Board of Professional Responsibility, Wyoming State Bar v. Gay Vanderpoel Woodhouse, WSB 5-1580

IN THE SUPREME COURT, STATE OF WYOMING
2022 WY 85April Term, A.D. 2022
June 29, 2022
BOARD OF PROFESSIONAL
RESPONSIBILITY, WYOMING
STATE BAR,
Petitioner,
D-21-0005
V.
GAY VANDERPOEL WOODHOUSE,
WSB #5-1580,
Respondent.
ORDER OF PUBLIC CENSURE
[{1] This matter came before the Court upon a Report and Recommendation for Public
Censure, filed herein May 23, 2022, by the Board of Professional Responsibility for the
Wyoming State Bar, pursuant to Rule 15 of the Wyoming Rules of Disciplinary Procedure.
The Court, after a careful review of the Board of Professional Responsibility’s Report and
Recommendation and the file, finds that the Report and Recommendation should be
approved, confirmed and adopted by the Court, and that Respondent Gay Vanderpoel
Woodhouse should be publicly censured for her conduct. It is, therefore,
[{2] ADJUDGED AND ORDERED that the Board of Professional Responsibility’s
Report and Recommendation for Public Censure, which is attached hereto and incorporated
herein, shall be, and the same hereby is, approved, confirmed, and adopted by this Court;
and it is further
[{3] ADJUDGED AND ORDERED that Gay Vanderpoel Woodhouse is hereby
publicly censured for her conduct, which is described in the Report and Recommendation
for Public Censure; and it is further
[14] ORDERED that, pursuant to Rule 25 of the Wyoming Rules of Disciplinary
Procedure, Ms. Woodhouse shall reimburse the Wyoming State Bar the amount of $50.00,
representing some of the costs incurred in handling this matter, as well as pay the
administrative fee of $750.00. This Court finds that, given the circumstances, Ms.
Woodhouse should not be liable for any other costs. See Rule 25(e). Ms. Woodhouse shall
pay the total amount of $800.00 to the Wyoming State Bar on or before September 1, 2022.
If Ms. Woodhouse fails to make payment in the time allotted, execution may issue on the
award; and it is further
[{5] ORDERED that the Clerk of this Court shall docket this Order of Public Censure,
along with the incorporated Report and Recommendation for Public Censure, as a matter
coming regularly before this Court as a public record; and it is further
[{6] ORDERED that, pursuant to Rule 9(b) of the Wyoming Rules of Disciplinary
Procedure, this Order of Public Censure, along with the incorporated Report and
Recommendation for Public Censure, shall be published in the Wyoming Reporter and the
Pacific Reporter; and it is further
[{7] ORDERED that the Clerk of this Court cause a copy of this Order of Public Censure
to be served upon Respondent Gay Vanderpoel Woodhouse.
[{8] DATED this 29" day of June, 2022.
BY THE COURT:
/s/
KATE M. FOX
Chief Justice
BEFORE THE SUPREME COURT D - 2 ] -0 0 05
STATE OF WYOMING
IN THE SUPREME COURT
STATE OF WYOMING
FILED
In the matter of )
GAY VANDERPOEL WOODHOUSE, ) MAY 23 2022
WSB 5-1580, ) WSB No. 2020-089 * ..
) Pasta woke.
Respondent. ) by CHIEF DEPUTY
REPORT AND RECOMMENDATION FOR PUBLIC CENSURE
THIS MATTER came before a Hearing Panel of the Board of Professional Responsibility
(“Panel”) for hearing on April 18 and 19, 2022, for hearing pursuant to Rulel5, W.R.Disc.P. Pre-
sent at the hearing were Panel members Debra J. Wendtland (Chair), John A. Masterson and Ja-
nine Thompson. Mark W. Gifford, Bar Counsel, appeared on behalf of the Wyoming State Bar.
Respondent Gay Vanderpoel Woodhouse appeared with her counsel, Stephen H. Kline. Numer-
ous witnesses testified as summarized below. Bar Counsel’s Exhibits BC-1 through BC-32 were
received into evidence as were Respondent’s Exhibits 2 through 6. The Hearing Pane! having
received testimony and reviewed the exhibits, having heard the arguments of counsel and being
fully advised in the premises, finds, concludes and recommends as set forth below.
