Vol. 35, No. 4
From the Courts
Matters Resulting in Diversion and Private Admonition
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 Admonition Summaries
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 ("OARC"). Thereafter, ARC or some other entity must approve the agreement.
From November 17, 2005 through February 20, 2005, at the intake stage, Regulation Counsel entered into 5 Diversion Agreements involving 10 requests for investigation. ARC entered into 3 Diversion Agreements involving 5 requests for investigation during this time frame. The PDJ approved one Diversion Agreement involving one request for investigation during this time frame. ARC issued 3 private admonitions involving 3 requests for investigation during this time frame. The PDJ did not approve any private admonitions 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 that 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: an attorney’s 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 and Colo. RPC 1.8(a); trust account issues, implicating Colo. RPC 1.15; discovery issues, implicating Colo. RPC 3.4(d) and Colo. RPC 8.4(d); 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, 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.
Random Samples of Diversion Agreements
— The respondent failed to properly supervise her paralegal. As a result, there was an error on an immigration form prepared for one of the respondent’s clients. The respondent signed and submitted the form without reviewing her paralegal’s work to make sure it was accurate. The respondent admitted that she generally does not review each immigration form after it is completed by a paralegal and before it is filed with the Immigration & Naturalization Service. Rather, due to the volume of forms completed by her office, the respondent relied on her paralegals to accurately complete the forms. As part of the conditions of the Diversion Agreement, the respondent shall attend Ethics School. The rules implicated are Colo. RPC 1.1 and Colo. RPC 5.3(a).
— The respondent was hired for a criminal matter in which the client was charged with sexual assault. The client was found guilty after a jury trial but was not sentenced due to a hearing for ineffective assistance of counsel. During the hearing on client’s motion for ineffective assistance of counsel, the judge made specific findings and found that the respondent provided ineffective assistance of counsel and provided "an incredibly bad performance or bad representation." The court found that the respondent failed to properly advise his client of the possible penalties and did not properly investigate the case. The court made a finding that the respondent misinformed his client about certain counts he was facing and that the respondent was not forthright with the court when he requested a continuance in an attempt to delay the trial. The respondent also failed to file any pretrial motions or in any way challenge the constitutionality of the statement his client made during a custodial interrogation. The court found, by the preponderance of the evidence, that the performance of the respondent was so deficient that it fell below the level of reasonably competent assistance expected of counsel in the Denver Metro area, and entered an order finding the respondent’s performance prejudiced his client and that his client received ineffective assistance of counsel. The court then granted a new trial to the client. The client had paid the respondent approximately $15,000 for the representation. As part of the conditions of the Diversion Agreement, the respondent shall attend Ethics School and participate in fee arbitration. The rules implicated are Colo. RPC 1.1, Colo. RPC 1.3, and Colo. RPC 1.5(a).
— The respondent initially was retained to represent client in a post-decree matter commencing in April 2004. The respondent set a hearing for mid-November 2004, on a contempt motion he filed on behalf of client. Between commencement of the representation in April 2004 and November 15, 2004, the respondent worked on the case and attempted to negotiate a resolution. However, on November 15, 2004, no hearing was held even though it had been scheduled. The respondent did not adequately explain to the client the reason for failing to proceed with the contempt hearing on the date. After the November 15, 2004 scheduled hearing date and until May 2005, the respondent was unable to demonstrate that any work was performed on the matter or that the hearing was rescheduled. The respondent also failed to maintain proper communication with the client during that period. In approximately May or June 2005, the respondent began working with a new law firm as an associate and continued to represent the client at the new firm. The respondent began working on the case again in May 2005, and was able to reach a stipulation that client agreed to enter with the opposing party. In July 2005, the respondent withdrew from the matter.
The respondent received approximately $3,000 from client and claims there was an amount due and owing to the respondent before commencement as an associate at the respondent’s new position of employment commencing in May or June 2005. Further, the new law firm sent an invoice to the client in September 2005, advising a total amount due and owing of $4,748.20. The respondent agrees he will not pursue collection of any amount owed prior to his employment with the new law firm and agrees to indemnify the client in the event the law firm where the respondent subsequently became employed pursues collection of its invoice.
