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Spokane City Councilwoman Karen Stratton, husband file for bankruptcy protection

UPDATED: Wed., Feb. 20, 2019

Spokane City Councilwoman Karen Stratton applauds contractors for their work during an opening ceremony for the Monroe Street reconstruction in September 2018. Stratton and her husband filed for bankruptcy protection in federal court last week, citing legal malpractice claims against his law firm. (Dan Pelle / The Spokesman-Review)
Spokane City Councilwoman Karen Stratton applauds contractors for their work during an opening ceremony for the Monroe Street reconstruction in September 2018. Stratton and her husband filed for bankruptcy protection in federal court last week, citing legal malpractice claims against his law firm. (Dan Pelle / The Spokesman-Review)

Spokane City Councilwoman Karen Stratton and her husband, a former president of the Park Board, have filed for bankruptcy protection, citing debts from legal malpractice claims tied to his law firm.

“Because of my position, I need to be transparent,” Stratton said in an interview. “People expect that, and we expect it of ourselves.”

Stratton and Chris Wright, her husband, filed paperwork Thursday in U.S. Bankruptcy Court for the Eastern District of Washington. They list owing more than $1 million to creditors, including student loans, credit cards and some other forms of debt. They filed for Chapter 7 bankruptcy, which puts the filers’ assets in the hands of a trustee, who then liquidates those assets to pay back creditors.

Wright said the reason for the filing was not because of extravagant spending, but because of legal claims tied to his single-person law firm. In September, the firm Centurion Construction filed a legal malpractice lawsuit against Wright, alleging he failed to timely respond to claims in a breach of contract lawsuit Wright had filed on the company’s behalf. Centurion alleges it lost $354,000 because Wright did not answer certain claims in court, leading to a default judgment against Centurion in a case that involved construction of a home in Liberty Lake.

A previous malpractice lawsuit filed by the banking firm Fidelity National resulted in another settlement totaling just under $351,000. In that case, Fidelity alleged Wright had failed to timely file documents related to a real estate sale case. Wright told Fidelity he’d been negligent and cited his involvement as president of the Spokane Park Board as a reason for the delay, according to court documents.

Wright said he didn’t want to discuss specifics of the cases because one is still active, but said he’d been stretched thin with other life commitments.

“I did allow myself to get distracted with the Park Board,” said Wright, who served as president of the board from March 2015 until the end of 2017, covering roughly the same time period as the alleged malpractice in the lawsuits. “But that’s not an excuse.”

According to the U.S. Judiciary Data and Analysis Office, which tracks trends in court filings, 8.7 million Chapter 7 bankruptcy claims were filed in the United States between 2005 and 2017.

The couple said their debts are not tied to the marijuana farm near Spangle they operate with other investors, and that property is exempt from asset liquidation. Stratton also said the couple hadn’t been living outside their means.

“We’re still living in the first house we bought,” said Stratton, who was first appointed to the City Council as a representative of northwest Spokane in August 2014. She won election to the seat two years later.

Stratton plan to file for re-election for her council seat this year. Stratton said she’s notifying campaign supporters of the filing and doesn’t believe it will be a distraction in the campaign.

“I don’t think it has anything to do with how I represent my district,” Stratton said. “If anything, it gives me another layer of understanding for the things that people go through.”

Stratton said she informed other members of the Spokane City Council of the bankruptcy filing in an email Monday night.

Stratton has drawn one challenger for her seat on the City Council, according to filings with the state’s Public Disclosure Commission. Christopher Savage, a member of the city’s Salary Review Commission, filed for the seat Jan. 30.

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