In submitting this report and recommendation, the Panel is mindful of this Court’s hold-
ing in Bd. of Pro. Responsibility v. Hinckley, 2022 WY 18, 73, 503 P.3d 584, 593 (Wyo. 2022):
“The purposes of the state bar disciplinary procedures are to maintain the in-
tegrity of the bar, to prevent the transgressions of an individual lawyer from
bringing its image into disrepute and to protect the public and the administration
of justice.” Bd. of Pro. Responsibility v. Richard, 2014 WY 98, J 51, 335 P.3d
1036, 1051 (Wyo. 2014) (citations and quotation marks omitted). See also, ABA
Standards for Imposing Lawyer Sanctions § 1.1 (ABA Standards). In disciplinary
proceedings, the responsibility of this Court is not to punish, but to inquire into
and gauge a lawyer’s continued fitness to practice law. This inquiry is conducted
with a view to safeguarding the interests of the public, the courts, and the legal
profession. See ABA Standards, Methodology (“The purpose of the disciplinary
proceeding is not punitive but to inquire into the fitness of the lawyer to continue
in that capacity for the protection of the public, the courts, and the legal profes-
sion.”); State ex rel. Okla. Bar Ass'n v. Wintory, 2015 OK 25, { 15, 350 P.3d 131,
135 (Okla. 2015) (“The purpose of lawyer discipline proceedings is to protect the
public and the administration of justice from lawyers who have not discharged,
will not discharge, or are unlikely to properly discharge their professional duties
to clients, the public, the legal system, and the legal profession.”’).
The Panel was impressed with the honesty and sincerity that was apparent in the testimo-
ny of all witnesses. The Panel did not have to resolve matters of witness credibility for purposes
of its findings and recommendation set forth below.
Findings of Fact and Conclusions of Law
1. Gay Vanderpoel Woodhouse has been licensed to practice in Wyoming since
1978 and is engaged in the active practice of law in Cheyenne, Wyoming. At all times relevant
to this matter, she was an attorney with the firm of Woodhouse Roden Nethercott, LLC.
2. The complaint against Ms. Woodhouse in the above-captioned matter was submit-
ted in October 2020 by Ken and Erin Waszkiewicz of Cheyenne. At all times relevant to the
complaint, Mr. and Ms. Waszkiewicz owned 100% of WyO Ninja, LLC (“WyO Ninja”), and
360 Degree Properties, LLC (“360 Degrees”). Cannon Meyer owned 100% of Ninja Playground,
LLC (“Ninja Playground”). WyO Ninja and Ninja Playground both owned an equal-share (50%)
interest in Ninja Playground Athletics, LLC ("Ninja Playground Athletics"). See Exhibit BC-1.
3, All of the LLCs were formed in Wyoming. Prior to the formation of Ninja
Playground Athletics, Ninja Playground operated a gym where people could train and work out
based on the Ninja Warrior television show. In late 2019, 360 Degree Properties purchase an
8,000 square foot building located at 1505 Pioneer Avenue, which it then lease to Ninja
Playground. This building housed the gym. The gym was then operated under Ninja Playground
Athletics. See Exhibit BC-2.
Ken & Erin
Waszkiewicz Cannon Meyer
(100% owners) (100% owner}
360 Degree ' ; 4
Properties LLC Wy0 Ninja LLC Ninja Playgroun :
o% owner
owns building) ts ; (tiionned
TT, ae
Building Vest = ee /
Ninja Playground
Athletics, LLC
Exhibit BC-1
4. Ninja Playground Athletics began its operation in January 2020. The gym was
forced to shut down in March of that year due te COVID-19. An ongoing business dispute be-
tween the partners of Ninja Playground Athletics became worse because the gym was shut down
and Mr. Meyer brought people into the gym to work out when it was shut down.
5. As a result, and in an attempt to bring an end to their disputes, Mr. and Ms.
Waszkiewicz offered to purchase Ninja Playground’s interest in Ninja Playground Athletics or
have Ninja Playground purchase WyO Ninja's interest in Ninja Playground Athletics. Mr. Meyer
(sole member of Ninja Playground) was unwilling or unable to do either.
6. In April 2020, Mr. and Ms, Waszkiewicz retained Cheyenne attorney Ryan
Wright to try and resolve the business dispute. Mr. Wright sent a request to mediate (pursuant to
Ninja Playground Athletics’ operating agreement, see Exhibit BC-2, p. 38 § 9.16.2) to Mr. Mey-
er. Exhibit BC-4. In response, Mr. Meyer hired Ms. Woodhouse, who then brought suit on behalf
of Ninja Playground and Ninja Playground Athletics against WyO Ninja and 360 Degrees for
access to the Ninja Playground Athletics facility, access to the books, records, and accounts of
Ninja Playground Athletics and the password(s) to the Ninja Playground Athletics’ website and
bank accounts. Mr. Meyer’s Complaint further sought damages for tortious interference with the
business. Exhibit BC-6.
