In the Matter of The Disciplinary Proceeding v. Sandra L. Ferguson (wsba No. 27472)

170 Wash.2d 916

246 P.3d 1236

In the Matter of the DISCIPLINARY PROCEEDING AGAINST Sandra L. FERGUSON (WSBA No. 27472), an Attorney at Law.

No. 200,719–8.

Supreme Court of Washington, En Banc.

Argued June 8, 2010.Decided Feb. 3, 2011.

Shawn Timothy Newman, Attorney at Law, Olympia, WA, for Petitioner.M. Craig Bray, Robert Dean Welden, Elizabeth Ann Turner, Washington State Bar Association, Seattle, WA, for Respondent.MADSEN, C.J.

[170 Wash.2d 921] ¶ 1 This matter involves an attorney disciplinary proceeding against Sandra L. Ferguson. The hearing officer found that Ferguson appeared ex parte before a superior court judge in a contested matter without notice to opposing counsel, failed to disclose all relevant facts at an ex parte hearing, and obtained relief through misrepresentation and deceit in violation of the Rules of Professional Conduct (RPC). The hearing officer recommended a 30 day suspension of Ferguson's law license. The Washington State Bar Association Disciplinary Board (Board) adopted a majority of the hearing officer's findings and conclusions but increased the sanction recommendation to a 90 day suspension.

¶ 2 Ferguson contends she engaged in no wrongful conduct. She characterizes this case as involving a legal issue: when may an attorney appear before a court ex parte and what relief is she entitled to obtain? However, properly viewed, the issue is Ms. Ferguson's disagreement with the hearing officer's findings of fact and conclusions of law.

¶ 3 Ample evidence in the record supports both. To the extent contrary evidence exists, it consists mainly of Ms. Ferguson's own testimony, particularly as to her state of mind, which the hearing officer was entitled to find not credible. Ultimately, the hearing officer found that Ferguson intended to appear ex parte in order to obtain relief she was not entitled to obtain ex parte, namely, a writ of restitution granting possession of a house to her clients pursuant to a finding of contempt against the opposing party and that she made knowing misstatements at the hearing.

¶ 4 We hold that substantial evidence in the record supports the Board's findings of fact, which in turn support its conclusions of law. We also hold that the Board's recommended 90 day suspension is an appropriate sanction. Finally, we hold that the Board Chair's reduced assessment of costs was not an abuse of discretion.

FACTS

¶ 5 In 2003–2004, Andrew and Julianne Ferguson (the Fergusons) and Linda and Douglas Bransford entered into three written agreements involving two pieces of property in Anacortes, Washington: the Nantucket Inn, a restaurant owned by the Bransfords, and a rental house owned by the Fergusons. The agreements were drafted by a real estate agent and did not clearly spell out the legal effect on the properties, the parties' rights, or the remedies for default. What is clear is that the Fergusons gave the Bransfords $53,000 in equity in their house as a down payment toward the purchase of the Nantucket Inn. The Bransfords were to make the mortgage payments for the house and the Fergusons were to pay rent for the Nantucket Inn. Pursuant to the agreements, the Fergusons took possession of the restaurant and the Bransfords took possession of the house. By 2004, both parties were alleging the other party was in default. In December 2004, the Bransfords filed suit in superior court seeking to nullify the Nantucket Inn sale agreement and property purchase and to quiet title to the house in the Bransfords. On February 7, 2005, the Fergusons filed their own complaint seeking a writ of restitution to gain possession of the house.

¶ 6 On March 18, 2005, Skagit County Superior Court Judge Michael Rickert held a show cause hearing on the Fergusons' writ of restitution for possession of the house. Each party was represented by counsel. In a written order, the superior court ruled that an additional hearing should be scheduled to sort out the parties' rights, but in the interim, the Bransfords were to bring the mortgage payments current by March 28.

¶ 7 On March 30, the judge held a second hearing. Counsel for the Fergusons, Stephen Schutt, alleged the Bransfords had not made all the mortgage payments required by the March 18 order. Counsel for the Bransfords, Douglas Owens, responded that the Bransfords had mailed the payments to the mortgage company recently, although they had not yet been received, and he offered to have Mrs. Bransford testify on that point.¹ During the hearing, the Bransfords' counsel explained to the court that if the Fergusons were given temporary possession of the house, they would “file bankruptcy, immediately claim that they [had] equity in the house, and then [the Bransfords would be] out in the cold,” meaning the bankruptcy court would deprive the superior court of jurisdiction and the Fergusons would be able to retain possession permanently. Decision Papers (DP) at 19. Furthermore, he stated, “[I]f the Fergusons go back to temporary possession, they can then claim the house as a homestead, Your Honor, and then everything ends.” Id.

