Kennedy, In re

• Decision Date: 27 January 1972
• Docket Number: Nos. 4206,4344,s. 4206
• Citation: 492 P.2d 1364,80 Wn.2d 222
• Court: Washington Supreme Court
• Parties: In the Matter of the Disciplinary Proceeding Against Robert T. KENNEDY, An Attorney at Law. In the Matter of the Disciplinary Proceeding Against Leonard W. SCHROETER, An Attorney at Law. C.D.

Page 222

80 Wn.2d 222

492 P.2d 1364

In the Matter of the Disciplinary Proceeding Against Robert T. KENNEDY, An Attorney at Law. In the Matter of the Disciplinary Proceeding Against Leonard W. SCHROETER, An Attorney at Law.

C.D. Nos. 4206, 4344.

Supreme Court of Washington, En Banc.

Jan. 27, 1972.

As Corrected Feb. 4, 1972.

Rehearing Denied March 17, 1972.

Rehearing Denied May 30, 1972.

Review Granted June 21, 1972.

Robert T. Kennedy, pro se, Seattle, William L. Dwyer, Seattle, for Leonard W. Schroeter.

Washington State Bar Assn., T. M. Royce, Bar Counsel, Seattle.

STAFFORD, Associate Justice.

This is a disciplinary action instituted by the Washington State Bar Association against Mr. Robert T. Kennedy and Mr. Leonard W. Schroeter. Although two items of complaint were lodged against each attorney, the second has been dismissed on recommendation of the board of bar governors.

The hearing panel (hereinafter called the panel) took testimony following which findings of fact, conclusions of law and recommendations were prepared and forwarded to the board of governors sitting as the disciplinary board (hereinafter called the board). The board reviewed the panel's findings, conclusions and recommendations and adopted them as their own. For the sake of clarity we shall hereafter refer only to the panel's findings of fact and conclusions of law.

The board concluded that Canons of Professional Ethics (hereinafter called CPE) Nos. 11 ¹ and 22 ² had been violated and recommended that this court suspend Mr. Kennedy The record reveals that Mr. Merton Fitzsimonds died as the result of an automobile collision in 1964. His widow retained Mr. Kennedy and Mr. Schroeter to represent her in an action for his wrongful death. In November 1964 she entered into a written contract of employment in which she agreed to pay them 33 1/3 per cent of the gross recovery. ³

from the practice of law for a period of 30 days and reprimand Mr. Schroeter.

The case, originally set for trial in May of 1967, was continued. Thereafter, in June of 1967, nearly three years subsequent to Mr. Fitzsimonds' death, the widow married Peter Markos. She failed to inform either of her lawyers.

Mrs. Fitzsimonds (hereinafter called Mrs. Markos) was notified that a deposition would be taken by defense counsel. In preparation therefor she discussed the matter with her lawyers. She conferred a second time with Mr. Kennedy at her apartment. At the time Mr. Kennedy was unaware that Mr. Markos was in the bedroom. When the deposition was taken, Mrs. Markos stated her name was Katherine G. Fitzsimonds. Thereafter defense counsel asked questions to which the following answers were made:

Q. With whom do you live? A. Myself. . . . Q. Can you tell us generally how you are getting along so far as financially is concerned, are you financially self-sufficient? A. As long as I am working I guess I am, to a certain extent. Q. What I mean, you are not getting support from any other source other than your own? A. No. Q. Your own assets? A. That is right. Q. And working ability? A. That is right.

The trial began September 18, 1967, but Mrs. Markos waited until the fourth day to inform her attorneys of her remarriage. That night Mr. Schroeter and his staff prepared The next day, the court was told of the remarriage. To justify the statements made in her deposition, a motion, supporting affidavit, and memoranda were introduced to explain why Mrs. Markos had remained financially independent of her new husband and had continued to use her former name.

a brief in an attempt to exclude evidence of the remarriage.

The same day Mr. Kennedy presented Mrs. Markos with a new employment contract providing for a fee of 50 per cent of the gross recovery rather than the original 33 1/3 per cent. The proposed contract bore the following heading:

BECAUSE OF FAILURE OF CLIENT TO DISCLOSE TO HER ATTORNEYS FULL INFORMATION VITAL TO THE PROSECUTION OF THIS CASE, CAUSING ADDITIONAL WORK, AND LOWERING THE POSSIBILITY OF RECOVERY, THIS CONTRACT OF EMPLOYMENT IS REVISED AS FOLLOWS:

Mrs. Markos declined to sign until it had been seen by her husband.

The weekend intervened. In the meantime, additional mid-trial briefing was done to avoid an adverse result. Thereafter, the trial judge ruled that the fact of remarriage was inadmissible. Nevertheless, he also ruled that false answers contained in the deposition were admissible for the purpose of impeachment.

