In re Disciplinary Proceeding Against Robert B. Jackson

• Decision Date: 17 April 2014
• Docket Number: No. 201,017–2.,201,017–2.
• Court: Washington Supreme Court
• Parties: In re DISCIPLINARY PROCEEDING AGAINST Robert B. JACKSON, Attorney at Law.

180 Wash.2d 201

322 P.3d 795

In re DISCIPLINARY PROCEEDING AGAINST Robert B. JACKSON, Attorney at Law.

No. 201,017–2.

Supreme Court of Washington,

En Banc.

April 17, 2014.

Francesca D'Angelo, Washington State Bar Association, Seattle, WA, for Respondent(s).

WIGGINS, J.

¶ 1 After an 11–day disciplinary hearing, a hearing officer concluded that Robert B. Jackson had committed 14 counts of misconduct. The presumptive sanction for 10 of the 14 counts is disbarment. Accordingly, the hearing officer recommended that Jackson be disbarred and a unanimous Washington State Bar Association Disciplinary Board (Board) agreed.

¶ 2 On appeal, Jackson generally assigns error to all of the hearing officer's findings of fact but fails to support any assertion with argument, legal authority, or references to the record. We hold that the hearing officer's credibility determinations and findings of fact are supported by substantial evidence and her conclusions of law are correct. There is no evidence of bias or misconduct on the part of the hearing officer or disciplinary counsel. In addition, the record supports the finding of seven aggravating factors and three mitigating factors and we hold that disbarment is not disproportionate. Thus, we accept the Board's unanimous recommendation and order Jackson disbarred.

FACTS

¶ 3 Robert B. Jackson was admitted to practice law in the state of Washington on November 16, 1989. This proceeding arises out of two separate matters: the Simonson matter (counts 1–5) and the Dainard matter (counts 6–14). Each matter involves thousands of pages of exhibits that, along with hours of testimony, evidence a complex web of fraud, deceit, conflicts of interest, and other serious violations of the Rules of Professional Conduct (RPC). The hearing officer made 391 detailed findings of fact. Although Jackson purports to assign error to all findings, he never argues this assignment of error. Accordingly, we treat the findings as verities on appeal. In re Disciplinary Proceeding Against Marshall, 160 Wash.2d 317, 329, 157 P.3d 859 (2007) (unchallenged findings of fact are verities on appeal). For context, we provide a short summary of the facts related to each matter prior to delving into the details.

I. Simonson Matter (Counts 1–5)

¶ 4 In the Simonson matter, Jackson assisted his client and business partner Doug Simonson in transferring real property that had previously been abandoned in Simonson's bankruptcy. Jackson helped Simonson obtain a loan on the property by falsely signing documents as an agent of the seller (Michael Levenhagen). Later, when the bankruptcy court froze Simonson's assets in an adversary proceeding, Jackson used his lawyer trust accounts to transfer funds for Simonson, in violation of the court's orders.

¶ 5 Jackson then represented three other couples (the Levenhagens, Laings, and Lanings) who were sued by the bankruptcy trustee for their participation in the Simonson property transactions. Jackson did not inform these clients (1) that he was personally involved in the transactions at issue, (2) that he was concurrently providing legal advice to Simonson, or (3) that his interests and those of Simonson were adverse to theirs. In response to discovery requests, Jackson intentionally withheld documents that would have assisted his clients' defense because the evidence contradicted Simonson's defenses and revealed Jackson's own culpability.

A. The Real Estate Transaction

¶ 6 In early 2004, Doug and Karen Simonson owned a residence in Kirkland, Washington. On April 27, 2004, the property was appraised for sale at $1.1 million. Two days later, the Simonsons filed a petition for bankruptcy, listing the Kirkland residence. Based on representations that the residence property had no equity beyond the secured loans, the bankruptcy court entered an order abandoning the property.

¶ 7 Soon thereafter, Doug Simonson, acting as an agent for Global Financial Solutions (GFS), contacted Michael Levenhagen—a potential buyer from Minnesota. GFS is a company that structures real estate investments by pairing investors with good credit with investment properties. Simonson did not tell Levenhagen that the residence property had been in bankruptcy, that he was living in it, or that he expected to receive a commission from the sale. Levenhagen purchased the property for $1 million. As part of the purchase agreement, GFS agreed to pay a buying partnership fee to Levenhagen for the use of his credit and to pay the mortgage.

