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. 08PDJ088
THE PEOPLE OF THE STATE OF COLORADO,
ROBERT JOHN MASON.
June 15, 2009
DECISION AND ORDER IMPOSING SANCTIONS
PURSUANT TO C.R.C.P. 251.19(b)
On March 10, 2009, a Hearing Board composed of Frances L. Winston, a citizen board member, Sisto J. Mazza, a member of the Bar, and William R. Lucero, the Presiding Disciplinary Judge ("PDJ"), held a one-day hearing pursuant to C.R.C.P. 251.18. James S. Sudler appeared on behalf of the Office of Attorney Regulation Counsel ("the People") and Michael D. Gross appeared on behalf of Robert John Mason ("Respondent") who also appeared. The Hearing Board now issues the following "Decision and Order Imposing Sanctions Pursuant to C.R.C.P. 251.19(b)."
Disbarment is generally appropriate when a lawyer knowingly violates the terms of a prior disciplinary order and thereby causes injury to a client, the public, the legal system, or the profession. The PDJ issued an order suspending Respondent from the practice of law and specifically ordered him not to practice law during his suspension. Thereafter, Respondent provided legal advice to one client and prepared legal documents for a second client. Is disbarment the appropriate sanction for his misconduct?
The Hearing Board finds clear and convincing evidence that Respondent knew that he could not counsel, advise, or assist any person in connection with legal rights and duties or to prepare any legal documents for anyone while under the PDJ’s order of suspension. Nevertheless, Respondent ignored the PDJ’s order and practiced law. Respondent’s claim that he did not know his actions constituted the unauthorized practice of law rings hollow given his disciplinary history, which included a three-year suspension for substantially similar conduct. Based upon the clear and convincing evidence presented, the Hearing Board finds that Respondent knowingly disobeyed a court order in violation of Colo. RPC 3.4(c) as alleged in Claim One and engaged in the unauthorized practice of law in violation of Colo. RPC 5.5(a) as alleged in Claim Two. Accordingly, the Hearing Board concludes that the presumptive sanction of disbarment is appropriate in this case.
SANCTION IMPOSED: ATTORNEY DISBARRED
III. PROCEDURAL HISTORY
On September 11, 2008, the People filed a "Complaint" alleging two separate violations of the Colorado Rules of Professional Conduct. Respondent filed an "Answer" on October 10, 2008. On February 5, 2009, the PDJ held a hearing and thereafter denied a "Motion for Summary Judgment" filed by Respondent on November 7, 2008, and "Complainant’s Response to Motion for Summary Judgment and Complainant’s Motion for Judgment on the Pleadings of (sic) for Summary Judgment" filed by the People on December 9, 2008.
IV. FINDINGS OF FACT AND RULE VIOLATIONS
The Hearing Board finds that the following facts and rule violations have been established by clear and convincing evidence.1
Respondent has taken and subscribed the oath of admission, was admitted to the bar of this Colorado Supreme Court on October 18, 1961, and is registered upon the official records, Attorney Registration No. 04324. Therefore, he is subject to the jurisdiction of the Colorado Supreme Court and the Hearing Board in these disciplinary proceedings pursuant to C.R.C.P. 251.1(b). Respondent’s registered business address is 2993 Broadmoor Valley Road, Suite 204, Colorado Springs, Colorado 80906.
Suspension in Consolidated Case Number 05PDJ035
In consolidated case number 05PDJ035, Respondent admitted that he had represented Sun Hee Park in a liquor licensing matter and had prepared and filed a liquor license application on behalf of Chong Suk Rosbach.2 Respondent also admitted that by knowingly engaging in the practice of law while under a prior order of suspension, his actions in representing these two clients violated Colo. RPC 3.4(c) and Colo. RPC 5.5(a). The Hearing Board notes that these rule violations are the same rule violations alleged by the People in the present complaint against Respondent.
On August 24, 2005, consistent with the stipulation of the parties, the PDJ entered an "Order Approving Conditional Admission of Misconduct and Imposing Sanctions Pursuant to C.R.C.P. 251.22" in consolidated case number 05PDJ035. This order incorporated an "Agreement to Refrain from Practice of Law" signed by Respondent in which he expressly agreed to refrain from the practice of law during the stipulated three-year period of suspension. The agreement defined the practice of law as follows:
The practice of law includes but is not limited to an unlicensed person’s or a suspended lawyer’s actions as a representative in protecting, enforcing or defending the legal rights and duties of another and/or counseling, advising and assisting that person in connection with legal rights and duties. In addition, preparation of any legal documents for others as a suspended lawyer is the unauthorized and unlicensed practice of law. All of the aforementioned actions constitute the practice of law regardless of the forum, court, agency, administrative body or governmental agency in which such actions occur or to which they may be related (emphasis added).3
Respondent also acknowledged that he would be in violation of the agreement if he engaged in any actions constituting the practice of law:
The respondent specifically agrees to refrain from any actions constituting the practice of law in Colorado. Should the respondent engage in any actions constituting the practice of law while his license is suspended he shall be subject to contempt of court proceedings and he shall be in violation of the Stipulation, Agreement, and Affidavit Containing the Respondent’s Conditional Admission of Misconduct and Affidavit Containing the Respondent’s Conditional Admission of Misconduct in Case Number 05PDJ035 (Consolidated with 05PDJ048).4
As stated above, the PDJ’s order accepting Respondent’s conditional admission of misconduct incorporated his written agreement. The PDJ specifically ordered the following:
Respondent agrees to refrain from engaging in the practice of law unless he is under the direct supervision of another Colorado licensed attorney. Respondent signed an agreement attached as Exhibit D to the Stipulation. Respondent agrees any violation of this agreement shall subject him to contempt of court proceedings.5
The Hearing Board finds that the agreement signed by Respondent and approved by the PDJ is consistent with Colorado Supreme Court case law defining the practice of law.6 The agreement affirmed that Respondent had read, studied, and understood it. Based upon this record, the Hearing Board finds that Respondent knew that filing legal documents or giving legal advice or counseling another while suspended would be unauthorized and would therefore constitute a violation of a condition of his agreement to refrain from the practice of law.