Respondent’s Violation of Rule 1.7
7. W.R.Prof.Conduct 1.7 provides:
(a) Except as provided in paragraph (b), a lawyer shall not represent a client if the
representation involves a concurrent conflict of interest. A concurrent conflict
of interest exists if:
(1) the representation of one client will be directly adverse to another cli-
ent; or
(2) there is a significant risk that the representation of one or more clients
will be materially limited by the lawyer's responsibilities to another
client, a former client or a third person or by a personal interest of the
lawyer.
(b} Notwithstanding the existence of a concurrent conflict of interest under para-
graph (a), a lawyer may represent a client if:
(1) the lawyer reasonably believes that the lawyer will be able to provide
competent and diligent representation to each affected client;
(2) the representation is not prohibited by law;
(3) the representation does not involve the assertion of a claim by one cli-
ent against another client represented by the lawyer in the same litiga-
tion or other proceeding before a tribunal; and
(4) each affected client gives informed consent, confirmed in a writing,
signed by the client.
8. Ms. Woodhouse admitted, under oath, that she undertook the representation of
Ninja Playground and Ninja Playground Athletics without obtaining written, informed consent to
represent Ninja Playground Athletics, and that she did so even though the Waszkiewicz’ limited
liability company (WyO Ninja) owned 50% of Ninja Playground Athletics. Further, Ms. Wood-
house admitted that the operating agreement for Ninja Playground Athletics LLC provided that
each member is also a manager and that the members both held an equal interest in this LLC. By
virtue of the fact that there were only two managers, decisions had to be unanimously agreed to
before they could be taken. See Exhibit 6, p. 4 { 20. By filing suit on behalf of Ninja Playground
Athletics and Ninja Playground, Ms. Woodhouse was in effect representing and suing her clients
because WyO Ninja owned 50% of Ninja Playground Athletics. Despite citing to the language
from the operating agreement in the complaint she filed, Ms. Woodhouse claimed in the com-
plaint to represent Ninja Playground Athletics, based solely upon the unilateral act of Ninja
Playground’s decision to hire her to suing WyO Ninja. In violation of the operating agreement
this was done without the informed consent of WyO Ninja.
9. On May 11, 2020, Mr. Wright sent a letter to Ms. Woodhouse informing her of
her conflict of interest. Exhibit BC-9. On May 13, 2020, Ms. Woodhouse stated “I see no con-
flict of interest to my representation. The ‘conflict’ was entirely created by your clients [WyO
Ninja and 360 Degrees]. They can end it and end my involvement in the case.” Exhibit BC-10.
10. | Unable to persuade Ms. Woodhouse to withdraw from the case due to her conflict
of interest, on July 17, 2020, Mr. Wright filed a motion to disqualify Ms. Woodhouse and anoth-
er lawyer in her firm because they refused to acknowledge there was a conflict of interest. Exhib-
it BC-17. According to Ms. Woodhouse’s testimony before the panel, it was at this point that she
knew she had a conflict. However, she filed a brief in opposition (see Exhibits BC-18, BC-19),
and argued at the September 3, 2020 hearing on the motion that she had no conflict. On October
9, 2020, Judge Sharpe granted the motion to disqualify Ms. Woodhouse and her firm, ruling that
there was a concurrent conflict of interest as defined by Rule 1.7, W.R.Prof.Cond. Exhibit BC-
20. In finding that a concurrent conflict of interest existed, the court reasoned:
Here, Plaintiffs’ counsel’s representation of Ninja Playground may be directly
adverse to Ninja Playground Athletics. Ninja Playground is a 50% member-
manager of Ninja Playground Athletics. The other 50% member-manager of Nin-
ja Playground Athletics is WyO Ninja. Currently, WyO Ninja has asserted claims
against Ninja Playground, including a claim of conversion. The issue of whether
Ninja Playground converted property of Ninja Playground Athletics may create an
adverse situation. Ninja Playground claims its interests are aligned with Ninja
Playground Athletics by wanting to reopen the business as soon as practicable. In
contrast, WyO Ninja asserts its interests are aligned with Ninja Playground Ath-
letics by wanting to comply with public health laws and not open without the abil-
ity to comply with the reopening requirements. These dual interests create a con-
flict of interest for Plaintiffs’ counsel to represent a 50% member-manager and
the LLC. In addition, there is a significant risk Plaintiffs’ counsel’s representation
of Ninja Playground Athletics will be materially limited by counsel!’s responsibili-
ties to Ninja Playground. The controversy in this case involves the member-
managers of Ninja Playground Athletics asserting claims against each other. Fur-
ther, WyO Ninja has refused to consent to Plaintiffs’ counsel representing Ninja
Playground Athietics, as required under the operating agreement [citation omit-
ted]. For these reasons, the court finds a current conflict of interest exists between
Ninja Playground and Ninja Playground Athletics.
