The Colorado Lawyer
Vol. 41, No. 4 [Page 119]
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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. 10PDJ095
THE PEOPLE OF THE STATE OF COLORADO
PETER B. ALBANI
June 7, 2011
DECISION AND ORDER IMPOSING SANCTIONS
PURSUANT TO C.R.C.P. 251.19(b)
On April 5 and 6, 2011, a Hearing Board composed of David M. Herrera and Robert A. Millman, members of the bar, and William R. Lucero, the Presiding Disciplinary Judge ("the PDJ"), held a two-day hearing pursuant to C.R.C.P. 251.18. Elizabeth Espinosa Krupa and Adam J. Espinosa appeared on behalf of the Office of Attorney Regulation Counsel ("the People"), and Peter B. Albani ("Respondent") was represented by Leonard Berenato and David Worstell. The Hearing Board now issues the following "Decision and Order Imposing Sanctions Pursuant to C.R.C.P. 251.19(b)."
Respondent and his co-counsel represented a client charged with multiple felonies for allegedly stealing $1,200,000.00 from her employer. During two in camera conferences, held without their client present, Respondent and his co-counsel made statements to the prosecutors and the judge expressing their disagreement with their client’s decision to reject plea offers in order to combat any future ineffective assistance of counsel claim his client might bring and to disclose to the court a developing conflict in the attorney-client relationship. By doing so, Respondent failed to maintain the confidences of his client in violation of Colo. RPC 1.4(a), 1.6(a), 1.7(b), and 1.8(b). In concealing these two in camera proceedings from his client, Respondent violated Colo. RPC 8.4(c) and 8.4(d).
Even though Respondent attempted to preserve his own interests by divulging client confidences without his client’s consent, the Hearing Board cannot find, under the facts here, that Respondent violated Colo. RPC 1.2(a). Nor does the Hearing Board find that Respondent’s statements to the tribunal violated Colo. RPC 3.3(a)(1) or 8.4(c).
In light of Respondent’s significant experience in the practice of law, but also taking into account several mitigating factors, the Hearing Board determines that a suspension for one year and one day, all stayed upon the successful completion of a two-year period of probation with conditions, is warranted.
II. PROCEDURAL HISTORY
On September 15, 2010, the People filed a complaint alleging that Respondent violated Colo. RPC 1.2(a), 1.4(a), 1.6(a), 1.7(b), 1.8(b), 3.3(a)(1), 8.4(c), and 8.4(d) with respect to his conduct in two in camera conferences held without his client present. Respondent filed an answer on November 1, 2010. The parties filed "Stipulated Facts and Law" on March 25, 2011. During the hearing on April 5 and 6, 2011, the Hearing Board heard testimony and considered the stipulated facts and law, the People’s stipulated exhibits 1-9, and Respondent’s exhibit A.
III. FINDINGS OF FACT AND RULE VIOLATIONS
The Hearing Board finds the following facts and rule violations have been established by clear and convincing evidence. Respondent took the oath of admission and was admitted to the bar of the Colorado Supreme Court on October 30, 1984. He is registered upon the official records, attorney registration number 13982, and is thus subject to the jurisdiction of the Hearing Board in these disciplinary proceedings.1
Representation of Patricia Ragusa
In 2004, Patricia Ragusa ("Ragusa") hired Respondent and his law partner, Robert Grossman ("Grossman"), to defend her against fifty-one counts of theft and attempted theft and fifty-one counts of computer crime and attempted computer crime filed by the Jefferson County District Attorney’s Office. The prosecution alleged that she stole $1,200,000.00 from her employer by wire transfers made from her computer.2 Ragusa paid Respondent and Grossman $110,000.00 for their representation. Following a trial in which she was convicted on all counts, Ragusa terminated Grossman and Respondent’s services in December 2005.
The First In Camera Proceeding
Ragusa’s case was tried before a jury from November 7 to 16, 2005, with Judge Tamara Russell presiding. On November 7, 2005, before the jury was selected, the court held an in camera proceeding with only Respondent, Grossman, and the prosecution present. Respondent initiated this proceeding, and at Respondent’s behest, his client was not privy to the discussions that followed.
During this in camera proceeding, Respondent disclosed to the court the district attorneys’ plea offers and his discussions with Ragusa concerning those offers. Respondent began by informing the court that he believed it was "appropriate to make a brief Schultheis record."3 Respondent revealed "that the district attorney’s office . . . [has] made us a number of plea bargain offers that we have advised our client to take unconditionally."4 Respondent further explained that he and Grossman had "met with [Ragusa] repeatedly and were very adamant that [they] felt she should take that deal,"5 and that "[Ragusa] led us to believe that she was going to take the deal" and they believed it was "folly for her not to have taken the deal, the final deal that was offered by the People."6
Respondent offered the following additional statements: (1) "We do not believe that [Ragusa is] incompetent";7 (2) "[W]e do not believe she is insane";8 (3) "[W]e believe that her decision is flat out wrong";9 (4) "[W]e believe that her choice is just a very, very poor one";10 and (5) "[W]e have advised [Ragusa] that Mr. Grossman and I have and will carry on with dignity. We will not act like we hate [the prosecutors] and that we do not enjoy this line of work."11 The court noted that Ragusa had "been advised on more than one occasion about [her potential sentence] by a couple of different judges" and decided to go forward with the trial.12
At the conclusion of the in camera proceeding, Respondent told the court that he would "not advise [Ragusa] of this [proceeding] should she ask [him and Grossman] what this was about. We don’t think it was appropriate. It would only throw a monkey wrench thinking that we’re against her."13
Ragusa testified that she did not give Respondent consent to speak to Judge Russell or the district attorneys about communications she had with her attorneys outside her presence. Respondent admits that the intent of this in camera proceeding was, in part, to make a record to protect himself in the event Ragusa brought an ineffective assistance of counsel claim against him in the future and that he did not consider how his conduct impacted his duties to Ragusa.14 Respondent also felt that he had a duty to the tribunal to disclose the fact that Respondent did not accept the plea and he wanted to give the judge insight into an appropriate sentencing range. Respondent also testified that he did not intend to make a Schultheis record or to deceive the court, as at the time he understood that a Schultheis hearing concerned a client who intended to offer perjured testimony; however, this was not Respondent’s concern.
The Second In Camera Proceeding
On November 9, 2005, following a recess during the prosecution’s case-in-chief, the court held another in camera proceeding, again without Ragusa. It is unclear from the record who requested this hearing. Respondent began the proceeding by stating that "a most fortuitous situation happened that under the guise of calling back to talk to us about a question, a sequestration potential violation, that gave us an opportunity to come into chambers . . . ."15
Respondent also revealed that during the recess he and Grossman were subjected to "perhaps the most vicious attack I’ve ever had to get from a client saying that I’m not fighting for her. And that I don’t—if I can, not to be rude, but to quote her, don’t give a sh[**], don’t give a f[***] and putting on a patsy defense."16 Respondent wanted to make a "record, because, as [he] anticipated prior to this trial, [Ragusa] seems to be trying to make us a target. . . ."17 He further stated, "I just thought, wow, this [sequestration problem] is fantastic because now we can go back and just cool our jets and make a record of what we perceive to be going on."18
During the in camera proceeding, Grossman revealed that Ragusa was "expressing that she may not want us continuing to represent her."19 The court asked the attorneys whether Ragusa wanted Respondent and Grossman to withdraw from representation and whether Ragusa wanted them to discontinue the defense now or in a future case.20 Grossman responded that he believed "she was referring to this case."21 Finally, Respondent stated that "Rob and I are certainly not going to quit. We’re not going to let her fire us, if that ever were to come."22 The court ended the hearing, instructed Respondent and Grossman to notify it if a Schultheis hearing needed to be conducted, and resumed the trial.23
Respondent admits that immediately prior to the second in camera proceeding he and Grossman had developed a conflict of interest with Ragusa and that he should have more clearly indicated to the judge the nature of that conflict. Respondent believes that had he done so, the judge could have made an appropriate ruling regarding the conflict. Respondent noted that, at the time, he felt that he had a duty of candor to the court to make a record regarding the breakdown in the attorney-client relationship. Respondent stated that in hindsight, he should have discussed the proceeding with Ragusa and it was error not to bring her back into chambers. He admitted that he revealed client confidences during these proceedings and that he realizes now he had a duty to Ragusa to have her present, to notify the court that there was a breakdown in the attorney-client relationship, and to discontinue the representation.
Ragusa’s Appeal and Remand
In April 2006, Ragusa was sentenced to fifteen years of incarceration, plus five years of mandatory parole and restitution. In June 2006, the Colorado State Public Defenders’ Office filed an appeal on behalf of Ragusa, requesting reversal of Ragusa’s conviction and arguing that her Sixth Amendment rights to have conflict-free counsel, to be present at trial, and to have the counsel of her choice were violated. Ragusa testified that she only became aware of the two in camera proceedings after her conviction, when she was able to review the record in connection with her appeal. Ragusa testified that she did not specifically recall her attorneys leaving the courtroom and going into chambers during the trial without her present. She did recall a series of bench conferences to which she was not privy. She remembers asking Respondent what he and Grossman had talked to the judge about during the bench conferences, and remembers Respondent stating that things were going well for them and not to worry; we are winning.