The Ada E. Smith Trust Matter
On or about June 25, 2007, less than two years after agreeing to refrain from the practice of law in consolidated case number 05PDJ035, Respondent filed a "Notice of Election and Demand for Sale by Public Trustee" with the Pueblo County Clerk and Recorder. Respondent signed this document and others in the foreclosure action as "Agent" or "Agent of Owner." Respondent also submitted a bid of $29,672.20 and other documents arising out of the notice of election and demand.7 While none of these documents necessitated a legal or adjudicatory analysis by a judge, the Public Trustee, other official, or the appearance of Respondent in a court of law, the Hearing Board finds that the "Notice of Election and Demand for Sale by Public Trustee" and other foreclosure documents submitted to the Public Trustee were in-fact legal documents as the term is commonly used and understood; that is, documents affecting legal rights.8
The Lighthouse Matter
On October 29, 2007, Lighthouse Investments ("Lighthouse"), a mortgagor, sent Respondent a letter notifying him that their mortgagee, Mike Nelson, had defaulted on a mortgage held by Lighthouse.9 The letter followed a discussion Respondent had with a representative of Lighthouse who requested Respondent’s counsel concerning their difficulties with collecting delinquent mortgage payments from Mr. Nelson. Lighthouse sought a means to collect these delinquent mortgage payments. In their letter to Respondent, Lighthouse expressed their "desire" and "need" for Respondent’s "legal representation."
During the discussion that preceded Lighthouse’s letter to Respondent, Respondent had explained to Lighthouse the advantages of proceeding with a foreclosure action against Mr. Nelson rather than filing a lawsuit against him. Respondent specifically advised Lighthouse to proceed against Mr. Nelson through a foreclosure proceeding, because he reasoned that a foreclosure proceeding would be less costly and would provide a quicker resolution than bringing a lawsuit to collect their past due mortgage payments. Respondent also explained to Lighthouse that if they sued Mr. Nelson, he would be given an opportunity to file an answer, which would delay the process of collecting money from him. Finally, Respondent offered to assist Lighthouse in the foreclosure proceeding. The Hearing Board finds that Respondent engaged in the practice of law when he counseled Lighthouse on legal strategy and the advantages of proceeding with the foreclosure action.
On November 16, 2007, Respondent sent Mr. Nelson a letter on behalf of Lighthouse after agreeing to represent them in the foreclosure action.10 Respondent informed Mr. Nelson of his obligation to pay all costs, court costs, Public Trustee fees and attorney fees pursuant to his agreement with Lighthouse. Respondent directed Mr. Nelson to deliver a check for $3,905.23 by November 26, 2007, or Respondent would proceed with the foreclosure action. Even though Respondent signed this letter "Robert J. Mason, Agent," the Hearing Board finds this letter to be substantially similar to a demand letter a lawyer commonly writes on behalf of a client before taking further action.
Respondent later collected two checks from Mr. Nelson while acting on behalf of Lighthouse. The first for $8,499.75 was returned to Mr. Nelson because it did not include two past-due payments and a second for $1,500.00 ostensibly for the costs of the foreclosure. Respondent admitted that he ultimately incurred no costs because he never initiated the foreclosure action. Respondent testified that he instead forwarded both checks from Mr. Nelson to Lighthouse and Respondent received payment of $350.00 from Lighthouse for his services.
Respondent also testified that he was careful to advise Lighthouse and others that he was not a lawyer and simply acted as an agent. In his view, both his disclosure to clients that he was not a lawyer and his care to avoid court appearances demonstrates that he was not practicing law. We disagree. First, Respondent’s characterization of his actions as that of an agent does not control our decision. Second, the practice of law is not confined to court appearances and the Hearing Board finds that Respondent was aware of the same based upon his prior disciplinary case.
Analysis of Rule Violations
Respondent asserts that he never engaged in the unauthorized practice of law because the Colorado Revised Statutes authorized his actions in the Ada E. Smith Trust and Lighthouse matters to act as an agent for a holder of debt.11 He testified that as a licensed lawyer, he frequently handled foreclosure actions and often observed non-lawyers doing the same. The People contend that Respondent cannot use the statutes to justify his actions in light of his status as a suspended lawyer pursuant to the agreement and order issued by the PDJ in consolidated case number 05PDJ035.
