|The Colorado Lawyer|
Vol. 38, No. 3 [Page 127]
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From the Courts
Colorado Disciplinary Cases
The Colorado Supreme Court adopted a series of changes to the attorney regulation system, including the establishment of the Office of the Presiding Disciplinary Judge (PDJ), pursuant to C.R.C.P. 251.16. The Court also made extensive revisions to the rules governing the disciplinary process, repealing C.R.C.P. 241 et seq., and replacing those rules with C.R.C.P. 251 et seq. The PDJ presides over attorney regulation proceedings and, together with a two-member Hearing Board, issues orders at trials and hearings. The Rules of Civil Procedure and the Rules of Evidence apply to all attorney regulation proceedings before the PDJ. See C.R.C.P. 251.18(d). Disciplinary Opinions may be appealed in accordance with C.R.C.P. 251.27.
The Colorado Lawyer publishes the summaries and full-text Opinions of PDJ William R. Lucero and the Hearing Board, whose members are drawn from a pool appointed by the Supreme Court. For space purposes, exhibits, complaints, and amended complaints may not be printed. Disciplinary Opinions are printed as submitted by the Office of the PDJ and are not edited by the staff of The Colorado Lawyer.
Case No. 08PDJ036
BRIAN KEITH HUGEN,
THE PEOPLE OF THE STATE OF COLORADO.
December 27, 2008
OPINION AND ORDER OF READMISSION
PURSUANT TO C.R.C.P. 251.29
On October 7, 2008, a Hearing Board composed of David A. Roth and Frederick Y. Yu, both members of the Bar, and William R. Lucero, the Presiding Disciplinary Judge ("PDJ"), held a Readmission Hearing pursuant to C.R.C.P. 251.29(d) and 251.18. Brian Keith Hugen ("Petitioner") appeared pro se and Lisa E. Frankel appeared on behalf of the Office of Attorney Regulation Counsel ("the People"). The Hearing Board now issues the following "Opinion and Order of Readmission Pursuant to C.R.C.P. 251.29."
An attorney seeking readmission to the practice of law must demonstrate fitness to practice, professional competence, rehabilitation, and full compliance with all applicable disciplinary orders by clear and convincing evidence. Petitioner demonstrated professional competence and a substantial change in his professional and personal character within his community. He also substantially complied with applicable disciplinary orders, accepted responsibility for past misconduct, and appeared genuinely remorseful. Should the Hearing Board readmit Petitioner to the practice of law?
DECISION OF THE HEARING BOARD:
ATTORNEY READMITTED TO THE PRACTICE OF LAW
II. PROCEDURAL HISTORY
On April 7, 2008, Petitioner filed a "Verified Petition for Readmission." The People filed "Respondent’s Answer to Petitioner’s Verified Petition for Readmission" on April 24, 2008. The People agreed to the technical sufficiency of the petition, but took no position regarding Petitioner’s readmission pending an investigation concerning his qualifications for readmission.
At the commencement of the Readmission Hearing, the People stipulated to Petitioner’s professional competence, but disputed his full compliance with all applicable disciplinary orders and took no position as to his rehabilitation and fitness to practice law. However, upon the conclusion of the Readmission Hearing, the People stated that they would not object to Petitioner’s readmission to the practice of law, with certain conditions.
III. FINDINGS OF FACT
The Hearing Board finds the following facts by clear and convincing evidence. The parties submitted "Petitioner’s and Respondent’s Stipulated Facts" and several joint exhibits, which have been incorporated into the findings below.
Petitioner was licensed to practice law in the State of Colorado in 1986. On February 3, 1997, the Colorado Supreme Court immediately suspended him from the practice of law during the pendency of disciplinary proceedings. The Colorado Supreme Court disbarred Petitioner on February 16, 1999. Accordingly, at least eight years have passed since the Colorado Supreme Court disbarred Petitioner.1
Petitioner successfully passed the February 2007 Colorado Bar Examination. He also successfully passed the August 2007 Multi-state Professional Responsibility Examination. The parties therefore stipulated that Petitioner is competent to practice law. Petitioner also made restitution to the parties affected by his misconduct, paid the costs of the disbarment proceedings, and has not had any discipline entered against him since the order of disbarment.
Petitioner entered into a stipulation, agreement and conditional admission of misconduct with the People, and the Colorado Supreme Court accepted it on February 16, 1999. In the stipulation, Petitioner agreed that he knowingly misappropriated funds of various clients without their knowledge or consent, falsified bank records supplied to the People, continued to practice law while under suspension without informing his law partner, his clients, opposing parties, or the court, and failed to keep a client informed about the status of her case and neglected the case.
The Colorado Supreme Court relied on its own case law and ABA Standard 4.11 and disbarred Petitioner from the practice of law. They also ordered him to pay costs in the amount of $2,683.25 within thirty days. Petitioner paid these costs on or about April 18, 2008.3
Testimony of Petitioner
Petitioner was born in Harvey, Illinois in 1960 and grew up in a "well-rounded family." He graduated from Calvin College with a Bachelor of Arts degree in 1983 and thereafter attended the Indiana University School of Law. Petitioner worked for a law firm, a federal magistrate, and a public defender’s office during law school, but still performed well and graduated with honors in 1986. Petitioner passed the Colorado Bar Examination in 1986 and began practicing as an associate attorney with a general practice law firm in Denver.
In 1990, Petitioner entered into a law partnership with Stephen Caplin, a former employer from his law school days. Mr. Caplin remained in Indianapolis, Indiana, while Petitioner managed a new law office in Colorado. Petitioner was in his early thirties at the time and without any prior law office management experience. He began with one secretary/paralegal and within a few years had a 5000 square foot office with five employees.