¶ 8 GFS failed to perform on its promise. Levenhagen contacted Simonson and Simonson blamed GFS for all of the issues, casting himself as a fellow victim of GFS. When Levenhagen traveled to Washington to explore selling the residence, he learned for the first time that Simonson had owned the property and that it had been involved in his bankruptcy. Simonson persuaded Levenhagen not to sell the property by telling him it did not have enough value to pay off the loans. Simonson continued to reside in the residence, while Levenhagen made the mortgage payments.

¶ 9 In April 2005, Simonson retained Jackson, who helped him set up and carry out a plan to transfer the residence so that it would ultimately end up back in Simonson's control while allowing Simonson to pull out cash along the way. Jackson prepared multiple documents to effectuate this complicated series of transfers.

¶ 10 The plan was implemented so that on June 7, 2005, Simonson transferred his ownership interest in Network Builders LLC to Levenhagen; this transfer was not recorded. Two days later, Levenhagen quitclaimed the residence to Network Builders and sent the documents to Jackson; these documents were recorded. The reason for this pair of transactions was that Simonson wished to obtain a hard money loan on the Kirkland residence even though he no longer had an ownership interest in it. To that end, Jackson drafted a real estate excise tax affidavit and signed it under penalty of perjury as Levenhagen's agent (the affidavit was necessary for quitclaim deed to be recorded). Jackson then recorded the affidavit and the quitclaim deed. By failing to record the Network Builders transfer and recording the quitclaim deed, the public record reflected that the residence belonged to Network Builders and that Network Builders was still owned by Simonson.

¶ 11 On June 13, 2005, Simonson obtained a $167,775.56 loan against the residence, signing the deed of trust as manager of Network Builders. Neither Jackson nor Simonson told Levenhagen that the property had been further encumbered.

¶ 12 On June 16, 2005, still unaware of the new loan against the property, Levenhagen transferred Network Builders (and, therefore, the residence) back to Simonson. Simonson told Levenhagen that the transfer was necessary because Kenneth North wanted Simonson to be the seller to a new buying partner. Even though Simonson received substantial funds from the secret loan, he told Levenhagen that he had no funds to make mortgage payments on the residence, so Levenhagen continued to make the payments while Simonson lived at the residence.

¶ 13 The residence property changed hands a few more times. Mark Laing owned the property in late 2005.¹ And in December 2007, David Laning took control of the property and Levenhagen was finally repaid for the mortgage payments he had made.

B. Fraud on the Bankruptcy Court

¶ 14 In January 2006, the bankruptcy trustee instituted an adversary proceeding against Simonson based on activity associated with Simonson obtaining a tax refund.² The bankruptcy court issued multiple restrainingorders restricting the movement of Simonson's assets and eventually froze his assets altogether.

¶ 15 Jackson failed to comply with these orders. In numerous transactions, Jackson violated the court's orders by accepting funds on Simonson's behalf and disbursing funds pursuant to Simonson's specific directions—e.g., agreeing to deposit $170,488.86 into his IOLTA Trust Account on behalf of Simonson; issuing an IOLTA account check to Key Bank payable to Merendon Mining, a tax shelter that was the apparent source of Simonson's retroactive tax refund; and purchasing a certified check also payable to Merendon Mining. Jackson then used multiple accounts to conceal the trail of money. Accordingly, the bankruptcy court granted the trustee's motion for sanctions against Jackson and his firm.

¶ 16 Jackson argued that he complied with court orders as soon as he became aware of them. But based on the totality of Jackson's demeanor during his testimony, the contradictions between his testimony and the exhibits, and the testimony of other, credible witnesses, the hearing officer concluded that Jackson lied to the bankruptcy court about his knowledge of the restraining orders to conceal his role in perpetrating fraud on the court. Based on the overwhelming evidence, the hearing office found that, in actively and intentionally participating in fraud on the bankruptcy court, Jackson violated 18 U.S.C. § 152. Although the hearing officer acknowledged the bankruptcy court's order granting a motion for sanctions against Jackson's firm, she independently relied on abundant documents and testimony to find that Jackson had violated discovery orders.

C. Conflicts of Interest

¶ 17 In April 2006, the trustee's attorney, Denise Moewes, filed a second adversary proceeding against parties who had played some role in the Kirkland residence transactions. The trustee sought to vacate the order of abandonment, to recover unauthorized postpetition transfers, and to compel turnover of the property. Michael Levenhagen, Mark Laing, David Laning, and their wives were among the named defendants. Five months later, Moewes filed a second amended complaint, adding Simonson as a defendant. Although there were obvious conflicts of interest among Simonson, GFS, and the Levenhagens/Lanings/Laings, Jackson's firm accepted representation of all parties. Jackson arranged for...