The Hearing Board finds that the statutes Respondent relied upon apply generally to foreclosures and do not purport to modify or redefine his obligations under a court order in the disciplinary system. Furthermore, the Colorado Supreme Court, not the legislature, has plenary jurisdiction over lawyers and a heightened concern for the conduct of suspended lawyers. Thus, Respondent’s argument that he was simply doing what any non-lawyer could do is irrelevant. A suspended lawyer is subject to greater restrictions than a private citizen because he holds a law license. Along with the greater authority granted to a lawyer by virtue of his licensure, he is also subject to greater responsibility, which includes a heightened responsibility to the judicial system as an officer of the court.12
We see little difference between the unauthorized practice Respondent previously admitted in consolidated case number 05PDJ035, and his conduct in representing the Ada E. Smith Trust and Lighthouse. Although Respondent did not appear before a tribunal or other administrative body in the present case, he nevertheless represented the interests of others by defending their legal rights and filing legal documents. Furthermore, as in the past, he now attempts to characterize his representation of others as something other than the practice of law. The Hearing Board finds that neither the law nor the facts presented here, including his agreement not to practice law while on suspension, support his position.
The Hearing Board further finds that Respondent’s claim that he did not think he was practicing law when counseling the Ada E. Smith Trust and Lighthouse entirely inconsistent with the facts presented and his previous admission that he engaged in the unauthorized practice of law in consolidated case number 05PDJ035. Based upon the facts presented, the Hearing Board finds that Respondent received ample notice of what constitutes the unauthorized practice of law while under suspension. He was also given sufficient warning of the consequences of further practicing law while on suspension. We find Respondent’s conduct was not the product of mistake or misjudgment; it was knowingly perpetrated. If Respondent failed to understand that his representation of the Ada E. Smith Trust and Lighthouse constituted the unauthorized practice of law, as he now claims, it was a product of willful blindness.13
In People v. Cain, 957 P.2d 346, 346–47 (Colo. 1998), the Colorado Supreme Court found that a suspended lawyer who prepared six warranty deeds, a promissory note, and notarized six deeds of trust to secure the note, engaged in the unauthorized practice of law.14 We find Respondent’s actions on behalf of the Ada E. Smith Trust and Lighthouse constitute the unauthorized practice of law as provided in Colorado case law. Just as important to our legal analysis as case law defining the practice of law is Respondent’s signed agreement, which contains nearly verbatim the language of the Conway-Bogue case cited above.
The Hearing Board therefore concludes that Respondent violated Colo. RPC 3.4(c) and Colo. RPC 5.5(a) in both the Ada E. Smith Trust and Lighthouse matters as alleged in Claim One and Claim Two of the People’s Complaint.
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.15 In imposing a sanction after a finding of lawyer misconduct, the Hearing Board must first consider the duty breached, the mental state of the lawyer, the injury or potential injury caused, and the aggravating and mitigating evidence pursuant to ABA Standard 3.0.
ABA Standard 3.0 Considerations—Duty, Mental State, and Injury
We begin with the proposition that members of the legal profession must adhere to the highest moral and ethical standards and respect the rule of law. The Hearing Board finds that Respondent violated his duty to the legal system, violated other duties owed as a professional, and violated his duty to comply with prior disciplinary orders.16 Respondent specifically violated his duty to comply with his own agreement (and subsequent disciplinary order) to refrain from the unauthorized practice of law. Lawyers are officers of the court with the duty to abide by legal rules of substance and procedure affecting the administration of justice. Here, Respondent failed to comply with this duty.
The Hearing Board next finds that Respondent knowingly engaged in the established misconduct.17 He was aware of the nature or attendant circumstances of his conduct despite his claim that he acted in good faith. We find that this is purely Respondent’s subjective belief. Objectively, the facts show Respondent practiced law while on suspension. After securing a suspension in consolidated case number 05PDJ035, in lieu of presumed disbarment for practicing law while on suspension in that case, Respondent agreed not to again practice law while under suspension. However, he did so again without referring to his agreement not to practice law while suspended. If officers of the court can ignore its orders, we cannot expect citizens to abide by them and respect for the judicial process is thereby severely jeopardized.
Finally, the Hearing Board finds that Respondent caused actual and potential injury to his clients, the public, the legal system, and the profession. Respondent’s misdirected efforts to find a way around his agreement demonstrates little respect or deference for the disciplinary process and is in dereliction of his duties as an officer of the court. Respondent could have easily complied with his agreement not to engage in the practice of law by having a lawyer supervise his actions as set forth in the agreement. Nevertheless, Respondent unilaterally chose to modify the agreement thus causing injury to the integrity of the legal system and in particular the disciplinary process.
ABA Standard 3.0 Considerations—Aggravating Factors
Aggravating circumstances are any considerations or factors that may justify an increase in the degree of discipline to be imposed.18 The Hearing Board considered evidence of the following aggravating circumstances in deciding the appropriate sanction:
Prior Disciplinary Offenses—9.22(a)
A review of Respondent’s prior discipline demonstrates a lengthy history of prior disciplinary offenses including the following:
- In May 1989, Respondent received a letter of admonition for contacting a represented party in violation of Colo. RPC 4.2. This discipline is remote and is of minimal consequence in our analysis of an appropriate sanction.19
- In May 1997, the Colorado Supreme Court suspended Respondent for six months based upon violations of Colo. RPC 1.7, 3.3(a)(2), 4.1(b), 8.4(c), and 8.4(d) after he failed to disclose to the court his interest in property that was the subject of litigation. Most important to the Hearing Board’s determination of the appropriate sanction in the present case was the Colorado Supreme Court’s finding that Respondent engaged in conduct involving dishonesty. However, the Hearing Board again considers this prior discipline remote and gives it minimal weight in determining the appropriate sanction.
- In October 2001, Respondent was suspended for one year and one day for violating Colo. RPC 1.1, 1.5(a), and 5.3(b) after he conducted an estate-planning seminar for the purpose of avoiding "rest" homecare costs.
