State of Washington

Ethics Advisory Committee

STATE OF WASHINGON

ETHICS OPINION 14-06

Question

May a full-time judge serve as a real estate managing broker for a spouse’s closely-held property management corporation while the spouse recovers from life-threatening injuries suffered in a car accident?

The judge’s spouse was recently and severely injured in a car accident and, in addition to massive broken bones and a failed respiratory system, suffered brain injuries that may be long-standing. The spouse operated a property management corporation solely owned by the spouse, and held and managed investments of the judge, the spouse, and members of the judge’s family.

Under state law, a property management company must have a managing broker. The judge’s spouse, who remains hospitalized, is currently listed as the managing broker for the closely-held property management corporation. Because of the extent of the spouse’s injuries, there would be no option for the judge but to close down the spouse’s closely-managed property management corporation unless the judge were designated as the managing broker for the business.

The spouse’s closely-held property management corporation has five employees: an office manager, an employee who schedules maintenance, another who does the maintenance, one who is responsible for interacting with the owners and tenants to lease out properties, and a bookkeeper. The judge would supervise such employees but would not otherwise perform the duties assigned to them.

The judge’s spouse is not expected to fully recover from the brain injuries suffered in the car accident for at least two years, after which the judge would withdraw as a managing broker in favor of the spouse or encourage the spouse to sell the business, which is separately owned by the spouse.

There is an exception under state law for a managing broker to be qualified by experience and education. WAC 308-124A-713. The judge likely would qualify as a managing broker under that exception.

Answer

CJC Canon 3 directs a judicial officer to conduct the judge’s personal and extrajudicial activities to minimize the risk of conflict with the obligations of judicial office. CJC 3.11 addresses financial, business, or remunerative activities in which judicial officers may and may not participate. CJC 3.11(B) restricts a judicial officer’s service in business activities except in two limited situations. The first exception is that a judge may manage or participate in a business closely held by the judge or members of the judge’s family, but only if doing so will not interfere with the proper performance of judicial duties, lead to frequent disqualification of the judge, involve the judge in frequent transactions before the court on which the judicial officer serves or result in violation of other provisions of the Code. CJC 3.11(B)(1) and (C).

Based on CJC 3.11(B)(1), the judicial officer may serve as a real estate managing broker for the spouse’s closely-held management corporation while the spouse recovers from the life-threatening injuries suffered in a car accident. The judicial officer should periodically examine the nature of that service to ensure it meets the conditions in CJC 3.11(C).

Opinion 14-06

08/21/2014