On September 3, 2009, the Colorado Court of Appeals reversed Ragusa’s 2006 conviction and remanded the matter for a new trial.24 This decision was premised on the two in camera proceedings at which Ragusa was not present. The court of appeals held that Ragusa was denied her rights to meaningfully exercise her choice of counsel, to be present at all critical stages of the proceedings, to make an intelligent and informed choice of whether to continue with counsel when a conflict appeared, and to receive zealous and loyal representation.25
The court of appeals also concluded that Respondent and Grossman "breached their duty to [Ragusa] by revealing [privileged] communications to the prosecution and to the court before and during the trial. This breach of duty is but one factor which evidences an actual conflict of interest between defendant and her counsel and the adverse effect the conflict had on their performance."26
In 2009, Respondent and Ragusa participated in legal fee arbitration. Respondent was ordered to, and did, reimburse Ragusa $1,500.00 of his total legal fees.27
On February 18, 2010, after the court of appeals’ remand, Judge Russell held a hearing on a motion to disqualify her as the judge in Ragusa’s second trial. At the hearing, Judge Russell stated, "I hope that people who read the case will note the fact that both times that counsel came back to see me, it was under pretext, they lied to me, then [sic] I would have never allowed them to come back had they told me the truth."28 Judge Russell’s testimony at the disciplinary hearing differed somewhat from her statements at the motions hearing on remand. At the disciplinary hearing, she testified that although she believed that counsel did ask for both in camera hearings under a pretext, her use of the term "lie" was too strong and she regretted using this term. After reviewing the transcripts of the in camera proceedings, she could not say that Respondent explicitly lied to her, but rather that he should have been more forthcoming. She further testified that after a few moments she realized the in camera discussions were not a Schultheis hearing, even though Respondent used that term, and she allowed Respondent to make his record and then proceeded with trial.
Following the motions hearing on remand, Ragusa pled guilty in November 2010 to one count of theft, a class four felony. In December 2010, Ragusa was sentenced to seven years in the custody of the Department of Corrections plus the mandatory parole period.
Colo. RPC 1.2(a)
Colo. RPC 1.2(a) requires lawyers to "abide by a client’s decision, after consultation with the lawyer, as to a plea to be entered, whether to waive a jury trial, and whether the client will testify."29 Pointing to Respondent’s statements made in the first in camera hearing that he disagreed with Ragusa’s decision to decline plea offers, the People contend that Respondent violated Colo. RPC 1.2(a).
The Hearing Board cannot find clear and convincing evidence that Respondent, by making such statements to the judge and prosecutors, failed to abide by Ragusa’s decision to reject the district attorneys’ plea offers and instead continue with trial. Although the Hearing Board views Respondent’s comments as a breach of client confidences, the fact that trial proceeded demonstrates that Respondent abided by Ragusa’s decision, albeit with the reservations he expressed outside his client’s presence. For these reasons, we cannot find that Respondent violated Colo. RPC 1.2(a).
Colo. RPC 1.4(a)
Respondent admits that he violated Colo. RPC 1.4(a),30 which requires lawyers to, among other things, keep clients reasonably informed about the status of a matter, promptly comply with reasonable requests for information, and explain a matter to the extent reasonably necessary so that the client can make informed decisions about the representation.31
Respondent’s admission is supported by the evidence showing that Respondent did not want Ragusa present during either in camera proceeding and that he did not have her consent to reveal their confidential communications. Ragusa testified that when she asked Respondent about certain communications he had had with the judge, Respondent just told her not to worry and that they were winning. Respondent never told Ragusa about the in camera hearings outside her presence and—as evidenced by the transcript—said he would refuse to disclose any information to Ragusa should she ask about them.32 Respondent also admitted that his intent behind revealing these communications, in part, was to protect himself from allegations of ineffective assistance of counsel. Accordingly, we find that Respondent failed to comply with his duties of communication in violation of Colo. RPC 1.4(a).
Colo. RPC 1.6(a)
The People contend that Respondent violated Colo. RPC 1.6(a), which provides in part that a lawyer "shall not reveal information relating to the representation of a client unless the client consents after consultation" or the disclosure "is impliedly authorized in order to carry out the representation."33
It is axiomatic that in the attorney-client relationship, an attorney must maintain confidentiality of information and must not reveal information related to the representation in the absence of the client’s consent.34 This foundational duty encourages a client to trust the attorney completely and to communicate frankly with the attorney "even as to embarrassing or legally damaging subject matter."35 The scope of information subject to the restrictions in Colo. RPC 1.6(a) is broad. The comment to Colo. RPC 1.6(a) provides: "The confidentiality rule, for example, applies not only to matters communicated in confidence by the client but also to all information relating to the representation, whatever its source."36
Respondent agrees, and the evidence demonstrates, that he violated Colo. RPC 1.6(a) when he revealed the following confidential client information without Ragusa’s consent during the two in camera proceedings: (1) his disagreement with Ragusa’s decision to reject the plea offer; (2) his strained relationship with Ragusa; (3) his advice to Ragusa during the representation and her responses and reactions; and (4) his belief that Ragusa was manipulating or would attempt to manipulate the judicial system and that she was setting him up for an ineffective assistance of counsel claim.
Colo. RPC 1.7(b)
The People posit that Respondent’s representation of Ragusa was materially limited when his self-interest drove him to reveal client confidences during the in camera proceedings in violation of Colo. RPC 1.7(b), which states that a lawyer shall not represent a client if the representation of that client may be materially limited by the lawyer’s own interests.37 The 2005 comment to Colo. RPC 1.7(b) provides: "The lawyer’s own interests should not be permitted to have an adverse effect on representation of a client."
Respondent has also admitted that his conduct violated Colo. RPC 1.7(b). Based on the evidence, the Hearing Board concludes that Respondent’s conduct in revealing client confidences was motivated in part by a desire to reduce his exposure to a potential ineffective assistance claim. Respondent also stipulated that immediately prior to and during the second proceeding he was developing a conflict of interest with Ragusa and again wanted to make a record to protect himself. He admits that he did not consider how his behavior impacted Ragusa. The Hearing Board finds this conduct to be clear and convincing evidence that Respondent materially limited his representation of Ragusa by protecting his own interests in violation of Colo. RPC 1.7(b).
Colo. RPC 1.8(b)
The People next assert that Respondent violated Colo. RPC 1.8(b), which provides that a "lawyer shall not use information relating to the representation of a client to the disadvantage of the client unless the client consents,"38 based on Respondent’s efforts to protect his own self-interest and his revelation of client confidences without Ragusa’s consent. The People argue Respondent was so concerned about an ineffective assistance of counsel claim that he placed in the record information that could be used in his favor and against Ragusa in a future proceeding regarding his representation. Respondent argues that Colo. RPC 1.8(b) applies only to prohibited business transactions, and therefore, he cannot be found in violation of this rule.39
With respect to Respondent’s statements made during the first in camera proceeding and his motivation to make them, Respondent’s conduct clearly shows that he and Grossman were in conflict with Ragusa. The nature of this conflict is further demonstrated by the fact Respondent and Grossman made a record that could be used in their favor and against Ragusa in an unspecified future proceeding that they suspected might occur regarding their representation.
Additionally, Respondent acknowledged that he knew he was developing a conflict of interest immediately prior to and during the second in camera hearing and admitted that he should have more clearly indicated to Judge Russell the nature of that conflict in order for her to make an appropriate ruling. However, Respondent did not do so; rather, he revealed his strained relationship with Ragusa on the record outside of Ragusa’s presence and without her consent in order to admittedly partially protect himself. Based on the evidence presented, the Hearing Board finds that at this point the conflict was apparent—enough so that Respondent felt compelled to exclude Ragusa while he made his record. Respondent had a duty to advise Ragusa about the nature of this conflict, yet he failed to do so. Respondent’s conduct disadvantaged Ragusa in violation of Colo. RPC 1.8(b).
Colo. RPC 3.3(a)(1)
Colo. RPC 3.3(a)(1) states that a lawyer "shall not knowingly make a false statement of material fact or law to a tribunal."40 The People argue that Respondent knowingly made a false statement of material fact when he informed the court that he felt it appropriate to make a Schultheis record during the first in camera proceeding.
The People contend that the only reason Respondent made this statement was to exclude Ragusa from the proceeding, that he knew he did not want to make a bona fide Schultheis record, and that he made no attempt to correct this misstatement.41 The People surmise that Respondent made these statements knowingly, with the intent to deceive the court as to the true purpose of the in camera proceeding. The People further contend that Respondent’s false statement concerned a material fact because the court permitted the hearing without Ragusa based on Respondent’s representations.
Respondent denies that he lied to the court, that he intended to mislead it, or that he wanted to make a Schultheis record. He asserts that at most he was negligent, as he does not remember using the term Schultheis, and if he did, he merely misspoke.
The record demonstrates that Respondent initiated the first in camera hearing by stating "[t]here is one more matter that we would like all four counsel to approach on."42 Respondent did not lie or use a pretext to initiate this proceeding, as this statement was truthful—he had a matter to discuss. Only when he was in chambers did he mention Schultheis, not before. The Hearing Board finds Respondent’s testimony credible that he misspoke in using the term Schultheis, as evidenced by his testimony that he believed a Schultheis record related only to a client’s demand to present perjured testimony and by the record he ultimately made. Respondent did admit that his purpose was to make a record to the court and the prosecutors about his conflicts with Ragusa without her present, a fact supported by his own statements that, if asked, he would refuse to tell Ragusa what was said. However, we cannot say that Respondent’s purpose behind this proceeding was misleading, as it was obvious to all those present at the hearing that Respondent was not trying to make a Schultheis record.43
The Hearing Board also finds Judge Russell’s testimony credible. At the disciplinary hearing, Judge Russell testified that although she believed counsel did ask for both in camera hearings on a pretext, her use of the term "lie" was too strong, she regretted using this term, since Respondent did not outright lie to her, but she felt Respondent should have been more forthcoming. Additionally, Judge Russell was never deceived by Respondent’s use of the term Schultheis, as she testified that she did not believe the in camera proceeding to be a Schultheis hearing and nevertheless allowed Respondent to proceed with his record absent Ragusa.
Further, we cannot say that Respondent’s statement that he believed a Schultheis record appropriate relates to a material fact because no evidence was presented that the statement induced the court to assent to Respondent’s request to conduct the hearing without Ragusa, thereby depriving her of the right to be present at all critical stages of the proceedings. As noted, Judge Russell knew this was not a Schultheis hearing but permitted Respondent to make his record anyway.