- In March 2003, Respondent was suspended for one year and one day for violating Colo. RPC 1.15(b), 5.3(b), 1.3, 1.15(f), 5.5(b), 5.3(b), 1.5(a), and 1.16(d) in three separate client matters after he offered estate planning services and thereafter failed to properly supervise non-lawyer staff members who worked directly with the clients. Most important to the Hearing Board is the finding that Respondent expended client funds before he earned them and failed to return them when the client requested a refund.
- In August 2004, Respondent was suspended for an additional five months, resulting from his suspension in 02PDJ041 (the case addressed immediately above) for violating Colo. RPC 3.3(a)(1) after he signed an entry of appearance form in the Colorado Springs Municipal Court in the name of Robert Shoop, a licensed attorney. In a second case, Respondent did the same. In neither case did Mr. Shoop give Respondent permission to use his name nor did he appear at any time on behalf of the clients Respondent represented in his attempted appearance.
- In August 2005, the PDJ accepted Respondent’s Conditional Admission of Misconduct and signed an order approving the same in consolidated case 05PDJ035 discussed in detail above.
Most important to the Hearing Board’s determination of sanctions is the similarity between Respondent’s conduct in the consolidated case 05PDJ035 and the present case. In both cases, Respondent represented others and when caught explained that he thought his conduct was authorized, that he was not acting as a lawyer, even though he assisted others in defending their legal positions and filed legal documents for them.
Pattern of Misconduct and Multiple Offenses—9.22(c) and (d)
The pattern of misconduct in 08PDJ088 is demonstrated in his insistence on practicing law in one form or another while under suspension. Given Respondent’s lengthy disciplinary history, especially that related to the unauthorized practice of law while under suspension, we find these aggravating factors apply.
Refusal to Acknowledge Wrongful Nature of Conduct—9.22(g)
Respondent contends that he did nothing wrong. He points to C.R.S. §38-38-100.3 and C.R.C.P. 120 to support his claim that what he did was authorized by state law and the Colorado Rules of Civil Procedure. As stated above, we disagree.
Substantial Experience in the Practice of Law—9.22(i)
Respondent has practiced law for over twenty years in Colorado. Respondent’s experience should have given him a better perspective on the activities he could and could not perform as a result of his suspension. Part of his experience as a lawyer includes his acknowledgment from prior conditional admissions of misconduct that he is familiar with the rules of the Colorado Supreme Court regarding the procedure for discipline of attorneys and with the rights provided by those rules.
ABA Standard 3.0 Considerations—Mitigating Factors
Mitigating factors are any considerations or factors that may justify in a reduction in the degree of discipline to be imposed.20 The Hearing Board finds that Respondent demonstrated a cooperative attitude in the formal proceedings with the People and the Hearing Board consistent with ABA Standard 9.32(e).
Analysis Under ABA Standards and Colorado Case Law
The Hearing Board considers the following standard the most appropriate given our finding that Respondent violated a court order not to practice law while under suspension, which we consider the gravamen of his misconduct.21
ABA Standard 8.1(a) provides:
Disbarment is generally appropriate when a lawyer . . . intentionally or knowingly violates the terms of a prior disciplinary order and such violation cause injury or potential injury to a client, the public, the legal system, or the profession . . . .
ABA Standard 8.1(b) provides:
Disbarment is generally appropriate when a lawyer . . . has been suspended for the same or similar misconduct, and intentionally or knowingly engages in further acts of misconduct that cause injury or potential injury to a client, the public, the legal system or the profession.
ABA Standard 8.1 and Colorado case law presume the most severe sanction of disbarment when a lawyer violates a court order to not practice law while under suspension.22 Upon consideration of the duties violated, the established mental state, the injury caused, the minimal evidence of mitigation and the substantial evidence of aggravation, especially Respondent’s continued pattern of practicing law while under a court order of suspension, the Hearing Board finds that the presumptive sanction of disbarment is most appropriate.
Within the last ten years, Respondent has engaged in serious misconduct including expending client funds without earning them, deceiving or attempting to deceive the court, making an entry of appearance in municipal court while suspended from the practice of law, assisting non-lawyers in the unauthorized practice of law, and practicing law while under an order of suspension; all of which occurred before he appeared before this Hearing Board. Any further effort to rehabilitate Respondent given his prior disciplinary history and defiance of court orders, would only endanger the public and diminish the integrity of the of the disciplinary system.
In spite of the numerous opportunities given to Respondent to avoid the unauthorized practice of law, Respondent continued to counsel, assist, and advise others, as well as file legal documents on their behalf while under an order of suspension. The Hearing Board therefore concludes that disbarment is the appropriate sanction in this case.
The Hearing Board therefore ORDERS:
1. ROBERT JOHN MASON, Attorney Registration No. 04324, is hereby DISBARRED from the practice of law and his name shall be stricken from the list of attorneys licensed to practice law in the State of Colorado. The disbarment SHALL become effective thirty-one (31) days from the date of this order in the absence of a stay pending appeal pursuant to C.R.C.P. 251.27(h).
2. Respondent 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 stipulated to Exhibits 1-12, which have been incorporated into the Hearing Board’s findings of fact.
2. See Stipulated Exhibit 12, "Stipulation, Agreement and Affidavit Containing the Respondent’s Conditional Admission of Misconduct" in consolidated case number 05PDJ035.
3. See Exhibit D to Stipulated Exhibit 12, "Stipulation, Agreement and Affidavit Containing the Respondent’s Conditional Admission of Misconduct" in consolidated case number 05PDJ035.
