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TCL > October 2011 Issue > Disciplinary Case Summaries for Matters Resulting in Diversion and Private Admonition

The Colorado Lawyer
October 2011
Vol. 40, No. 10 [Page  127]

© 2011 The Colorado Lawyer and Colorado Bar Association. All Rights Reserved.

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From the Courts
Matters Resulting in Diversion

Disciplinary Case Summaries for Matters Resulting in Diversion and Private Admonition

Articles describing Diversion Agreements and private admonitions as part of the Attorney Regulation System are published on a quarterly basis. These summaries are contributed quarterly by the Colorado Supreme Court Office of Attorney Regulation.


Diversion and Private Admonition Summaries

Diversion is an alternative to discipline.1 Pursuant to the rule and depending on the stage of the proceeding, Attorney Regulation Counsel (Regulation Counsel), the Attorney Regulation Committee (ARC), the Presiding Disciplinary Judge (PDJ), the hearing board, or the Supreme Court may offer diversion as an alternative to discipline. For example, Regulation Counsel can offer a Diversion Agreement when the complaint is at the central intake level in the Office of Attorney Regulation Counsel (OARC). Thereafter, ARC or some other entity must approve the agreement.

From April 29, 2011 through July 29, 2011, at the intake stage:

  • Regulation Counsel entered into 10 Diversion Agreements involving 10 requests for investigation
  • the ARC approved 11 Diversion Agreements involving 11 requests for investigation
  • there were 0 Diversion Agreements submitted to the PDJ for approval
  • the ARC issued 0 private admonitions
  • the PDJ approved 0 private admonitions.

Determining Whether Diversion is Appropriate

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

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

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

3) whether the attorney is likely to benefit from participation in the program.

Regulation Counsel will consider diversion only if the presumptive range of discipline in the particular matter is likely to result in a public censure or less; however, if the attorney has been publicly disciplined in the last three years, generally the matter will not be diverted.2 Other factors may preclude Regulation Counsel from agreeing to diversion.3

Purpose of the Diversion Agreement

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

Conditions of the Diversion Agreement

The type of misconduct dictates the conditions of the Diversion Agreement. Although each Diversion Agreement is factually unique and different from other agreements, often the requirements are similar. Generally, the attorney is required to attend Ethics School and/or Trust Account School. Classes are conducted by OARC attorneys. The attorney also may be required to fulfill any of the following conditions:

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

Note: The terms of a Diversion Agreement may not be detailed in this summary if the terms are generally included within Diversion Agreements.

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

Types of Misconduct

The types of misconduct resulting in diversion from April 29, 2011 through July 29, 2011 generally involved the following:

  • providing competent representation to a client, implicating Colo. RPC 1.1
  • scope of representation and allocation of authority between client and lawyer, implicating Colo. RPC 1.2
  • an attorney’s neglect of a matter and/or failure to communicate, implicating Colo. RPC 1.3 and 1.4
  • fee issues, implicating Colo. RPC 1.5
  • conflict of interest with current clients, implicating Colo. RPC 1.8
  • trust account issues, implicating Colo. RPC 1.15
  • responsibilities of supervisory lawyer, implicating Colo. RPC 5.1
  • failure to supervise associates and/or staff, implicating Colo. RPC 5.3
  • unauthorized practice of law, implicating Colo. RPC 5.5
  • committing a criminal act, implicating Colo. RPC 8.4
  • engaging in conduct involving dishonesty, fraud, deceit, or misrepresentation, implicating Colo. RPC 8.4
  • conduct prejudicial to the administration of justice, implicating Colo. RPC 8.4.

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

Notes

1. See C.R.C.P. 251.13.

2. See C.R.C.P. 251.13(b).

3. See id.

__________________

Samples of Diversion Agreements

Below are some Diversion Agreements that Regulation Counsel determined appropriate for specific types of misconduct from April 29, 2011 through July 29, 2011. Each sample gives a general description of the misconduct, the Colorado Rule(s) of Professional Conduct implicated, and the corresponding conditions of the Diversion Agreement.

Competence

> Respondent practices immigration law with other lawyers outside Colorado. A client hired the firm for representation regarding cancellation of removal. Other lawyers in the firm (not respondent) worked on the matter. They concluded that the client was not eligible for temporary protected status (TPS); in fact, the client was eligible for this relief. The client’s application for cancellation of removal was denied.