Consequently, the Hearing Board cannot find clear and convincing evidence that Respondent’s use of the term Schultheis was a false statement knowingly made to the court in violation of Colo. RPC 3.3(a)(1).
Colo. RPC 8.4(c)
The People’s seventh claim for relief alleges Respondent violated Colo. RPC 8.4(c), which provides that it is professional misconduct for a lawyer to engage in conduct involving dishonesty, fraud, deceit, or misrepresentation. The People plead this claim based on the same operative facts pertinent to their Colo. RPC 3.3(a)(1) claim. The People contend that Respondent either knew his statement regarding a Schultheis record was false and failed to correct it, or was reckless in failing to determine whether his statement was true prior to making it. The People also argue that Respondent violated this rule by (1) intentionally, knowingly, or recklessly failing to tell Ragusa that he revealed client confidences to the court; and (2) by telling Ragusa that things were going well and they were winning when asked about the in camera hearings.
Respondent again denies making a misrepresentation to the court. He states that he misspoke when using the term Schultheis and made the statement during the heat of the moment. However, Respondent admitted that he never told Ragusa about the in camera proceedings and that he would have refused to tell Ragusa about the content of such proceedings should she have asked.
Based on the analysis set forth responding to the People’s Colo. RPC 3.3(a)(1) claim, the Hearing Board concludes Respondent did not engage in conduct involving misrepresentation when he told the court that he believed it appropriate to make a brief Schultheis record. No evidence was presented demonstrating that Ragusa asked Respondent about what was said during the two in camera hearings. Ragusa testified that she was not aware of any in camera hearings during the trial and only remembered asking Respondent what was said at bench conferences. Thus, we cannot say that Respondent, by telling Ragusa that things were going well or that they were winning in response to her inquiry, violated Colo. RPC 8.4(c).44
However, it is uncontroverted that Respondent never told Ragusa about the in camera proceedings and that he would have refused to tell Ragusa about them should she have asked. A misrepresentation by omission is as egregious as an express or verbal misrepresentation.45 Respondent had a duty to maintain client confidences.46 And Ragusa as a criminal defendant had a right to be present at all critical stages of the trial.47 By not disclosing to Ragusa that he had revealed client confidences during the in camera proceedings, Respondent violated his duty to her, denied her the right to make an informed choice about whether she wanted to reveal such confidences, and denied her the right to be present at the hearings. In concealing these proceedings and his statements therein from Ragusa, Respondent was deceitful and engaged in dishonest conduct in violation of Colo. RPC 8.4(c).48
Colo. RPC 8.4(d)
Finally, the Hearing Board turns to the People’s eighth claim for relief: that Respondent’s use of false pretenses to persuade the court and the prosecutors to be present when he made harmful statements about Ragusa and disclosed her confidences in her absence prejudiced the administration of justice in violation of Colo. RPC 8.4(d). The People suggest that by engaging in this conduct, Respondent delayed and altered the course of the trial—as evidenced by the reversal of Ragusa’s conviction on appeal due to Respondent’s actions.
The Hearing Board finds that Respondent’s deliberate disclosure of client confidences and concealment of the disclosures from Ragusa was clearly prejudicial to the administration of justice, as contemplated by Colo. RPC 8.4(d).49 He further caused injury to the judicial system by interfering with and causing delays to Ragusa’s trial, which resulted in the expenditure of additional and unnecessary judicial resources.50
The American Bar Association Standards for Imposing Lawyer Sanctions (1991 & Supp. 1992) ("ABA Standards") and Colorado Supreme Court case law govern the selection and imposition of sanctions for lawyer misconduct. ABA Standard 3.0 mandates that, in selecting the appropriate sanction, the Hearing Board consider the duty breached, the injury or potential injury caused, Respondent’s mental state, and the aggravating and mitigating evidence.
ABA Standard 3.0—Duty, Injury, and Mental State
Duty: Respondent’s disclosure of client confidences to the judge and the prosecutors during two in camera proceedings and his concealment of the proceedings from his client in violation of Colo. RPC 1.4(a), 1.6(a), 1.7(b), 1.8(b), 8.4(c), and 8.4(d) constitutes a dereliction of his duties to Ragusa, his client, the general public, and to the legal system.
Mental State: The Hearing Board concludes that Respondent acted knowingly with respect to all of the People’s claims (save Colo. RPC 1.2(a), 3.3(a)(1), and 8.4(c)) when he revealed client confidences during the two in camera proceedings, refused to tell Ragusa about the hearings, and asked the court to hold two in camera hearings without Ragusa present so that he could make a record to protect, in part, his own self-interest.
Injury: Through his misconduct, Respondent caused actual and potential injury to Ragusa, the general public, and the legal system. By revealing client confidences without consent and by refusing to properly advise Ragusa of the conflict that he knew had developed, Respondent caused actual injury to Ragusa by preventing her from knowingly and intelligently exercising her right to conflict-free and effective counsel during her trial.51 Respondent’s misconduct violated Ragusa’s right to effective representation and to a fair trial.52
Ragusa testified that when she first was made aware of the in camera hearings, she was shocked that her own attorneys were "lying about her behind her back" and "purposefully making her look bad." Ragusa testified that she was very angry, hurt, and betrayed when she read the transcripts, which "led [her] to believe that every lawyer was a con."
Respondent’s conduct also inflicted harm upon the general public and the legal system, as his behavior adversely affected Ragusa’s trial, which was reversed and remanded. Although Ragusa was able to enter into a plea bargain to her benefit, the reversal caused substantial delays in the judicial process and the expenditure of additional and unnecessary judicial resources.
Finally, Respondent’s conduct and the confidences he revealed had the potential to affect Judge Russell’s rulings in the case and to affect the conduct of the prosecution.53
ABA Standard 3.0—Aggravating Factors
Aggravating circumstances are any considerations or factors that may justify an increase in the degree of discipline to be imposed. The Hearing Board considers evidence of the following aggravating circumstances in deciding the appropriate sanction.
Dishonest or Selfish Motive—9.22(b): Respondent acted with a dishonest and selfish motive when he asked the court to make a record revealing client confidences in both in camera hearings to protect himself should Ragusa bring a claim against him for ineffective assistance of counsel. However, we cannot find, based on the evidence, that Respondent’s sole motivation was dishonest and selfish, as he also was motivated by his duty of candor to the tribunal. Thus, we will not weigh this factor heavily in aggravation.
Vulnerability of the Victim—9.22(h): Ragusa was a vulnerable client because she was charged with over one hundred felony criminal counts, was facing significant jail time, and was in custody at the time of trial. She therefore reasonably relied on Respondent to zealously defend her and protect her legal interests.
Substantial Experience in the Practice of Law—9.22(i): As Respondent has been a member of the Colorado bar since 1984, he has substantial experience in the practice of law.
ABA Standard 3.0—Mitigating Factors
Mitigating factors are any considerations or factors that may justify a reduction in the degree of discipline imposed. The Hearing Board considers evidence of the following mitigating circumstances in deciding the appropriate sanction.
Absence of a Prior Disciplinary Record—9.32(a): Respondent has been practicing law for over twenty years and has no prior disciplinary history. The Hearing Board gives great weight to this factor.
Timely Good Faith Effort to Make Restitution or to Rectify Consequences of Misconduct—9.32(d): Respondent has made a timely good faith effort to make restitution and rectify the consequences of his misconduct. He willingly participated in good faith in a legal fee arbitration proceeding, paid the $1,500.00 award, and apologized to Ragusa during those proceedings. Since participating in this disciplinary action, Respondent testified that he has voluntarily completed fourteen to fifteen hours of ethics CLEs in order to identify his mistakes and become a better attorney.
Full and Free Disclosure to Disciplinary Board or Cooperative Attitude toward Proceedings—9.32(e): The evidence indicates that Respondent has consistently cooperated with the People throughout this proceeding.
Character or Reputation—9.32(g): The Hearing Board heard testimony from multiple witnesses at trial as to Respondent’s good reputation and character within the legal community. Specifically, Michael Kossen, a criminal defense attorney, met Respondent in 1989, has co-counseled over fifteen cases with Respondent, and has consulted with him in more than one hundred cases. He testified as to Respondent’s reputation as an honest and hard-working attorney who puts forth an extraordinary effort on his cases. Colin Brese, a criminal defense attorney who has co-counseled cases with Respondent in over twenty trials, testified that Respondent is professional and honest and that his behavior in this matter was out of character and not typical. The Hearing Board finds the testimony of these two witnesses to be credible evidence of good character.54
Delay in the Disciplinary Proceedings—9.32(j): The Ragusa case occurred in 2005—over five years ago. The delay was not caused by the People. The court of appeals’ opinion was announced in 2009 and the People acted promptly by filing a complaint within a year of the opinion. Because of this delay in the disciplinary proceedings, however, it was difficult for all witnesses to precisely recall all of the underlying events and statements. However, because Respondent was unable to establish unfair prejudice as a result of the delay, this factor will not be weighed heavily.55
Imposition of Other Penalties or Sanctions—9.32(k): Respondent paid Ragusa the $1,500.00 arbitration award. Additionally, Respondent was severely chastised for his misconduct by the court of appeals in a published decision. This decision, as testified to by Respondent’s colleagues, has caused some harm to Respondent’s reputation.
Remorse—9.32(l): Respondent displayed great remorse for his behavior at the disciplinary hearing. He testified that he regrets his behavior during the in camera proceedings and that he realizes the statements he made had no place in front of the judge or the prosecutors. Respondent acknowledges that his statements did not assist Ragusa, that he should never have made them, and that he should have told her about the hearings. Respondent testified that he "cringes" when he reads the record and that he greatly regrets his behavior. The Hearing Board finds Respondent’s testimony credible.
