How They Really Feel

The Washington State Supreme Court has reaffirmed the principles and consequences of mishandling entrusted funds and imposed disbarment of an attorney

Attorneys are often required to safeguard others’ property in the course of their work. To prevent mistakes and deter abuse, attorneys must deposit funds belonging to clients or third parties in a separate, interest-bearing “trust account.” The funds in an attorney’s trust account do not belong to the attorney. For that reason, it is both unethical and potentially criminal for an attorney to use their trust account as a “piggy bank” to cover business or personal expenses.

It is undisputed that attorney Paul Arnold Wallstrom has repeatedly violated these fundamental principles. Most egregiously, Wallstrom admits that he intentionally converted (i.e., stole) thousands of dollars from his trust account for his own use, despite knowing those funds belonged to his clients. For his theft of client funds and other serious misconduct, the Disciplinary Board (Board) of the Washington State Bar Association (WSBA) unanimously recommended that Wallstrom be disbarred and ordered to pay restitution.

Wallstrom correctly recognizes that disbarment is the appropriate sanction in accordance with our precedent. Nevertheless, he asks the court to reject the Board’s unanimous recommendation and impose only a one-year suspension. To reach this result, Wallstrom urges the court to disregard our well-established framework for reviewing attorney disciplinary sanctions and, instead, determine the appropriate sanction based on a single question: “‘Do you really feel that Paul Wallstrom needs to be disbarred to achieve the purposes of attorney discipline?’” Appellant’s Opening Br. at 24. We decline to follow this approach.

For decades, this court has been carefully refining its sanctions analysis to promote “consistency” and “fundamental fairness” through the evenhanded application of clearly established guidelines. In re Disciplinary Proceeding Against Kuvara, 149 Wn.2d 237, 258, 66 P.3d 1057 (2003). Wallstrom seeks to erase this body of law and return to a time when there was “no objective standard by which to measure the appropriateness of disciplinary sanctions in a particular case.” In re Disciplinary Proceeding Against Noble, 100 Wn.2d 88, 94, 667 P.2d 608 (1983). Yet, he does not show that our precedent should be disavowed, and his subjective approach would certainly result in “[i]nconsistent sanctions,” which “cast doubt on the efficiency and the basic fairness of all disciplinary systems.”  ABA, ANNOTATED STANDARDS FOR IMPOSING LAWYER SANCTIONS Preface at xii (2d ed. 2019) (ABA ANNOTATED STANDARDS).

Thus, we reject Wallstrom’s approach and follow the analytical framework set forth in our precedent. On the merits, we adopt the Board’s unanimous recommendation of disbarment and restitution to Wallstrom’s former client.

Respondent was initially admitted in 1978 and had a personal injury practice.

An overdraft on his trust account in 2017 led to a bar investigation.

Wallstrom initially came to the attention of the Office of Disciplinary Counsel (ODC) in February 2017, when he overdrew his trust account by presenting a check against insufficient funds. ODC opened a grievance shortly thereafter to investigate the overdraft. While the investigation was ongoing, Wallstrom presented two more trust account checks against insufficient funds, causing additional overdrafts in September 2017 and April 2018. Wallstrom could not fully explain the overdrafts, and ODC ultimately decided to audit five years of his trust account records, from January 2014 to January 2019.

The court concluded that personal issues involving alcohol abuse did not mitigate the sanction

The hearing officer found that much of Wallstrom’s misconduct occurred while he was abusing alcohol, including his misconduct in SF’s case and some of his misconduct in GL’s case, as detailed above. However, it is undisputed that Wallstrom’s personal “problems did not cause the misconduct, particularly the misappropriation of trust funds or [his] persistent failure to keep accurate financial records.” Id. At all times, Wallstrom knew he must “replace” the funds he converted, and he “knew right from wrong as far as preserving the integrity of trust funds.” Id. at 81-82. Therefore, the hearing officer concluded that Wallstrom’s “personal and emotional problems do not constitute an extraordinary mitigating factor with respect to the presumptive disbarment sanction and should otherwise be given little weight.” Id. at 86. Wallstrom challenges this conclusion on appeal.

Delay also did not mitigate the presumptive sanction

the hearing officer and the Board correctly concluded that delay is not an applicable mitigating circumstance in accordance with this court’s precedent. We adopt their unanimous conclusion, and we reject Wallstrom’s argument that ELC 1.4 creates a stand-alone mitigator for the passage of time.

Sanction

In sum, the second stage of our three-stage analysis supports the presumptive sanction of disbarment because there are multiple, unchallenged aggravating circumstances and no extraordinary mitigators. As to the third stage of our analysis, the Board’s recommendation is unanimous, and Wallstrom does not argue that disbarment “is disproportionate to other cases involving similar conduct.” Kelley, 3 Wn.3d at 566. Thus, there are no “specific reasons for adopting a different sanction, [and] we will adopt the sanction recommended by the Board.” Id. at 551.

Justice Yu authored the unanimous opinion. (Mike Frisch)