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Komron Michael Allahyari (WSBA No. 19804, admitted 1990), of Seattle, resigned in lieu of disbarment, effective January 10, 2011. Mr. Allahyari affirmatively admitted that the WSBA could prove by a clear preponderance of the evidence the alleged violations of the Rules of Professional Conduct, and that proof of such violations would suffice to result in disbarment, but did not affirmatively admit the facts and misconduct herein. This resignation is based on conduct involving dishonesty, and failure to maintain trust account records and individual client ledgers.
The Statement of Misconduct reads as follows:
In December 1997, Mr. Allahyari entered into a written agreement to represent Clients in a personal injury action on a contingent fee basis. Since Clients had been injured during the commission of a crime, their substantial medical costs were paid by the Washington State Crime Victims Compensation Program (CVCP). The CVCP timely and periodically sent to Mr. Allahyari notices of its increasing lien for the Clients’ medical expenses.
In February 2003, the Clients agreed to settle their claims in return for $125,000 from the defendants’ commercial general liability insurer and assignment of the defendants’ claims against a liability insurer and against Lawyer B. On February 5, 2003, pursuant to the terms of the settlement, the liability insurer wired $125,000 into Mr. Allahyari’s trust account. Pending resolution of the CVCP lien, Mr. Allahyari withheld $26,000 from the settlement.
To pay the substantial costs of their case, the Clients had borrowed $80,000 from a relative in return for a promissory note at 12% interest to repay the loan out of the proceeds of their claims. On February 18, 2004, the Clients settled the assigned claims against the liquor liability insurer for $672,500. Mr. Allahyari deposited the $672,500 settlement check into his trust account. In February 2004, the CVCP had liens of at least $100,406.64 on the Clients’ settlement.
On February 24, 2004, Clients agreed to pay their relative $125,000 in full satisfaction of the promissory note and accrued interest. On March 4, 2004, Mr. Allahyari met with Clients to go over the Settlement Statement, and then commenced disbursement of the settlement. According to the Settlement Statement, Mr. Allahyari should have withheld $100,406.04 from the disbursements for use in resolving the CVCP lien. Mr. Allahyari disbursed $80,000 in repayment of the loan from the relative, $187,899.52 to Clients, $9,191.30 to his firm for reimbursement of costs, an additional $15,000 to one of the Clients, and $2,115 to another individual. Mr. Allahyari subsequently made withdrawals of the remaining funds from the trust account for his personal and business use, reducing the balance to zero by May 31, 2005.
On July 26, 2004, the CVCP had issued Distribution Orders reducing its lien to $50,242.52. To settle this lien, Mr. Allahyari negotiated a compromise whereby the CVCP accepted $35,088.83 in full payment of its lien, which recognized an additional claim by Mr. Allahyari of $3,011.41 in costs. Because Mr. Allahyari had already removed all of the Clients’ funds from his trust account, he funded the $35,088.33 payment from his own funds.
Mr. Allahyari did not maintain an individual Client ledger for the funds he received in trust for his Clients. He removed funds he should have withheld from disbursement to pay the CVCP lien, and used the funds for his personal use. Mr. Allahyari failed to maintain other clients’ trust funds in trust, using them for his personal use before distributing them to the appropriate parties.
Mr. Allahyari’s conduct violated RPC 8.4(c), prohibiting a lawyer from engaging in conduct involving dishonesty, fraud, deceit, or misrepresentation; former RPC 1.14(a), requiring that all funds paid to a lawyer or law firm be deposited in one or more identifiable interest-bearing trust accounts and that no funds belonging to the lawyer or law firm be deposited therein; current RPC 1.15A(b), prohibiting a lawyer from using, converting, borrowing, or pledging client or third-person property for the lawyer’s own use; and RPC 1.15B(a), requiring a lawyer to maintain current trust account records and listing the minimum requirements of what the records must include.
Leslie C. Allen represented the Bar Association. Joseph J. Ganz represented Mr. Allahyari. |