In 1996, Petitioner began experiencing serious cash flow problems, which affected his ability to pay his staff, lease, and other overhead expenses. He asked Mr. Caplin for assistance, but Mr. Caplin informed Petitioner that he needed to be self-sufficient. At this point, Petitioner admittedly "crossed the line" and began using client funds to pay his expenses. He would replenish the funds after settling cases, but the situation eventually "snowballed" and resulted in the misappropriation of funds belonging to several clients. During this time, Petitioner kept his actions hidden from Mr. Caplin, his wife, his family, and his friends. He felt a great deal of stress and guilt for his actions.
In 1996, Allstate Insurance filed a Request for Investigation with the People. In response to a subpoena from the People, Petitioner added, "insult to injury" by sending the People fraudulent bank statements. He later admitted his actions and produced the proper records.
The Colorado Supreme Court immediately suspended Petitioner from the practice of law on February 3, 1997. Nevertheless, Petitioner continued to practice law for several weeks with the hopes of settling a large personal injury claim, which would allow him to replenish his COLTAF account. He failed to tell anyone about his immediate suspension.
Mr. Caplin became aware of the immediate suspension in May 1997 and immediately locked Petitioner out of the law office and began informing clients, opposing counsel, and the courts of the situation. Petitioner then decided to meet with the People and fully disclose all of the facts and documents demonstrating the extent of his misconduct. He fully cooperated with the People from this point forward. Petitioner contacted his clients, informed them of his suspension, and assisted them in obtaining new counsel. With assistance from the People, Petitioner also established a fund that would distribute all funds generated from legal work performed before his suspension to his clients. The creation of this fund resulted in full restitution for all of his clients.
Petitioner entered into a stipulation with the People in late 1998. As stated above, the Colorado Supreme Court approved the stipulation and disbarred Petitioner from the practice of law on February 16, 1999.
Petitioner later met with the Arapahoe County District Attorney’s office without precondition and confessed to his misconduct against the advice of counsel. In January 2000, he pled guilty to felony theft (F3) and the court sentenced him to six years in the Department of Corrections. Petitioner served ten months before a sentencing court granted his motion for reconsideration and sentenced him to Community Corrections for six years without parole. He began in a halfway house and worked for a Discount Tire shop until he transferred to non-residential intensive probation in March 2001. He earned the maximum amount of "good time" and completed his sentence in 2004.
Petitioner’s actions seriously affected his family. He was unemployed for an extended period of time and the family struggled financially. Petitioner finally found a job working in automobile sales, but he lost this job after pleading guilty to a felony. His wife divorced him in 2001, but he re-married in 2003. Petitioner experienced significant depression and anxiety during this time and received only limited counseling from his father, a pastor, and briefly from a counselor in 2001.
Petitioner admittedly failed to properly wind-up his legal matters at the time the Colorado Supreme Court disbarred him. However, Petitioner had no clients or court matters in 1999, because he had not been practicing law for nearly two years.
In its disbarment order, the Colorado Supreme Court ordered Petitioner to pay costs in the amount of $2,683.25. Petitioner signed a payment plan in 1999 to pay $400.00 per month towards the costs. Petitioner failed to pay these costs until the People advised him that they remained outstanding after he filed his petition for readmission. Petitioner thereafter paid the outstanding costs in April 2008.
In March 2001, Petitioner began working for Advanced Professional Services ("APS"). APS provided billing services for 80-85 healthcare providers. Petitioner became responsible for disputed insurance claims for general medical, workers’ compensation, and automobile claims. In 2003, Petitioner became an independent contractor for 15-20 doctor offices and when the "no-fault" law "sunsetted" on July 1, 2003, it became more of a lien-based practice.
Petitioner works with attorneys to confirm balances owed, provide records, and negotiate settlements on behalf of the medical professionals he represents. The medical professionals have given him full authority to settle matters, despite their knowledge of Petitioner’s past felony conduct. This includes the authority to seek equitable distributions that benefit the patient. Petitioner annually collects checks totaling $2–3 million; he makes deposits, and provides monthly statements to the medical professionals.
In 2007, Petitioner began working as a paralegal for the law firm of Bell & Wright, a general practice law firm. He drafts letters to opposing counsel and clients and performs legal research. If readmitted to the practice of law, Petitioner may work part-time as an associate or "of counsel" with the firm. Petitioner would like to be able to provide legal assistance for the doctors when they have simple interpleader matters, or to his family and/or friends when they ask him for help. He does not intend to practice as a solo practitioner.
Petitioner has also created a limited liability corporation with Joseph Ramos, M.D., to fund medical services for injured persons in return for a portion of the injured clients’ recovery from parties responsible for the injury. This "funding company" is in its early stages, but Petitioner assured the Hearing Board that Dr. Ramos would supply personal funds to the company in the event they became necessary.
As stated above, Petitioner successfully passed the February 2007 Colorado Bar Examination and successfully passed the August 2007 Multi-state Professional Responsibility Examination. He has also attended several Continuing Legal Education courses without receiving credit, followed developments in various legal publications, and completed the mandatory course on professionalism.4
With regard to rehabilitation, Petitioner noted that he has not engaged in any disciplinary or criminal misconduct since the date of his disbarment. He repeatedly apologized and fully accepted responsibility for his misconduct. Petitioner expressed deep remorse for his conduct and acknowledged that he harmed his clients, his family, the legal profession, the courts, and the citizens of Colorado. Petitioner has since engaged in various acts of community service by serving as a parent counselor, volunteering with his church and providing personal services to those in need.
