In the Disciplinary Matter Involving Walton

676 P.2d 1078
CourtAlaska Supreme Court
DecidedJanuary 3, 1984
Docket6289
StatusPublished
Cited by17 cases

This text of 676 P.2d 1078 (In the Disciplinary Matter Involving Walton) is published on Counsel Stack Legal Research, covering Alaska Supreme Court primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
In the Disciplinary Matter Involving Walton, 676 P.2d 1078 (Ala. 1984).

Opinions

OPINION

PER CURIAM.

This is a disciplinary matter involving attorney Peter B. Walton. Walton allegedly “created” a document, a copy of which he later attached, as an exhibit, to an unverified complaint. This action resulted in the Alaska Bar Association [ABA] initiating disciplinary proceedings against him. The Disciplinary Board1 of the ABA recommended that Walton be suspended from the practice of law for eighteen months.2 Walton contends that he has been denied due process of law and that the evidence does not support a finding of any wrongdoing.

Walton “created” the document while representing the Aleut Corporation in civil litigation against L. William Childs. Childs had been Aleut’s chief executive officer from 1972 until mid-1975, when his relationship with the corporation’s board of directors and officers deteriorated. When Childs left Aleut, there was disagreement as to Aleut’s obligations under its employment contract with Childs. Aleut filed a declaratory judgment action against Childs to resolve the uncertainty.

In early March, 1978, Frank Cowden, Aleut’s vice-president and director for litigation, reviewed all of Aleut’s outstanding loans. He discovered a March 2, 1973, promissory note, executed by Childs in favor of Aleut for $13,000. The promissory note stated that it was secured by a deed of trust on a specified parcel of real estate. Unable to find a copy of the deed of trust in the corporation’s records, Cowden went to the Recorder’s Office and obtained a copy of the recorded deed. Although the promissory note referred to a deed of trust, the one found at the Recorder’s Office was labelled a second deed of trust and contained a subordination clause. The deed of trust was signed by Childs and notarized on March 2, 1973. The subordination clause stated that the deed was subordinate to another deed of trust held by Alaska Mutual Savings Bank, which secured a $47,000 loan to Childs executed on March 5, 1973, and was recorded on March 6, 1973. Thus, on its face, the deed of trust in favor of Aleut appeared to have been altered, by adding the subordination clause after Childs had signed it. In addition, Childs had not recorded the deed until October 6, 1973.

[1080]*1080In mid-March 1978, Walton filed a second lawsuit on Aleut’s behalf against Childs [Childs II], alleging that the $13,000 loan was illegal. Childs moved to dismiss the complaint. However, so that scheduled depositions could be completed, the parties stipulated that Aleut’s opposition to that motion did not have to be filed until April 25, 1978.

Childs’ deposition began on April 13, 1978. He testified that the $13,000 loan was made pursuant to an understanding that Aleut would furnish the down payment that Childs needed to purchase a home in Anchorage, in consideration for his moving to Alaska to work for the corporation. He stated that he had signed the promissory note March 2, 1973, and that he had executed and delivered a copy of the deed of trust to Aleut on the same date. He further testified that the deed of trust had not been altered after he signed it. On April 21, 1978, Childs’ deposition was resumed. Before any questioning began, Childs stated that he wanted to change his earlier statement that the deed of trust had not been altered. He admitted that it had and that he knew of this prior to having it recorded.

On April 25, 1975, Aleut, through Walton, filed an amended complaint in Childs II alleging that Childs had defrauded the corporation in obtaining the $13,000 loan. Paragraph 4 of that complaint stated:

4. Accordingly, on 2 March, 1973, for the purpose of financing a down payment in connection with the purchase of a home in Anchorage, Alaska, defendants obtained funds from the plaintiff totaling $13,000, repayment of which they professed would be made according to the terms of a Promissory Note attached hereto marked Exhibit A. At the same time, defendants executed a Deed of Trust for the benefit of the plaintiff Corporation and delivered a copy thereof to the president and secretary of the plaintiff corporation. A copy of that copy is attached hereto marked Exhibit B.
The original Deed of Trust was either retained by defendant L. William Childs or, at his discretion, was left with a legal secretary named Susan Abbott, then employed by attorneys for the plaintiff Corporation. On its face, the original Deed of Trust {of which a copy is attached marked Exhibit B) appeared to be a first Deed of Trust, not secondary to any other lien on the subject property.
Either by express representations or by his silence, defendant L. William Childs represented to plaintiff and/or led the plaintiff to reasonably believe that the said Deed of Trust, Exhibit B, was a first Deed of Trust and not subordinate to any other lien on the subject property. In fact, however, defendant did not own the real property in which he purported to grant plaintiff a security interest in the form of a Deed of Trust.

(Emphasis added). In Paragraph 8, the amended complaint alleged that Childs later materially altered the original deed of trust by adding the word “Second” to the top of the document and by adding the subordination clause. The complaint referred to this allegedly altered deed as Exhibit D.

Although the references to Exhibit B in Paragraph 4 suggested that the original deed of trust is a copy (or a copy of a copy) of an existing document signed by Childs,3 that was not in fact the case. As stated in the opening brief submitted by Walton to this court:

Walton created illustrative Exhibit “B” by making a xerox copy of the deed of trust as altered and recorded by Childs. Using this copy, Walton then blanked out what he believed to be those provisions that had been wrongfully added to the instrument after its execution.

The blanked out parts consisted of: “(1) recording data; (2) the word ‘Second’) (3) the subordination clause; (4) and the re[1081]*1081cording information on p. 2 (reverse side) of the Deed of trust...Walton “created” this document on April 14, 1978, the day after Childs stated in his deposition that the deed had not been altered, but before Childs later corrected his earlier statement.

The amended complaint was served on Childs’ attorney, Hugh G. Wade, on April 25, 1978. Although Walton believed that filing the amended complaint rendered the motion to dismiss moot, he filed an opposition to the motion in which the deed of trust he “created” was referred to4 and attached thereto as Exhibit K.

Wade eventually discovered through depositions that Exhibit B was a reconstruction of the deed of trust, and filed a motion for sanction in the superior court. The superior court dismissed the amended complaint in Childs II without prejudice, and referred the matter to the district attorney for possible criminal prosecution under AS 11.30.800 (Preparing False Evidence)5 and to the ABA for possible disciplinary action.

On August 5, 1980, the State Bar Disciplinary Administrator, pursuant to Bar Rule II-15(e), filed a Petition for Formal Hearing with the Disciplinary Board.

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Bluebook (online)
676 P.2d 1078, Counsel Stack Legal Research, https://law.counselstack.com/opinion/in-the-disciplinary-matter-involving-walton-alaska-1984.