In another matter, the respondent and his law firm were retained to represent a client in post-decree matters and received a $2,000 retainer. Despite a provision in the fee agreement that fees would be "determined monthly as the services are rendered," the respondent did not provide monthly billing statements to the client for the first several months of the representation. The client requested billing statements in May and June 2005. The respondent asserts he sent one to the client at that time but she asserts she never received it. Although the respondent asserts that billing records were kept electronically during this time, the respondent could not produce billing statements or billing information. Additionally, the fee agreement signed by the client included the following language: "Hourly rates double for work on Saturday, Sunday, holidays, and between 7:00 p.m. and 8:00 a.m." No other language is contained in the fee agreement about this provision, thereby creating the impression that this provision is entirely discretionary on the part of the lawyer. On September 1, 2005, the respondent sent an invoice to the client stating that the client owed an additional $2,818.20 for services rendered in connection with the representation. The respondent agrees not to pursue collection of the $2,818.20 unpaid balance, and agrees to indemnify the client in the event the client is pursued for collection of that amount from the respondent’s previous firms. As part of the conditions of the Diversion Agreement, the respondent shall attend Ethics School and agree not to pursue collection of monies from complainants and indemnify them from future collection actions by the respondent’s former law firm. The rules implicated are Colo. RPC 1.4, Colo. RPC 1.5, and Colo. RPC 1.15(g)(5).
Fees/Trust Account Issues
— The respondent, in a post-decree matter, mistakenly caused the client’s retainer to be deposited in his office account rather than his trust account. The respondent also placed cash and jewelry owned by his client in his safe. After the retainer was consumed, the respondent used cash held in his safe to pay himself for services he provided. The respondent did not provide regular accountings to the client. The respondent failed to advise the client that the hourly rate stated in the prior written fee agreement had increased. The client terminated the respondent’s services. As part of the conditions of the Diversion Agreement, the respondent shall attend Ethics School, Trust Account School, and participate in fee arbitration. The rules implicated are Colo. RPC 1.5(a), Colo. RPC 1.15(a) and (c), and Colo. RPC 1.4(a) and (b).
— The respondent represented a client in a civil matter, which representation included attending a hearing to consider an award of attorney fees in favor of the client. The respondent had been practicing law for approximately one year at the time he started working on the client’s case. His work was supervised by a more experienced lawyer at all times. The respondent sent a letter to his client reciting the terms of a "modified contingent fee basis" and a proposed written fee agreement. The client declined to sign the agreement. Nevertheless, the respondent and the law firm proceeded with the representation at the attorney fee hearing on that basis. The respondent asserts that the supervising lawyer at the law firm negotiated this fee arrangement with the client and directed the respondent to draft the letter to the client. The respondent asserts that he did not have authority to negotiate fee arrangements with clients while he worked at the firm. The respondent (and his firm) aggressively advocated the interests of the client, as well as the firm’s interests in recovering an award of attorney fees. In the time leading up to the attorney fees hearing, the opposing counsel noted his intent to call respondent as a witness and cross-examine him about the attorney fees. The respondent objected to being called as a witness at the attorney’s fee hearing, and cited Colo. RPC 3.7. The respondent did not discuss the exception contained in Rule 3.7 that specifically allows for an attorney to be a witness "where the testimony relates to the nature and value of legal services rendered in the case." At the time of the hearing on attorney fees, the respondent abandoned this position and confessed the motion, making himself available to testify about the attorney fees claimed in the case. In ruling on the award of attorney fees, the court found that the respondent "knew or should have known that his conduct was vexatious and otherwise improper." The court also found that the respondent and his law firm entered into an improper contingent fee arrangement with the client as it pertained to the pursuit and collection of attorney fees, in violation of Colo. RPC 1.5(c) and Colo. RPC 1.7(b). The court found that the respondent’s conduct in asserting the position in reliance on Colo. RPC 3.7 without referring to the exception in the rule was "disingenuous" and "groundless." The court imposed sanctions in the amount of $11,546.88 against the respondent and his law firm (joint and several). Additionally, the law firm was ordered to pay $1,000 to the clerk of court to remedy harm caused to the "People of Colorado." These sanctions were upheld on appeal. The law firm, through the supervisory lawyer, entered into an agreement with opposing counsel to pay the $11,546.88 plus moderate interest in installments. As part of the conditions of the Diversion Agreement, the respondent shall attend Ethics School. The rules implicated are Colo. RPC 1.5(c), Colo. RPC 1.7(b), Colo. RPC 3.1, and Colo. RPC 8.4(d).