Petitioner is presently struggling with his finances. He provides the sole source of income for his family and is currently behind on his home and automobile payments. A significant tax lien has also been entered against Petitioner, most of which came from the same time period as his misconduct. He has paid $200.00 per month toward the tax lien since November 2007. Nevertheless, Petitioner believes that he is in a much better position to handle any financial emergency in an appropriate manner.
Testimony of Robert Bell
Robert Bell is an attorney who has been licensed in Nevada since 1980 and in Colorado since 1993. He practices in the areas of personal injury, family law, criminal defense, and business law. Mr. Bell also serves as a municipal judge and as an administrative judge.
Petitioner began working part-time as a paralegal for Mr. Bell over two years ago. He advised Mr. Bell about his past misconduct when Mr. Bell hired him. Petitioner performs legal research, prepares documents, and organizes discovery for Mr. Bell. Mr. Bell stated that Petitioner has an excellent knowledge of the law, provides excellent work, and that he would love to offer Petitioner an associate position in the event the Hearing Board readmits Petitioner to the practice of law. Mr. Bell therefore recommended that the Hearing Board readmit Petitioner to the practice of law.
Testimony of Ronald Wilcox
Ronald Wilcox is an attorney who has been licensed attorney in Colorado since 1983. He practices in the areas of water law and complex commercial litigation.
Mr. Wilcox met Petitioner in a complicated interpleader action in 2006. He had numerous conversations with Petitioner during the case and found him to be knowledgeable as well as open and honest about his past misconduct. Mr. Wilcox would trust Petitioner with his own funds and would hire Petitioner if they practiced in the same area of the law. Mr. Wilcox therefore recommended that the Hearing Board readmit Petitioner to the practice of law.
Testimony of Steven Kaufman
Steven Kaufman is an attorney who has been licensed in Colorado since 1980. He practices in the areas of plaintiffs’ personal injury litigation.
Mr. Kaufman met Petitioner in 1986 when Petitioner applied for a law clerk position, and later worked as an associate with his firm. He recalled that Petitioner demonstrated an excellent knowledge of the law and provided excellent work product. Mr. Kaufman stated that he would entrust Petitioner with his own funds and that he would hire Petitioner back, because he believes that although Petitioner took the wrong path, he tried to make things right in the end. Mr. Kaufman therefore recommended that the Hearing Board readmit Petitioner to the practice of law.
Testimony of Joseph Ramos, M.D.
Joseph Ramos is a medical doctor specializing in internal medicine and professor of surgery for the University of Colorado Health Sciences Center who has been licensed since 1997. He is board certified in emergency medicine. Dr. Ramos also graduated from law school in May 2008, and was awaiting his results from the Colorado Bar Examination at the time of the Readmission Hearing.
Dr. Ramos began working with Petitioner in 2003 after his office contracted with Petitioner to perform billing services. Shortly after his office contracted with Petitioner, Dr. Ramos became aware of Petitioner’s past conduct. Nevertheless, Petitioner handled all of the billing and collection for Dr. Ramos’ practice and maintained full authority to settle cases. Dr. Ramos described Petitioner as "frugal" and extremely organized when it comes to managing overhead costs.
Dr. Ramos implemented a "triple-check" system to monitor Petitioner’s handling of funds. In fact, unknown to Petitioner, Dr. Ramos checked on him as recently as a week before the Readmission Hearing. The "triple-check" system has never revealed any impropriety on the part of Petitioner. Dr. Ramos testified that he has absolute confidence in Petitioner’s trustworthiness.
Dr. Ramos and Petitioner also created a limited liability corporation called "Medlaw" related to funding medical services. This "funding company" is in its early stages with low overhead, but it is self-funded and current in its obligations. Dr. Ramos and Petitioner provide the labor themselves, though they anticipate hiring an employee in the event the Hearing Board readmits Petitioner to the practice of law.
Dr. Ramos has absolute confidence in Petitioner’s beliefs, values, and rehabilitation going forward. Dr. Ramos therefore recommends that the Hearing Board readmit Petitioner to the practice of law.
IV. LEGAL ANALYSIS
C.R.C.P. 251.29 governs the readmission of an attorney to the practice of law following disbarment.5 Under C.R.C.P. 251.29(a), Petitioner must demonstrate by clear and convincing evidence that he: (1) is rehabilitated; (2) is fit to practice law; (3) is professionally competent; and (4) has complied with all applicable disciplinary orders and relevant rules.
People v. Klein, 756 P.2d 1013, 1016 (Colo. 1998) interprets the language of the prior rule governing readmission to the bar, C.R.C.P. 241.22, and sets forth criteria for a hearing board to consider in evaluating whether an attorney has been rehabilitated from his or her past conduct. Klein considers the following factors (but a hearing board is not limited to only these factors):
- Conduct since the imposition of the original discipline;
- Professional competence;
- Candor and sincerity;
- Recommendations of other witnesses;
- Present business pursuits of the petitioner;
- Personal and community service aspects of the Petitioner’s life; and
- Recognition of the seriousness of his or her previous misconduct.
The Hearing Board finds that Petitioner has experienced a sustained change in his character since the time of his disbarment. He has acted responsibly in his personal and professional life, and become a reliable, honest and trustworthy employee and business partner. Petitioner maintained his professional competence during his disbarment and also became an active member of his community. He recognized the gravity of his past misconduct and was candid, sincere, and remorseful in these proceedings.
In addition to his own testimony, Petitioner presented four witnesses who addressed several of these factors and unanimously recommended that the Hearing Board readmit him to the practice of law. These witnesses confirmed the efforts Petitioner has undertaken to demonstrate his rehabilitation.