Id., pp. 8-9. Based upon the foregoing findings, the court granted Mr. Wright’s motion to dis-
qualify Ms. Woodhouse as counsel for the plaintiffs.
11. Ms. Woodhouse concedes, and the Hearing Panel finds by clear and convincing
evidence and the testimony of Ms. Woodhouse before the panel, that her representation of the
plaintiffs in the underlying litigation violated Rule 1.7, W.R.Prof.Cond.
Respondent’s Violation of Rule 3.1(a)
12. Shortly after Judge Sharpe granted Mr. Wright’s motion to disqualify Ms. Wood-
house as plaintiffs’ counsel, Mr. Wright filed a Rule 12(b)(6) motion to dismiss for failure to
bring a claim upon which relief may be granted. Exhibit BC-26. In the motion, Mr. Wright ar-
gued that the lawsuit was in essence a derivative action for which the plaintiffs had failed to fol-
low the requirements of W.R.C.P. Rule 23.1 and W.S. § 17-16-741 applicable to such actions.
13. The deficiency of Ms. Woodhouse’s apparent attempt to paint the claim she as-
serted on behalf of Ninja Playground Athletics as a derivative action was pointed out earlier by
Mr. Wright in his briefing on the motion to disqualify plaintiffs’ counsel. See Exhibit BC-19 pp.
4-7 JJ 13-22; ef Exhibit BC-18 pp. 7 { 22.
14. —_In granting the defendants’ motion to dismiss, Judge Sharpe reasoned:
Here, Plaintiffs filed the Complaint asking the court to find Defendants
breached the operating agreement for Ninja Playground Athletics, improperly
locked Plaintiffs out of the gym facility, and deprived Plaintiffs of the quiet en-
joyment and use of the gym facility. [Citation omitted.] These allegations are
harms to Ninja Playground Athletics, not Ninja Playground, individually. This
finding is evidenced by Plaintiffs’ prayer for relief which asks the court to provide
Plaintiffs access to the gym facility, award damages for interfering with Plaintiffs’
use of the gym, and order WyO Ninja to provide Plaintiffs with the passwords for
Ninja Playground Athletics’ website and bank account. [Citation omitted.] Ninja
Playground does not plead “an actual or threatened injury that is not solely the re-
sult of an injury suffered or threatened to be suffered by” Ninja Playground Ath-
letics. WYO. STAT. ANN. § 17-21-901(b). Thus, after reviewing the Complaint, the
court finds Ninja Playground does not plead a direct cause of action against De-
fendants. Rather, it appears Plaintiffs assert claims on behalf of Ninja Playground
Athletics without following the procedures for bringing a derivative action. See,
e.g., Sullivan, 2018 WY 19, [§ 22-23, 412 P.3d at 312 (explaining the difference
between a direct and derivative action); Frifchel, 2019 WY 117, f§ 12-15, 452
P.3d at 604-05 (discussing the distinction between direct and derivative actions).
In Wyoming, “[a] member maintaining a direct action . . . shall plead and
prove an actual or threatened injury that is not solely the result of an injury suf-
fered or threatened to be suffered by the limited liability company.” Wyo. STAT.
ANN. § 17-21-901(b). As the Wyoming Supreme Court has warned: “The distinc-
tion between a derivative action and a direct action is important because ‘a plain-
tiff who mischaracterizes a derivate cause of action as direct [risks] dismissal of
the claim’ for failure to comply with derivative suit procedural requirements.”
Mantle, 2019 WY 29, J 154, 437 P.3d at 807 (alteration in original) (citation
omitted). Because Plaintiffs’ alleged injury is derivative in nature and Plaintiffs
did not bring a derivative claim, the court finds the Complaint should be dis-
missed. See Fritchel, 2019 117, | 22, 452 P.3d at 606 (“Although our precedent in
direct versus derivative actions is limited, we have never strayed from the rule
that derivative injuries must be remedied by derivative actions.”); see also Man-
tle, 2019 WY 29, 4 154, 437 P.3d at 807. [footnote omitted.]
