06/30/2016

Disciplinary Case Summaries for Matters Resulting in Diversion and Private Admonition

 


Summaries of diversion agreements and private admonitions are published on a quarterly basis. They are contributed quarterly by the Colorado Supreme Court Office of Attorney Regulation.


 

 

Diversion is an alternative to discipline (see CRCP 251.13). Pursuant to the rule and depending on the stage of the proceeding, Attorney Regulation Counsel (Regulation Counsel), the Attorney Regulation Committee (ARC), the Presiding Disciplinary Judge (PDJ), the hearing board, or the Supreme Court may offer diversion as an alternative to discipline. For example, Regulation Counsel can offer a diversion agreement when the complaint is at the central intake level in the Office of Attorney Regulation Counsel (OARC). Thereafter, ARC or some other entity must approve the agreement.

From February 1, 2016 through April 30, 2016, at the intake stage, Regulation Counsel entered into three diversion agreements involving three separate requests for investigation. ARC approved nine diversion agreements involving 11 separate requests for investigation during this time frame. There were no diversion agreements submitted to the PDJ for approval. ARC issued five private admonitions involving five matters. The PDJ did not approve any private admonitions during this time frame.

Determining if Diversion Is Appropriate

Regulation Counsel reviews the following factors to determine whether diversion is appropriate:

1) the likelihood that the attorney will harm the public during the period of participation;

2) whether Regulation Counsel can adequately supervise the conditions of diversion; and

3) the likelihood of the attorney benefiting by participation in the program.

Regulation Counsel will consider diversion only if the presumptive range of discipline in the particular matter is likely to result in a public censure or less. However, if the attorney has been publicly disciplined in the last three years, the matter generally will not be diverted under the rule (see CRCP 251.13(b)). Other factors may preclude Regulation Counsel from agreeing to diversion (seeCRCP 251.13(b)).

Purpose of the Diversion Agreement

The purpose of a diversion agreement is to educate and rehabilitate the attorney so that he or she does not engage in such misconduct in the future. Furthermore, the diversion agreement may address some of the systemic problems an attorney may be having. For example, if an attorney engaged in minor misconduct (neglect), and the reason for such conduct was poor office management, one of the conditions of diversion may be a law office management audit and/or practice monitor. The time period for a diversion agreement generally is no less than one year and no greater than three years.

Conditions of the Diversion Agreement

The type of misconduct dictates the conditions of the diversion agreement. Although each diversion agreement is factually unique and different from other agreements, many times the requirements are similar. Generally, the attorney is required to attend ethics school and/or trust account school conducted by attorneys from OARC. An attorney may be required to fulfill any of the following conditions:

  • law office audit
  • practice monitor
  • financial audit
  • restitution
  • payment of costs
  • mental health evaluation and treatment
  • continuing legal education (CLE) courses
  • any other conditions that would be determined appropriate for the particular type of misconduct.

Note: The terms of a diversion agreement may not be detailed in this summary if the terms are generally included within diversion agreements.

After the attorney successfully completes the requirements of the diversion agreement, Regulation Counsel will close its file, and the matter will be expunged pursuant to CRCP 251.33(d). If Regulation Counsel has reason to believe the attorney has breached the diversion agreement, then Regulation Counsel must follow the steps provided in CRCP 251.13 before an agreement can be revoked.

Types of Misconduct

The types of misconduct resulting in diversion during February 1, 2016 through April 30, 2016 generally involved the following:

  • failure to communicate, implicating Colo. RPC 1.4
  • fee issues, implicating Colo. RPC 1.5
  • confidentiality of information, implicating Colo. RPC 1.6
  • conflict of interest, implicating Colo. RPC 1.7
  • trust account issues, implicating Colo. RPC 1.15 through 1.15E
  • declining or terminating representation, implicating Colo. RPC 1.16
  • failing to respect the rights of a third person, implicating Colo. RPC 4.4
  • restrictions on the practice of law, implicating Colo. RPC 5.4
  • unauthorized practice of law/multijurisdictional practice of law, implicating Colo. RPC 5.5
  • committing a criminal act, implicating Colo. RPC 8.4(b) and CRCP 251.5
  • conduct prejudicial to the administration of justice, implicating Colo. RPC 8.4(d).

Some cases resulted from personal problems the attorney was experiencing at the time of the misconduct. In those situations, the diversion agreements may include a requirement for a mental health evaluation and, if necessary, counseling to address the underlying problems of depression, alcoholism, or other mental health issues that may be affecting the attorney’s ability to practice law.

Diversion Agreements

Below are some diversion agreements that Regulation Counsel determined appropriate for specific types of misconduct during February 1, 2016 through April 30, 2016. The sample gives a general description of the misconduct, the Colorado Rule(s) of Professional Conduct implicated, and the corresponding conditions of the diversion agreement.

Professional Independence, Unauthorized Practice

  • When respondent opened a law firm, respondent gave minority ownership interests to the office manager and several family members. Respondent did not know about the prohibition of non-lawyer ownership at the time. The firm was not profitable and no dividends were ever paid. When respondent learned of the prohibition, the non-lawyer ownership interests were dissolved.

