Schafer Law Firm
Washington Building, Suite 1302
1019 Pacific Avenue
P.O. Box 1134
Tacoma, Washington 98401-1134
(206) 383-2167 (Fax: 572-7220)

March 17, 1998

Randy V. Beitel, Disciplinary Counsel
Washington State Bar Association
2101 - 4th Ave., 4th Floor
Seattle, WA 98232-2330

             Re:   WSBA Grievance No. 9800133 (the "Tollefson Grievance")

Dear Mr. Beitel:

            This responds to the letter by former disciplinary counsel Julie Shankland (who I understand has left the disciplinary office and has passed her files to you) of 1/29/98 requesting my response to the above-referenced grievance. Though the actual grievant apparently was too shy to be identified to me by your office, I am speculating [Golly, I hope that won't trigger another improper-speculation grievance.] that the grievant was Pierce County Superior Court Judge Brian Tollefson. Since I find it easier to keep track of my grievances by names rather than numbers, I refer to this grievance as the Tollefson Grievance.

            Please consider this letter also a reply to the very same issue that was raised as Item #2 in the anomymous grievance that I consider as the Bulmer Grievance (WSBA File No. 9702125).

            I am asked to identify facts upon which I made the following statement, which the unnamed grievants allege falsely impugns the integrity of a judge, namely Judge Brian Tollefson. I made the statement in a flyer that I published summarizing allegations of misconduct by his colleague, Pierce County Superior Court Judge Grant L. "Cadillac" Anderson.

"The insurer resisted, a lawsuit was filed, and with Pierce's very strong support Hamilton won a startling summary judgment from Judge Brian Tollefson in September 1995. Somehow, the damages grew to almost $500,000 by early 1996 when the case settled while on appeal. Judge Anderson's courtroom is in very close proximity to Judge Brian Tollefson's, and one can only speculate whether Anderson secretly influenced Tollefson."
            Before I respond, I first wish to quote the full relevant portion of my statement as it was published in the Tacoma Voice weekly newspaper (1/15/98 issue, page 4) that later was re-published it the Office of the Administrator of the Courts' Judicial News (2/9/98 issue, page 32):
            "Hamilton reportedly first discovered a broken roof truss in the Pacific Lanes building in July 1993. He had it fixed and other trusses beefed-up, and submitted a $125,000 claim to the insurance company from which he--on 10/1/92--had purchased a casualty insurance policy. His prominent insurance agent and close friend (fellow bank director and head of Bratrud Middleton Insurance agency), Robert M. Pierce, assured him from the outset that the loss would be fully covered. The insurer resisted, a lawsuit was filed, and with Pierce's very strong support Hamilton won a startling summary judgment from Judge Brian M. Tollefson on 9/25/95. Somehow, the damages grew to almost $500,000 by early 1996 when the case settled while on appeal. Hamilton and Anderson had lunch together on 9/25/95 (and probably many other days), and Anderson's courtroom is in very close proximity to Judge Brian Tollefson's, so one can only speculate whether Anderson secretly influenced Tollefson. The insurer's attorney knew nothing about the cozy relationship between its agent Pierce, Hamilton, and Anderson."
In reviewing my public records collection, I find that I misstated the date on which Hamilton had lunch with Judge Anderson and on which Judge Tollefson granted the summary judgement: It was Friday, 9/29/95 instead of Monday, 9/25/95. But I don't think that was a material mistake.

            I am sending a copy of this response to Judge Brian Tollefson. I submit that the relevant question that I invite him to answer is this: If Judge Tollefson himself knew the facts described in this letter before he heard the Pacific Lanes broken truss insurance claim case, would he have recused himself due to the appearance of fairness problem arising from Judge Anderson's involvment? I am confident that he would have, because he would have recognized that ordinary reasonable persons would speculate that Judge Anderson's involvement might influence Judge Tollefson's ruling!

            Grant L. Anderson, who was a private attorney until January 1993, was Personal Representative of the estate of his deceased client, Charles Hoffman, from March 1989 through 1992. Hoffman had owned and operated Pacific Lanes for years before his death, and his estate, with Anderson in charge, continued to own and operate it from the time of his death through 1992. In late 1992, Anderson caused the Hoffman's estate to sell Pacific Lanes to his long-time friend William L. Hamilton. (There has already been so much media coverage of Hamilton's appreciative gift of a Cadillac to Anderson, that I won't belabor that here.)

            Hamilton and Anderson have claimed (to explain the roughly $100,000 post-closing reduction in Hamilton's $300,000 purchase price for Pacific Lanes's business assets) that Hamilton effectively bought Pacific Lanes some time in September 1992. Hamilton actually closed on his purchase of the Pacific Lanes real property in October 1993, for $508,000, though the property was appraised at more than $1 million. Judge Anderson signed the closing papers on behalf of the Hoffman estate.