See Exhibit BC-29 pp 7-8.
15. During the hearing, Ms. Woodhouse conceded, and the Panel finds, that there was
no basis in the law for the claim she asserted as a direct action on behalf of Ninja Playground
Athletics against WyO Ninja. Thus, Ms. Woodhouse violated Rule 3.i(a), W.R.Prof.Conduct,
which provides in relevant part, “A lawyer shall not bring or defend a proceeding, or assert or
controvert an issue therein, unless there is a basis in law and fact for doing so that is not frivo-
lous, which includes a good faith argument for an extension, modification or reversal of existing
law.” The Panel rejects the contention of Bar Counsel that Ms. Woodhouse also violated Rule
3.1(b), which provides, “The signature of an attorney constitutes a certificate by him that he has
read the pleading, motion, or other court document; that to the best of his knowledge, infor-
mation, and belief, formed after reasonable inquiry, it is well grounded in fact and is warranted
by existing law or a good faith argument for the extension, modification, or reversal of existing
law; and that it is not interposed for any improper purpose such as to harass or to cause unneces-
sary delay or needless increase in the cost of litigation.” Mr. Wright conceded at the hearing that
Ninja Playground LLC potentially had a direct action against WyoNinja LLC.
Dismissal of Bar Counsel’s Contention that Respondent Violated Rule 8.4(d)
16. In the formal charge, Bar Counsel contended that Ms. Woodhouse also violated
Rule 8.4(d), W.R.Prof.Conduct. That rule provides, “It is professional misconduct for a lawyer to
*** enpage in conduct prejudicial to the administration of justice.”
17. In Bd of Pro. Responsibility v. Hinckley, 2022 WY 18, Jf 71-72, 503 P.3d 584,
611-612 (Wyo. 2022), the Court held:
Although we have addressed violations of Rule 8.4(d) in prior cases, we have
never precisely defined what type of conduct violates the rule. Our cases demon-
strate Rule 8.4(d) does not prohibit an attorney from making a mistake, or even
from committing malpractice. It focuses on conduct which interferes with the le-
gal process. See, e.g., Bd. of Pro. Responsibility v. Fulton, 2006 WY 51, 133 P.3d
514, 518 (Wyo. 2006) (the attorney violated Rule 8.4(d) “by counseling [the cli-
ents] regarding how to unlawfully avoid tax consequences of interest earned from
the settlement monies”); Bd. of Pro. Responsibility v. Barnes, 2013 WY 5, 297
P.3d 77, 78-79 (Wyo. 2013) (attorney was disbarred after falsifying documents he
presented to the county treasurer in violation of several rules of professional con-
duct, including Rule 8.4({d)); Bd. of Pro. Responsibility v. Davidson, 2009 WY 48,
47 5, 19, 205 P.3d 1008, 1010, 1016 (Wyo. 2009) (attorney violated Rule 8.4{d)
by falsely alleging in a motion for reassignment of the trial judge that the judge
had engaged in an improper ex parte communication with opposing counsel and
was “rumored” to afford favoritism to members of opposing counsel’s firm).
In light of this precedent, we adopt a test from the D.C. Court of Appeals for
determining whether an attorney’s conduct violates Rule 8.4(d). In re Owusu, 886
A.2d 536 (D.C. 2005). Under that test, the disciplinary authority must present
clear and convincing evidence: “(1) that the attorney acted improperly in that he
either [took] improper action or fail[ed] to take action when ... he or she should
[have] act[ed]; (2) that the conduct involved bear[s] directly upon the judicial pro-
cess (i.¢., the administration of justice) with respect to an identifiable case or tri-
bunal; and (3) that the conduct taint[ed] the judicial process in more than a de
minimis way, meaning that it at least potentially impact{ed] upon the process to a
serious and adverse degree.” /d. at 541 (citations and quotation marks omitted).
See also, Att'y Grievance Comm'n v. Moawad, 475 Md. 424, 257 A.3d 611, 644
(2021) (“An attorney violates [Rule 8.4(d)] when his or her conduct impacts nega-
tively the public’s perception or efficacy of the courts or legal profession.”) (cita-
tion and quotation marks omitted).