Respondent agreed to represent the client with his appeal for $3,000. Respondent filed a notice of appeal, but not an opening brief. He also filed a motion to remand to the immigration judge regarding the issue of TPS. In January 2010, the Board of Immigration Appeals (BIA) issued its decision regarding the appeal. The BIA affirmed the immigration judge’s legal conclusions, and noted that respondent filed a notice of appeal but did not file an appellate brief. The BIA also denied the motion for remand, finding that the client did not submit an application for TPS with his motion, show that such an application had been filed, or submit evidence to establish TPS. According to respondent, he did not proceed with filing an appellate brief with the BIA because he wanted to focus on the TPS issue in the motion for remand. He thought that was the best avenue for relief and that there was little likelihood of success with an appeal. Respondent believed that by conceding his office’s ineffective assistance of counsel regarding the TPS issue in the motion to remand, the BIA would readily remand the matter, even without a TPS application being filed. The client hired new counsel who filed a motion to reopen the proceedings based on ineffective assistance of counsel. The motion was granted.

Rule Implicated: Colo. RPC 1.1.

Diversion Agreement: As part of the conditions of the Diversion Agreement, respondent must attend Ethics School, complete eight hours of CLE in immigration law, refund the client $3,000, and pay all costs associated with the one-year Diversion Agreement.

__________________

> In June 2010, the client retained respondent for representation in connection with the estate of the clients mother. On the same day, respondent sent the client an engagement letter confirming representation. He stated that respondent would be providing such legal representation as you may request." Respondent’s engagement letter contained no language that otherwise limited the scope of the representation.

Respondent negotiated with the client’s adult children regarding the estate of the client’s mother, including ownership of a home located in Colorado. Respondent did not dispute the children’s position that a beneficiary deed executed by the client’s mother in favor of the client’s children defeated the joint tenancy the client had with his mother in the Colorado property.

The negotiation was unsuccessful. In July 2010, the client’s daughter filed the matter in probate court, asking to be appointed personal representative of the estate. The client wanted respondent to enter his appearance as client’s counsel in the probate litigation to contest the will and object to his daughter being appointed personal representative.

Instead of entering his appearance in the probate litigation, respondent wrote to the client in August 2010, stating that: (1) the firm drafted an objection for the client to sign and file pro se; (2) the firm was not entering an appearance at that time; and (3) the firm would require $5,000 to continue to assist the client with the matter.

The client sent respondent the additional $5,000, thinking that was what respondent wanted to enter his appearance as client’s counsel in the probate litigation. Respondent did not enter his appearance. Instead, respondent wrote to the client in late August 2010, stating that he had deposited the $5,000 in his firm’s trust account but would require additional funds if the will contest continued and if the firm would be required to enter its appearance with the court.

Because respondent would not enter his appearance in the probate court, the client wrote a letter in September 2010, terminating respondent’s services. The client also informed respondent that he disputed all of respondent’s charges.

The client learned from his subsequent counsel that contrary to respondent’s advice, the client had the right to sole ownership of the Colorado property. Colorado state law provides that a beneficiary deed does not sever or defeat a joint tenancy.

Respondent’s June 2010 engagement letter stated that the fee charged would be based on factors set forth in Colo. RPC 1.5, including the amount of time spent and charged at an hourly rate, but that the amount billed could be higher or lower than the figure arrived at by simply multiplying the rate of the attorneys who worked on the matter times the number of hours individually worked. Respondent sent the client billing statements but never provided any information about the amount of time or number of hours worked, even though respondent was billing the client on an hourly basis.

The client paid respondent a total of $8,417. Respondent currently is holding $5,559 of the client’s funds in his firm’s trust account. Respondent has not refunded any of the client’s money.

Rules Implicated: Colo. RPC 1.1, 1.2(a) and (c), 1.4, and 1.5(a) and (f).

Diversion Agreement: As part of the conditions of the Diversion Agreement, respondent must attend Ethics School, refund the client, and pay all costs associated with the two-year Diversion Agreement.

Diligence and/or Failure to Communicate

> Respondent represented a client in a criminal case. Respondents flat fee agreement with the client contained earmarks that defined when respondent would pay herself; however, the first earmark was not reasonable. Further, when respondent transferred money from her COLTAF account to her office account, in accordance with the earmarks, she did not provide her client a billing statement or accounting or otherwise inform him that she had transferred the funds.

Respondent did not timely respond to her client’s inquiries regarding his case. Respondent and her client discussed having respondent contact a certified public accountant (CPA) so that she could understand the financial documents in the case. Respondent asserted she attempted to contact the CPA one time. It was the only attempt to contact the CPA.

After the client terminated respondent, respondent promptly provided him a refund check. The client was told he would receive a billing statement at a later date. Respondent did not provide the client with a billing statement for approximately four months.

Rules Implicated: Colo. RPC 1.3, 1.4(a), and 1.15(b) and (c).