Sanctions Analysis under ABA Standards and Case Law
ABA Standard 4.22 provides that suspension is generally appropriate when a lawyer knowingly reveals information relating to the representation of a client not otherwise lawfully permitted to be disclosed and this disclosure causes injury or potential injury to a client.56 The Hearing Board finds that ABA Standards 4.22 provides an appropriate starting point in our analysis because Respondent did not act intentionally, but rather knowingly, when he revealed client confidences.
The Hearing Board cannot conclude, in light of sanctions levied in similar cases, that a lengthy suspension, as the People request, is appropriate in this instance. We also add that we cannot, in good conscience, conclude that public censure is the most suitable sanction for Respondent’s conduct, as Respondent suggests. Respondent’s conduct was not an isolated incidence of negligence, but rather involved knowing disclosures of client confidences made on more than one occasion. Moreover, Respondent’s conduct caused actual injury to Ragusa and the legal system, and as discussed above, his behavior flouted the attorney’s core duties of loyalty and protection of client confidences.
The People cite People v. Smith for the proposition that a two-year period of suspension is appropriate here.57 However, we consider this case factually distinguishable insofar as the attorney in Smith, who purchased cocaine from his client, intentionally aided law enforcement by surreptitiously recording conversations with that client in order to reduce his own exposure to prosecution.58 The court found that the client’s sale of cocaine was encouraged by the attorney, the attorney’s misconduct contributed to the client’s criminal activities, the attorney intentionally aided the police in prosecuting his client by obtaining information and evidence through unauthorized recordings of conversations, and the attorney was motivated to cooperate in order to minimize repercussions from his own use of cocaine.59
A more relevant case is the Colorado Supreme Court’s decision in People v. Lopez.60 In that matter, an attorney gave his client’s handwritten document outlining his client’s version of underlying events to the district attorney in connection with plea negotiations without his client’s permission.61 There, the attorney’s misconduct warranted a public censure.62 Respondent’s misconduct is somewhere more serious than the lawyer’s misconduct in Lopez because Respondent knowingly revealed multiple client confidences to the court and prosecutors on the record during two in camera hearings. However, Respondent’s misdeeds were limited to disclosure of client confidences within one case, while in Lopez the attorney also made misrepresentations in his response to investigation in violation of Colo. RPC 8.4(c), which further supported a more severe sanction.63 Even given these distinctions, we conclude that the Lopez case provides more relevant guidance than the Smith case where the conduct and underlying motivation was more egregious than here and is simply not analogous to the case at hand.64
In light of the mitigating factors established by the evidence, including: (1) Respondent has not been disciplined in over twenty years of practice; (2) Respondent has an otherwise good character; and (3) Respondent has expressed significant remorse for his misconduct, we find that a shorter period of suspension is the most appropriate sanction here. Accordingly, we impose upon Respondent a suspension of one year and one day, all stayed upon the successful completion of a two-year period of probation.
The legal profession demands an elevated standard of conduct from its members, and the community expects lawyers to exhibit the highest standards of honesty and integrity. Respondent’s misconduct was an affront to the fundamental professional duties of communication, loyalty, and honesty he owed to his client. His disclosure of client confidences and his failure to recognize and discuss a developing conflict with his client undermined his client’s right to conflict-free counsel, to effective representation, and to a fair trial. In light of the serious nature of Respondent’s misconduct and the factors in mitigation, the Hearing Board concludes Respondent should be suspended for one year and one day, all stayed upon the successful completion of a two-year period of probation.
The Hearing Board therefore ORDERS:
1. PETER B. ALBANI, attorney registration number 13982, is hereby SUSPENDED for ONE YEAR AND ONE DAY, ALL STAYED UPON THE SUCCESSFUL COMPLETION OF A TWO-YEAR PERIOD OF PROBATION. The suspension SHALL become public and effective thirty-one days from the date of this order upon the issuance of an "Order and Notice of Suspension" by the PDJ and in the absence of a stay pending appeal pursuant to C.R.C.P. 251.27(h).
2. Respondent SHALL file any post-hearing motion or application for stay pending appeal with the PDJ on or before June 27, 2011. No extensions of time will be granted.
3. 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. See C.R.C.P. 251.1(b).
2. The case was captioned State of Colorado v. Patricia Ragusa, case number 04CR3101, Jefferson County District Court.
3. Ex. 1 at 26:1-3. The Schultheis case discusses an attorney’s obligation to request to withdraw from a case when the attorney is unable to dissuade his client from presenting fabricated or perjured testimony. People v. Schultheis, 638 P.2d 8, 13 (Colo. 1981). Only when the motion to withdraw is denied by the court should counsel proceed with a request for a record outside the presence of the judge and prosecutor. Id. at 14. The record should be made in a manner that protects the confidentiality of the attorney-client relationship. Id. Judge Russell testified that in Jefferson County a Schultheis record may also reference a situation where there is a breakdown in the attorney-client relationship and the attorney can no longer represent his or her client. Here, according to Judge Russell, an attorney would request to make a record outside the presence of the trial judge and prosecutors. Jefferson County has a procedure that includes a hearing in the presence of a second judge and court reporter wherein breakdowns in the attorney-client relationships are addressed on the record without the trial judge’s participation. The record is then sealed and opened only for appellate purposes.
4. Ex. 1 at 26:4-7.
5. Id. at 26:12-13.
6. Id. at 26:17-20.
7. Id. at 27:11. Respondent testified that he commented on Ragusa’s competence only because Judge Russell asked him about it.
8. Id. at 27:20.
9. Id. at 27:19.
10. Id. at 27:23-24.
11. Id. at 29:3-6.
12. Id. at 27:25-28:4. Judge Russell testified when she realized that Respondent was not requesting either type of Schultheis hearing, she allowed defense counsel to make their record, was satisfied that the client was competent, and continued with the trial. She recognized there was a potential conflict between Ragusa and her attorneys but did not feel that it called for action other than to continue with the trial. Tom Jackson ("Jackson"), one of the prosecutors present, testified that he did not feel that Ragusa needed to be present, and that it did not register with him at the time that this hearing or the discussions therein might cause a reversal. Michelle Cantin-Weaver ("Cantin-Weaver"), the second prosecutor, also testified that she had no concerns that the hearing or discussions might cause a reversal.
13. Id. at 29:15-18.
14. Respondent testified that he believed someday Ragusa would claim he never discussed the various plea offers with her.
15. Ex. 2 at 208:10-13. Respondent testified that his use of the term "under the guise" was nothing more than poor word choice. The Hearing Board finds this testimony credible. Indeed, the evidence before the Hearing Board indicates that the initial purpose of the second in camera hearing was to address a sequestration issue.
16. Id. at 208:16-20. Respondent testified that a "massive blowup" occurred prior to the second in camera proceeding and that Ragusa was yelling, swearing, and making threats. He stated that this "was beyond anything [he] had ever experienced" and that it "shook him." Ragusa, by contrast, testified that she never yelled at Respondent.
17. Id. at 208:23-25.
18. Id. at 209:19-22.
19. Id. at 209:23-24.
20. Id. at 209:25-210:6.
21. Id. at 210:7-8.
22. Id. at 213:15-17. Respondent testified that he made this statement in the heat of the moment and that he regrets making it. He testified that he is aware of the fact that Ragusa could have discharged his services if she wanted to.
23. Id. at 213:23-25.
24. Id. at 2 ¶ 5; Ex. 5 (People v. Ragusa, 220 P.3d 1002 (Colo. App. 2009)).
25. Ex. 5 at 7-8.
26. Ex. 5 at 8-9. The court of appeals found that Respondent and Grossman shared privileged information with the prosecution and the trial court in the first in camera proceeding, when they discussed their advice to Ragusa about the plea offers and their assessment of her decision. As to the second in camera proceeding, the court of appeals determined that Respondent and Grossman again revealed client confidences by repeating statements Ragusa made to them about their defense and expressing their concerns that she was setting them up for future litigation. Ex. 5 at 9.
27. Ex. 8.
28. Ex. 4 at 14:11-19.
29. Colo. RPC 1.2(a) (2005). The Hearing Board notes that Respondent has asked it to apply the 2005 version of the Rules of Professional Conduct. The People appear to have a contrary opinion, citing only to the current rules with the exception of their Colo. RPC 1.7(b) claim, to which they cite the 2005 rule. However, the current rules became effective on January 1, 2008. Colo. RPC 9 (2010). Accordingly, the Hearing Board has determined that, because the events in question occurred during 2005, it will apply the 2005 rules. See People v. Lopez, 845 P.2d 1153, 1154 n.1 (Colo. 1993) (applying rules in effect at the time the conduct forming the basis for discipline occurred).
30. At the conclusion of the disciplinary hearing, Respondent confessed claims II (Colo. RPC 1.4(a)), III (Colo. RPC 1.6(a)), and IV (excluding paragraph 27 of the complaint) (Colo. RPC 1.7(b)). Respondent did not, however, admit that he was acting knowingly or with intent, only that he was negligent. See also Respondent’s Memo. of Legal Authorities at 9.
31. Colo. RPC 1.4(a)-(b) (2005).
32. Ex. 1 at 29:15-18.
33. Colo. RPC 1.6(a) (2005).
34. Colo. RPC 1.6 cmt. (2005).
37. Colo. RPC 1.7(b) (2005).
38. Colo. RPC 1.8(b) (2005).
39. The Hearing Board, however, does not read Colo. RPC 1.8(b) as strictly limited to prohibited business transactions. This section of the rule is broader than Colo. RPC 1.8(a) (which specifically addresses prohibited business transactions), and by its plain language applies to all situations where an attorney uses information gained during the representation to his own benefit and to the disadvantage of the client.
40. Colo. RPC 3.3(a)(1) (2005).
41. We note that the People rely on Colo. RPC 3.3(a)(1) (2010) which provides that a lawyer shall not knowingly "fail to correct a false statement of material fact or law previously made to a tribunal by the lawyer." However, this language was not part of rule in effect at the time of Respondent’s conduct. Thus, we do not consider whether Respondent failed to correct his statements in our analysis.