Petitioner has demonstrated a substantial change of character from the conduct that led to his disbarment. He has also developed significant skills that should help him avoid similar misconduct in the future. The Hearing Board therefore finds clear and convincing evidence that Petitioner is rehabilitated and fit to practice law.
Fitness to Practice
In the opinion disbarring Petitioner, the Colorado Supreme Court stated, "If Hugen applies for readmission pursuant to C.R.C.P. 251.29, his compliance with all orders related to the criminal proceeding arising from his misconduct and his making of complete restitution to the parties affected by that misconduct shall be major factors in determining whether he is once again fit to practice law."6
The People stipulated that Petitioner made restitution and the Hearing Board finds clear and convincing evidence that he took extraordinary efforts to ensure his clients received it in a timely manner. With regard to orders related to the criminal proceeding, the only evidence presented is that Petitioner earned the maximum amount of "good time" during his sentence.
The parties stipulated that Petitioner successfully passed the February 2007 Colorado Bar Examination, and the August 2007 Multi-state Professional Responsibility Examination. The Hearing Board also finds that Petitioner has attended several Continuing Legal Education courses without receiving credit, followed developments in various legal publications, and completed the mandatory course on professionalism.
The testimony of Petitioner and Robert Bell demonstrated that Petitioner has been working as a part-time paralegal for Mr. Bell for the past two years. This experience, as well as his current employment, has afforded Petitioner the opportunity to maintain his knowledge of relevant case law and new statutes during his disbarment. The parties stipulated to Petitioner’s competence and the Hearing Board finds clear and convincing evidence that Petitioner is competent to practice law.
Compliance with All Applicable
Disciplinary Orders and Rules
C.R.C.P. 251.28 sets forth specific notice requirements a suspended or disbarred attorney must follow upon the effective date of such an order.7 Proof of compliance with C.R.C.P. 251.28(g) is a condition precedent to any petition for readmission to the practice of law.
Petitioner failed to notify clients or opposing counsel of his disbarment. He stated that he had no pending matters or clients at the time. However, Petitioner had pending clients at the time of his order of immediate suspension and should have complied with C.R.C.P. 241.21 at that time.
The People did not object to the Readmission Hearing going forward based upon Petitioner’s noncompliance with C.R.C.P. 251.28 and 241.21. They also did not object to Petitioner’s readmission to the practice of law based on this noncompliance.
In its disbarment order, the Colorado Supreme Court ordered Petitioner to pay the costs in the amount of $2,683.25 within thirty days. Petitioner signed a payment plan in 1999 to pay $400.00 per month towards the costs and thereafter mistakenly believed the costs had been paid. Petitioner paid the costs on or about April 18, 2008.
Although he initially failed to fully comply with all disciplinary orders and rules, the Hearing Board finds clear and convincing evidence that Petitioner has since substantially complied with them.
The purpose of attorney disciplinary proceedings is to protect the public and the administration of justice from attorneys who fail to uphold their professional duties to clients, the public, the legal system, and the legal profession.8 Petitioner failed to uphold these duties and the Colorado Supreme Court disbarred him.
In the nine years since his disbarment, Petitioner has become a law-abiding, honest, hardworking, and trustworthy individual. He has earned the respect and trust of his employers for whom he is responsible for handling millions of dollars and accounting for these funds. Petitioner has maintained his professional competence and become an active member of his community. He is remorseful for his past conduct and his actions to rehabilitate himself provide the Hearing Board with evidence that he will not engage in such conduct again.
In their closing argument, the People did not object to Petitioner’s readmission to the practice of law with certain conditions. Petitioner stated that he did not object to any of the conditions set forth by the People. The Hearing Board may condition readmission upon compliance with any additional orders and finds several of these conditions appropriate in light of his current financial situation to ensure his continued success.9
In this case, Petitioner provided clear and convincing evidence that he is rehabilitated, fit to practice law, professionally competent, and substantially compliant with all applicable disciplinary orders and relevant rules. The Hearing Board believes that Petitioner will uphold his professional duties to clients, the public, the legal system, and the legal profession in the future. Accordingly, the Hearing Board concludes that Petitioner should be readmitted to the practice of law with conditions.
1. The Hearing Board GRANTS the "Verified Petition for Readmission" filed by Petitioner on April 7, 2008. Petitioner SHALL contact the Office of Attorney Registration within twenty (20) days of the date of this order and comply with all necessary conditions of readmission required of a "newly admitted attorney" which include the payment of registration fees, completion of requisite paperwork, obtaining a new attorney registration number, and appearing before the PDJ to take the oath of admission. The PDJ will issue an "Order and Notice of Readmission Pursuant to C.R.C.P. 251.29(a)" upon Petitioner’s successful compliance with the above conditions.
2. Petitioner SHALL submit to and pay for a practice monitor acceptable to the People who shall quarterly monitor Petitioner’s practice and trust accounts for eighteen (18) months from the date of this order.
3. Petitioner SHALL attend and successfully pass the one-day ethics school sponsored by the People within one year of the date of this order. Petitioner shall register and pay the costs of ethics school within thirty (30) days of the date of this order.
4. Petitioner SHALL attend and successfully pass the one-half-day Trust Account School sponsored by the Office of Attorney Regulation Counsel within one year of the date of this order, and pay all costs associated therewith. Petitioner shall register for and pay the costs of Trust Account School within thirty (30) days of the date of this order.
5. Petitioner SHALL pay the costs of these proceedings. The People SHALL submit a Statement of Costs within fifteen days of the date of this order. Petitioner SHALL have ten days to file a response.
