In the Matter of the Disciplinary Proceeding Against WILLIAM H. WAECHTER, an Attorney at Law.
William H. Waechter committed multiple lawyer trust account
violations. Among other things, he converted client funds and
most egregiously, he forged a client's signature on a
check. Waechter appeals the Washington State Bar Association
(WSBA) Disciplinary Board's (Board) unanimous
recommendation to disbar him. He contends that the Board
erred by failing to consider the emotional problems
mitigating factor and that double jeopardy principles apply.
While we agree that the emotional problems mitigator should
have been considered in relation to his trust account
practices, it carries little weight in this case and does not
affect his sanction. We agree with the Board's
recommendation and disbar Waechter from the practice of law.
has been a licensed attorney in Washington since 1991. In
2010, he started his own personal injury firm as a solo
practitioner. Among his professional banking accounts,
Waechter operated a lawyer trust account and his firm's
operating account. For about one year, Waechter's
paralegal handled the firm's finances and accounting.
Upon the paralegal's departure from the firm, Waechter
took over the bookkeeping duties.
WSBA's Office of Disciplinary Counsel (ODC) began
investigating Waechter after notification of overdrafts in
his trust account. The subsequent audit of Waechter's
trust account covered the period in which he maintained the
firm's finances: January 1, 2012 through August 6, 2013.
The audit revealed numerous violations of the Rules of
Professional Conduct (RPC), including trust account
discrepancies, theft, conversion of client funds, and a check
bearing a client signature that Waechter had forged. See,
e.g., Findings of Fact, Conclusions of Law &
Hr'g Officer's Recommendation (FFCL) at 3-4
(conversion), 5-12 (theft), 12-13 (failure to maintain lawyer
trust account check register), 15-18 (conversion, forgery).
WSBA charged Waechter with 15 counts of misconduct arising
out of these acts.
the way this case has been framed, some discussion of the
facts and procedural history is necessary to properly resolve
the issues presented.
Trust Account Practices (Counts 1-8)
following counts involve misconduct arising from
Waechter's representation of personal injury clients. For
clarity, we discuss the misconduct by charge and as it
relates to the specific client involved.
first count, Waechter converted thousands of client funds for
his own use. Over the course of six transfers from his lawyer
trust account, Waechter removed $10, 300 that the WSBA's
auditor could not attribute to any client. See FFCL
at 1, 3-4; 1 Verbatim Report of Proceedings (VRP) (May 16,
2016) at 14, 57-58.
six transfers followed a pattern. Waechter's operating or
personal accounts were overdrawn or short of funds; in
response, he transferred trust account funds to cover the
shortage. See, e.g., 1 VRP (May 16, 2016) at 59-60,
62, 64, 66-67, 71-72, 117, 123. For example, on January 6,
2012, Waechter's business account was in the red: the
balance was negative $97.22. Two weeks later, Waechter
transferred $100 from the trust account to cover the
overdraft, bringing the negative balance of $97.22 to a
in March 2012, Waechter transferred $1, 500 from trust into
his operating account to avoid an overdraft. He did not
record this transfer in his check register. As an explanation
for the transfer and why he thought he owned the funds,
Waechter claimed another client's subrogation lien would
be reduced and Waechter would then own those funds. But when
this transfer was made, the lien had not been reduced and
would not be for another seven months.
hearing officer concluded Waechter removed funds from his
trust account unrelated to any client and converted these
funds for his own use, violating RPC 8.4(b) (by committing
theft), RPC 1.15A(b) (a lawyer must not use, convert, borrow,
or pledge client or third person property for the
lawyer's own use), and/or RPC 8.4(c) (it is misconduct
for a lawyer to engage in conduct involving dishonesty,
fraud, deceit, or misrepresentation).
remaining counts involve misconduct arising from
Waechter's representation of five personal injury
client Karin Huster, Waechter worked on a contingency fee
agreement. He would take 33 A percent of the total
settlement. The case settled for $55, 000 in February 2012.
Waechter told Huster he would reduce his fee and take his
third of the settlement from $50, 000 instead of the full
$55, 000. See 1 VRP (May 16, 2016) at 150; FFCL at
8. The subrogation interest was reduced. The difference
between the subrogation fee and the amount paid from
Huster's settlement was $535.62, which Waechter paid to
himself by check.
deposition testimony and at the disciplinary hearing,
Waechter acknowledged that Huster did not know the
subrogation amount was reduced or that Waechter kept the
difference for himself. Waechter also recalled that he was
told the Mahler fees applied to Huster's funds
after the start of the ODC investigation. He admitted that
the $500 should have gone to Huster. Waechter eventually paid
the Mahler fees on May 2, 2016, after prompting by
the WSBA investigator.
hearing officer determined the counts relating to
Waechter's representation of Huster were proved by a
preponderance of the evidence. For converting client funds in
count 2, the hearing officer found Waechter violated RPC
1.15A(b). For failing to provide an accurate written
accounting to Huster and failing to properly pay clients and
subrogation parties in counts 7-8, Waechter violated RPC
1.15A(e), RPC 1.4, RPC 1.5(c)(3), and RPC 1.15A(f).
