Vol. 34, No. 4
From the Courts
Matters Resulting in Diversion
Matters Resulting In Diversion and Private Admonition Summaries
Editor’s Note: Articles describing Diversion Agreements and private admonitions as part of the Attorney Regulation System are published on a quarterly basis. These summaries are contributed by the Colorado Supreme Court Office of Regulation Counsel.
Diversion and Private
Background Information Regarding Diversion
Diversion is an alternative to discipline. See C.R.C.P. 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. Thereafter, ARC or some other entity must approve the agreement.
From November 19, 2004 through February 16, 2005, at the intake stage, Regulation Counsel entered into 10 Diversion Agreements involving 12 separate requests for investigation. ARC approved 5 Diversion Agreements. The PDJ approved 2 Diversion Agreements during this time frame. ARC did not issue any private admonitions during this time frame. The PDJ approved one private admonition involving 2 separate requests for investigation during this time frame.
Regulation Counsel reviews the following factors to determine if diversion is appropriate: (1) there is little likelihood that the attorney will harm the public during the period of participation; (2) Regulation Counsel can adequately supervise the conditions of diversion; and (3) the attorney is likely to benefit 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 C.R.C.P. 251.13(b). Other factors Regulation Counsel considers may preclude Regulation Counsel from agreeing to diversion. See C.R.C.P. 251.13(b).
The purpose of a Diversion Agreement is to educate and rehabilitate the attorney so that the attorney does not engage in such misconduct in the future. Furthermore, the Diversion Agreement also 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, then one of the conditions of diversion may be a law office management audit and/or practice monitor. The time period for a Diversion Agreement is generally no less than one year nor greater than two years.
Types of Misconduct
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, which are conducted by attorneys from the Office of Attorney Regulation Counsel. An attorney also 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; attend CLE courses; and any other conditions that may be 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 C.R.C.P. 251.33(d). If Regulation Counsel has reason to believe that the attorney has breached the Diversion Agreement, then Regulation Counsel must follow the steps provided in C.R.C.P 251.13 before an agreement can be revoked.
The types of misconduct resulting in diversion for the time period described above generally involve the following: lack of competence implicating Colo. RPC 1.1; an attorney’s neglect of a matter and/or failure to communicate, implicating Colo. RPC 1.3 and Colo. RPC 1.4, where the client is not harmed or restitution is paid to redress the harm or malpractice insurance exits; fee issues, implicating Colo. RPC 1.5; conflicts of interest, implicating Colo. RPC 1.7(b); communication with represented persons, implicating Colo. RPC 4.2; conduct that is prejudicial to the administration of justice, implicating Colo. RPC 8.4(d); trust account issues, implicating Colo. RPC 1.15; knowingly disobeying an obligation under the rules of a tribunal, implicating Colo. RPC 3.4(c); and criminal conduct, implicating Colo. RPC 8.4(b).
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 counseling, if necessary, to address the underlying problems of depression, alcoholism, or other mental health issues that may be affecting the attorney’s ability to practice law.
Random Samples of
— Complainant retained respondent for a $650 fee in an immigration matter. The complainant was eligible for special consideration to remain in the United States due to an earthquake and hardship in complainant’s country of citizenship. Respondent was to help complainant obtain "Temporary Protective Status," but sent the application to the wrong governmental office. After respondent became aware of the error, too much time had elapsed for the complainant to appeal the denial of the application. Respondent conferred no benefit upon the complainant. As part of the conditions of the Diversion Agreement, respondent must attend Ethics School and refund $650. The rule implicated is Colo. RPC 1.1.