Diversion Agreement: As part of the conditions of the Diversion Agreement, respondent must attend Ethics School, revise her fee agreement, and pay all costs associated with the one-year Diversion Agreement.

__________________

> Respondent performed significant legal services for his client and then attempted to collect his fees out of a judgment ultimately awarded to the client. Respondent failed to communicate adequately with his client regarding his collection efforts and the funds he took possession of as a result of garnishments of the judgment amounts. Respondent also failed to provide an accounting before removing funds from his trust account for earned fees or when his client requested the accounting.

Rules Implicated: Colo. RPC 1.4(a)(2) and (a)(3) and 1.15(b) and (c).

Diversion Agreement: As part of the conditions of the Diversion Agreement, respondent must attend Ethics School, attend Trust Account School, and pay all costs associated with the one-year Diversion Agreement.

__________________

> Respondent is a criminal law attorney who agreed to represent a client in a criminal case and agreed to draft the Governmental Immunity Notice (Notice) in a civil matter. During the course of the representation of the client, respondent failed to communicate with the client about the client’s objectives, and failed to safeguard the client’s funds in respondent’s COLTAF account. Respondent deposited the client’s retainer in his operating account on receipt. At the time respondent deposited the client’s retainer, respondent had earned a portion of it by attending two court hearings on behalf of the client in the criminal matter. Respondent completed the client’s criminal case and completed the Notice, and earned the client’s funds in its entirety.

Rules Implicated: Colo. RPC 1.4(a)(2) and 1.15(a).

Diversion Agreement: As part of the conditions of the Diversion Agreement, respondent must attend Ethics School, attend Trust Account School, work with a financial monitor, and pay all costs associated with the three-year Diversion Agreement.

__________________

> Respondent is a patent law attorney. During the course of the representation of a client, respondent failed to communicate with the client about the clients objectives, failed to properly document the basis and rate of his fee, and failed to safeguard the client’s funds in a trust account. Respondent mistakenly believed that he was not required to maintain a trust account for client funds based on the nature of his law practice. When respondent received the client’s funds in this matter, he placed the client’s funds in the client’s file until the funds were earned. After earning the client’s funds, respondent took the funds from the client’s file and used them for his benefit. Respondent has since set up a COLTAF account and has modified his written fee agreement to comply with the rules.

Rules Implicated: Colo. RPC 1.4(a)(2); 1.5(b); and 1.15(a), (c), and (d).

Diversion Agreement: As part of the conditions of the Diversion Agreement, respondent must attend Ethics School, attend Trust Account School, work with a financial monitor, and pay all costs associated with the two-year Diversion Agreement.

Fee/Trust Account Matters

> Respondent started practicing bankruptcy law approximately four years ago. Respondent did not place bankruptcy retainers he received from his bankruptcy clients into his COLTAF account. According to respondent, he had a pay as you go arrangement with most of his clients. Respondent said he would work on client files and that over time, the clients would make payments until respondent was fully paid. When that occurred, respondent’s office would file the bankruptcy petition. Respondent disclosed that some of his clients made substantial or full payment before he had completed the work, but respondent did not place these client funds into his COLTAF account.

Respondent realized he was incorrectly handling client funds when he attended an online CLE course in May 2011. Respondent stated he was changing the way he would handle client funds, and that he was using his COLTAF account in accordance with the Rules of Professional Conduct.

Rule Implicated: Colo. RPC 1.15(a).

Diversion Agreement: As part of the conditions of the Diversion Agreement, respondent must attend Ethics School, attend Trust Account School, and pay all costs associated with the one-year Diversion Agreement.

Conflict of Interest

> On two occasions, respondent loaned money to two of his clients.

Rule Implicated: Colo. RPC 1.8(e).

Diversion Agreement: As part of the conditions of the Diversion Agreement, respondent must attend Ethics School and pay all costs associated with the one-year Diversion Agreement.

__________________

> Respondent, an associate at a law firm, was given check writing authority. Respondents employer asked respondent to issue a check in the amount of $1,000 for investigation of a liability issue, and respondent complied. Although respondent did not know at the time, the recipient of the check was a client of the law firm. At the request of her employer, respondent issued another check in the amount of $1,000 as an advance for a client of the firm. In actuality, both checks were loans made to clients.

Rule Implicated: Colo. RPC 1.8(e).

Diversion Agreement: As part of the conditions of the Diversion Agreement, respondent must attend Ethics School and pay all costs associated with the one-year Diversion Agreement.

