State Bar rebukes ML attorney

Larry Tracy admonished for conflict of interest

Moses Lake attorney Larry Tracy, a former City Councilman, has been admonished by the Washington State Bar for a conflict of interest in a bankruptcy case in 1999.

Tracy represented Virginia Gray Ivan Ottawa to file a chapter seven bankruptcy petition in 1997. According to court documents, she had shared with him her finances and need for an automobile.

Before her bankruptcy became final, she had obtained a 1994 Honda Accord in her divorce and purchased a 1995 Toyota, according to court papers, and she had told Tracy she wanted to keep both after the bankruptcy.

Ottawa continued to experience financial problems, according to court documents. She informed Desert Auto Sales of her intention to file for chapter 13 bankruptcy, and the business repossessed her Honda on July 22, 1998.

Ottawa retained Moses Lake attorney Luke McKean to represent her in the chapter 13 bankruptcy. McKean demanded Desert Auto Sales return the auto.

At the time, Tracy was representing Desert Auto Sales. According to court documents, Ottawa told McKean she felt it was unfair for Tracy to represent Desert Auto Sales after he had represented her previously.

McKean then filed a bankruptcy adversary proceeding for the repossession of the Honda.

On Aug. 28, 1998, Tracy filed an objection to confirmation of plan on behalf of Desert Auto Sales and Basin Boyer Bank and against Ottawa, according to court documents.

Tracy said in an interview with the Herald that Ottawa had already obtained McKean as her attorney for the second bankruptcy case, so he wasn't representing both clients at the same time.

Ottawa filed a grievance against Tracy on Sept. 11, 1999.

According to Gretchen Baumgardner, chairperson of the Washington State Bar, Tracy caused no harm to Ottawa in his action, in part because the bankruptcy court eventually ruled against Desert Auto Sales.

An admonishment is the lowest form a discipline the bar can hand down, bar spokeswoman Judy Berrett said, and Tracy will receive no sanctions.

Admonitions are meted out when the offense appears to be an isolated incident of negligence, according to bar rules.

Tracy has practiced law since 1972 in Moses Lake. He estimated about 90 percent of her work involves bankruptcies. He was elected to the Moses Lake City Council in 1999. He served one term before challenging fellow Councilman Richard Pearce for his seat and losing in 2003.

According to Baumgardner, Tracy and McKean discussed Ottawa's dissatisfaction with Tracy's representation of the auto dealer and bank.

Neither attorney could identify any information Tracy would have obtained from the chapter seven case that would be relevant to Ottawa's chapter 13 case, according to Baumgardner.

When asked by the Herald if he was treated fairly by the bar, Tracy wasn't sure.

"Fair — I don't know," he said. "Fair is a hard word to pin down. We did what we did to get it resolved."