1. See C.R.C.P. 251.29(a) ("A disbarred attorney may not apply for readmission until at least eight years after the effective date of the order of disbarment.").
2. See In re Hugen, 973 P.2d 1267 (Colo. 1999).
3. See Exhibit 12, "Petitioner’s and Respondent’s Stipulated Facts" at ¶11.
4. See Exhibit 13.
5. A disbarred attorney may not apply for readmission until at least eight years after the effective date of the order of disbarment. C.R.C.P. 251.29(a).
6. See In re Hugen, 973 P.2d 1267, 1271 (Colo. 1999).
7. The Hearing Board notes that C.R.C.P. 241.21 was the rule in effect at the time of Petitioner’s immediate suspension from the practice of law.
8. See ABA Standard 1.1.
9. See C.R.C.P. 251.29(e).
Case No. 07PDJ015
THE PEOPLE OF THE STATE OF COLORADO,
DANIEL R. ROSEN.
November 21, 2007
OPINION AND ORDER IMPOSING SANCTIONS
PURSUANT TO C.R.C.P. 251.19
On September 5-6, 2007, a Hearing Board composed of Victoria Koury, a member of the Bar, Larry Daveline, a citizen board member, and William R. Lucero, the Presiding Disciplinary Judge ("PDJ"), held a hearing pursuant to C.R.C.P. 251.18. Charles E. Mortimer, Jr. appeared on behalf of the Office of Attorney Regulation Counsel ("the People"). Cecil E. Morris, Jr., appeared on behalf of Daniel R. Rosen ("Respondent") who also appeared. The Hearing Board issues the following "Opinion and Order Imposing Sanctions Pursuant to C.R.C.P. 251.19" based upon the evidence presented by the parties.
Suspension is generally appropriate when a lawyer knowingly engages in conduct that is a violation of a duty owed to the profession, and causes injury or potential injury to a client, the public, or the legal system. In an attempt to settle an injury claim for his client, Respondent failed to advise an insurance company of his client’s death. Did such conduct potentially injure the legal profession and legal system?
The Hearing Board concludes the evidence is clear and convincing that Respondent acted dishonestly and deceitfully in his negotiations with Safeco Insurance Company as alleged in Claims One through Five. However, the Hearing Board finds the evidence falls short of clear or convincing that Respondent committed the felony of attempted theft as alleged in Claim Six.
SANCTION IMPOSED: ATTORNEY SUSPENDED FOR SIX (6) MONTHS,
ALL STAYED ON THE SUCCESSFUL COMPLETION OF
A SIX (6) MONTH PERIOD OF PROBATION WITH CONDITIONS.
II. PROCEDURAL HISTORY AND BACKGROUND
On February 22, 2007, the People filed their Complaint in this matter and Respondent filed his answer on April 6, 2007. The complaint contained six claims for relief based upon Respondent’s alleged dishonesty and deceit in representing a client in a personal injury claim arising out of an accident caused by a party insured by Safeco Insurance Company ("Safeco").
At the conclusion of the evidence, the People argued that Respondent attempted theft from Safeco of settlement funds, which included $9,000.00 for pain and suffering, a claim that Respondent knew was not available under Colorado law, and that his conduct warrants disbarment. ABA Standard 5.11.
Respondent argued that the People failed to establish clear and convincing evidence that he intended to permanently deprive Safeco of funds belonging to them. Further, Respondent argued that the substantially admitted misrepresentations alleged in Claims One through Five all arose out of a single episode and should not be treated as separate acts of dishonesty. Respondent therefore argues that a public censure is most appropriate under ABA Standard 5.13.
III. FINDINGS OF MATERIAL FACT
The Hearing Board considered the testimony of each witness and exhibit admitted into evidence, and finds the following material facts established by clear and convincing evidence.1
Respondent has taken and subscribed the Oath of Admission, was admitted to the Bar of the State of Colorado on October 17, 1996, and is registered as an attorney upon the official records of the Colorado Supreme Court, Attorney Registration No. 27000. He is therefore subject to the jurisdiction of the Colorado Supreme Court and the Office of the Presiding Disciplinary Judge in these proceedings. Respondent’s business address is 8310 South Valley Highway, Suite 210, Englewood, Colorado 80112.
Respondent is a solo practitioner who has practiced law for twenty-five years in Florida and for the last eleven years in Colorado. His legal practice is a high-volume personal injury practice, in which he utilizes paralegals and form letters in communicating with insurance companies.
David Bourelle Hires Respondent
In January 2004, David Bourelle ("Bourelle") suffered injuries in an automobile accident. In February 2004, Bourelle hired Respondent on a contingent fee basis to represent him in a potential lawsuit arising from his injuries. Bourelle reported head, knee, and neck injuries following the accident. Safeco had insured the at-fault driver who allegedly caused Bourelle’s injuries. After taking Bourelle’s case, Respondent worked with him and his medical providers to obtain care for the injuries and determine when he reached maximum medical improvement. However, by October 2004, Bourelle informed Respondent that he no longer wanted further treatment. Instead, he wanted to settle the dispute with Safeco and its at-fault driver.
Based upon his client’s direction to settle the case, Respondent prepared a settlement demand. However, Respondent chose not to immediately send the settlement demand to Safeco, because he was seeking additional documents, and because of the holiday season.