¶ 8 At the March 30 hearing, the court denied the writ of restitution and ordered the case set for trial on the merits as soon as possible, deciding “more testimony and comments and study on it” was necessary to determine the rights of each party in this “fairly muddy situation.” Id. In a written order, the court consolidated the two actions, found the Bransfords were entitled to maintain possession of the house at that time in order to preserve the status quo, and ordered the Bransfords to continue making mortgage payments on the house.

¶ 9 Around the time of these hearings, the Fergusons were concerned about their worsening financial situation and were consulting with bankruptcy attorney Mary Schmitt to explore their options. Prior to the comments of Doug Owens at the March 30 hearing, Mary Schmitt informed the Fergusons that gaining possession of the house prior to bankruptcy would enhance their financial and legal position significantly. It would enable them to avoid foreclosure, claim a homestead exemption, and retain possession of the house with substantial equity.

[170 Wash.2d 924] ¶ 10 Attorney Schutt ceased representing the Fergusons after the March hearing, and Ms. Ferguson, Andrew Ferguson's sister, stepped in as counsel for the Fergusons. Between April 4 and April 8, 2005, Ms. Ferguson spent 22 hours researching and drafting documents. The hearing officer found her research “revealed the statutory and court rule notice and hearing requirements applicable to issuance of a Writ of Restitution, Order of Contempt, Preliminary Injunction, and Temporary Restraining Order.” Id. at 21. On April 8, Ferguson finished drafting various pleadings. On April 11, without notice to the Bransfords' counsel, she appeared ex parte before Judge Rickert.

¶ 11 At the disciplinary hearing, Ferguson's sister-in-law testified that she had called PHH Mortgage (PHH), the mortgage company, on the morning of April 11, and was told that the Bransfords' mortgage checks had not yet posted to the account. She also testified that because she had no new information, she did not provide Ms. Ferguson with any new information from PHH on the morning of the ex parte hearing. However, a PHH employee testified that on the morning of April 11, PHH records would have shown that the Bransfords' checks had posted to the account on April 6.

¶ 12 During the ex parte proceedings on April 11, Ferguson presented her pleadings and argued that the Bransfords had violated the court's March 18 order and had lied to the court at the March 30 hearing by failing to make the required mortgage payments yet stating they had done so. Ferguson did not inform the court of the Fergusons' intention to file for bankruptcy. She also knew that the mortgage company had recently sent the Fergusons notice of a new requirement that all mortgage payments be made with certified funds. Ferguson also knew that the Fergusons' former attorney had recently sent the Bransfords' attorney notice of this new requirement. Rather than informing the court of this relevant information that might account for the delay in the mortgage company's processing of checks sent by the Bransfords, Ferguson failed to disclose the information, instead arguing that the Bransfords were lying and had not made the mortgage payments.

[170 Wash.2d 925] ¶ 13 The judge signed Ferguson's proposed order holding the Bransfords in contempt and granted a writ of restitution for possession of the house to the Fergusons as a remedy for the Bransfords' contempt. Attorney Owens received notice of the ex parte hearing and order approximately two days after the hearing. He called the judge in a state of distress and then scheduled a hearing for his motion to vacate the order. The afternoon before the hearing, the Fergusons filed for bankruptcy using funds provided by Ferguson. Ms. Ferguson appeared at the motion to vacate hearing with notice of the bankruptcy filing that deprived the superior court of jurisdiction. Ultimately, the Bransfords' claim for the house was never heard. When the Bransfords received an offer of purchase for the Nantucket Inn, the parties settled all claims with respect to both properties. The Bransfords gave up all claims to the house in the settlement.

¶ 14 As a result of this ex parte communication, the Washington State Bar Association (WSBA) charged Ms. Ferguson with the following:

Count 1

By presenting motions and supporting declarations, appearing and obtaining an ex parte Writ of Restitution, Order of Contempt and other relief without notice to the opposing party or opposing party's counsel, Respondent violated one or more of the former Rules of Professional Conduct (RPC): 3.5(b), 8.4(d) and 3.4(c).

Count 2

By failing to disclose relevant facts to the Court during an ex parte appearance, Respondent violated former RPC 3.3(f).

Count 3

By obtaining an ex parte Writ of...