Disobeying an Obligation Under the Rules of a Tribunal
— In the respondent’s personal tax court proceedings, the Tax Court found that the respondent and the respondent’s spouse failed to comply with the Tax Court’s orders; the court found the conduct resulted in delay and wasted the Commissioner’s and the Tax Court’s time. The Tenth Circuit Court of Appeals affirmed the Tax Court’s findings. As part of the conditions of the Diversion Agreement, the respondent must attend Ethics School. The rules implicated are Colo. RPC 3.4(c) and Colo. RPC 8.4(d).
— The respondent acknowledged when he completed his attorney registration form for 2005 that he was not in compliance with his child support order. The respondent failed to make monthly child support payments during a period of time in 2003 and 2004. The respondent and his ex-wife discussed the nonpayment before it occurred and the ex-wife agreed the respondent could make the payments when funds were available. Nonetheless, the respondent did not file a motion to modify the support order at that time. The respondent and the ex-wife have since formalized their agreement by filing a motion to modify the support order, which motion has been approved by a district court. As part of the conditions of the Diversion Agreement, the respondent must attend Ethics School, make all required child and spousal support payments, submit monthly reports detailing the child and spousal support payments, and provide copies of the checks for such payments, for a period of two years. The rule implicated is Colo. RPC 3.4(c).
— The respondent went through a contentious divorce. During the turmoil, the respondent reported to the police that she and her husband were using a controlled substance. The divorce court made findings, including that the respondent and her husband had substance abuse problems and had not filed tax returns. For several years, the respondent has suffered from a disease, the symptoms of which have included impaired reasoning and memory and emotional instability. The respondent also was diagnosed with a bipolar disorder, caused by the disease or by the drugs used to treat it. The respondent has been and is being treated for her medical problems and has stopped using controlled substances. The respondent has engaged an accountant to assist her with filing her tax returns. As part of the conditions of the Diversion Agreement, the respondent must attend Ethics School, undergo random full-screen urinalysis testing for one year; and periodically be examined by her physician for recurrence of the disease. The rules implicated are Colo. RPC 3.4(c), Colo. RPC 8.4(d), and Colo. RPC 8.4(h).
— The respondent represented a number of clients who had paid a contractor for construction materials for their homes. When the contractor failed to pay the suppliers, liens were placed against the clients’ properties. The respondent wrote the contractor a letter in which he made the following statements: "This letter is to therefore, require that you contact this office within seven days and make arrangements to adequately secure all of my clients relative to the respective amounts owed to them. In the event that this is not forthcoming, my clients will collectively approach the __________ County Sheriff’s Office, as well as the __________ Judicial District Attorney’s Office and commence the filing of criminal complaints against you for theft of construction funds." As part of the conditions of the Diversion Agreement, the respondent must attend Ethics School. The rule implicated is Colo. RPC 4.5.
Responsibilities Regarding Nonlawyer Assistants
— The respondent received fourteen signed releases from an opposing counsel in a workers’ compensation case. The claimant and her lawyer addressed these releases to specific providers. Approximately one month later, the respondent directed her paralegal to obtain medical records from two additional providers in the workers’ compensation case. The respondent did not review the file to determine if she received releases for these specific providers. Four days later, the respondent’s paralegal sent letters to the providers requesting medical records. Although the letters indicate that a release is attached, no releases were attached to either letter. The respondent learned from one of the providers that they did not receive a release for the medical records being sought. The respondent directed her paralegal to send a release to the provider by facsimile. That day, the respondent’s paralegal altered one of the specific releases provided by opposing counsel by whiting out the named provider and writing in the name of the additional provider from whom they were seeking the medical records. The paralegal then sent the release and a copy of her letter to the provider by facsimile. The provider sent copies of the claimant’s medical records to the respondent. About two months later, opposing counsel wrote to the respondent about her receipt of medical records from a provider for whom opposing counsel’s client did not provide a release. This letter demanded an explanation of how the records were obtained, and requested that the respondent forward all copies of those records to opposing counsel. The respondent wrote to opposing counsel and explained that the respondent’s former paralegal altered a medical release without her knowledge, consent, or encouragement to obtain the records. The respondent provided all copies of the medical records to opposing counsel. As part of the conditions of the Diversion Agreement, the respondent shall attend Ethics School. The rule implicated is Colo. RPC 5.3(b).