Diligence and/or Failure to Communicate
— In early April 2003, client hired respondent for corporate work and provided respondent original documents. Respondent verbally agreed to perform client’s work for a $450 flat fee, which client paid. Even though respondent had not previously represented client or his corporation, respondent did not provide client any written fee disclosure regarding the basis or rate of fee. In mid April, respondent informed client that respondent was unable to complete the work because of computer problems. From April through June, client left numerous messages for respondent, but received no response or call back. When respondent failed to respond to client’s calls, client hired and paid another firm to perform the work for which client had paid respondent. In July, client sent a certified letter to respondent requesting a refund and the return of client’s documents. The letter was returned to client as unclaimed. Thereafter, client made periodic calls to respondent but got no response. On a weekend in January 2004, client encountered respondent in a local store. When client asked about client’s documents and retainer, Respondent asked client to call him the following Monday. Client did so, but respondent did not return his calls. In early April 2004, client’s attorney wrote to respondent to again request the return of client’s original documents and a refund of client’s retainer. Respondent admits he received this letter and did not respond to it. In July 2004, client filed a request for investigation. In August 2004, respondent was asked to respond to client’s request, to return client’s original documents, and to refund any unearned portion of client’s retainer. Over the weekend of September 11, 2004, respondent met with client to return client’s documents and refund the entire $450. As part of the conditions of the Diversion Agreement, respondent must attend Ethics School and Trust Account School. The rules implicated are Colo. RPC 1.3, 1.4 and Colo. RPC 1.5(b).
— On November 2, 2002, client hired respondent’s firm for representation in client’s pending divorce case. Throughout the firm’s representation, client received monthly billing statements of fees and costs incurred. In August 2003, respondent decided to leave his firm and begin work as a solo practitioner. Client elected to have respondent complete his case. On September 5, 2003, client signed a new fee agreement with respondent and paid a $2,000 retainer. Respondent’s written fee agreement provided that respondent would supply monthly billing statements to client. Respondent sent client a billing statement for September and October 2003, but then failed to provide client any billing statements, even though client requested billing information on several occasions. Client’s final orders hearing was held in April 2004. When client asked the amount of fees owed, respondent told client his bill was about $1,500. Respondent subsequently provided a final billing statement with an outstanding balance of $3,240.75. Client disputed respondent’s final bill and filed a small claims court action. On November 17, 2004, the court ruled that client did not have to pay the outstanding fees claimed by respondent. Respondent admits he failed to provide client any fee information from November 2003 until April 2004, despite specific requests from client. As part of the conditions of the Diversion Agreement, the respondent must attend Ethics School. The rules implicated are Colo. RPC 1.4(a) and Colo. RPC 1.15(b).
— The complainant retained respondent to represent her for personal injuries resulting from a motorcycle accident. The health insurance carrier gave notice, through its agent, that it was making a subrogation claim for medical bills. An issue arose as to whether the client’s motorcycle liability carrier owed the client PIP benefits. When the personal injury case settled, respondent’s paralegal notified the client and the subrogation agent that they would hold the subrogation funds in respondent’s trust account. The subrogation agent rejected the offer and insisted that it hold the subrogation funds in escrow until the PIP claim was resolved. After several months, the subrogation agent called respondent’s paralegal about the status of the PIP claim. The paralegal did not return the phone calls. The subrogation agent then left a message for respondent’s paralegal that unless a call was returned, the agent would release the subrogation funds to the health insurance provider. The paralegal did not return the phone call, and did not inform respondent as to the status of the case. The subrogation agent then released the funds to the health insurance carrier. Respondent was unaware of what transpired with the subrogation funds, and did not keep his client informed as to the status of the case. Respondent did not make reasonable efforts to supervise the paralegal. As part of the conditions of the Diversion Agreement, respondent must attend Ethics School and obtain a practice audit for supervision of paralegals. The rules implicated are Colo. RPC 1.4(a), Colo. RPC 1.4(b), and Colo. RPC 5.3(b).
