State Bar Association (WSBA). On March 31, 1996, a front page article about the investigation appeared in the Sunday joint edition of The Seattle Times and the Seattle...