Steven A. Reisler
[Ogden, Murphy, Wallace P.L.L.C. letterhead was naturally used.
The firm represents Ocean Beach Hospital/Pacific County Hosp. Dist. #3.
It honored my request for a copy of this letter by e-mail,
which I then converted to HTML format. Doug Schafer]
FOR SETTLEMENT PURPOSES ONLY
June 22, 1998
Douglas C. Rasmussen Kurt Bulmer
Pamela Salgado Attorney at Law
Bullivant Houser Bailey, P.C. 201 Westlake Avenue N.
2400 Westlake Office Tower Seattle, WA 98109
1601 Fifth Avenue Attorney for Grant L. Anderson
Seattle, WA 98101
Attorneys for Thomas Oldfield
Steven W. Fisher Sloan Bobrick & Oldfield
2601 North Alder St.
Peter A. Deming Tacoma, WA 98407
Inslee, Best, Doezie & Ryder, P.S Attorneys for
Rainier Plaza, Suite 1900 William Hamilton
777 - 108th Ave. N.E.
Bellevue, WA 98009
Attorneys for Kevin Iverson
Re: Hoffman Trust and Estate
We have studied the material provided by Steve Fisher, the current trustee of the Hoffman Trust, pursuant to the action for an accounting filed by our client (the "Accounting"). We have also examined the materials and testimony made public during the Commission on Judicial Conduct hearing In re the Honorable Grant Anderson, as well as all of the information in the possession of our client relative to this matter.
Based on our review of the facts of testimony, we have reached these conclusions about the current and former trustees' and personal representatives' administration of the Hoffman Trust and Estate:
1. Messrs. Fisher and Anderson failed to disclose material information regarding the administration of the Hoffman Trust and Estate to the beneficiaries, i.e., the nature and existence of in excess of $125,000 in management fees, the agreement to reduce/adjust the price of the sale of the Pacific Lanes business (by $90,000), the receipt of fees and commissions on or related to the sale of Trust and Estate assets ($81,000) and the sale of Trust and/or Estate assets to interested partners and employees in their law firm (the dollar value of which has not yet been accurately ascertained).
2. Messrs. Fisher and Anderson have breached their common law and statutory duties as trustees, including their duties to provide an annual accounting, disclose and account for all fees, not to self deal, terminate the trust, disclose material information, and to comply with the Allard statute.
3. Mr. Anderson, as trustee, knew or should have known of fraudulent acts or practices of the personal representative in the administration of the Hoffman Trust and Estate, and had a duty to pursue redress for those acts on behalf of the Trust and Estate.
4. Mr. Fisher knew or should have known of fraudulent acts or practices of the predecessor trustee and predecessor personal representative in the administration of the Hoffman Trust and Estate, and had a duty to pursue redress for those acts on behalf of the Trust and Estate.
5. Messrs. Fisher and Anderson breached the standard of care and ethical standards applicable to attorneys in their capacity as attorneys at various times for the Hoffman Trust, Hoffman Estate and various related corporate entities.
6. Messrs. Fisher and Anderson are liable for the disgorgment of some or all of the fees received from the Hoffman Trust and Estate and their related corporations ($200,000).
7. Mr. Kevin Iverson breached his professional duties as a certified public accountant and knowingly made material misrepresentations regarding the financial affairs of the Hoffman Trust, Hoffman Estate and related corporate entities. Mr. Iverson and/or his accounting firm are liable for disgorgment of some or all of his related fees and for damages to the Hoffman Trust in a dollar value of which has not yet been accurately ascertained.
8. Mr. Grant Anderson sold the business, land and buildings of Pacific Lanes to an insider for a minimum of $500,000 less than fair market value, amounts which Messrs. Anderson, Fisher and/or Hamilton may be required to pay in damages to the Hoffman Trust in order to make it whole. Independently, Mr. Fisher sold the land and buildings of Pacific Lanes for a minimum of $400,000 less than fair market value without an independent appraisal or sale in an open-market transaction. However, in calculating our total damages we are not double counting the value of the land.
9. Messrs. Anderson and Fisher, as a result of violating their statutory and common law duties as fiduciaries, and for breaching their ethical duties as attorneys, are liable for all of Ocean Beach Hospital's costs and attorneys' fees incurred in pursuing this matter (currently, ~$70,000).
The aggregate potential liability of Steve Fisher, Judge Anderson, William Hamilton and Kevin Iverson exceeds one million dollars. You and your clients may or may not agree with all or some of these observations and conclusions. However, all of you have had access to all of this same information as well as to the applicable body of law regarding fiduciaries, attorneys, and insiders. [The bolded emphasis in this Web-published copy was added by D. Schafer.]
Our client is well aware of the vagaries involved in this type of case, as we know your clients, too, are aware of their risks. Our client also understands that it may ultimately receive less than its total actual damages. Although, our client is committed to pursuing this matter to resolution, we recognize that a bird in hand is worth two in the bush. Therefore, we will accept $750,000, plus payment of all of our costs and attorney fees incurred to date, paid to the Hoffman Trust in settlement of our clients' claims.
If you want to settle this matter as set forth above, individually or collectively, contact us at your earliest convenience. If we have not resolved this matter by July 22, 1998, we will file suit.
Very truly yours,
OGDEN MURPHY WALLACE, P.L.L.C.
Steven A. Reisler
cc: Pam Ott
Stanbery Foster, Jr.
Douglas E. Albright
Donald W. Black