Legal Ethics

Judge sanctions lawyers $32K for 'intentionally misleading conduct' in settlement negotiations

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A Seattle judge has fined two lawyers $32,000 for failing to tell opposing counsel that the county risk manager never approved a proposed $250,000 settlement, even as deal language was being negotiated.

Judge Beth Andrus of King County imposed the sanction last Wednesday on lawyers Richard Jolley and Stewart Estes, the Tacoma News Tribune reports. Pierce County Prosecutor Mark Lindquist had hired the two lawyers to defend a false arrest lawsuit filed by Lynn Dalsing of Longbranch.

A mediator had suggested the $250,000 figure. Testimony differed over whether Jolley asked Dalsing’s lawyer whether he would accept that amount, though the judge found the version of events by Dalsing’s lawyer more credible.

Andrus said Jolley and Estes had “engaged in bad faith litigation tactics by misleading plaintiff’s counsel into believing that Pierce County was willing to pay plaintiff $250,000, when in fact Pierce County was not willing to do so.”

“This case presents a disturbing situation that, after great reflection, the court cannot dismiss as ‘just the way the game is played,’ ” Andrus wrote. “If left unchecked, such conduct would encourage future abuses. The court cannot permit lawyers to engage in intentionally misleading conduct—whether that conduct is directed toward opposing counsel or the court.”

The prosecutor’s office had accused Dalsing of child molestation based on a photo that was later found to have nothing to do with Dalsing or the child, according to this July story by the News Tribune. Dalsing spent seven months in jail before a judge tossed the charges. Dalsing sued in state court; that is the suit before Andrus.

Dalsing’s husband, however, was convicted of multiple counts of child rape. The prosecutor’s office filed new charges against Dalsing in 2014 that accused her of helping her husband. A judge tossed those charges based on a finding of prosecutorial vindictiveness. Dalsing filed a separate suit in federal court based on prosecutor actions since the first lawsuit.

Settlement negotiations in the state suit had stalled until an adverse ruling in the federal lawsuit. At that point, Dalsing’s lawyer renewed the $250,000 settlement offer and “an agreement began to take shape,” according to the News Tribune article. Believing the $250,000 was the working amount, Dalsing’s lawyer agreed to include language sought by the prosecutor’s office that said the original charges against Dalsing were brought in good faith.

After the county risk manager refused to approve the settlement, Andrus invited a motion for sanctions.

Jolley told the News Tribune that the sanction wasn’t newsworthy, the sanction won’t be paid by the county, and the county will win the case if it goes to trial. “This has nothing to do with the merits of the lawsuit. It’s a tempest in a teapot,” he said. “Now we’re getting into the merits. This case is a dog.”

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