— Respondent was retained by a client to file a bankruptcy. At the time he was retained, respondent quoted a flat fee of $700, which the client understood to be the fee for the entire bankruptcy matter. Respondent did not communicate the basis or rate of his fee to the client in writing. The client paid the fee and provided respondent with all necessary financial documents. The client understood respondent would prepare and file the bankruptcy petition promptly. Respondent failed to communicate with the client for several months thereafter, and failed to return telephone calls from the client. Respondent also failed to file the client’s bankruptcy. When the client met with respondent approximately three months later, respondent informed the client he had not filed the bankruptcy petition and that the client was not eligible for a bankruptcy. Respondent returned the client’s paperwork but refused to refund any of the retainer, claiming he had performed sufficient work in evaluating the client’s eligibility for a bankruptcy to earn the entire amount. As part of the conditions of the Diversion Agreement, respondent must attend Ethics School and refund the $700 retainer to the client within thirty days. The rules implicated are Colo. RPC 1.4(a), Colo. RPC 1.4(b), Colo. RPC 1.5(b), and Colo. RPC 1.16(d).
— Respondent undertook representation of a client without a clear understanding of what he was being hired to do. Respondent did not enter into a written fee agreement with the client, did not have a trust account into which he could deposit the cash retainer, and did no work on the client’s behalf. The entire retainer was ultimately refunded. Respondent sent a letter to the opposing party in a post-decree domestic case despite the fact that counsel represented the opposing party. Respondent felt this was appropriate because the subject matter of his letter dealt with possible ramifications to the opposing party in a foreign jurisdiction, and due to the fact that the opposing party’s lawyer was not admitted in those jurisdictions. Respondent was not admitted in those jurisdictions either, and his letter sought to persuade the opposing party to consent to jurisdiction in Colorado. Additionally, respondent’s letter conveyed a threat to notify the opposing party’s military superiors of the opposing party’s failure to comply with financial obligations if he did not consent to jurisdiction in Colorado. Such a report to the opposing party’s military superiors could have resulted in criminal or disciplinary action against the opposing party. As part of the conditions of the Diversion Agreement, respondent must attend Ethics School and Trust Account School, and conduct a law office management audit by an experienced attorney approved by the Office of Attorney Regulation Counsel. The rules implicated are Colo. RPC 1.3, Colo. RPC 1.5(b), Colo. RPC 1.5(f), Colo. RPC 1.15(a)–(h), Colo. RPC 4.2, and Colo. RPC 4.5(a).
Conflict of Interest
— Respondent was hired by one of two co-personal representatives of an estate to review a settlement agreement and confirm the estate inventory. Later, the client had a dispute with respondent and fired respondent. Respondent was then hired by the other personal representative and filed an action to remove his former client as the co-personal representative. Respondent later withdrew as attorney for the personal representative. As part of the conditions of the Diversion Agreement, respondent must attend Ethics School. The rule implicated is Colo. RPC 1.7(b).
— Respondent was hired by two franchisees to handle a dispute with the franchiser. There was no written fee agreement nor was there a written communication with the clients to confirm the basis or rate of the fee. After being hired, the clients referred another client to him. He wrote a note thanking them for the referral and told them their referrals earn free credits for services. When a bill was later sent, there was a credit on the bill for the referral. As part of the conditions of the Diversion Agreement, respondent must attend Ethics School. The rule implicated is Colo. RPC 1.5(b).
— Respondent agreed to substitute as counsel for a client in a civil matter pending in district court less than two months before the case was scheduled to go to trial. Respondent failed to memorialize the basis or rate of his fee in writing at or within a reasonable time after the client retained him. Respondent also failed to thoroughly review the file or a previously-filed trial management order before submitting a new trial management order to opposing parties and the court for approval. The new trial management order did not specify all of the damages sought by the client. At the time of trial, it became clear that respondent would be seeking damages on behalf of his client beyond those specified in the trial management order. The court gave the client the option of proceeding to trial based on the trial management order as written, or having the trial date continued and being allowed to submit an amended trial management order. The client chose the continuance, but was ultimately required to pay sanctions in the form of attorney fees and costs incurred by the other parties in preparing for the original trial date. Thereafter, respondent withdrew from representation because of a dispute with the client concerning the fees. The dispute resulted, at least in part, from respondent’s failure to memorialize the fee agreement in writing. Respondent refunded to the client all fees paid by the client to respondent. As part of the conditions of the Diversion Agreement, respondent must attend Ethics School. The rules implicated are Colo. RPC 1.5(b), Colo. RPC 1.1, and Colo. RPC (1.3).