On Monday, the 25th of September, when Mr. Kennedy inquired again about the proposed contract, Mrs. Markos suggested that they discuss the matter with her husband. That evening Mr. Kennedy met the Markos at their apartment. No agreement was reached. As Mr. Kennedy departed, he told the Markos that they would be required to decide by morning whether to pay on an hourly basis or increase the fee to 50 per cent.

Prior to court the next morning, Mr. Kennedy and Mr. Schroeter met Mrs. Markos in Mr. Schroeter's office. Although Mr. Schroeter was anxious to leave for court, Mr. Kennedy insisted on discussing the fee. He testified that: 'I said I was sitting here and getting an agreement out of her one way or the other.' Mr. Kennedy further testified that Inasmuch as Mrs. Markos had not returned the proposed 50 per cent contract, Mr. Kennedy dictated a letter to Mr. Schroeter's secretary, which he characterized as 'better than a memo' that might have been signed by Mrs. Markos. It purported to memorialize the suppositions revised contract, in self-serving terms. Mr. Kennedy signed the letter, had Mr. Schroeter's secretary sign it on his behalf, and mailed it to Mrs. Markos. Mr. Schroeter denied seeing or reading the letter.

he told her the hourly fee would be approximately $10,000 plus $3,000 or $4,000 in costs, and that she finally 'agreed to a 50% Fee, saying 'maybe the 50 percent would be the best agreement". Mrs. Markos denied making that statement.

While Mr. Kennedy prepared the letter, Mr. Schroeter engaged in a settlement discussion with defense counsel. He requested enough money to 'get his client 'out' with her costs'. Defense counsel made a final offer of $7,500 which Mr. Schroeter discussed with Mrs. Markos. Believing that her total costs and expenses would be about $2,475, she accepted the offer.

Mr. Schroeter left the United States shortly thereafter and did not return until sometime in December. After his departure all transactions, with reference to the lawsuit, were handled by Mr. Kennedy.

In October 1967, Mr. Kennedy visited Mrs. Markos at her place of employment and asked her to sign the $7,500 draft that had been made payable jointly to Mr. Schroeter and to her. She asked for an opportunity to take it home, agreeing to sign and return it if her husband approved. She never returned the instrument.

Up to this point, neither Mr. Kennedy nor Mr. Schroeter had furnished Mrs. Markos with a statement of costs and expenses. No accounting had been made.

In November 1967, Mr. Kennedy telephoned Mrs. Markos and told her that if she failed to return the draft promptly he would have the insurance company cancel it and reissue one payable to the clerk of the court. He also informed her that upon reissuance he would draw out the money and pay At this point, there can be no question that Mr. Kennedy knew a serious dispute existed over the so-called 50 per cent contract.

the 50 per cent attorneys' fees, costs and expenses. Mrs. Markos replied that she did not believe he could carry out his threats. Mr. Kennedy responded that he not only could, but would do it.

Following the foregoing encounter, Mr. Kennedy telephoned defense counsel and asked him to stop payment on the original draft and issue a new draft payable to the court. He did not reveal the dispute over attorneys' fees. Instead, he told defense counsel the change was necessitated because Mr. Markos was attempting to have his wife repudiate the settlement. A new draft was issued payable to the clerk of the court.

After the new draft was issued, Mr. Kennedy had Mr. Schroeter's law associate, Mr. Charles Talbot, sign a stipulation for an order dismissing the law suit. The order, presented to a court commissioner, also directed release of the $7,500 draft to Mr. Schroeter. On November 20, 1967, the court clerk endorsed the draft to Mr. Schroeter, Mr. Talbot receipted for it, and handed it to Mr. Kennedy.

Mr. Kennedy took the draft to Mr. Schroeter's office and had it deposited in Mr. Schroeter's trust bank account. Inasmuch as Mr. Schroeter's secretary was authorized to sign checks on the account, Mr. Kennedy had her issue checks in full payment of the attorneys' fees, based upon the disputed 50 per cent contract (one half being paid to Mr. Kennedy and one half to Mr. Schroeter). Also, checks were issued in payment of all other bills and expenses even remotely connected with the law suit. Mrs. Markos was not informed of these developments.

By early December, Mrs. Markos still had received no accounting of funds. Mr. Kennedy insists she could have come to his office to request an accounting. In spite of that, a client is not required to force an accounting from her attorney. CPE 11 places the burden upon the Lawyer to Mr. and Mrs. Markos consulted Mr. Josef Diamond, an attorney, and asked him to determine what had happened to the Fitzsimonds case. Mr. Schroeter informed Mr. Diamond that the money had been paid through the clerk of the court and had been completely disbursed. After expressing surprise, Mr. Diamond arranged for the Markos to meet with Messrs. Kennedy and Schroeter at Mr. Schroeter's office. The meeting took place approximately two weeks before Christmas. Then, for the first time, Mrs. Markos was presented with a statement and an accounting which revealed the $7,500 had been entirely disbursed. $3,750 had been paid for attorneys' fees and $3,849.07 for other items of expense, none of which had been discussed with or approved by her. The $7,599.07...