4. Id. at ¶3.
5. See Stipulated Exhibit 12, "Order Approving Conditional Admission of Misconduct and Imposing Sanctions Pursuant to C.R.C.P. 251.22."
6. See Denver Bar Ass’n v. Public Utilities Comm’n, 154 Colo. 273, 279, 391 P.2d 467, 471 (1964); People v. Shell, 148 P.3d 162, 171 (Colo. 2006).
7. See Stipulated Exhibits 5, 6, 7, 8, 9, and 10.
8. "Legal" means of or related to the law or permitted by the law. "Document" means instruments of authority. See Black’s Law Dictionary 712 (7th ed. 1999).
9. See Stipulated Exhibits 1 and 2. The Hearing Board notes that Mr. Nelson did not testify in these disciplinary proceedings.
10. See Stipulated Exhibit 4.
11. See C.R.S. §38-38-100.3(c)(10). "‘Holder of an evidence of debt’ means the person in actual possession of or otherwise entitled to enforce an evidence of debt; except that ‘holder of an evidence of debt’ does not include a person acting as a nominee solely for the purpose of holding the evidence of debt or deed of trust as an electronic registry without any authority to enforce the evidence of debt or deed of trust . . . . "
12. See State v. Schumacher, 519 P.2d. 116 (Kan. 1974).
13. See U.S. v. Heredia, 483 F.3d 913, 917 (9th Cir. 2007).
14. See also Conway-Bogue Realty Inv. Co. v. Denver Bar Ass’n, 135 Colo. 398, 411, 312 P.2d 998, 1004-05 (1957) (The preparation of legal documents, coupled with explanation or advice as to the legal effect thereof, constitutes the practice of law).
15. See In re Roose, 69 P.3d 43, 46-47 (Colo. 2003).
16. See ABA Standards 6.0, 7.0, and 8.0. In addition, ABA Standard 8.0 implicates duties owed to a client, the public, the legal system, and/or the profession.
17. See ABA Definitions. "‘Knowledge’ is the conscious awareness of the nature or attendant circumstances of the conduct but without the conscious objective or purpose to accomplish a particular result."
18. See ABA Standard 9.21.
19. See In re Hickox, 57 P.3d 403, 407 (Colo. 2002) and People v. Peters, 82 P.3d 389, 396 (Colo. 2003).
20. See ABA Standard 9.31.
21. The appendix to the ABA Standards states that the appropriate standard for Rule 3.4(c) and Rule 5.5(a) violations are 6.2 and 7.0. However, the Hearing Board finds that ABA Standard 8.0 is the most applicable standard because its commentary states that it is usually applied when a lawyer practices law while under an order of suspension as found in this case. Nevertheless, applying ABA Standard 6.2 or 7.0, the Hearing Board would reach the same conclusion of disbarment based on the extensive aggravation in this case.
22. See People v Redman, 902 P.2d 839 (Colo. 1995); People v. Zimmerman, 960 P.2d 85 (Colo. 1998).
Case No. 07PDJ078
(consolidated with Nos. 07PDJ085, 08PDJ004,
08PDJ027, 08PDJ040, and 08PDJ057)
THE PEOPLE OF THE STATE OF COLORADO,
CHARLES WILLIAM RASURE, JR.
May 20, 2009
DECISION AND ORDER IMPOSING SANCTIONS
PURSUANT TO C.R.C.P. 251.19(c)
On November 20, 2008 and February 19, 2009, the Presiding Disciplinary Judge ("the Court") held sanctions hearings pursuant to C.R.C.P. 251.15(b). Kim E. Ikeler appeared on behalf of the Office of Attorney Regulation Counsel ("the People") at both sanctions hearings. Charles William Rasure, Jr. ("Respondent") failed to appear at either sanctions hearing. The Court now issues the following "Decision and Order Imposing Sanctions Pursuant to C.R.C.P. 251.19(c)."
Disbarment is generally appropriate when a lawyer knowingly converts client property and causes injury or potential injury to a client. Respondent engaged in a pattern of misconduct, which included the knowing conversion of client property. Respondent failed to answer the complaints or otherwise participate in these proceedings in a meaningful manner. What is the appropriate sanction for his misconduct?
SANCTION IMPOSED: ATTORNEY DISBARRED
II. PROCEDURAL HISTORY
The People filed complaints in this consolidated matter on January 17, 2008 (07PDJ078), December 19, 2007 (07PDJ085), January 14, 2008 (08PDJ004), March 13, 2008 (08PDJ027), April 15, 2008 (08PDJ040), and June 16, 2008 (08PDJ057). Respondent failed to answer any of the complaints and the Court granted motions for default in each of the above-captioned cases. Upon the entry of default, the Court deems all facts set forth in the complaints admitted and all rule violations established by clear and convincing evidence.1
III. ESTABLISHED FACTS AND RULE VIOLATIONS
The Court hereby adopts and incorporates by reference the factual background of this case fully detailed in the admitted complaints.2 Respondent took and subscribed the Oath of Admission and gained admission to the Bar of the Colorado Supreme Court on May 15, 1995. He is registered upon the official records, Attorney Registration No. 25569, and is therefore subject to the jurisdiction of the Court pursuant to C.R.C.P. 251.1.3
The Wilson Matter—07PDJ078
Clyde and Barbara Wilson retained Respondent to assist them with the sale of their residence after a lien had been placed on the property two days before its sale. Respondent thereafter arranged for the sale to close with the lien amount to be held in escrow by Respondent pending resolution of the dispute. At Respondent’s request, Mr. Wilson tendered a check to Tasco, L.L.C., a company formed and owned by Respondent, for the amount of the lien ($13,600.00) on December 6, 2005. Respondent endorsed the check, deposited it into his operating account, and began spending the escrow funds the following day without authorization from the Wilsons.