— In the first matter, respondent was retained concerning a civil lawsuit. The fee agreement provided, inter alia, that (1) respondent owned the client’s file; (2) respondent would retain it after the close of the engagement; and (3) respondent would not turn over the file or make copies of it if the client had not paid its bill in full. Respondent received a retainer, but was unable to produce a deposit slip showing this deposit of this amount to his COLTAF account. Respondent also was not able to produce records of the deposit, a ledger, or other record-keeping system related to the monies held in trust for the client or trust account reconciliation records. Respondent did not send a draft complaint to his client, despite the passage of approximately six months and despite respondent’s promises that the draft was ready. Respondent refunded most of the retainer and provided an accounting.
In a second matter, respondent used a similar fee agreement. This fee agreement provided that: (1) respondent owned the client’s file; (2) the file remained the property of respondent after the engagement was completed; and (3) while a bill remained unpaid, respondent would not turn over the file or copies of it. This fee agreement also provided for the client to pay a non-refundable retainer. Despite the passage of several months, respondent did not provide any draft pleadings to his clients. As part of the conditions of the Diversion Agreement, respondent must attend Ethics School and Trust Account School and have a practice audit. The rules implicated are Colo. RPC 1.15(g), Colo. RPC 1.5(g), Colo. RPC 1.16(d), and Colo. RPC (1.3).
— Respondent’s bank reported two overdrafts on an attorney trust account belonging to respondent. Respondent is a youth group leader through her church. Respondent was scheduled to take a group of children to a retreat in the mountains and was to be paid $300 by the church. Respondent received the check and realized it was made payable to "Diocese" rather than to her. She went to the retreat and paid the $300 fee with a check from her attorney trust account. She expected to be reimbursed this amount from the church immediately, but the funds were not forthcoming from the church for approximately two weeks. This delay in reimbursement contributed to the overdrafts on respondent’s trust account. Respondent opened her trust account when she started her own law practice. During the time the account has been open, respondent kept earned fees in the account and paid those fees directly to her creditors. Respondent also estimated what her earned fees were and withdrew such funds from the trust account based on those estimates. However, respondent also failed to maintain ledgers and did not reconcile the account. As part of the conditions of the Diversion Agreement, respondent must attend Trust Account School and have financial monitoring. The rules implicated are Colo. RPC 1.15(a), Colo. RPC 1.15(g), and Colo. RPC 1.15(h).
Knowingly Disobey an Obligation
Under the Rules of a Tribunal
— Respondent violated Rule 45 of the Colorado Rules of Civil Procedure regarding issuance of subpoenas in sending subpoenas where no underlying case existed, no deposition was scheduled, and without providing notice to opposing counsel. In the first matter, respondent sent a letter and subpoena to a party seeking cell phone records when there was no underlying litigation. In the second matter, respondent sent a subpoena for school records to the records custodian with a deposition date that was not scheduled and advised the custodian could avoid attending the deposition by sending the records forty-eight hours in advance. Respondent did fax a subpoena to a notice to opposing counsel. As part of the conditions of the Diversion Agreement, respondent must attend Ethics School. The rules implicated are Colo. RPC 3.4(c) and Colo. RPC 8.4(d).
Communication with Person
Represented by Counsel
— In a domestic matter, respondent contacted the opposing party despite knowing the opposing party was represented by counsel. The opposing party reported the direct contact to his attorney and told his attorney that respondent had threatened to file federal criminal charges against him if a settlement could not be reached. As part of the conditions of the Diversion Agreement, respondent must attend Ethics School. The rules implicated are Colo. RPC 4.2 and Colo. RPC 4.5.