3-8 concern Waechter's representation of Tori Weisel,
David Rowland, Cal Rooks, and Tiffany Judson.
Tori Weisel's case settled in October 2012 for a sum of
$7, 250. The funds were deposited in the trust account. A
month later, Waechter wrote a check for $2, 000 in fees and
deposited it into his personal account. 1 VRP (May 16, 2016)
at 126 ('"Weisel fee'" written in the
'"Memo"' portion of the check); see
also id. at 127 (Weisel fee check deposited into
Waechter's account); FFCL at 7.
later e-mailed Weisel with a breakdown of her settlement,
subrogation amount, and costs. In the e-mail, Waechter
represented that he '"ha[d] no intention of taking a
fee on this matter.'" 1 VRP (May 16, 2016) at 132.
Waechter sent a second e-mail saying again that he would take
'"[n]o fee, just costs, but costs are very
low.'" Id. On January 17, 2013, Waechter
sent a third e-mail to Weisel reiterating that he would take
no fee and that he would pay the $2, 500 subrogation. Weisel
approved this accounting. Weisel was not made aware that
Waechter had already taken a fee in her case or received an
addition, Waechter issued a check to Weisel for the total
client net of $4, 648.58 on March 25, 2013. The trust account
lacked sufficient funds from Weisel's settlement to cover
this check because, as Waechter knew, he had already
disbursed the funds to other clients and to himself.
WSBA investigating officer sent Waechter a letter on October
22, 2014, informing him that neither subrogation party in the
Weisel case had been paid. Waechter sent a check to one
company for the full amount, even though there were no Weisel
funds in trust to pay that amount. The other subrogation
party waived its lien. Waechter explained he "didn't
have the wherewithal to recognize" the lien had not been
pursued or why it had not been paid. Id. at 139.
Ultimately, Waechter paid the one subrogation holder after
notification from the ODC investigation, nearly two years
after the case had settled. He finally paid Weisel the funds
she was owed, $1, 000, prior to the disciplinary hearing.
hearing officer concluded Waechter knew the accounting he
provided Weisel was false and misleading because he had
already taken $2, 000 in fees and insufficient funds existed
to pay the $2, 500 in subrogation fees. The hearing officer
found that Waechter converted these subrogation funds
intentionally and failed to provide an updated settlement
statement or accounting. The hearing officer further
determined Weisel was injured by this deception, deprived of
an opportunity to object to Waechter's handling of the
funds, and deceived as to the amount she was owed.
also represented David Rowland. The fee agreement for
Rowland's case stated Waechter would receive 33 ⅓
percent on gross recovery. The matter settled in February
2012 with a recovery of $55, 000.00. Waechter paid Rowland
$33, 163.38 on February 9, 2012; the subrogation was listed
at $8, 249.35; and Waechter took $18, 331.50 in fees. These
numbers were listed as line items on the settlement
statement. One subrogation party reduced its claim to $4,
496.00. The funds were deposited into trust on February 27,
2012. Waechter paid the subrogation fee not through
Rowland's settlement amount but through funds deposited
for Weisel and another client.
Cal Rooks, Waechter settled the case in March 2013 for $11,
000. He deposited the sum in trust. Waechter reduced his fee
and transferred that amount to his operating account.
Waechter owed approximately $8, 700 to Rooks. The trust
account had insufficient funds to cover this in March 2013.
Waechter did not pay Rooks until April 8, 2013. This
triggered an overdraft, which Waechter supplemented with his
Waechter represented Tiffany Judson. This case settled in
January 2014 for $40, 000. Waechter deposited the amount into
trust and on February 13, 2014, he disbursed the funds: $17,
000 to Judson, $13, 333 to himself, and approximately $7, 900
in subrogation and costs. This left about $1, 700 for Judson.
But Waechter did not hold these funds in trust for her;
instead he wrote a check for that amount to himself.
hearing officer held that counts 3-8 were proved by a
preponderance of the evidence. For count 3, Waechter
converted funds owed to Weisel and third party subrogations
without permission and with intent to deprive these parties
of their funds. Waechter violated RPC 8.4(b), RPC 1.15A(b),
RPC 1.15A(f), and RPC 8.4(i).
count 4, the hearing officer found Waechter failed to
maintain funds in trust for Weisel, Rowland, Rooks, and
Judson. This violated RPC 1.15A(c)(1). For count 5, Waechter
violated RPC 1.15A(h)(8) by ...