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David W. Hubert (WSBA No. 16488, admitted 1986), of Veradale, received a censure on February 8, 2002, following a stipulation approved by the Disciplinary Board on November 30, 2001. This discipline is based upon his failing to supervise nonlawyer assistants, to safeguard and maintain records of client funds, and sharing legal fees with a nonlawyer from 1996 to 1998.
On March 12, 1996, Mr. Hubert and Ms. K signed an independent contractor agreement. Ms. K’s company, Washington Paralegal Services, Inc. (WPSI), would act as a non-real estate closing agent, and Mr. Hubert would provide services to WPSI’s clients. WPSI would obtain the client, make a preliminary determination of client needs, and draft the appropriate paperwork. Mr. Hubert then reviewed the work and gave approval or made recommendations for changes. Mr. Hubert would appear in court, if necessary, except for real estate transactions, and be paid a small fee for each matter reviewed as per the agreement.
Mr. Hubert established a trust account for WPSI to hold funds in escrow during real estate closings and granted Ms. K signatory rights. Mr. Hubert allowed WPSI to perform the accounting for the trust account, reconciling it each month. Mr. Hubert did not supervise this accounting.
In April 1997, without Mr. Hubert’s knowledge, Ms. K signed a wire-transfer services agreement with Seafirst, authorizing her, not Mr. Hubert, to request and verify wire transfers on the trust account.
Between September 1997 and September 1998, Ms. K embezzled in excess of $275,000 from the trust account through wire transfers to other banks. On September 11, 1998, Mr. Hubert learned of the possible embezzlement through an anonymous letter, and by September 16, 1998 Mr. Hubert had determined that WPSI had embezzled money from the trust account. He immediately removed Ms. K from the account.
On September 25, 1998, Mr. Hubert wrote to all affected clients and informed them of the situation. Mr. Hubert provided his insurance company and policy number to the clients, along with the name of the FBI agent in charge. Mr. Hubert’s insurance covered all claims.
Mr. Hubert’s conduct violated RPCs 5.3, requiring lawyers to supervise nonlawyer assistants; 1.14, requiring lawyers to safeguard client funds, maintain complete records of funds, and promptly deliver funds they are entitled to receive to clients; and 5.4(a), prohibiting lawyers from sharing legal fees with nonlawyers.
Sachia Stonefeld Powell represented the Bar Association. J. Donald Curran represented Mr. Hubert.
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