Failure to Supervise Associates and/or
Staff and Unauthorized Practice of Law

> In late 2009 and early 2010, respondent met and began a business relationship with a person involved in negotiating mortgage loan modifications on behalf of individual consumers. Respondent worked as an independent contractor for the loan modification company reviewing customer files. Respondent did not have contact with clients, and did not supervise any of the employees of the loan modification company or ensure compliance with state law governing loan modification services. Respondent terminated her relationship with the loan modification business in 2010.

Rules Implicated: Colo. RPC 5.3(a) and 5.5(a)(3).

Diversion Agreement: As part of the conditions of the Diversion Agreement, respondent must attend Ethics School, complete four CLE hours related to law practice management, and pay all costs associated with the two-year Diversion Agreement.

Criminal Conduct

> Respondent was convicted of Driving While Ability Impaired (DWAI). Respondents blood alcohol content (BAC) registered at .187% at the time respondent was pulled over. Respondents conviction led to fines, alcohol classes, a suspended license, and two years of alcohol monitoring on respondent’s car. This was respondent’s first and only alcohol-related driving conviction.

Respondent underwent a psychiatric evaluation. The psychiatrist concluded that respondent’s driving while impaired appeared to be a result of limited poor judgment leading to alcohol misuse. The psychiatrist observed no indications of any psychiatric or medical condition that would impair respondent’s ability to practice law.

Rules Implicated: Colo. RPC 8.4(b) and C.R.C.P. 251.5(b).

Diversion Agreement: As part of the conditions of the Diversion Agreement, respondent must attend Ethics School, comply with all terms of the court sentence, submit to full-screen random urinalysis testing twice a month during the pendency of his criminal probation, and pay all costs associated with the eighteen-month Diversion Agreement.

__________________

> Respondent was convicted of Driving Under the Influence (DUI) of alcohol. The blood results indicated that respondents BAC was .223%. Respondent was involved in a crash causing heavy front-end damage to his vehicle, as well as heavy front-end damage to another parked vehicle.

Rules Implicated: Colo. RPC 8.4(b) and C.R.C.P. 251.5(b).

Diversion Agreement: As part of the conditions of the Diversion Agreement, respondent must attend Ethics School, abstain from alcohol, comply with all terms of the court sentence, participate in MEMS 3000 alcohol testing, verify participation in any treatment or support program recommended by the evaluator or probation department, provide monthly progress reports to the OARC, and pay all costs associated with the three-year Diversion Agreement.

__________________

> Respondent pleaded guilty to an amended charge of DWAI. He received a suspended jail sentence and twelve to eighteen months probation. His BAC level measured .184%. Respondent also pleaded guilty to and received an unsupervised deferred judgment on a charge of Prohibited Use of a Weapon. Respondent had a handgun in the glove compartment of the vehicle, with a fully loaded magazine in the gun, and a second fully loaded magazine loose in the glove compartment. This was respondent’s first alcohol-related offense.

Rules Implicated: Colo. RPC 8.4(b) and C.R.C.P. 251.5(b).

Diversion Agreement: As part of the conditions of the Diversion Agreement, respondent must attend Ethics School, comply with all terms of the court sentence, abstain from alcohol use, submit to random breathalyzer tests, attend individual therapy, and pay all costs associated with the two-year Diversion Agreement.

__________________

> In October 2010, respondent was arrested after an argument with his wife. During the argument, respondent slapped his wife in the face with an open hand. Respondent pleaded guilty to HarassmentStrike/Shove/Kick, CRS § 18-9-111(1)(a), a third-degree misdemeanor, and domestic violence, CRS § 18-6-801. Respondent received a deferred judgment and sentence and must complete twenty-four months of supervised probation. The conditions of his probation include a domestic violence evaluation and compliance with treatment recommendations, payment of fines and costs, no possession of firearms, abstinence from alcohol and other drugs without a valid prescription, no criminal violations, and no serious traffic offenses.

Rules Implicated: Colo. RPC 8.4(b) and C.R.C.P. 251.5(b).

Diversion Agreement: As part of the conditions of the Diversion Agreement, respondent must attend Ethics School; comply with all terms of the court sentence, including anger management classes and monitored sobriety; abstain from alcohol and other mood-altering substances; and pay all costs associated with the two-year Diversion Agreement.

__________________

> Respondent was convicted of two Class 2 petty offenses and two Class C misdemeanors. Respondent failed to report the convictions to the OARC until several years later. Respondent suffered from post-traumatic stress disorder and major depressive disorder, and removed himself from the practice of law while he dealt with those issues.

Rules Implicated: Colo. RPC 8.4(b) and C.R.C.P. 251.5(b).