42. Ex. 1 at 25:19-20. Respondent does not remember using the term Schultheis and Judge Russell testified that she did not remember any discussion of Schultheis until the parties were in chambers—a fact supported by the record.
43. Judge Russell, Jackson, and Cantin-Weaver all testified that they did not believe the November 7, 2005, proceeding was a Schultheis hearing.
44. See People v. Regan, 831 P.2d 893, 895 (Colo. 1992) (finding attorney’s misrepresentations regarding status of matter to one client violated precursor to Colo. RPC 8.4(c)); see also People v. Eaton, 828 P.2d 246, 247 (Colo. 1992) (finding attorney’s misrepresentations of status of matters to multiple clients violated same rule).
45. See CJI-Civ 19:2 (4th ed.) (2011), Nondisclosure or Concealment—Elements of Liability; Mallon Oil Co. v. Bowen/Edwards Assocs., Inc. 965 P.2d 105, 111 (Colo. 1998) ("To succeed on a claim for fraudulent concealment or non-disclosure, a plaintiff must show that the defendant had a duty to disclose material information. A defendant has a duty to disclose to a plaintiff with whom he or she deals material facts that ‘in equity or good conscience’ should be disclosed.") (internal citations omitted).
46. ABA Standards § II; Colo. RPC 1.6.
47. Illinois v. Allen, 397 U.S. 337, 338, 90 S.Ct. 1057, 1058 (1970) ("One of the most basic of the rights guaranteed by the Confrontation Clause is the accused’s right to be present in the courtroom at every stage of his trial."); Colo. Const. art. II, § 16 (guaranteeing criminal defendants "the right to appear and defend in person").
48. See People v. Regan, 831 P.2d 893, 895 (Colo. 1992) (finding attorney’s misrepresentations regarding status of matter to one client violates precursor to Colo. RPC 8.4(c)); see also People v. Eaton, 828 P.2d 246, 247 (Colo. 1992) (finding attorney’s misrepresentations of status of matters to multiple clients violates same rule).
49. Hearing Board member Robert A. Millman believes that the facts demonstrate Respondent’s willful concealment of the two in camera proceedings from Ragusa in violation of Colo. RPC 1.4(a), 8.4(c), and 8.4(d). However, Mr. Millman would not have found separate violations of all three of these Rules of Professional Conduct, as he believes the claims to be cumulative and nothing more than a "piling on" of multiple rule violations founded upon the same conduct.
50. See In re Smith, 989 P.2d 165, 170, 173 (Colo. 1999) (affirming finding of Colo. RPC 8.4(d) violation where the hearing board determined, inter alia, that two actions filed and prosecuted by attorney resulted in the unnecessary, excessive expenditure of judicial resources); People v. Murray, 887 P.2d 1016, 1020 (Colo. 1994) (finding attorney’s conduct to violate Colo. RPC 8.4(d) when he caused the court to delay resolution of matter).
51. The Colorado Court of Appeals found that Respondent’s and Grossman’s misconduct denied Ragusa the rights to meaningfully exercise her choice of counsel, be present at all critical stages of the proceedings, and make an intelligent and informed choice of whether to continue when a conflict appeared. Ex. 5 at 5-6. The Hearing Board notes that although it has considered the findings and conclusions of the court of appeals, it has made its own independent determination of the actual and potential injuries suffered by Ragusa. See In re Egbune, 971 P.2d 1065, 1067 (Colo. 1999) (stating district court’s ruling is not binding on a hearing board because the burden of proof in a civil action is generally by preponderance of the evidence while in a lawyer discipline proceeding proof is by clear and convincing evidence).
52. People v. Harlan, 54 P.3d 871, 879 (Colo. 2002) ("The right to conflict-free counsel is encompassed within the right to effective assistance of counsel. . . . That counsel must be conflict-free ensures that a defendant will receive the zealous advocacy to which he is entitled.").
53. Judge Russell testified at the hearing that the confidences Respondent disclosed had no effect on her rulings during the trial. The only reason she recused herself on remand was that she did not want Ragusa to feel that she was not getting a fair trial. Jackson testified that the in camera hearings did not affect his behavior during trial, as the evidence against Ragusa was very strong, and his knowledge of what Respondent was thinking did not affect him or change his strategy.
54. Although Judge Russell testified that she has known Respondent for over twenty years, that she considers him a fine attorney, that she has never questioned his honesty or any of his actions during trials, and that she felt his actions during this matter were an aberration and out of character, the Hearing Board recognizes that she was not specifically called as a character witness. See People v. Morley, 725 P.2d 510, 518 (Colo. 1986) (noting that it is generally improper for a judge to testify voluntarily as a character witness at an attorney disciplinary proceeding absent exceptional circumstances, and noting that it is within the discretion of the hearing board to consider whether a judge’s testimony may unfairly inject the prestige of the judge’ office into the proceedings in determining whether to permit the judge to testify as a character witness under these exceptional circumstances).
55. "Delay is a mitigating circumstance when the respondent attorney is able to establish that the proceeding’s time span resulted in unfair prejudice to him or her, or is caused by unjustified prosecutorial delay." In re Disciplinary Proceeding Against Preszler, 232 P.3d 1118, 1133 (Wash. 2010).
56. The People also request the Hearing Board apply ABA Standards 4.32 and 7.2. The Hearing Board finds that ABA Standard 4.32 is unnecessary to its analysis but notes that its sanctions determination would be the same under this standard. Likewise, the Hearing Board does not consider ABA Standard 7.2, as that standard does not change its analysis.
57. 778 P.2d 685, 687-88 (Colo. 1989).
58. Id. at 687.
59. Id. at 688.
60. 845 P.2d 1153 (Colo. 1993).
61. Id. at 1154-55.
62. Id. at 1156.
63. Id. at 1155-56.
64. See also People v. Rosen, 198 P.3d 116, 119-21 (Colo. 2008) (suspending for six months, all stayed with probation where attorney knowingly made deceitful statements to an insurance company by referring to his deceased client in the present tense and misinforming the insurer of the timing of his client’s death); In re Gibson, 991 P.2d 277, 278-79 (Colo. 1999) (continually misrepresenting status of case to client for four years warranted thirty-day suspension based on mitigating factors); Columbus Bar Ass’n v. Willette, 884 N.E.2d 581, 588-89 (Ohio 2008) (suspending attorney for one year, with six months stayed, for revealing client confidences, making misrepresentations to clients, falsely advertising his services, and soliciting business over the telephone). Although these cases imposed a more severe sanction than that imposed in this matter, they are distinguishable in that they involved multiple instances of deceitful statements and revelations of client confidences for an extended period of time.
Case No. 10PDJ084
THE PEOPLE OF THE STATE OF COLORADO
ROBERT S. McCORMICK
December 23, 2011
OPINION AND DECISION DISMISSING COMPLAINT
PURSUANT TO C.R.C.P. 251.19(b)(1)
On October 20 and 21, 2011, a Hearing Board composed of Marna M. Lake and Peter R. Bornstein, members of the bar, and William R. Lucero, the Presiding Disciplinary Judge ("the PDJ"), held a hearing pursuant to C.R.C.P. 251.18. April M. McMurrey appeared on behalf of the Office of Attorney Regulation Counsel ("the People"), and Robert Stuart McCormick ("Respondent") appeared with counsel, Gary M. Jackson. The Hearing Board now issues the following "Opinion and Decision Dismissing Complaint Pursuant to C.R.C.P. 251.19(b)(1)."
Respondent was hired to provide advice about whether a Mexican national, who was married to a U.S. citizen, could obtain lawful residency in the United States. The People allege Respondent violated Colo. RPC 1.1, 1.3, and 1.4(a) by providing incorrect legal advice to his clients and by inadequately communicating with them. The Hearing Board does not find clear and convincing evidence supporting the People’s claims. Accordingly, we dismiss the People’s complaint in its entirety.
II. PROCEDURAL HISTORY
The People filed a complaint in this case on August 4, 2010, alleging Respondent violated Colo. RPC 1.1, 1.3, and 1.4(a). Respondent answered on September 13, 2010, and later amended his answer on June 8, 2011.1 Although a hearing was originally set to begin on February 28, 2011, the PDJ granted a request by Respondent’s counsel for a continuance, and the hearing was rescheduled for July 19, 2011.
Respondent filed a motion on June 27, 2011, in which he argued the disciplinary matter should be dismissed, contending the action was barred by the statute of limitations and laches. After receiving the People’s response on July 12, 2011, the PDJ denied Respondent’s motion on July 13, 2011.
On July 11, 2011, Respondent filed a motion to compel, arguing that his client, Regulo Flores-Garcia ("Flores-Garcia"), had failed to provide documents as required by a subpoena duces tecum. The People responded on July 13, 2011, and the PDJ denied Respondent’s motion that same day. Also on July 13, 2011, the PDJ granted Respondent’s request to continue the hearing and rescheduled it for October 20, 2011. On October 3, 2011, Respondent filed a second motion to compel Flores-Garcia’s compliance with a subpoena duces tecum. The People responded on October 5, 2011, and the PDJ denied Respondent’s motion on October 7, 2011.
During the hearing on October 20 and 21, 2011, the Hearing Board heard testimony from Respondent, Nancy Elkind, Evelyn McCormick, Adela Rivas, and Lourdes Rodriguez.2 Flores-Garcia did not testify. The PDJ admitted the People’s exhibits 1-12, 14-33, 35-37, and 39, as well as Respondent’s exhibits A, C - K, M - P, and R.3 In addition, with leave from the PDJ, both parties filed written closing arguments on October 28, 2011.
III. FINDINGS OF FACT
AND CONCLUSIONS OF LAW
Respondent took the oath of admission and was admitted to the bar of the Colorado Supreme Court on May 25, 1983, under attorney registration number 12870.4 He is thus subject to the jurisdiction of the Hearing Board in these disciplinary proceedings.5
Relevant Immigration Law
This disciplinary case concerns legal advice Respondent provided regarding an immigration matter. We provide a brief overview of pertinent immigration law before discussing Respondent’s representation.