Respondent Notified of David Bourelle’s Death
On February 18, 2005, Bourelle’s brother notified Respondent’s office by telephone that Bourelle had died from a medical condition unrelated to the automobile accident. The same day, one of Respondent’s employees sent an electronic message from the case management system to Respondent, which stated as follows:
David’s (Bourelle’s) brother called today and said that he died on 2/8/05 after a recent surgery on his kidneys and liver. His father is the executor of his estate and they would like to know what they need to do to close out his case etc - Please advise JoAnn2
On February 21 and 22, 2005, Respondent wrote to a member of his staff that he needed to see the file on the Bourelle case and discuss it.3
Up to this time in Respondent’s career, he testified that he never had a client die while in the process of settling a claim with an insurance company. Further, Respondent was unaware of the effect that the death of a client had on the attorney-client relationship and the need to disclose the client’s death to the insurance company. He was also unaware of its effect on a client’s continued right to collect damages, specifically, damages for pain and suffering.
Respondent Sends Settlement Demand
Without Disclosing Death
On February 25, 2005, Respondent sent a written settlement demand to Safeco.4 In this letter, Respondent outlined his client’s injuries, the doctors who provided treatment, and the results of tests, as well as the special damages suffered by his client. Respondent specifically wrote:
It is Dr. Nadler’s opinion that my client has been left with a 6% to 7% impairment of the body as a whole, as a whole, as a result of this L4-5 disc herniation. In addition, the doctor recommends that he avoid lifting more than 20 pounds, as well as repetitive bending.
Respondent demanded a settlement of $65,000.00 on behalf of his client. At the time Respondent wrote this letter, he was aware that his client had died, but he failed to disclose this fact to Safeco.
Safeco Offers to Settle the Case
On or about April 12, 2005, a representative of Safeco called Respondent’s office and spoke with one of his employees. During this conversation, Safeco made a counteroffer of settlement for $23,000.00, which specifically included nearly $9,000.00 for pain and suffering. Respondent’s employee forwarded this counteroffer to Respondent via electronic mail.5
On April 25, 2005, Respondent wrote another letter to Safeco.6 In this letter, Respondent stated that Bourelle needed additional medical treatment. Respondent rejected Safeco’s offer to settle for $23,000.00, but reduced his demand from $60,000.00 to $50,000.00.
Respondent Advised Pain and Suffering Claim
Abated upon Death
On or about April 28 or 29, 2005, Respondent spoke with attorney Greg Gold about the Bourelle case. Respondent often worked with Mr. Gold, a trial attorney, on cases that he was unable to settle. Respondent respected Mr. Gold’s counsel and judgment. After Respondent described the Bourelle case, Mr. Gold advised him that the claim for pain and suffering abated when Bourelle died, under Colorado law.7 The parties stipulated that this was the first time that Respondent realized Bourelle’s death affected the claim for damages, specifically the damages for pain and suffering.8
After learning that he could not claim damages for pain and suffering on behalf of a deceased client, Respondent received a letter from Safeco, which included an offer to settle the Bourelle matter for $31,765.00.9 This settlement offer did not specifically detail what part of the $31,765.00 offer, if any, represented damages for pain and suffering. Safeco’s letter also included a release from liability for Bourelle to sign upon his acceptance of Safeco’s check in the amount of $31,765.00 sent under separate cover. Respondent never negotiated the settlement check, but instead kept in his office.
After receiving the check from Safeco, a paralegal from Respondent’s office sent a fax on or about July 25, 2005, to Bourelle’s brother, Mark, in California enclosing the release from liability that Safeco sent to Respondent and a "closing settlement statement" prepared by Respondent’s office.10 In the closing settlement statement, the client received $12,579.29 as his net payment after subtracting advanced costs, medical expenses, and attorney’s fees of one-third.
After receiving the settlement statement and release on July 25, 2005, Mark Bourelle called Respondent’s office. He spoke with a member of Respondent’s staff about the release. Mark Bourelle and his family questioned whether it would be proper for them to sign the release for Bourelle. As a result of their concern, Mark Bourelle contacted Safeco and advised them that Respondent had provided them with the release and had asked them to sign it. Neither Mark Bourelle nor Safeco advised Respondent of this call. Furthermore, there is no evidence that Respondent otherwise learned of Mark Bourelle’s call to Safeco.
The parties stipulate that shortly after sending the "closing settlement statement" to Mark Bourelle, Respondent formed a belief that Bourelle’s family was not taking action to probate his estate, either formally or informally, Bourelle’s father was not acting as the executor of the estate, the family had not and apparently could not reach an agreement as to the disposition of the estate, and as a result, Bourelle’s father was not in a position to sign the release on behalf of the estate as he earlier understood was the case. At that point, Respondent considered commencing a probate action in Colorado.
On August 11, 2005, nearly three weeks after Mark Bourelle called Safeco, Respondent sent a letter to Safeco informing them for the first time that Bourelle had died. Respondent also wrote that he would hold the settlement check until a probate estate was set up in Colorado and a personal representative had been appointed for his deceased client.11 In this letter, however, Respondent indicated that Bourelle had died "subsequent" to the settlement reached with Safeco. This statement was not true and Respondent was aware that it was not true. Safeco never answered Respondent’s letter dated August 11, 2005. Shortly thereafter, however, Safeco commenced an investigation of Respondent’s conduct in the settlement of Bourelle’s claim.
On November 7, 2005, Respondent’s paralegal sent Respondent a message on his electronic case management system stating that an investigator from Safeco wanted to interview Respondent and the paralegal who prepared certain correspondence in the Bourelle settlement negotiations.12 However, Respondent would not agree to meet with Safeco’s investigator. This is the first time that Respondent or his office knew of an investigation by Safeco into the Bourelle matter.
On November 10, 2005, Respondent sent another letter to Safeco.13 In this letter, Respondent wrote that he had "recently" learned that his client passed away on February 8, 2005. This statement was not true and Respondent was aware that it was not true. Respondent also inquired of Safeco as to how they would like to proceed with the settlement and that he still held the check in anticipation that an estate would be set up by the Bourelle family. Again, for some time, Safeco never responded to Respondent.