On August 20, 2006, Respondent filed a complaint in La Plata County District Court on behalf of the Wilsons. Respondent took no further action on the case, and the district court dismissed it for lack of prosecution on January 29, 2007. Throughout the first half of 2007, the Wilsons continually asked Respondent for the status of the litigation and for the return of their escrow funds. The Wilsons told Respondent that they needed the $13,600.00 to assist with the purchase of a home in Texas. Respondent initially failed to return the escrow funds and instead provided the Wilsons with a variety of excuses for the delay in returning them. On August 28, 2007, Mr. Wilson complained to the People and shortly thereafter Respondent returned the $13,600.00 to the Wilsons.
Respondent exercised, albeit temporarily, unauthorized dominion and control over $13,600.00 held in trust on behalf of his clients and used these escrow funds for his own purposes. His knowing conversion of the escrow funds constitutes a violation of Colo. RPC 8.4(c). Respondent also violated Colo. RPC 1.15(a) when he knowingly failed to keep the escrow funds separate from his own.
The Bishop Matter—07PDJ085
On October 16, 2000, Genevieve Bishop filed a lawsuit against her ex-husband in Lake County, Illinois related to businesses they owned together. Ms. Bishop’s ex-husband later died in January 2003. His widow subsequently filed a petition for the formal probate of his will in La Plata County District Court. Ms. Bishop then retained Respondent and paid him a $5,000.00 retainer fee to represent her in matters related to the probate case.
On July 11, 2003, Respondent filed a claim in the probate case of "unknown value but anticipated to be in excess of $200,000.00" on behalf of Ms. Bishop. The claim alleged fraud, breach of contract, and breach of fiduciary duty related to various entities controlled by her ex-husband. Both sides filed several pleadings related to the claim, including a motion to dismiss filed by the personal representative. On December 3, 2003, the probate court held the motion to dismiss in abeyance and ordered Ms. Bishop to file a civil action in a court of appropriate jurisdiction within thirty days and provide proof within forty days. If Ms. Bishop failed to comply with this order, the probate court would grant the personal representative’s motion to dismiss.
The next day, Respondent notified the probate court of the civil action in Lake County. On January 24, 2004, the Lake County civil action was dismissed without prejudice at the request of Ms. Bishop’s Illinois counsel in order to pursue the claim in Colorado. Respondent filed a civil action in La Plata County on March 17, 2004.
On June 7, 2004, the La Plata District Court dismissed the civil action for lack of subject matter jurisdiction. The district court found that Ms. Bishop had failed to file the civil action in a timely manner and failed to provide proof of that filing to the probate court. Respondent first filed a notice of appeal with the Colorado Court of Appeals, but then later filed a notice of dismissal. Ms. Bishop denies that she authorized the dismissal motion.
Respondent violated Colo. RPC 1.3 when he failed to file an action in La Plata County District Court against the ex-husband’s estate within the deadline set by the probate court. Respondent also violated Colo. RPC 1.3 when he failed to prosecute the appeal. As a result, Ms. Bishop lost her right to pursue her claims against her ex-husband’s estate.
The Mazili Matter—08PDJ004
On April 21, 2006, Christine Mazili retained Respondent to represent her personally and as the personal representative of her father’s estate in litigation related to the repayment of certain loans. Ms. Mazili paid Respondent a $3000.00 retainer fee that day and an additional $2000.00 on April 27, 2006. Respondent deposited both checks into COLTAF accounts.
On May 1, 2006, Respondent transferred the $3000.00 into his operating account even though he had only performed a total of $1060.00 worth of work up to that point. Respondent then wrote a number of sizeable checks from this account. On May 11, 2006, Respondent transferred the $2000.00 into his operating account even though he had only performed a total of $2580.00 worth of work up to that point.
On May 16, 2006, Respondent filed a two-sentence response to a motion for summary judgment filed in the litigation. On July 5, 2006, the court granted the motion for summary judgment and found no dispute as to the facts and law based on the response filed by Respondent. Respondent thereafter failed to notify Ms. Mazili for over two months that summary judgment had been entered against her. He never sought reconsideration of the court’s order.
Ms. Mazili had also retained Respondent to commence a legal matter against her sister on April 28, 2006. Ms. Mazili informed Respondent that time was of the essence in the matter. Respondent failed to take any action in this matter over a period of five months.
Pursuant to the fee agreement, Respondent earned the entire $5000.00 retainer fee by July 29, 2006. Nevertheless, Respondent violated Colo. RPC 8.4(c) when he transferred Ms. Mazili’s entire retainer fee to his operating accounts before he fully earned it and violated Colo. RPC 1.15(a) and (f)(1) when he failed to hold the unearned funds separate from his own. Respondent also violated Colo. RPC 1.3 when he neglected Ms. Mazili with regard to the dispute with her sister. Finally, Respondent violated Colo. RPC 1.4(a) and (b) when he failed to inform Ms. Mazili about the district court’s entry of summary judgment until several months later, failed to provide Ms. Mazili with a copy of the order granting summary judgment, and failed to adequately communicate with Ms. Mazili concerning the dispute with her sister.