18. Applying the Owusu three-factor test to the evidence and sworn testimony of Ms.
Woodhouse before the Panel, the Panel finds clear and convincing evidence that Ms. Woodhouse
admits that she acted improperly in that she either took improper action or failed to take action
when she should have in filing a claim in which she had a conflict of interest and which in part
lacked a legal basis. Thus, the first prong of the Owusu test has been satisfied.
19. The Panel also finds clear and convincing evidence that Ms. Woodhouse’s con-
duct bore directly on the administration of justice in an identifiable case, i.e., the lawsuit before
Judge Sharpe. Further, the Panel finds that Ms. Woodhouse admitted the same in her testimony
before the Panel. Thus, the second prong of the Owusu test has been satisfied.
20. However, the Panel does not find clear and convincing evidence that Ms. Wood-
house’s conduct tainted the judicial process in more than a de minimis way, the third prong of the
Owusu test. Accordingly, the charge that Ms. Woodhouse violated Rule 8.4(d) is dismissed.
The Appropriate Sanction for Respondent’s Misconduct
21. Rule 15(b)(3)(D), Wyo.R.Disc.Proc., provides, “In imposing a sanction after a
finding of misconduct by the respondent, the BPR shall consider the following factors, as enu-
merated in the ABA Standards for Imposing Lawyer Sanctions:
(i) Whether the lawyer has violated a duty owed to a client, to the public, to the legal
system, or to the profession;
(ii) Whether the lawyer acted intentionally, knowingly, or negligently;
(iii)The actual or potential injury caused by the lawyer’s misconduct; and
(iv)The existence of any aggravating or mitigating factors
21. The American Bar Association’s “Standards for Imposing Lawyer Discipline”
(hereafter referred to as the “ABA Standards”) state, “The purpose of lawyer discipline proceed-
ings is to protect the public and the administration of justice from lawyers who have not dis-
charged, will not discharge, or are unlikely properly to discharge their professional duties to cli-
ents, the public, the legal system, and the legal profession.”
22, ABA Standard 3.0 lists the factors to be considered in imposing a sanction after a
finding of lawyer misconduct and mirrors the language of Rule 15(b)(3)(D), Wyo.R.Disc.Proc.:
(a) the duty violated;
(b) the lawyer’s mental state;
(c) the potential or actual injury caused by the lawyer’s misconduct; and
(d) the existence of aggravating or mitigating factors.
The Duty Violated
23. Ms. Woodhouse’s violation of Rules 1.7(a) (conflict of interest) implicates ABA
Standard 4.3, “Failure to Avoid Conflicts of Interest,” which provides:
Absent aggravating or mitigating circumstances, upon application of the factors set out in
Standard 3.0, the following sanctions are generally appropriate in cases involving con-
flicts of interest:
4.31 Disbarment is generally appropriate when a lawyer, without the informed consent
of client(s):
10
4.32
4.33
4.34
24,
(a) engages in representation of a client knowing that the lawyer’s interests
are adverse to the client’s with the intent to benefit the lawyer or another,
and causes serious or potentially serious injury to the client; or
(b) — simultaneously represents clients that the lawyer knows have adverse in-
terests with intent to benefit the lawyer or another, and causes serious or
potentially serious injury to a client; or
(c) represents a client in a matter substantially related to a matter in which the
interests of a present or former client are materially adverse, and knowing-
ly uses information relating to the representation of a client with the intent
to benefit the lawyer or another, and causes serious or potentially serious
injury to a client.
Suspension is generally appropriate when a lawyer knows of a conflict of interest
and does not fully disclose to a client the possible effect of that conflict, and caus-
es injury or potential injury to a client.
Reprimand [i.e., “public censure” under Rule 9(a)(3), W.R.Disc.P.] is generally
appropriate when a lawyer is negligent in determining whether the representation
of a client may be materially affected by the lawyer’s own interests, or whether
the representation will adversely affect another client, and causes injury or poten-
tial injury to a client.
Admonition [i.e., “private reprimand” under Rule 9(a)(4), W.R.Disc.P.] is gener-
ally appropriate when a lawyer engages in an isolated instance of negligence in
determining whether the representation of a client may be materially affected by
the lawyer’s own interests, or whether the representation will adversely affect an-
other client, and causes little or no actual or potential injury to a client.
Applying ABA Standard 4.3 to the evidence and testimony presented at the hear-
ing, the Panel finds that the presumptive sanction for Ms. Woodhouse’s violation of Rule 1.7 is a
public censure. The Panel finds that Ms. Woodhouse was negligent in determining whether the
representation of Ninja Playground and Ninja Playground Athletics in a claim against WyO Nin-
ja was a conflict of interest. Further the Panel finds that Ms. Woodhouse’s negligent actions
caused injury to a party in the form of increased legal costs and increased legal proceedings.