On February 15, 2006, Safeco requested the return of the settlement funds and Respondent sent them back on February 16, 2006. Safeco ultimately agreed to settle the case for $14,187.07.14
Safeco’s investigator attempted to obtain a statement from Respondent, but he refused when Safeco’s investigator refused to state the purpose of the investigation.15
IV. CONCLUSIONS OF LAW—SUBSTANTIVE ALLEGATIONS
The Hearing Board finds clear and convincing evidence that Respondent violated the following rules of professional conduct as alleged in the Complaint:
- First Claim, Colo. R.P.C. 8.4(c) and 4.1(a) for failing to advise Safeco of his client’s death upon receiving notice from Mark Bourelle.16
- Second Claim, Colo. R.P.C. 8.4(c) and 4.1(a) for writing a letter to Safeco, which stated his client "is" suffering from permanent injuries as a result of the negligence of Safeco’s insured. At the time Respondent wrote this letter, he was aware that Bourelle was dead. This letter is deceitful in that it infers that Bourelle was currently suffering from injuries arising out of the accident with Safeco’s insured.
- Third Claim, Colo. R.P.C. 8.4(c) and 4.1(a) for writing a letter to Safeco, which stated his client "is" in need of additional medical treatment. Again, at the time Respondent wrote this letter he was aware of his client’s death and the statement is therefore deceitful.
- Fourth Claim, Colo. R.P.C. 8.4(c) and 4.1(a) for writing a letter to Safeco, which stated that "subsequent" to a settlement Respondent and Safeco reached, Bourelle had died. This statement was not true.
- Fifth Claim, Colo. R.P.C. 8.4(c) and 4.1(a) for writing a letter to Safeco, which stated that he did not have knowledge of the date of his client’s death until "recently." This statement was misleading. Respondent’s letter was written on or about November 10, 2005, nearly ten months after Mark Bourelle advised Respondent of his brother’s death.
- Sixth Claim, Colo. R.P.C. 8.4(b) and Colo. R.C.P. 251.5(b) alleged attempted felony theft in violation of the criminal law of Colorado. The People’s theory of the case is that Respondent attempted to steal money belonging to Safeco; that is the sum of $9,000.00, which represented the amount that Safeco estimated for pain and suffering and was included in the $31,765.00 check Safeco tendered to Respondent following their negotiations.
Colo. R.P.C. 8.4(b) states that it is professional misconduct to commit a criminal act, which adversely reflects on the lawyer’s honesty and trustworthiness. There is no question that Respondent acted deceitfully in initially failing to disclose his client’s death to Safeco and in concealing this fact in later correspondence with them. However, this evidence alone falls short of proving the crime of attempted theft. In order to prove attempted theft, the People must prove each and every one of the following elements by clear and convincing evidence:17
- That Respondent;
- In the State of Colorado;
- Exercised control over
- Anything of value
- Which was the property of another
- By deception; and
- With the intent to permanently deprive the other of the use or benefit of the thing of value.
The essential elements of attempted theft are that Respondent, acting with the specific intent to permanently deprive Safeco of a thing of value, engaged in conduct which is strongly corroborative of the firmness of his purpose to complete the crime of theft. See C.R.S. §18-2-101(1). After carefully reviewing all of the evidence, including Respondent’s testimony on the issue of intent to permanently deprive, the Hearing Board finds the People failed to meet their burden. We need not therefore address the issue of the affirmative defense of abandonment Respondent raised in these proceedings.18
The American Bar Association Standards for Imposing Lawyer Sanctions (1991 & Supp. 1992) ("ABA Standards") and Colorado Supreme Court case law are the guiding authorities for selecting and imposing sanctions for lawyer misconduct. The appropriate sanction depends upon the facts and circumstances of each case.
Analysis Under the ABA Standards
ABA Standards 7.2 deals with a lawyer’s violation of duties owed to the profession. It specifically provides:
Suspension is generally appropriate when a lawyer knowingly engages in conduct that is a violation of a duty owed to the profession, and causes injury or potential injury to the public or the legal system.
However, before imposing a sanction after a finding of lawyer misconduct, ABA Standard 3.0 directs the Hearing Board to first consider the following factors to determine whether the presumed sanction is appropriate:
(1) the duty violated;
(2) the lawyer’s mental state;
(3) the actual or potential injury caused by the misconduct; and
(4) the existence of aggravating or mitigating factors.
A. THE DUTY VIOLATED
Respondent violated his duty as an attorney to the legal profession to act with candor as a representative of the profession.
B. THE LAWYER’S MENTAL STATE
Respondent was aware of his conduct and the attendant circumstances; that is, he knew that his client had died; yet he failed to advise Safeco. Nevertheless, the evidence is insufficient to conclude that Respondent acted with the conscious objective of committing theft or attempted theft as alleged in Claim Six.
C. THE ACTUAL OR POTENTIAL INJURY
Respondent caused injury to the legal profession. When a lawyer fails to act with candor, his lack of integrity affects the profession and the fair and reasonable administration of justice. While Respondent’s actions took place outside the context of a formal proceeding before a court, they nevertheless potentially injured the profession and the legal system by eroding trust in a lawyer’s word.
D. AGGRAVATING AND MITIGATING FACTORS
1. MATTERS IN AGGRAVATION, ABA STANDARD 9.2
The Hearing Board considered evidence of the following aggravating circumstances in deciding the appropriate sanction.