            Hamilton had taken out, effective 10/1/92, a property and casualty insurance policy on Pacific Lanes, including coverage for "collapse" of the structure. Hamilton claimed to have first learned in July 1993 that the Pacific Lanes structure had one or more broken roof trusses. At least one roof truss had broken years earlier but was "jerry-rigged" together by a piece of lumber someone had bolted to it. In 1993, he filed a claim with his insurance carried, U.S. Fidelity & Guaranty Company (USF&G), which resisted payment. Robert Pierce, Hamilton's agent, urged USF&G to pay the claim, and greatly assisted Hamilton in proving his claim in the ensuing litigation. On 9/29/95, Judge Brian Tollefson ruled on summary judgement that the USF&G policy covered the broken trusses and the resulting monetary damages. Though it inially appealed, USF&G ended up settling the case by paying slightly more that $500,000 to Hamilton.

            The reasonableness of my speculation that Anderson may have influenced Tollefson rests to some degree upon the mass of information that implicates the basic integrity of Anderson. I will not attempt to summarize all of it here, as I believe that much of it has already has been publicly disclosed in connection with Anderson's Commission on Judicial Conduct ("CJC") proceeding and much more will come out in civil cases now underway concerning the Hoffman Estate and also concerning [redacted 8/27/02 pursuant to a client's settlement agreement], and possibly in federal criminal proceedings. (CJC public files reflect that Hamilton, at least, is under investigation by a federal grand jury.) I will here focus simply on the information that closely ties Anderson to Hamilton's Pacific Lanes' broken truss insurance claim. I will refer primarily to (a) the several depositions published by the CJC as supporting its charges against Judge Anderson (copies of which are available from CJC for about $20) and (b) the 5-day CJC fact-finding hearing transcript (a copy of which is available from the CJC for about $30), selected pages of which I will enclose with this letter. I urge you to obtain and review those complete transcripts, for they provide evidence of considerable lawyer misconduct that ought to be further investigated

            In Anderson's 12/17/96 deposition transcript (before he had been properly coached to match his story with Hamilton's), he readily acknowledged that he knew Pacific Lanes had serious structural problems--including a broken roof truss mended with a "jerry-rigged" patch of lumber--before making the deal to sell Pacific Lanes to Hamilton, which he explained was one of the main reasons why he sold it "as is" to Hamilton for such a low price. See transcript pages 55 through 60, but especially page 58 where Anderson states that he knew of one or more broken trusses and that he disclosed the problem to Hamilton before the 1992 sale.

            In contrast, when Anderson later was asked in the CJC fact-finding hearing about why he sold Pacific Lanes to Hamilton at the low price, he described other problems but said nothing at all about the broken truss or trusses having been one of the main reasons he sold it for such a low price. See Day Four transcript, pages 592 to 595.

            Steve Fisher, Anderson's law partner, disclosed in his 1/23/97 deposition that the lawyers had been aware of the structural problems before the problems "became severe" in the summer of 1993 when the building department found out about them and closed down the building until they were fixed. See his transcript pages 41 to 43, especially line 8 on page 41, and page 42 line 21 to page 43 line 14.

            Hamilton testified at the CJC fact-finding hearing, just as he previously had declared in papers filed in his insurance claim litigation, that he first learned of the Pacific Lanes building structural problems--specifically, the broken trusses--in the summer of 1993. Day 2, page 68 line 21 to page 69 line 8.

            Hamilton also testified that he ultimately received $500,000 from the insurance company (USF&G) on the broken trusses claim. Day 2, page 132 lines 1 through 4.

            On the subject of the extent to which Anderson and Hamilton met and conferred with one another concerning Pacific Lanes, both men made admissions. First, Anderson (who took the bench in January 1993) signed the transaction papers for the estate in October 1993 when Hamilton closed on his purchase of the Pacific Lanes real property (both parties using wholly-owned corporations as the ownership vehicles). In Hamilton's 1/21/97 deposition at page 29 line 16, he said:

"I met with Grant Anderson on a number of occasions subsequent to the purchase of this bowling alley. That is why I wanted to hire him; I wanted him to have to meet with me. As a friend and as a person knowledgeable, I could ask him a direct question and I would get a direct answer. In no way did that affect legal advice. It had [to] do with the operation, specific questions about specific people, things of this nature."
A few pages earlier, at page 25 line 4, Hamilton admitted that he had told me that he wanted to make Grant Anderson the secretary of the corporation, Pacific Recreation Enterprises, Inc., that I had helped him to form to purchase and operate Pacific Lanes, saying:
            "I told Mr. Schafer that I wanted to make Grant Anderson corporate secretary of the corporation. The purpose of that statement at that time and now was that Grant Anderson I knew to be a capable businessman. I valued his expertise. He had been operating this particular business for a number of years since the demise of Chuck Hoffman. I wanted Grant Anderson, if I was going to buy this thing on the basis of the information that I had available, which is the best information available, I wanted him as close to me as possible for questions and answers.
            I remember telling Mr. Schafer that I wanted to make him [Anderson] an officer of the corporation so he would be employed; he would be compensated, however minuscually [sic] and therefore be obliged to be available to me to answer specific questions that otherwise I knew I wasn't going to be able to ask or answer."
(My own recollection is that Hamilton, in August, 1992, told me that he intended, sometime later, to make Anderson the corporate secretary so that he could repay him for the great deal Anderson was giving him on buying the bowling alley.) In the same 1/21/97 deposition at page 94 line 20 to page 95 line 2, Hamilton said that whenever he had questions about the operation of Pacific Lanes, Anderson was very helpful.