25.
Ms. Woodhouse’s violation of Rule 3.1(a) (meritorious claims and contentions)
falls under ABA Standard 6.2:
11
6.2
Abuse of the Legal Process
Absent ageravating or mitigating circumstances, upon application of the fac-
tors set out in Standard 3.0, the following sanctions are generally appropriate in
cases involving failure to expedite litigation or bring a meritorious claim, or fail-
ure to obey any obligation under the rules of the tribunal except for an open re-
fusal based on an assertion that no valid obligation exists:
6.21
6.22
6.23
6.24
26.
27.
Disbarment is generally appropriate when a lawyer knowingly violates a
court order or a rule with the intent to obtain a benefit for the lawyer or an-
other, and causes serious or potentially serious injury to a party or causes se-
rious or potentially serious interference with a legal proceeding.
Suspension is generally appropriate when a lawyer knows that he or she is
violating a court order or rule, and causes injury or potential injury to a cli-
ent or a party, or causes interference or potential interference with a legal
proceeding.
Reprimand [i.e., “public censure” under Rule 9(a){3), W.R.Disc.P.] is
generally appropriate when a lawyer negligently fails to comply with a court
order or rule, and causes injury or potential injury to a client or other party,
or causes interference or potential interference with a legal proceeding.
Admonition [i.e., “private reprimand” under Rule 9(a)(4), W.R.Disc.P.] is
generally appropriate when a lawyer engages in an isolated instance of negli-
gence in complying with a court order or rule, and causes little or no actual or
potential injury to a party, or causes little or no actual or potential interfer-
ence with a legal proceeding.
Applying ABA Standard 6.2 to the evidence and testimony presented at the hear-
ing, the Panel finds that the presumptive sanction for Ms. Woodhouse’s violation of Rule 3.1(a)
is a public censure. The Panel finds that Ms. Woodhouse negligently failed to comply with Rule
23.1, W.R.Civ.P., in attempting to bring a derivative action as a direct action. Further the Panel
finds that Ms. Woodhouse’s negligent actions caused injury to a party in the form of increased
legal costs and increased legal proceedings.
The Lawyer’s Mental State
The preamble to the ABA Standards for Imposing Lawyer Sanctions (the “ABA
Standards”) includes the following discussion regarding mental state:
12
The mental states used in this model are defined as follows. The most culpable
mental state is that of intent, when the lawyer acts with the conscious objective or
purpose to accomplish a particular result. The next most culpable mental state is
that of knowledge, when the lawyer acts with conscious awareness of the nature
or attendant circumstances of his or her conduct both without the conscious objec-
tive or purpose to accomplish a particular result. The least culpable mental state is
negligence, when a lawyer fails to be aware of a substantial risk that circumstanc-
es exist or that a result will follow, which failure is a deviation of a care that a
reasonable lawyer would exercise in the situation.
28. The Panel finds that Ms. Woodhouse acted negligently in failing to comply with
Rules 1.7 and 3.1(a).
The Potential or Actual Injury Caused by the Lawyer’s Misconduct
29. Under the ABA Standards, “injury” is defined as “harm to a client, the public, the
legal system, or the profession which results from a lawyer’s misconduct. The level of injury can
range from ‘serious’ injury to ‘little or no’ injury; a reference to ‘injury’ alone indicates any lev-
el of injury greater than ‘little or no’ injury.” “Potential injury” is defined as “harm to a client,
the public, the legal system or the profession that is reasonably foreseeable at the time of the
lawyer’s misconduct, and which, but for some intervening factor or event, would probably have
resulted from the lawyer’s misconduct.”
30. The Panel finds, and Ms. Woodhouse herself testified that, her conduct caused
actual injury to Mr. and Mrs. Waszkiewicz in the form of substantial and significant increased
legal costs and increased legal proceedings. (*GW testimony: admit substantial amount of
money in legal fees and substantial amount of the Court’s time. She also admits costs were sig-
nificant. P. 17/lines 6-19)
Agegravating and Mitigating Factors
31. ABA Standard 9.0, entitled “Aggravation and Mitigation,” provides as follows:
9.1 Generally
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After misconduct has been established, aggravating and mitigating circumstances may be
considered in deciding what sanction to impose.
9.2. Aggravation
9.21
9.22
Definition. Aggravation or aggravating circumstances are any considerations or
factors that may justify an increase in the degree of discipline to be imposed.