— The respondent maintained a trust account with a lawyer who had been disbarred. Two overdrafts occurred in the account. Pursuant to the Office of Attorney Regulation Counsel’s direction, the respondent then closed the trust account and opened a new trust account without the disbarred lawyer on the account. As part of the conditions of the Diversion Agreement, the respondent must remove the disbarred lawyer’s name from any business accounts and must attend Ethics School and Trust Account School. The rules implicated are Colo. RPC 5.3(b) and Colo. RPC 5.4(b).
False or Misleading Communication
As part of an advertisement for the respondent’s company, the respondent identified himself by a name, which implied he had qualifications that he did not have. In addition, after going on inactive status, the respondent provided legal advice to members of the public. As part of the conditions of the Diversion Agreement, the respondent must attend Ethics School. The rule implicated is Colo. RPC 7.1(a)(1).
The respondent pled guilty and has been convicted on the following charges: CRS § 42-4-1301(1)(b) (driving while ability impaired by alcohol or drugs), and CRS § 42-4-1007(1)(a) (driving on roadways laned for traffic). The respondent had submitted to a blood draw, in order to determine his blood alcohol content. The analysis of the blood alcohol content ("BAC") chemical test indicated a BAC of 0.230. An independent re-test of the blood specimen indicated a BAC of 0.207. Pursuant to the respondent’s above-mentioned guilty plea and conviction, the court sentenced the respondent to twelve months of unsupervised probation, and ordered the respondent to complete Level II alcohol education; fifty-six hours of therapy at a state certified agency; to complete forty-eight hours of useful public service; to attend a presentation by a victim- impact panel; to refrain from consuming alcoholic beverage for the period of probation; to pay fines as ordered by the court; and to serve a period of home detention. As part of the conditions of the Diversion Agreement, the respondent shall attend Ethics School, comply with the court sentence, abstain from the use of alcohol, attend weekly Alcoholics Anonymous meetings or the equivalent for one year, perform random breathalyzers once a week or take Antabuse for one year. The rule implicated is Colo. RPC 8.4(b).
— The respondent pled guilty to the charge of driving under the influence. The respondent had submitted to a blood test to determine his BAC. The results of the blood specimen analysis indicated a BAC of 0.318. The respondent was sentenced and conviction entered pursuant to the above-mentioned guilty plea. The respondent was sentenced to ten days of electronic monitoring, fifteen months of supervised probation, fines and costs, Level II education and fifty-two hours of therapy, monitored sobriety, victim impact panel, and sixty-four hours of community service. As part of the conditions of the Diversion Agreement, the respondent shall attend Ethics School, comply with the court sentence, abstain from the use of alcohol, comply with recommendations of psychiatrist after consultation, attend group therapy for one year, and remain on Antabuse for two years. The rule implicated is Colo. RPC 8.4(b).
—The respondent received a private admonition for driving under the influence of alcohol with a blood alcohol content of .426 grams of ethanol per 100 milliliters of blood. The rule violated is Colo. RPC 8.4(b).
— The respondent wrote an affidavit at the request of opposing counsel for a party who now and previously was the opposing party in a lawsuit. The opposing party is currently using the affidavit in the current litigation. The affidavit revealed information relating to the representation of the client and was written without client consent after consultation. The committee found that the respondent violated Colo. RPC 1.6(a) (confidentiality) by revealing information relating to representation of a former client without first consulting and obtaining consent from such client. The duty of confidentiality continues after the client-lawyer relationship has terminated. The respondent also violated Colo. RPC 1.9(c) by using and revealing information relating to the representation to the disadvantage of the former client in a subsequent court proceeding. There is no exception in Rule 1.6 or Rule 3.3 that would permit or require the respondent to reveal confidential information with respect to a client that has not become generally known.
— The respondent received a private admonition for possessing and consuming alcohol contrary to a restraining order issued against him. The respondent also was convicted of driving while ability impaired by alcohol. The rules violated are Colo. RPC 3.4(c) and Colo. RPC 8.4(b).
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