Diversion Agreement: As part of the conditions of the Diversion Agreement, respondent must attend Ethics School, submit to an independent medical examination, continue all mental health treatment indicated by the examiner, and pay all costs associated with the two-year Diversion Agreement.

__________________

> Respondent suffered from an illness requiring regular medication. Over a period of several months, respondent stopped taking prescribed medication and experienced a psychotic breakdown. During this period, respondent engaged in criminal conduct and was jailed. Respondent was hospitalized and treated. Respondent pleaded guilty to second- and third-degree misdemeanors related to placing a child in a situation that posed a threat of injury. Respondent also pleaded guilty to reckless endangerment of a police officer and to a traffic violation. Respondent received two years’ probation with conditions.

Rules Implicated: Colo. RPC 8.4(b) and C.R.C.P. 251.5(b).

Diversion Agreement: As part of the conditions of the Diversion Agreement, respondent must attend Ethics School; comply with all terms of the court sentence; follow a regimen of counseling, medication, and medication-related testing; and pay all costs associated with the three-year Diversion Agreement.

Conduct Prejudicial to the Administration of Justice

> Respondent contacted a doctor to act as a rebuttal expert witness in an adoption case. Respondent sent an e-mail to the doctor confirming her hourly rate and providing respondents contact information for purposes of submitting an invoice for her services. In that e-mail and subsequent follow-up contacts, respondent did not advise the doctor that her client would be responsible for paying the doctor’s fees. Following the doctor’s work on the case, the doctor submitted her invoice to respondent. Thereafter, the doctor attempted to collect the debt from respondent on a number of occasions. Respondent did not pay the doctor for more than one year, until after the doctor filed a complaint with the OARC.

Rules Implicated: Colo. RPC 8.4(d).

Diversion Agreement: As part of the conditions of the Diversion Agreement, Respondent must attend Ethics School and pay all costs associated with the one-year Diversion Agreement.

__________________

> On four occasions, respondent used her professional status as a licensed attorney to visit an inmate at the Denver Detention Center with whom respondent had been in a turbulent and violent relationship for several years. Respondent never represented the inmate at the time of her professional visits; however, during one visit, respondent presented the inmate with a power of attorney form they had discussed. Respondent’s diagnosed mental disability contributed to her misconduct. Respondent is currently in compliance with her mental health treatment plan and taking her medications. Respondent and the inmate have ceased contact with each other.

Rule Implicated: Colo. RPC 8.4(d).

Diversion Agreement: As part of the conditions of the Diversion Agreement, respondent must attend Ethics School, submit to an independent mental health examination, and pay all costs associated with the two-year Diversion Agreement.

__________________

Respondent hired an expert to assist him with investigation into a legal matter on behalf of respondent’s client. Respondent agreed to be jointly and severally liable for the expert’s fees. The expert completed a significant amount of work, billing $42,193.08 over an eight-month period. Respondent paid the expert $23,136.52 over that time and failed to pay the remaining amounts, because he and his client no longer had funds to pay the expert. Approximately two years later, and after a formal complaint was filed, respondent paid the remaining amount due to the expert with 8% interest.

Rule Implicated: Colo. RPC 8.4(d).

Diversion Agreement: As part of the conditions of the Diversion Agreement, respondent must attend Ethics School, work with a practice monitor, and pay all costs associated with the one-year Diversion Agreement.

__________________

While working as a court-appointed child and family investigator, respondent failed to maintain appropriate boundaries with one parent. Respondent employed a parent for a short period while the investigation was ongoing, and provided gifts to the parent’s children. These actions led to the other parent’s complaint to the court of unfair treatment, requiring the court to expend resources to consider this argument and resolve the issue.

Rule Implicated: Colo. RPC 8.4(d).

Diversion Agreement: As part of the conditions of the Diversion Agreement, respondent must attend Ethics School, complete eight hours of CLE in family law, and pay all costs associated with the one-year Diversion Agreement.

__________________

A private investigative company performed work for respondent in 2009 and 2010. On a number of occasions, the investigative company attempted to collect from respondent the debt for outstanding invoices related to this work. In January 2011, respondent paid the outstanding balance on the 2010 invoices, but not on the 2009 invoices. Respondent still owes the investigative company $3,452.80. Respondent acknowledged liability for the debt, but asserted an inability to pay it. Respondent indicated he had personal problems that contributed to his inability to pay.

Rule Implicated: Colo. RPC 8.4(d).

Diversion Agreement: As part of the conditions of the Diversion Agreement, respondent must attend Ethics School, repay the outstanding balance owed to the investigative company within 120 days, and pay all costs associated with the one-year Diversion Agreement.

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