Respondent acted with a dishonest motive in his negotiations with Safeco. He did not tell them his client had died and thereafter exacerbated his initial dishonesty by continuing to lead Safeco to believe his client was still alive for nearly nine months.
A Pattern of Misconduct—9.22(c)
The record is clear that Respondent engaged in multiple misrepresentations and that this was a pattern of misconduct.
Substantial Experience in the Practice of Law—9.22(i)
Respondent has practiced law for over twenty years as a personal injury lawyer who specializes in settling cases before formal litigation.
2. MATTERS IN MITIGATION, ABA STANDARD 9.3
The Hearing Board considered evidence of the following mitigating circumstances in deciding the appropriate sanction.
Absence of a Prior Disciplinary Record—9.32(a)
Respondent practiced nearly twenty-five years without a prior disciplinary record. The Hearing Board found this to be a significant mitigating factor.
Timely good faith effort to rectify consequences
While Respondent initially deceived Safeco, albeit late, he disclosed his lack of candor to Safeco and returned their check.
Full disclose and a cooperative attitude
toward the proceedings—9.32(e)
Respondent supplied the People with all of his records and cooperated in the investigation of this matter as well as the hearing.
Respondent testified in these proceedings and expressed remorse for his actions in dealing with Safeco. The Hearing Board finds that Respondent’s expression of remorse is genuine.
Analysis Under Case Law and ABA Standards
Respondent’s counsel correctly points out that the facts presented in this matter are of first impression in Colorado. But while this case presents an issue of first impression in Colorado, the ABA Standing Committee on Ethics and Professional Responsibility issued a formal opinion in 1995, which clearly addresses a lawyer’s duty to disclose the death of his client in these circumstances. The "general rule" is that the death of a client terminates the relationship of the lawyer and client and, therefore, the lawyer may not take further steps in connection with the representation pending authorization from the duly authorized personal representative of the deceased client. See ABA Formal Opinion 95-397.
But the more egregious issue concerns Respondent’s continued pattern of deceit. Even after he became aware that his deceased client could not obtain damages for pain and suffering, Respondent continued to press the settlement without advising the insurance company of his client’s death and leading them to believe that his client was still alive.
A lawyer’s word should be his or her bond. As Justice Kourlis stated in In re Pautler 47 P.3d 1175, 1178 –79 (Colo.2002):
The jokes, cynicism, and falling public confidence related to lawyers and the legal system may signal that we are not living up to our obligation; but, they certainly do not signal that the obligation itself has eroded. For example, the profession itself is engaging in a nation-wide project designed to emphasize that "truthfulness, honesty and candor are the core of the core values of the legal profession." Lawyers themselves are recognizing that the public perception that lawyers twist words to meet their own goals and pay little attention to the truth, strikes at the very heart of the profession as well as at the heart of the system of justice. Lawyers serve our system of justice, and if lawyers are dishonest, then there is a perception that the system, too, must be dishonest. Certainly, the reality of such behavior must be abjured so that the perception of it may diminish.
On a core issue, Respondent engaged in misleading and dishonest correspondence with Safeco for over six months. His conduct falls below the standards of honesty and integrity that the public expects and deserves from its legal representatives. The Hearing Board agrees with Respondent’s counsel that Respondent made a mistake in not understanding that he could no longer represent his client, once Bourelle died. However, it was more than mistake or misjudgment on Respondent’s part to continue to deceive Safeco after he learned of his client’s death and its impact on settling the claim. Such actions were knowingly deceitful.
The Hearing Board therefore ORDERS:
1. DANIEL R. ROSEN, Attorney Registration No. 27000, is hereby SUSPENDED from the practice of law for a period of SIX (6) MONTHS, ALL STAYED upon the successful completion of a SIX (6) MONTH PERIOD OF PROBATION, with the condition that that he complete the Ethics School sponsored by the Office of Attorney Regulation Counsel within six (6) months of the date of this order. The effective date of Respondent’s probation is thirty-one (31) days from the date of this order.
2. DANIEL R. ROSEN SHALL pay the costs of these proceedings. The People shall submit a Statement of Costs within fifteen (15) days from the date of this Order. Respondent shall have ten (10) days thereafter to submit a response.
1. The parties provided the Court with a stipulation of facts. The Hearing Board adopts and incorporates this stipulation into its findings.
2. See Exhibits 3 and 4 (emphasis added).
3. See Exhibit 4.
4. See Exhibit 7.
5. See Exhibit 8.
6. See Exhibit 9.
7. C.R.S.A. § 13-20-101.
8. See Exhibit 11.
9. See Exhibit 15.
10. See Exhibit 16. The Hearing Board notes that Exhibit 16, as originally tendered, included a release for $14,187.07. The parties later tendered a separate document that should have been tendered, a release based upon a check in the amount of $31,765.00.
11. See Exhibits 18 and 20. On October 28, 2005, someone entered a comment in Respondent’s electronic case management system that stated, "LM for Sandra (Bourelle) telling her that Virginia (Frazer-Abel) would be calling regarding setting up the estate."
12. See Exhibit 22.
13. See Exhibit 23.
14. See Exhibit 25.
15. See Exhibit 20.
16. The Hearing Board notes that at the time these events occurred, Colo. R.P.C. 4.1 did not require that the statements be material. The new rule, effective January 1, 2008, adds the element of materiality to this rule.
17. See CO-JICRIM 16:01.
18. Respondent argues that even if the People proved attempted theft, he abandoned any such effort when he advised Safeco that his client was deceased. The People argue that it is Respondent’s burden to prove by clear and convincing evidence that he abandoned any effort to commit theft and absent any motivation to do so based upon the circumstances, which increases the probability of detection.
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