First, several governmental agencies are vested with authority over immigration matters. Visas are issued by U.S. consulates, which are units of the State Department. Before March 1, 2003, immigration matters other than consular matters were primarily handled by the Immigration and Naturalization Service ("INS"). On March 1, 2003, INS ceased to exist; its responsibilities were divided among agencies in the newly formed Department of Homeland Security ("DHS"), one of which, as relevant here, is Citizenship and Immigration Services ("USCIS").6 The State Department and DHS have issued separate regulations and guidance governing administration of the Immigration and Nationality Act ("INA").7
The INA restricts admission8 into the United States by persons who are not U.S. citizens or nationals, denominated "aliens."9 An alien who has entered the United States without being admitted or paroled is deemed to be unlawfully present.10 If an alien has been unlawfully present in the United States for more than one year, he or she is presumptively inadmissible—that is, barred from lawful re-entry—for ten years from the date he or she leaves the United States, under the "waivable ten-year bar."11 Among the possible waivers of this bar is the "hardship waiver," which is available to an alien who is married to a U.S. citizen and who can demonstrate that refusal of admission would cause exceptional hardship for the alien’s spouse.12
By contrast, an alien who unlawfully re-enters or attempts to re-enter the United States after having previously entered the country unlawfully and stayed for more than one year is subject to the "non-waivable ten-year bar."13 This means the alien is ineligible for a hardship waiver and cannot legally re-enter the United States for at least ten years.14 The hardship waiver also is unavailable for an alien who has been subject to an order of removal.15
We now turn from standards governing admissibility to the process for legally entering the United States. In most instances, a foreign national must apply for a visa before traveling to the United States. There are two types of visas: non-immigrant visas, which grant temporary permission to enter the country, and immigrant visas, which authorize permanent residency.16 A visa does not itself guarantee entry into the United States, but rather permits a foreign national to arrive at a port of entry and be examined for admissibility by an immigration officer.17
A foreign national who is engaged or married to a U.S. citizen must follow certain procedures to obtain a visa based upon that relationship. A K-1 non-immigrant visa is available for a U.S. citizen’s fiancé(e) who seeks to enter the United States in order to marry the U.S. citizen.18 The first step is for the U.S. citizen to file Form I129F with USCIS, providing information about the intended marriage.19 Upon approval of that application, the foreign national may obtain a K-1 visa at a U.S. consulate, as long as he or she is also eligible for an immigrant visa.20 The foreign national must marry his or her fiancé(e) within ninety days of entering the United States21 and subsequently may adjust his or her status to that of a lawful permanent resident.22
There are two different routes by which a foreign spouse of a U.S. citizen may obtain permanent residency: through an immigrant visa or a non-immigrant visa.23 Under the first option—the immigrant visa route—the U.S. spouse first files Form I13024 to document the marital relationship, then the foreign spouse files an application for an immigrant visa and attends a consular visa interview.25
The second path to obtaining permanent residency—the non-immigrant visa route—is intended to shorten the time spouses are physically separated, by permitting a foreign spouse to obtain a K-3 non-immigrant visa26 abroad and then enter the United States to await approval of the immigrant visa petition.27 After the U.S. spouse has filed Forms I-130 and I-129F and the immigrant visa application is pending, the foreign spouse applies for a K3 visa in the U.S. consulate of the country where the marriage took place.28 Once the consulate issues that visa, the beneficiary can travel to the United States to await processing of the immigrant visa petition.29
The visa processes outlined above are only part of the procedure a foreign national engaged or married to a U.S. citizen must follow if the foreign national is subject to the waivable ten-year bar. In that case, after filing a visa application, the foreign national must file Form I-601 at a U.S. consulate to obtain a hardship waiver.30 The applicant has the burden to prove his or her eligibility for the waiver.31 The consulate typically forwards waiver applications to USCIS, which has authority to approve or reject them.32
Representation of Adela Rivas
and Regulo Flores-Garcia
In November 2002, Respondent met with Adela Rivas ("Rivas"), a U.S. citizen, and Flores-Garcia, a Mexican national. At the time, Respondent had been practicing immigration law in northern Colorado for five years.33 Rivas and Flores-Garcia, who were romantically involved, sought Respondent’s advice on how Flores-Garcia could obtain legal status in the United States. At the time, Rivas was married to another Colorado resident, but she was considering filing for divorce. Flores-Garcia was in a common-law marriage with a woman living in Mexico.34
According to Respondent, Flores-Garcia mentioned during their initial meeting that he had first entered the United States via bus in 1999. Flores-Garcia told Respondent that an immigration officer in Tijuana, Mexico had inspected him and allowed him to proceed into California, but he received no written authorization to cross the border. At the disciplinary hearing, Respondent testified that Flores-Garcia was somewhat evasive regarding the facts surrounding his 1999 entry, but Respondent believed there were three possible grounds for arguing Flores-Garcia’s entry had been lawful: (1) an officer had inspected him; (2) he provided information suggesting he might be eligible for a waiver under a family unification provision for special agricultural workers;35 and (3) he had obtained from the Mexican consulate in Denver an identification card known as a matricula card, and Mexican nationals in 1999 arguably could cross the border without a visa or passport if they intended to obtain a matricula card.36 Contrary to Respondent’s testimony, Rivas claims Respondent never discussed with them the possibility of arguing Flores-Garcia’s 1999 entry had been lawful.
At their initial meeting, Respondent recommended filing a request under the Freedom of Information Act ("FOIA") to determine if INS had any records of Flores-Garcia’s entry into the United States that would affect his admissibility, such as an order of removal. Rivas and Flores-Garcia approved this course of action and paid Respondent $500.00 to file the FOIA request.37 Respondent received a favorable response on December 3, 2003, indicating INS had no records concerning Flores-Garcia’s entry into the United States.38
In late 2002 and early 2003, while awaiting the FOIA response, Respondent met with Rivas and Flores-Garcia a number of times. According to Respondent, he advised the couple that Flores-Garcia was presumptively subject to the waivable ten-year bar because he had stayed in the United States for over a year following his 1999 entry, but he would be eligible for a hardship waiver in the future if he and Rivas were engaged or married. The process Respondent outlined was for Flores-Garcia to file a visa petition, attend a visa interview at the U.S. consulate in Juarez, Mexico, and apply for an I-601 hardship waiver. Rivas’s recollection of this advice is largely consonant with Respondent’s testimony.
In early 2003, Flores-Garcia expressed a desire to visit his ailing mother in Mexico. Respondent and Evelyn McCormick (Respondent’s wife and office manager) both testified that Respondent advised Flores-Garcia not to return to Mexico. Respondent avers he also told Flores-Garcia that, should he travel to Mexico, he could not return to the United States until Rivas’s divorce was finalized and he obtained a visa. Respondent testified that he warned Flores-Garcia not to re-enter the United States illegally, because doing so could trigger the non-waivable ten-year bar. In spite of Respondent’s advice, Flores-Garcia elected to return to Mexico.
In December 2003, Rivas’s divorce was finalized.39 Early the next year, she told Respondent she wanted to travel to Mexico to marry Flores-Garcia.40 Respondent explained that, if she did so, the couple would need to file an I130, apply for a K-3 visa, and request a hardship waiver.41
Rivas married Flores-Garcia in Mexico in April 2004. She then returned to Colorado. Rivas entered into a fee agreement with Respondent on May 18, 2004, and paid him $1,500.00 to prepare and file a visa application and related forms.42
According to Respondent, he learned only in late May 2004, after signing the fee agreement, that Flores-Garcia had illegally re-entered the United States in September 2003 and again returned to Mexico in March 2004. Respondent asserts he discovered Flores-Garcia’s 2003 re-entry when a notaria43 sent him a biographic information sheet—one component of the I-130 application—which Rivas and Flores-Garcia had filled out and which listed Flores-Garcia’s 1999 and 2003 entries into the United States.44 Respondent suspects the notaria previously gave the couple incorrect advice about Flores-Garcia’s eligibility for legal status and whether it was wise for him to return to Mexico.45
Rivas presented a different story regarding the events described above. She initially testified that neither she nor Flores-Garcia told Respondent of Flores-Garcia’s plan to return to Mexico, implying that Respondent never warned Flores-Garcia not to re-enter the United States illegally. However, Rivas subsequently conceded that Respondent did tell Flores-Garcia he should only return with legal documentation. Rivas also claimed that she informed Respondent soon after September 2003 of Flores-Garcia’s illegal re-entry and that she filled out the biographic information sheet listing Flores-Garcia’s 1999 and 2003 entries while in Respondent’s office. According to Rivas, Respondent then advised her that he no longer believed filing for a fiancé visa was a viable strategy and she should instead file an I-130. Rivas also claims that Respondent told her it was preferable for Flores-Garcia to return to Mexico pending processing of his applications and that the couple decided to marry in Mexico rather than the United States on the basis of this advice.
Contrary to Rivas’s testimony, Respondent testified that his assessment of Flores-Garcia’s case shifted dramatically in May 2004, when he says he learned of the 2003 re-entry. Although he deemed this revelation to be quite damaging, he claims Rivas begged him to pursue any possible means of securing legal status for Flores-Garcia, even if success was unlikely.46 Respondent researched the available options, including by consulting with two other immigration lawyers.