Factors which may be considered in aggravation. Aggravating factors include:
(a) prior disciplinary offenses;
(b) dishonest or selfish motive;
(c) a pattern of misconduct;
(d) multiple offenses;
(e) bad faith obstruction of the disciplinary proceeding by intentionally failing to
comply with rules or orders of the disciplinary agency;
(f) submission of false evidence, false statements, or other deceptive practices during
the disciplinary process;
(g) refusal to acknowledge wrongful nature of conduct;
(h) vulnerability of the victim;
(i) substantial experience in the practice of law;
(j} indifference in making restitution; and
(k) illegal conduct, including that involving the use of controlled substances.
9.3. Mitigation
9.31
9.32
Definition. Mitigation or mitigating circumstances are any considerations or fac-
tors that may justify a reduction in the degree of discipline to be imposed.
Factors which may be considered in mitigation. Mitigating factors include:
(a) absence of a prior disciplinary record;
(b) absence of a dishonest or selfish motive;
(c) personal or emotional problems;
(d) timely good faith effort to make restitution or to rectify consequences of miscon-
duct;
(e) fuli and free disclosure of disciplinary board or cooperative attitude toward pro-
ceedings;
(f} inexperience in the practice of law;
(g) character or reputation;
(h) physical disability;
(i) mental disability or chemical dependency including alcoholism or drug abuse
when:
(1) there is medical evidence that the respondent is affected by a chemical de-
pendency or mental disability;
(2) the chemical dependency or mental disability caused the misconduct;
(3) the respondent’s recovery from the chemical dependency or mental disability
is demonstrated by a meaningful and sustained period of successful rehabilita-
tion; and
(4) the recovery arrested the misconduct and recurrence of that misconduct is un-
likely.
(j) delay in disciplinary proceedings;
(k) imposition of other penalties or sanctions;
(1) remorse; and
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(m) remoteness of prior offenses
9.4 Factors Which Are Neither Aggravating nor Mitigating
The following factors should not be considered as either aggravating nor mitigating:
(a) forced or compelled restitution;
(b) agreeing to the client’s demand for certain improper behavior or result;
(c) withdrawal of complaint against the lawyer;
(d) resignation prior to completion of disciplinary proceedings;
(e) complainant’s recommendation as to sanction; and
(f) failure of injured client to complain.
32. The Panel notes that Ms. Woodhouse reimbursed Mr. and Ms. Waszkiewicz for
legal fees incurred in the underlying litigation in the amount of $31,784.17.
33. The Panel finds aggravating factors are multiple offenses and substantial experi-
ence in the practice law. The Panel further finds there are significant mitigating factors including
(1) absence of a prior disciplinary record; (2) absence of a dishonest or selfish motive; (3) timely
good faith effort to make restitution in the form of a substantial reimbursement of Complainants’
attorney’s fees incurred in defending the underlying Jawsuit; (4) full and free disclosure to Bar
Counsel; (5) remorse and (6) Respondent’s good character and reputation.
34, In consideration of the evidence presented, the testimony given and the admis-
sions of Ms. Woodhouse there is clear and convincing evidence of misconduct in the violation of
Rule 1.7, Additionally, the Panel notes the presence of significant mitigating factors present in
the case. Together, the evidence, testimony and mitigating factors support the Panel finding that
a public censure is the appropriate sanction in this case for the violation of Rule 1.7.
35. Likewise, in consideration of the evidence presented, the testimony given and the
admissions of Ms, Woodhouse there is clear and convincing evidence of misconduct in the viola-
tion of Rule 3.1(a). Additionally, the Panel notes the presence of significant mitigating factors
present in the case. Together, the evidence, testimony and mitigating factors support the Panel
finding that a public censure is the appropriate sanction for the violation of Rule 3.1(a).
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Recommendation
In consideration of the foregoing findings of fact and conclusions of law, the Panel rec-
ommends as follows:
1. That Ms. Woodhouse receive a public censure for violations of Rule 1.7 and a
public censure for the violation of 3.1(a), W.R.Prof.Cond.
2. That Ms. Woodhouse be required to pay an administrative fee of $750.00 and be
required to reimburse the Wyoming State Bar for certified costs of this proceeding as provided in
Rule 25(e), W.R.Disc.P.
Dated this be day of May, 2022.
Debra J. Wendtlagd, Chair
Hearing Panel of the Board of Professional
Responsibility
Wyoming State Bar
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