The Albrecht Matter—08PDJ027
In April 2004, Christine Albrecht retained Respondent to assist in a dispute involving the sale of real estate. Ms. Albrecht gave Respondent $4,800.00 to hold in escrow pending resolution of the dispute. Respondent deposited the escrow funds into a COLTAF account and the escrow funds remained in the COLTAF account until Respondent removed them when the account was closed in June 2004. Respondent did not notify Ms. Albrecht that he had removed the escrow funds from the COLTAF account and did not seek or receive authorization for him to exercise dominion or control over such funds.
The real estate dispute eventually resolved itself without further assistance from Respondent. Beginning in September 2006, Ms. Albrecht and others on her behalf began contacting Respondent seeking a refund of the escrow funds. Respondent initially failed to reply to these contacts, but later promised action to return the escrow funds. Respondent failed to follow through on any of his promised action.
On August 24, 2007, Ms. Albrecht complained to the People who shortly thereafter commenced an investigation. The People asked Respondent to provide a current bank statement demonstrating that he continued to hold Ms. Albrecht’s funds in trust. Respondent promised to provide such a statement, but then failed to do so. The People then issued notices of deposition and subpoenas to Durango banks where Respondent maintained accounts.
Respondent did not respond to the request for investigation or substantively participate in the investigation. In early October 2007, Respondent paid $4,800.00 to Ms. Albrecht in the form of a check drawn on a personal account with an entity called "E-Trade Complete."
Respondent violated Colo. RPC 8.4(c) when he knowingly exercised, albeit temporarily, unauthorized dominion or ownership over $4800.00 held in trust on behalf of his client. Respondent also violated Colo. RPC 8.1(b), Colo. RPC 3.4(c), and C.R.C.P. 251.5(d) when he knowingly failed to respond to requests by the People for information and therefore disobeyed an obligation under the rules of a tribunal.
The Johnson Matter—08PDJ040
In early 2007, Margarita Johnson hired Respondent to serve as counsel for her mother’s estate. Ms. Johnson’s husband paid Respondent a $17,500.00 retainer fee for his services. Respondent proceeded to obtain a tax identification number for the estate and later sent a form to Ms. Johnson by which she would accept appointment as the estate’s personal representative.
Beginning in June 2007, Ms. Johnson sent Respondent e-mails inquiring about the status of the probate case. Respondent told Ms. Johnson that the probate court had rejected his pleadings for technical reasons and blamed the probate court for the delay in the matter. In fact, Respondent had never filed the pleadings necessary to commence a probate proceeding. When Ms. Johnson later contacted the probate court, she learned that her acceptance of appointment as personal representative had never been filed. She then sent another e-mail to Respondent and asked him to file this pleading and any other necessary documents. Ms. Johnson later found out that the probate case itself had never been filed. When she repeatedly attempted to contact Respondent for an explanation of his actions, Respondent failed to reply.
The Colorado Supreme Court immediately suspended Respondent from the practice of law in late November 2007. Respondent failed to notify Ms. Johnson of his suspension, return her file, or return the unearned portion of her retainer fee at this time. Ms. Johnson eventually discovered that Respondent had been immediately suspended from the practice of law. When she confronted Respondent about it, he reassured her that he would clear everything up "next week." Ms. Johnson retained new counsel who commenced the probate proceeding.
Respondent acted dishonestly when he told Ms. Johnson that the probate court had rejected his pleadings when in fact he had never filed them. Respondent also knowingly converted the unearned portion of the $17,500.00 retainer fee paid to him by Ms. Johnson. Both of these acts constitute violations of Colo. RPC 8.4(c). Respondent also violated Colo. RPC 1.3, Colo. RPC 1.4(a) and (b), and Colo. RPC 1.16(d) when he neglected Ms. Johnson’s legal matter, failed to adequately communicate with her, and finally failed to return her property upon termination of the representation.
The Homeowners Litigation Matter—08PDJ057
In the fall of 2006, certain subdivision homeowners retained Respondent to represent them in a pending litigation matter. The homeowners collectively paid Respondent a $7000.00 retainer fee. Respondent agreed to bill the homeowners at a rate of $200.00 per hour.
Respondent entered his appearance in the litigation and responded on behalf of certain homeowners to the plaintiffs’ motion for default judgment. Respondent also filed an answer on behalf of the other homeowners. The district court entered a decree quieting title in the plaintiffs and enjoined certain homeowners. The district court entered a default judgment against the same homeowners. Respondent moved to set aside the default judgment. The district court granted the motion as to certain homeowners.
Plaintiffs’ counsel and Respondent thereafter submitted initial disclosures. No discovery appears to have taken place. In the fall of 2007, the court ordered the parties to engage in mediation. The homeowners were in contact with Respondent about the upcoming mediation. Respondent did not send invoices or billing statements to the clients during his representation.
In late November 2007, the Colorado Supreme Court administratively suspended Respondent from the practice of law. The Colorado Supreme Court then immediately suspended Respondent from the practice of law in a second proceeding on January 16, 2008. Respondent failed to inform his clients of either suspension as required by C.R.C.P. 251.28 and C.R.C.P. 251.8.
In mid-January 2008, a client learned from opposing counsel that Respondent had been suspended from the practice of law. Another client sent an e-mail to Respondent asking him how to respond to opposing counsel. Respondent promised to address this matter upon his return to Durango on January 23, 2008.