Respondent testified that he settled on a strategy with two elements. First, he developed a legal theory, which we refer to as the "I-601 strategy": that the consulate in Juarez was legally obligated to forward Flores-Garcia’s I601 hardship waiver application to USCIS for adjudication, even though Flores-Garcia’s 1999 and 2003 entries were presumptively illegal and the consulate typically would refuse to accept an I-601 for an alien subject to the non-waivable ten-year bar. Second, if Flores-Garcia obtained an interview for an immigrant visa, he could present evidence that his 1999 entry had been legal; if that argument prevailed, he would not be subject to either of the ten-year bars, since he had remained only briefly in the United States after his 2003 re-entry.47
Respondent testified that he thoroughly discussed his legal strategies with Rivas in advance, he prepared her for the issues to be addressed at the consular interview, and she understood the odds were not in their favor. Respondent also claims he discussed these issues with Flores-Garcia after he returned to Mexico. At the disciplinary hearing, Rivas equivocated regarding her expectations for the interview, though she admitted Respondent told her there was no guarantee of success.
Respondent filed an I130 in June 2004 and an I129F the following month.48 In August 2004, Respondent submitted to the U.S. embassy in Mexico City an expedited request for waiver of inadmissibility along with an I601, arguing that Rivas was suffering emotional trauma due to her separation from Flores-Garcia and incurring great expense by visiting him in Mexico.49
Rivas’s I-129F petition was approved in February 2005,50 and the couple attended a May 2005 consular interview in Juarez regarding the K-3 visa application.51 After the interview, the officer determined that Flores-Garcia was ineligible for the visa and could not re-apply for ten years.52 The officer did not accept or forward to USCIS Flores-Garcia’s I-601 hardship waiver application.
After the consular interview, Respondent claims he explained the range of appellate options to Rivas. He testified that Rivas wanted to attend an immigrant visa interview scheduled for May 2006 rather than immediately filing an appeal. Rivas, meanwhile, flatly disputes that Respondent ever discussed an appeal with her.
To preserve their appeal rights, Respondent wrote to the consulate in late May 2005, maintaining that Flores-Garcia was entitled to a hardship waiver and that the consular officer had been legally obligated to accept Flores-Garcia’s proffered I601.53 Respondent received a response from the consulate dated August 29, 2005, stating that Flores-Garcia was subject to the non-waivable ten-year bar.54 Respondent next wrote to Senator Kenneth Salazar in October 2005, arguing that Flores-Garcia should be eligible for a waiver.55 The senator’s office replied later that month, saying the senator had written to the consulate.56 A consular officer responded to the senator’s inquiry on November 1, 2005, reasserting that Flores-Garcia was ineligible for a visa.57
The People allege that Respondent did not share with Rivas copies of the correspondence from the consulate and the senator’s office. Respondent, however, avers he mailed a copy of the letter he had received from the senator’s office to the address Rivas had given him, but it was returned as undeliverable because she no longer lived there. Respondent also testified that he sent Rivas a copy of the letter the consulate had mailed to the senator.
Rivas and Flores-Garcia ultimately elected not to attend the May 2006 interview for the I-130 petition, and Flores-Garcia never obtained approval of the I-130.58 Also in 2006, Rivas told Respondent that Flores-Garcia had illegally re-entered the United States a third time and had been arrested for driving under the influence.59 Because it had become a matter of public record that Flores-Garcia had unlawfully re-entered the United States, Respondent told Rivas he could do nothing more for the couple. As Respondent explained at the disciplinary hearing, in light of Flores-Garcia’s criminal record, it was inconceivable that a consular officer would exercise discretion in Flores-Garcia’s favor.
Rivas filed a grievance against Respondent in 2009. She claims she decided to do so based on advice she received from a volunteer lawyer at a Denver church in May 2009. The volunteer lawyer, who reviewed several documents in Rivas’s possession, apparently told her that Flores-Garcia’s 1999 and 2003 entries into the United States made him ineligible for legal status and that any contrary advice the couple might have previously received would have been incorrect.
Rivas and Flores-Garcia have divorced, though they continue to live together. At present, Flores-Garcia is awaiting a removal hearing scheduled for February 2012. The Hearing Board is unaware whether Flores-Garcia intends to raise a defense that Respondent provided ineffective assistance of counsel.60
Alleged Violations of Colo. RPC 1.1 and 1.3
We address the People’s claims under Colo. RPC 1.1 and 1.3 together, since these claims arise out of the same fundamental assertion that Respondent provided incompetent representation. Colo. RPC 1.1 requires lawyers to competently represent their clients; competency entails the legal knowledge, skill, thoroughness, and preparation reasonably necessary for the representation. Colo. RPC 1.3 obligates lawyers to act on their clients’ behalf with reasonable diligence and promptness.
The crux of the People’s argument with respect to both claims is that Respondent provided inaccurate legal advice to Rivas and Flores-Garcia because he did not undertake sufficient legal analysis to understand that Flores-Garcia was ineligible for legal residency. The People further argue that Respondent did not develop the I-601 strategy in 2004, as he claims. Rather, the People allege he devised this legal theory several months before the disciplinary hearing in an effort to mask his earlier incompetency.
To resolve the People’s claims, we must address the contradictory nature of Respondent’s and Rivas’s testimony. Respondent’s defense is premised upon his assertions that Rivas and Flores-Garcia hid from him the key fact of Flores-Garcia’s 2003 illegal re-entry, that Rivas pleaded with him to try to help her husband, even if the odds of securing relief were quite low, that he fully advised Rivas about his proposed strategies, and that he did not charge Rivas for the time he spent advancing the I-601 strategy. Rivas, on the other hand, claimed she immediately informed Respondent of Flores-Garcia’s 2003 re-entry, and her testimony conveyed a general belief that he did not fully advise her of the tenuous nature of the legal strategy he was pursuing.
We conclude that the inconsistencies in Respondent’s and Rivas’s testimony should be resolved in Respondent’s favor. We gather from a broad range of testimony in this matter, as well as from the extensive evidence of Respondent’s solicitude for Rivas and Flores-Garcia, that Respondent is a lawyer deeply committed to serving his clients and to fighting what he perceives to be the injustices inflicted by immigration law and policy. We find Rivas to be substantially less credible. She spoke with an unnaturally flat affect and in an often evasive, muddled, and almost dazed manner, in some instances asking for questions to be repeated numerous times. In addition, we are somewhat skeptical of Rivas’s motivation for filing a grievance against Respondent. That she did not file her complaint until 2009 raises a question as to whether other motives gave rise to her grievance.
We also find it difficult to accept the People’s assertion that Respondent did not grasp the concept of the non-waivable ten-year bar. Respondent testified that he had handled hundreds of immigration cases by the time he represented Rivas and Flores-Garcia and that the majority of his immigration cases have involved illegal entries into the United States. It is implausible that a lawyer as intellectually curious, experienced, and dedicated as Respondent would fail to understand a rudimentary principle of his area of legal practice.
However, we find it more challenging to determine whether Respondent’s representation of Flores-Garcia after Respondent learned of the 2003 re-entry met the standards of competence expected of lawyers. Since Respondent testified that he relied in large part upon the I-601 strategy after learning of the re-entry, this strategy merits further explanation.
The practice of U.S. consulates, in accordance with the State Department’s Foreign Affairs Manual ("FAM"), a non-binding guidance document, has been to decline to forward a K-3 visa applicant’s I-601 waiver request to USCIS if the applicant appears to be ineligible for an immigrant visa.61 FAM also grants consular officers discretion to accept or reject a proffered I601 application.62
Respondent’s strategy was to challenge the consular practice of withholding waiver requests, relying on 8 C.F.R. § 212.7(9), a DHS regulation, which at the time stated: "An applicant for an immigrant visa or K nonimmigrant visa who is inadmissible and seeks a waiver of inadmissibility shall file an application on Form I-601 at the consular office considering the visa application. Upon determining that the alien is admissible except for the grounds for which a waiver is sought, the consular officer shall transmit the Form I-601 to the service for decision."63 Respondent also relies on 8 U.S.C. § 1182(d)(3)(A), which provides that an alien who is inadmissible "but who is in possession of appropriate documents or is granted a waiver thereof and is seeking admission, may be admitted into the United States temporarily as a nonimmigrant in the discretion of the Attorney General."64 Respondent argues that Flores-Garcia was eligible for a waiver for a K-3 visa, which is a non-immigrant visa,65 so the consular officer had a legal duty to forward the waiver application to USCIS. Even if it appeared to the consular officer that Flores-Garcia’s 1999 and 2003 entries made him subject to the non-waivable ten-year bar and thus ineligible for an immigrant visa, Respondent believes it was ultra vires for the officer to rule Flores-Garcia ineligible for an immigrant visa, since only a non-immigrant visa petition was before the officer.
If the consular officer had in fact forwarded Flores-Garcia’s I-601 to USCIS and Flores-Garcia had received a waiver, Respondent claims Flores-Garcia would have benefitted by gaining the ability to argue in the United States—rather than in Juarez, where review is less favorable—that his 1999 entry had been lawful.66 Respondent testified that if the consular officer refused to forward the I-601 application, as he expected, he planned to administratively appeal that decision. He had other clients in a similar position to that of Flores-Garcia who could join in such an appeal. If they succeeded in setting a new precedent for consular processing, Respondent believed many other immigrants would benefit.
In contrast to Respondent’s view, the People’s witness Nancy Elkind ("Elkind"), who the PDJ accepted as an expert on immigration law, testified that the I601 strategy lacked merit. Although DHS regulations direct consular officers to forward proffered I601s to USCIS, Elkind noted that consulates must adhere to FAM, which authorizes consular officers to reject a waiver application filed by a K-3 applicant who appears to be ineligible for an immigrant visa. Elkind also testified that, assuming Flores-Garcia was subject to the non-waivable ten-year bar, he would gain no benefit from the consulate forwarding his waiver application to USCIS because USCIS would not grant him a waiver.
