| Description: |
Melvin H. Champagne (WSBA No. 6680, admitted 1976), of Spokane, was disbarred, effective April 6, 2012, by order of the Washington
State Supreme Court following approval of a stipulation. While not affirmatively admitting to the misconduct, Mr. Champagne admitted
there is a substantial likelihood that the WSBA could prove, by a clear preponderance of the evidence, the facts and misconduct set forth in the Stipulation. This misconduct involves misappropriation of client funds. According to the Stipulation: Matter No. 1: Mr. Champagne represented Client A since the early 1990s in various legal matters, including estate planning. Mr. Champagne was aware that Client A suffered from medical and mental illnesses, and represented her in two involuntary commitment proceedings. In April 2000, Client A executed a Special Needs Trust, in which Client A assigned all of her beneficiary interest in a Family Trust. The Special Needs Trust was prepared by Mr.
Champagne, who was named trustee. Client A’s son was named the alternate trustee and beneficiary on Client A’s death. In July 2000, Mr. Champagne resigned as trustee of the Special Needs Trust, leaving Client A’s son as sole trustee. In 2005, through independent counsel, Client A amended the Special Needs Trust to include certain bequests to her grandson and other individuals, and gifted the remainder of the estate to Mr. Champagne and his wife. There is insufficient evidence to prove any undue influence by Mr. Champagne in connection with Client A’s gift to him. Client A’s son and grandson were not aware of the provisions in the Special Needs Trust. In late September 2007, Mr. Champagne received $164,934.88 on behalf of Client A, representing her share of a disbursement from the Family Trust. In December 2007, Mr. Champagne received $8,781.46, representing Client A’s final distribution from the Family Trust. Although he was no longer trustee of Client’s Special Needs Trust, Mr. Champagne opened a bank account in his name as trustee for Client A’s Trust, in which he deposited the $173,715.80. Between October 5, 2007, and January 18, 2008, Mr. Champagne intentionally transferred funds, totaling $100,000, from Client A’s Trust to individuals involved in another, unrelated client matter, for which Mr. Champagne may have had personal liability exposure. Although he used some of the funds to pay Client A’s expenses, the majority of funds in Client A’s Trust were not used for Client A. In September 2008, Client A’s Trust had a balance of $94.26. Mr. Champagne started depositing his own funds into Client A’s Trust to pay Client A’s expenses and routinely provided legal services to Client A without charging her for the services. In March 2010, Client A died. At that time, Client A’s Trust contained $23.58. Mr. Champagne attempted to borrow funds to place into Client A’s Trust, but was unsuccessful. In August 2010, Mr. Champagne filed a Chapter 7 bankruptcy and listed Client A as an unsecured creditor who was owed $35,000 on a malpractice claim in his bankruptcy schedules. Mr. Champagne subsequently obtained an order of discharge and his bankruptcy was closed. Client A’s grandson and others, who would have received special bequests totaling $39,000 after Client A’s death, never received any proceeds due to Mr. Champagne’s misappropriation of funds. Matter No. 2: In December 2004, Mr. Champagne was hired to represent Client B in an estate matter (the Estate) in which Client B was a beneficiary. In September 2006, Mr. Champagne received a check for $53,346.54 representing funds belonging to the Estate. Client B had an interest in the funds. Mr. Champagne deposited the check into his IOLTA account, commingling the Estate’s funds with other client funds. During the period that Mr. Champagne handled the Estate’s funds, he failed to maintain accurate financial records for his IOLTA account transactions. Mr. Champagne intentionally used most of the Estate’s funds for personal purposes. On October 2, 2007, the balance in Mr. Champagne’s IOLTA account was $6,127.13. As of that date, none of $53,346.54 belonging to the Estate or Client B had been disbursed on their behalf and Mr. Champagne had misappropriated at least $47,219.41 of Estate’s funds. On March 30, 2007, Mr. Champagne received $38,870.56 in connection with a personal loan. Mr. Champagne deposited the $38,870.56 into his trust account and used the money to make disbursements to Client B and the Estate. In addition, Mr. Champagne wrote off his attorney fees. Since Mr. Champagne did not maintain accurate trust account and billing records, the precise amount of the Estate’s funds that were ultimately misappropriated cannot be ascertained, but available information indicates that the combination of returning funds and writing off attorney fees resulted in no net loss to Client B or the Estate. Mr. Champagne’s conduct violated RPC 1.15A(b), prohibiting a lawyer from using, converting, borrowing, or pledging client or hird-person property for the lawyer’s own use. Jonathan H. Burke represented the Bar Association. Melvin H. Champagne represented himself. |