Opinion ID: 2714911
Heading Depth: 2
Heading Rank: 2

Heading: Dainard Matter

Text: In the Dainard matter, Jackson partnered with his clients Rob and Claire Dainard to purchase an investment property. The property had development potential because it was zoned multifamily and was adjoined by two properties that were also amenable to development. Jackson lied on a mortgage application to obtain a loan at a more favorable interest rate. Jackson then lied to the Dainards about his involvement with another client and business partner, Kenneth North, who sought to purchase the same three properties for development. Jackson intentionally deceived the Dainards to induce them to offer to sell their interest in the property.
Beginning in 2000 and continuing through 2007, Jackson was the attorney for Robert and Claire Dainard. Jackson and his wife became friends with the Dainards 10 No. 201,017-2 during this period. At the time of the events associated with this grievance, Jackson was representing Claire Dainard in a personal injury action. In October 2005, the Dainards became interested in a property at 115 Webster in Chelan County for its development potential. With Jackson's help, they signed a purchase and sale agreement for 115 Webster. Soon after, Jackson convinced the Dainards to allow him and his wife to join in the investment. In November 2005, the Jacksons and the Dainards formed RPC 8 Enterprises LLC to purchase the property. But first, Jackson convinced the Dainards to transfer the purchase and sale agreement for 115 Webster to Jackson and his wife because Jackson would be able to obtain better financing through his contacts at Bank of America. On June 7, 2006, Mr. Dainard received a copy of correspondence between Jackson and Ancora Financial regarding a loan. When asked, Jackson told Mr. Dainard that Bank of America had not worked out. A week later, to get a more favorable loan agreement, Jackson misrepresented that the property was his second home on a mortgage application. 9 At the same time, Jackson signed a Second Home Rider, which likewise stated that the property was to be used as the Jacksons' second home. The hearing officer concluded that Jackson intentionally violated 18 U.S.C. § 1344 when he signed the Second Home Rider and falsely claimed the property as his second home. 8 RPC is presumably an acronym for Robert/Patricia/Claire; it is ironic in light of the number of RPC violations accompanying its formation. 9 Even though Jackson told the Dainards he would quitclaim the property immediately, he did not file the paperwork to quitclaim 115 Webster to RPC Enterprises until September 2007, and even then he incorrectly listed the grantee as RPC LLC. 11 No. 201,017-2 At the hearing, both Jackson and his wife argued that the Dainards had arranged the financing and that they discovered the Second Home Rider language only at closing. The Jacksons further argued that they signed the rider because they were concerned that if they did not, the Dainards would lose their earnest money deposit. The hearing officer rejected this testimony as false, finding that it was directly contradictory to other, more credible evidence-e.g., the loan officer testified that he dealt only with Jackson, and the original loan application, signed six weeks before closing, stated that the property would be used as a second home. The hearing officer also found that it was not credible that Jackson had missed the references to the property being used as a second home because the evidence demonstrated that Jackson paid great attention to detail. Accordingly, the hearing officer concluded that the Dainards were not informed of and did not consent to the false representations.
During the time the Dainards/RPC Enterprises owned 115 Webster, Jackson, acting on behalf of himself and North, attempted to acquire 115 Webster, along with the two adjoining properties. He did this without apprising the Dainards, even though he knew the Dainards had purchased 115 Webster with an eye towards acquiring the adjoining properties for development. 10 In March 2007, Jackson signed a purchase and sale agreement binding RPC Enterprises to purchase the Mack property (one of the adjoining properties) without informing the Dainards. He did so to lock up the property so that he and North could 10 Early on, Mr. Dainard specifically asked Jackson if he represented North. Jackson lied and said, No. 12 No. 201,017-2 explore the full investment potential of the three properties. Jackson did not have the authority to enter into the agreement, and had the Dainards been aware of the transaction, they would not have authorized it. In the ensuing months, Jackson continued his efforts to secure the three properties for North. In September 2007, North made a presentation at a Chelan winery regarding a condo development on the three properties, even though he had not acquired 115 Webster yet. When the Dainards learned about the presentation, they informed Jackson that they were not interested in doing business with North. The Dainards eventually decided not to accept any purchase offers on the property. The hearing officer found that from the inception, there was a significant risk that Jackson's representation of RPC Enterprises and the Dainards would be materially limited by his personal interests and his responsibilities to other concurrent clients-specifically Kenneth North. Nevertheless, Jackson persisted in his representation of all parties, and never informed the Dainards of his involvement with North, who was similarly interested in developing 115 Webster and its adjoining properties. The hearing officer found that the Dainards provided credible evidence that they had no knowledge of Jackson's actions; none of the numerous e-mails concerning the three properties were copied to the Dainards. The hearing officer rejected Jackson's argument that he had no attorney-client relationship with North. Jackson admitted to representing one or more of North's companies. In addition, Jackson drafted numerous documents for North and his company, provided advice to North, and maintained North's funds in his trust account. 13 No. 201 ,017-2 The hearing officer concluded that these activities created a reasonable belief on the part of North that Jackson was his attorney. 11