Opinion ID: 1454365
Heading Depth: 1
Heading Rank: 11

Heading: thirty-second cause of complaint

Text: In this cause the Bar alleged that Griffith violated former Disciplinary Rules DR 1-102(A)(2), (4) and (6), all supra, and the following statutes: [ORS 9.460] An attorney shall:    (4) Employ, for the purpose of maintaining the causes confided to the attorney, such means only as are consistent with truth, and never seek to mislead the court or jury by any artifice or false statement of law or fact; [ORS 9.527] The Supreme Court may disbar, suspend or reprimand a member of the bar whenever, upon proper proceedings for that purpose, it appears to the court that:    (4) The member is guilty of wilful deceit or misconduct in the legal profession. This cause also arises out of the transactions concerning the 16-acre subdivision near Medford. The Bar alleged: In July 1982, a loan in excess of $1 million owed by the members of the Village Joint Venture to First Northwest on the subdivision was past due. At the same time a loan in excess of $1.7 million owed by First Northwest, Griffith, Brookens and Hardy to Columbia Pacific was also past due. [23] Wolf, on behalf of First Northwest, formulated a plan whereby members of Village Joint Venture, Central Point and others would borrow $1.1 million from Columbia Pacific to pay off the loan owing from Village Joint Venture to First Northwest. To carry out this plan, Wolf (a) incorporated Rogue Valley Development Group with some of the members of Village Joint Venture and some new Medford people as principals; (b) formed Kingsland Manor, a partnership among some of the members of Village Joint Venture; (c) restructured Central Point by eliminating Griffith, Wolf and Brookens as shareholders; (d) instructed the president of Columbia Pacific to divide the $1.1 million loan from that bank between Rogue Valley, Kingsland Manor and Central Point; (e) directed Columbia Pacific to disburse the proceeds of the $1.1 million loan to the accounts of First Northwest, Griffith, Brookens and Hardy at Columbia Pacific. The Bar also alleged: Wolf directed that the $1.1 million loan be divided between Rogue Valley, Central Point and Kingsland Manor so as to circumvent the legal lending limits of Columbia Pacific. Wolf concealed from Columbia Pacific's Board of Directors the true borrowers and beneficiaries of the $1.1 million loan. Wolf represented all parties to these transactions. At the time the $1.1 million loan was disbursed, Griffith knew: (a) Wolf had arranged for Columbia Pacific to loan $1.1 million to members of Village Joint Venture and shareholders of Central Point; (b) a substantial portion of the funds from the loan were to be paid to First Northwest; (c) First Northwest, in turn, used the loan proceeds to reduce the overdue loan obligations of First Northwest and its shareholders at Columbia Pacific; (d) Columbia Pacific Bank renewed certain loan obligations that First Northwest and its shareholders had at the bank; (e) First Northwest and Columbia Pacific were in financial difficulty and Village Joint Venture and Central Point could not service or repay the $1.1 million loan obligation. Griffith's answer was a general denial. Former DR 1-102(A)(4) provides that a lawyer shall not engage in conduct involving dishonesty, fraud, deceit or misrepresentation. We have previously discussed this Disciplinary Rule in detail in the second cause of complaint. We will not repeat that discussion. We hold that Griffith, although at times semi-passive, was a willing participant in a dishonest scheme that in effect transferred a bad loan in the amount of $1.1 million from First Northwest to Columbia Pacific. His loyalty to First Northwest was greater than his loyalty to Columbia Pacific. We hold that by clear and convincing evidence Griffith is guilty of violating former DR 1-102(A)(4). Griffith is also guilty of violating former DR 1-102(A)(6). In re Magar, supra . Former DR 1-102(A)(2) does not apply. We hold also that Griffith is guilty of willful misconduct in violation of ORS 9.527(4). In re Willer, 303 Or. 241, 246, 735 P.2d 594 (1987); In re Bridges, 298 Or. 53, 61, 688 P.2d 1335 (1984); In re Morrow, 297 Or. 808, 818, 688 P.2d 820 (1984). ORS 9.460(4) does not apply.