— On March 7, 2004, respondent was involved in an accident with several parked vehicles. It was determined that respondent had been drinking and appeared to be under the influence of alcohol at the time of and shortly after the accident. Respondent was transported to the hospital and advised of the Colorado express consent advisement, and initially consented to a blood test. At the time a nurse was going to take a blood sample, respondent stated that respondent was not driving and refused to consent to the nurse drawing a blood sample for testing. Respondent was arrested for driving while under the influence of alcohol. Respondent received a citation charging her with offenses related to the accident and driving while under the influence of alcohol. On June 23, 2004, pursuant to her plea of guilty, the court convicted respondent of driving while ability impaired and failing to drive in a single lane. The other charges were dismissed. Respondent was sentenced to twelve months of supervised probation, alcohol education and therapy, was ordered to complete useful public service, and to pay fines and costs associated with the case. In addition, respondent was ordered to pay restitution to the owners of the other vehicles damaged in the accident. Respondent reported her conviction to the Office of Attorney Regulation Counsel pursuant to Colorado Rule of Civil Procedure 251.20(b). At the request of the Office of Attorney Regulation Counsel, respondent was evaluated to determine if there are any substance abuse issues that interfere with her ability to practice law. The evaluator determined that respondent did not meet the criteria for a substance abuse or dependence disorder. This is respondent’s first alcohol-related offense. As part of the conditions of the Diversion Agreement, respondent must attend Ethics School. The rule implicated is Colo. RPC 8.4(b).
— Respondent was operating a motor vehicle while under the influence of alcohol. Respondent struck the rear of another vehicle and was cited for his driving conduct. Respondent failed voluntary roadside maneuvers and had a blood alcohol concentration of .173. This was respondent’s first alcohol related offense and there were no injuries in the collision. As part of the conditions of the Diversion Agreement, respondent must attend Ethics School, comply with sentence and comply with evaluation and counseling. The rule implicated is Colo. RPC 8.4(b).
Conduct that Adversely Reflects
On a Lawyer’s Fitness to Practice Law
Respondent represented a family of the decedent in a wrongful death claim arising out of a single car vehicular collision. Complainant was the criminal defense attorney who represented the driver-defendant in the criminal case arising out of the same single car vehicular collision. Respondent appeared at the courthouse on the same day of defendant’s first appearance, seeking to interview the defendant. When the criminal defense lawyer denied respondent’s request to interview his client, respondent became extremely vocal and belligerent toward the criminal defense lawyer and, at one point, impeded his egress from a room where a confrontation took place. Respondent also repeatedly advised that he was going to speak with the defendant. As part of the conditions of the Diversion Agreement, respondent must attend Ethics School. The rule implicated is Colo. RPC 8.4(h).
— The sole shareholder of the law firm was placed on disability-inactive status. Respondent became the de facto manager for the firm in his absence. Respondent allowed the disabled attorney’s name to appear on the law firm’s letterhead without designation of disability-inactive status and with no indication that he was not authorized to practice law. Respondent used such letterhead for professional correspondence. Additionally, the disabled attorney’s business cards were displayed at the reception area of the law office, his name continued to appear on office signs without designation or indication that he was not authorized to practice law, the disabled attorney’s name and biography appeared in the law firm’s listing in Martindale.com without designation of his disability-inactive status, and with no indication he was not authorized to practice law. Respondent participated in the use of such false or misleading communication to the public. Finally, the disabled attorney’s name appeared in the Denver Metropolitan Qwest Dex telephone directory and Yellow Pages without designation of disability-inactive status, with no indication he was not authorized to practice law. Again, respondent participated in the use of such false or misleading communication to the public. The rules implicated are Colo. RPC 7.1(a) and Colo. RPC 7.5(a).
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