On January 24, 2008, the clients checked the Colorado Supreme Court website and learned that Respondent had been suspended from the practice of law. They then retained new counsel to handle their case. One of the homeowners sent an e-mail to Respondent and requested that he surrender their file and provide an accounting of their funds. New counsel later requested the same. Respondent failed to comply with either request.
Respondent violated Colo. RPC 1.15(b) and 1.16(d) when he failed to return the file to his clients and failed to provide them with an accounting of their funds. Respondent also violated Colo. RPC 8.4(c) when he knowingly converted the unearned portion of their $7000.00 retainer fee and when he acted deceitfully in failing to address his suspensions with his clients.
The ABA 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.4 In imposing a sanction after a finding of lawyer misconduct, the Court must first consider the duty breached, the mental state of the lawyer, the injury or potential injury caused, and the aggravating and mitigating evidence pursuant to ABA Standard 3.0.
Respondent’s failure to participate in these proceedings leaves the Court with no alternative but to consider only the established facts and rule violations set forth in the complaints as well as the complaining witness statements in evaluating these factors.5 The Court finds that Respondent violated duties owed to his clients, the public, the legal system, and other duties owed as a professional.6 Respondent specifically violated his duty to preserve the property of his clients, his duty to diligently perform services on their behalf, his duty to be candid with them during the course of the professional relationship, and his duty abide by the legal rules of substance and procedure which affect the administration of justice. The entries of default established that Respondent knowingly engaged in this conduct and caused actual and potential harm to his clients, the public, the legal system, and the profession.
The Court finds that several aggravating factors exist in this case including prior disciplinary offenses, a dishonest or selfish motive, a pattern of misconduct, multiple offenses, substantial experience in the practice of law, and indifference to making restitution.7 Due in part to the absence of any contradictory evidence, the Court finds clear and convincing evidence to support each aggravating factor. Respondent failed to participate in these proceedings and therefore presented no evidence in mitigation.
The ABA Standards suggest that disbarment is the presumptive sanction for the most serious misconduct demonstrated by the admitted facts and rule violations in this case.8 Disbarment is generally appropriate when a lawyer knowingly converts client property and causes injury or potential injury to a client.9 Colorado Supreme Court case law applying the ABA Standards also holds that disbarment is the presumptive sanction for conversion of client or third-party funds.10 Knowing conversion or misappropriation of client money "consists simply of a lawyer taking a client’s money entrusted to him, knowing that it is the client’s money and knowing that the client has not authorized the taking."11 Neither the lawyer’s motive in taking the money, nor the lawyer’s intent regarding whether the deprivation is temporary or permanent, are relevant for disciplinary purposes.12 Significant mitigating factors may overcome the presumption of disbarment, however, Respondent failed to present any in this case.13
One of the primary goals of our disciplinary system is to protect the public from lawyers who pose a danger to them. The facts established in the complaint, without explanation or mitigation, reveal the harm Respondent has caused his clients, the public, the legal system, and the profession. He knowingly failed to preserve the property of his clients, failed to diligently perform services on their behalf, failed to be candid with them during the course of the professional relationship, and failed to abide by the legal rules of substance and procedure which affect the administration of justice. Upon consideration of the nature of Respondent’s misconduct, his mental state, the actual and potential harm he caused, and the absence of mitigating factors, the Court concludes that the ABA Standards and Colorado Supreme Court case law both support disbarment in this case.
The Court therefore ORDERS:
CHARLES WILLIAM RASURE, JR., Attorney Registration No. 25569, is hereby DISBARRED from the practice of law, effective thirty-one (31) days from the date of this order, and his name shall be stricken from the list of attorneys licensed to practice law in the State of Colorado.
1. Respondent SHALL pay full restitution to the Attorneys Fund for Client Protection in the amount of $17,500.00, plus any additional amounts paid by the fund as a result of this consolidated case.
2. Respondent SHALL pay the costs of these proceedings. The People shall submit a "Statement of Costs" within fifteen (15) days of the date of this order. Respondent shall have ten (10) days within which to respond.
1. See People v. Richards, 748 P.2d 341, 346 (Colo. 1987).
2. See the People’s complaints in 07PDJ078, 07PDJ085, 08PDJ004, 08PDJ027, 08PDJ040, and 08PDJ057 for further detailed findings of fact.
3. The Court takes judicial notice of the fact that the Colorado Supreme Court immediately suspended Respondent from the practice of law on January 16, 2008.
4. See In re Roose, 69 P.3d 43, 46-47 (Colo. 2003).
5. The Court considered complaining witness statements from Genevieve Bishop, and Greg and Yvonne Ellis.
6. See ABA Standards 4.0, 5.0, 6.0, and 7.0.
7. See ABA Standards 9.22(a), (b), (c), (d), (i) and (j).
8. Respondent’s misconduct also implicates ABA Standards 4.4, 4.6, 5.1, 6.2, and 7.0.
9. See ABA Standard 4.11.
10. See e.g. People v. Linville, 114 P.3d 104 (Colo. 2005) (attorney acting as trustee); People v. Motsenbocker, 926 P.2d 576 (Colo. 1996) (attorney acting as bar association treasurer); and People v. McDowell, 942 P.2d 486 (Colo. 1997) (attorney holding funds for real estate transaction).
11. See People v. Varallo, 913 P.2d 1, 11 (Colo. 1996).
12. Id. at 10-11.
13. See In re Fischer, 89 P.3d 817 (Colo. 2004) (finding significant facts in mitigation).