Rule Implicated: Colo. RPC 5.4.

Diversion Agreement: One-year diversion with conditions, including ethics school and payment of costs.

  • Respondent is domiciled in Colorado but is licensed in and practices law in another state. Respondent agreed to help a friend in his divorce by assisting him with some emails between the friend and his ex-wife. Respondent provided legal advice regarding Colorado law in emails sent to both husband and ex-wife, and offered to draft a settlement agreement for them.

Rules Implicated: Colo. RPC 5.5 and 1.7.

Diversion Agreement: One-year diversion with conditions, including ethics school and payment of costs.

Communication/Fee Issue

  • Respondent represented a client in filing a claim against an estate. The initial representation was for a flat fee; however, respondent did not provide the client with a written statement of the basis or rate of respondent’s fee. After the claim was filed and rejected by the estate, the client retained respondent to litigate the claim on an hourly basis. The parties entered into a fee agreement, and the client paid respondent a retainer. Based on respondent’s accounting of all work performed on the case, which was calculated at an hourly rate, respondent believed the retainer was earned at the time the client paid it, so respondent deposited it into the operating account rather than respondent’s trust account. Ultimately, respondent earned the funds and did not bill the client for any additional fees incurred. When the client terminated respondent and requested an accounting, respondent did not timely provide one.

Rules Implicated: Colo. RPC 1.4(a), 1.5(b), and 1.15A(b).

Diversion Agreement: One-year diversion with ethics school, trust account school, and costs.

  • Complainant contacted respondent’s organization about assisting complainant with issues complainant was having with the Department of Corrections. Respondent’s conduct led complainant to believe that respondent and respondent’s organization were providing legal services for complainant. Respondent did not communicate with complainant at certain times while assisting complainant. Respondent also did not return complainant’s file when complainant requested. Respondent returned documentation from the file to complainant following complainant’s filing of the request for investigation.

Rules Implicated: Colo. RPC 1.4 and 1.16(d).

Diversion Agreement: One-year diversion with ethics school and costs.

  • Respondent agreed to represent a client in efforts to secure survivor benefits under the spouse’s military retiree status. Respondent accepted a retainer and placed the funds in a trust account. Respondent communicated the basis and rate of fees to the client verbally when respondent was initially retained, but failed to provide the client with a written disclosure of the basis and rate of respondent’s fees. Respondent completed the client’s work and sent the client an invoice for services. The client advised respondent in writing that the client was disputing all but $500 of the charges. That same day, respondent transferred the client’s entire retainer to the operating account. After the client complained, respondent returned the disputed money to the trust account.

Rules Implicated: Colo. RPC 1.5(a) and 1.15A(c).

Diversion Agreement: One-year diversion agreement with mandatory referral to fee arbitration, ethics school, and costs.

  • Complainant retained respondent to assist in obtaining nonprofit status for complainant’s company. Respondent entered into an hourly fee agreement with complainant but switched to a flat fee during the representation. Written notice was not provided to complainant, and respondent only communicated with complainant once over the next several months. Complainant terminated the representation, but respondent neither disbursed nor returned to complainant money that still was held in trust.

Rules Implicated: Colo. RPC 1.4, 1.5(b), and 1.16(d).

Diversion Agreement: One-year diversion agreement with ethics school, trust account school, costs, and refund of any monies remaining in trust to complainant.

Confidentiality

  • Respondent represented a developmentally disabled client. After respondent was terminated, respondent petitioned the court to appoint a guardian ad litem for the former client, believing that the client’s choice of subsequent counsel and other decisions were the result of undue influence. Respondent’s petition included more confidential information than was reasonably necessary.

Rule Implicated: Colo. RPC 1.6.

Diversion Agreement: Eighteen-month diversion with conditions, including ethics school, CLE, and costs.

Criminal Conduct

  • Respondent pleaded guilty to driving while ability impaired. Respondent was cooperative with authorities but refused to submit to a chemical test.

Rules Implicated: Colo. RPC 8.4(b) and CRCP 251.5(b).

Diversion Agreement: One-year diversion with conditions, including ethics school and costs.

Conduct Prejudicial to the Administration of Justice

  • Respondent represented a woman in a divorce case. Respondent improperly disclosed confidential Parental Responsibility Evaluations to the district attorney prosecuting client’s husband for protection order violations.

Rule Implicated: Colo. RPC 8.4(d).

Diversion Agreement: Three-year diversion with conditions, including ethics school, costs, and eight hours of CLE.

  • Respondent precipitated a verbal altercation with opposing counsel at a mediation. Opposing counsel subsequently obtained a civil protective order against respondent, and respondent also later pleaded guilty to two counts of disorderly conduct.

Rules Implicated: Colo. RPC 4.4(a), and 8.4(d) and (h).

Diversion Agreement: Two-year diversion with conditions, in­cluding ethics school, costs, and compliance with the terms of both the civil protective order and the criminal sentence.