            In Anderson's 12/17/96 deposition at page 54 lines 5 to 22, he reports telling Hamilton at about the time that Anderson was going onto the bench that while his periodic meetings with Hamilton to "troubleshoot" Hamilton's business deals could not continue, Anderson "still would have breakfast with him. That was okay."

            On the specific issue of Hamilton and Anderson conferring and meeting at about the time that Judge Brian Tollefson ruled on summary judgment for Hamilton and against the USF&G, I recalled when I met Hamilton for coffee on 12/18/95 to ask him about Anderson's integrity, he mentioned to me having observed a court hearing a few weeks earlier in which my name came up. From his description of it, I recognized it as a particular attorneys' fee hearing before Anderson in the Mike Barovic Estate (No. 94-4-00800-8). Hamilton told me that he was in Anderson's courtroom that day waiting to join Anderson for lunch. The day of that hearing was 9/29/95, as indicated by the Note for Motion Docket form and the Order enclosed with this letter. It wasn't until much later that I realized that Judge B. Tollefson's hearing on the summary judgment motion by Hamilton against USF&G (Case No. 94-2-10512-0) had been on that very same day--9/29/95. Enclosed are two Notes for Motion Docket showing that date and the summary judgment order presented two weeks later, 10/16/95, which mistakenly referred to the hearing date as having been on 8/29/95 instead of its actual date of 9/29/95.

            My recollection of Hamilton's revelation over coffee about him having sat through the Barovic attorneys' fee hearing while waiting to go to lunch with Anderson was confirmed by Hamilton in his 1/21/97 deposition at page 99 lines 11 through 24. Though Hamilton, in his 1997 deposition, was off by weeks as to the time, thinking it had been in early December, the fact is that the Barovic case was my only one involving Anderson, and that 9/29/95 hearing was the only one in which my fees were considered. Thus, I consider it an admitted fact that Hamilton had lunch with Anderson on 9/29/95, the very same day that Judge B. Tollefson decided the summary judgment in favor of Hamilton against USF&G. It seems obvious that the two men would have conferred a few days beforehand to set up their lunch, and possibly also to discuss the pending cross-summary judgment motions filed by Hamilton and USF&G in the insurance coverage case.

            I continue to think that ordinary reasonable people certainly will speculate about whether or not Anderson may have secretly influenced Judge B. Tollefson in some manner concerning the insurance claim case. Judge Tollefson may or may not even have known that he was being influenced, for it could have been even through seemingly innocent "small talk" by Anderson about "big, bad insurance companies that make outrageous profits from premiums while unreasonably denying policyowners' claims." It might have been comments about the widely-despised King County lawyers who dare to try cases in Pierce County. Who knows in what form any influence may have taken?

            If desired, I could provide documentation showing that insurance agent Robert Pierce was closely associated, as a fellow Sound Banking Company founder and director, with Hamilton. His staunch support of Hamilton "from day one" against USF&G is well-documented in the insurance claim court file.

            I contacted USF&G's King County trial counsel, who had been extremely surprised in 1995 at having lost the summary judgment motion. When I explained to him the foregoing information, he said that he clearly would have sought to move the case from Pierce County or sought a visiting judge had he known of Judge Anderson's involvment with Hamilton and Pacific Lanes. As I recall, he made some comment about Pierce County's well-earned reputation for corruption, but I may have him mistaken with many other King County lawyers I have spoken with over the years. Unfortunately, it appears that USF&G simply factors old losses into its rates, and appears uninterested in seeking to re-open the insurance claim case based upon fraud.

            I trust that this adequately explains why I publicly "speculate" whether Anderson secretly influenced Judge Brian Tollefson. I do hope that the "thought police" will not seek to punish all those who may speculate about possible misconduct by governmental officials. If you would like me to explain any other speculations that I may have made, please let me know.

Very truly yours,
 
 

Douglas A. Schafer

Enclosures
cc:       Commission on Judicial Conduct
            Media Representatives
            Law Enforcement Officials
            Superior Court Judge Brian M. Tollefson