On the other hand, the testimony of Lourdes Rodriguez ("Rodriguez"), an immigration lawyer who both refers cases to Respondent and receives referrals from him, supported the validity of Respondent’s approach.67 In her view, it is a matter of due diligence to press consular officers to accept I-601 applications filed by applicants for non-immigrant visas. Rodriguez shares Respondent’s view that consular officers are legally required to forward I-601s proffered by K3 visa applicants to USCIS. She also stated that, while it may take several years to challenge a consular officer’s failure to forward an I-601, eventually the consulate will in fact forward I-601s to USCIS. In addition, Rodriguez testified that upon receiving a K-3 visa and waiver, a foreign national may seek adjudication of his or her case in the United States and generally may travel back and forth to his or her country of origin during that period.
It is challenging for us to reconcile the testimony provided by Respondent, Elkind, and Rodriguez concerning the I-601 strategy. Part of the difficulty lies in the fact that their testimony appears to have been grounded in different assumptions regarding the nature of the legal advice Respondent provided and whether there were any grounds for arguing Flores-Garcia was not subject to the non-waivable ten-year bar. On the whole, we credit Elkind’s view that Respondent’s I601 strategy was unlikely to secure relief for Flores-Garcia in light of consular policy and practice. Yet we also conclude there was a valid legal basis for the I-601 strategy, and we believe a lawyer could pursue this strategy in good faith.
The People further claim that, even if the I-601 strategy might have theoretical legal merit, Respondent actually devised this strategy only several months before the disciplinary hearing to rationalize his earlier incompetent legal advice. The People emphasize that Respondent’s answer and amended answer do not spell out the I-601 strategy. They note, for instance, that Respondent’s answer concedes the I-601 waiver was not available to Flores-Garcia because of the non-waivable ten-year bar.68 Respondent, on the other hand, points to a note citing 8 C.F.R. § 212.7(9) in his original client file as evidence that he formulated the I-601 strategy during the representation.69 In addition, he stresses that he offered the legal advice in question approximately five years before this disciplinary proceeding and has since represented hundreds of other clients; as a result, he claims he had forgotten the details of this representation. Respondent also testified that his client file was in the possession of his former counsel when he first responded to the People’s complaint, and it was only upon a detailed review of the file that he recalled the strategy he had pursued.
The Hearing Board is troubled by the inconsistencies in Respondent’s representations about his legal strategy, and it appears possible that he did not originally rely on the I-601 strategy as heavily as he now suggests. But this does not mean he acted incompetently. The I-601 strategy was not the sole course of action Respondent took on his clients’ behalf. In addition to laying the foundation for an appeal, which could have been grounded on several legal theories,70 Respondent’s efforts included discussing the matter with Senator Salazar’s office and positioning Flores-Garcia to benefit from any possible amnesty program. Respondent testified that there was a possibility Congress would grant amnesty to persons with an approved I130; in fact, he notes that an amnesty bill was pending before Congress in 2004, though it did not pass. He also planned to ask Senator Salazar to introduce a private bill for the benefit of Flores-Garcia and to raise the matter with the congressional ombudsperson. Finally, simply by assisting Rivas and Flores-Garcia with the I130, Respondent provided his clients a service of some value, as Elkind acknowledged. Had Flores-Garcia and Rivas completed that application process, as Respondent advised, and remained married, the approved I-130 would have remained valid for Flores-Garcia’s future use.
We wish to stress that the legal strategy Respondent undertook would not be appropriate under all circumstances. Not all clients want their lawyers to pursue legal strategies that have a low probability of yielding relief. But here, Respondent avers he told his clients that Flores-Garcia likely would be inadmissible for ten years and he continued the representation because Rivas pled with him to do anything possible to help her husband. Another significant circumstance here is that Respondent performed much of his legal work without compensation.71
Most important, we must not quell the crusading spirit of lawyers like Respondent who attempt to rectify injustices they perceive in our legal system. Legal challenges to ingrained assumptions and entrenched practices may initially appear foolhardy, yet ultimately bring about valuable changes in the law. As recognized in comments 1 and 2 to Colo. RPC 3.1, lawyers should account for "the law’s ambiguities and potential for change," and good-faith arguments are not frivolous merely because the lawyer "believes the client’s position ultimately will not prevail."72
In sum, we cannot accept the People’s argument that Respondent misunderstood the legal framework governing Flores-Garcia’s case and provided incompetent advice as a result. Rather, we believe Respondent understood the legal hurdles standing in his clients’ way but pressed forward with several uncertain legal theories in the face of Rivas’s repeated entreaties that he pursue all legal options. In our view, Respondent advanced his legal strategies with both a good-faith basis and his client’s informed consent. Accordingly, we find the People have not proved a violation of Colo. RPC 1.1 or 1.3 by clear and convincing evidence.
Alleged Violations of Colo. RPC 1.4(a)
The People allege Respondent failed to adequately communicate with Rivas in violation of Colo. RPC 1.4(a), which requires a lawyer to keep a client reasonably informed about the status of a matter. The People’s claim rests on the assertion that Respondent never gave Rivas a copy of the letter from the consulate to Senator Salazar’s office or a copy of the letter from the senator’s office to Respondent. The People point both to Rivas’s testimony that she never saw the letters in question and to Respondent’s failure to present documentary evidence demonstrating that he had shown the letters to Rivas.
But the People, not Respondent, bear the burden of establishing that misconduct occurred. Given our assessment of the relative credibility of Respondent and Rivas, we are inclined to believe Respondent’s testimony that he mailed copies of the letters to Rivas. Respondent’s averments are consonant with other evidence of his conscientious communication efforts, including Rivas’s own testimony that Respondent was available to talk to her whenever she needed and that he reviewed with her the statutes governing Flores-Garcia’s admissibility. Thus, we do not find by clear and convincing evidence that Respondent violated Colo. RPC 1.4(a).
IV. CONCLUSION AND ORDER
We conclude the People have failed to demonstrate clearly and convincingly that Respondent engaged in any misconduct, and we accordingly DISMISS their complaint.
1. Respondent represented himself in this matter until January 6, 2011, when Mr. Jackson entered his appearance on Respondent’s behalf.
2. In assessing the testimony and evidence presented in this matter, the Hearing Board is governed by C.R.C.P. 251.18(d), which provides in part that "proof shall be clear and convincing evidence."
3. The People’s exhibits 1-7, 9-12, 14-33, 35-37, and 39 were stipulated, as were Respondent’s exhibits A, D-F, J-K, and R.
4. Respondent’s registered business address is 2828 North Speer Boulevard, Suite 103, Denver, Colorado 80211.
5. See C.R.C.P. 251.1(b).
6. See 6 U.S.C. §§ 251, 271, 291.
7. The INA is contained in Title 8 of the United States Code. DHS’s regulations are codified in Title 8 of the Code of Federal Regulations; the State Department’s appear in Title 22.
8. Admission is defined as the "lawful entry of [an] alien into the United States after inspection and authorization by an immigration officer." 8 U.S.C. §%1101(a)(13)(A).
9. 8 U.S.C. § 1101(a)(3).
10. See 8 U.S.C. § 1182(a)(6), (a)(9)(B).
11. See 8 U.S.C. § 1182(a)(9)(B)(i)(II). Under a closely related statute, an alien who voluntarily departs the United States after having been present unlawfully for more than 180 days but less than one year is subject to a three-year bar on admissibility. 8 U.S.C. § 1182(a)(9)(B)(i)(I).
12. 8 U.S.C. § 1182(a)(9)(B)(v).
13. 8 U.S.C. § 1182(a)(9)(C)(i)(I).
14. 8 U.S.C. § 1182(a)(9)(C)(i) - (ii).
15. 8 U.S.C. § 1182(a)(9)(C)(i)(II). In general terms, an order of removal is an order determining that an alien is inadmissible or deportable. See 8 U.S.C. § 1229(a)(i).
16. See 8 U.S.C. § 1201(a).
17. See 8 U.S.C. § 1201(h).
18. 8 U.S.C. § 1101(a)(15)(k)(i).
19. 8 U.S.C. § 1184(d)(1).
20. 22 C.F.R. § 41.81(d).
21. 8 U.S.C. § 1101(a)(15)(k)(i).
22. See 8 U.S.C. § 1255(d).
23. Department of State, Immigrant Visa for a Spouse or Fiance(e) of a U.S. Citizen, http://travel.state.gov/visa/immigrants/types/types_1315.html (last visited Dec. 19, 2011).
24. "An I-130 petition allows a citizen or permanent resident to request that [DHS] classify certain alien family members, including a spouse and children, as ‘immediate relatives’ who thus become eligible for immigrant visas without regard to normal quotas." Atunnise v. Mukasey, 523 F.3d 830, 832 (7th Cir. 2008). Approval of an I-130 alone does not grant a foreign national permission to enter the United States.
25. Department of State, Immigrant Visa for a Spouse of a U.S. Citizen (IR1 or CR1), http://travel.state.gov/visa/immigrants/types/types_2991.html (last visited Dec. 19, 2011).
26. "A K-3 visa allows a beneficiary of an I-130 petition to enter the United States to await the availability of an immigrant visa." Atunnise, 523 F.3d at 832, citing 8 U.S.C. § 1101(a)(15)(K)(ii).
27. Department of State, Nonimmigrant Visa for a Spouse (K-3), http://travel.state.gov/visa/immigrants/types/types_2993.html (last visited Dec. 19, 2011).
28. 22 C.F.R. § 41.81(b)(2).
29. Department of State, Immigrant Visa for a Spouse or Fiancé(e) of a U.S. Citizen.
30. Consulate General of the United States, Ciudad Juarez, Mexico, Form I-601—Application for a Waiver: Filing the Application, http://ciudadjuarez.usconsulate.gov/hcis601.html (last visited Dec. 19, 2011).
31. See 8 U.S.C. § 1361 (placing burden of proof on alien to establish eligibility for visa or other document required for entry to the United States and to show he or she is not inadmissible).
32. See Consulate General of the United States, Form I-601—Application for a Waiver.
33. Between 1983 and 1997, Respondent practiced criminal law and oil and gas law.
34. Flores-Garcia also had two children living in Mexico. He speaks Spanish and knows little English, while Rivas is fluent in both English and Spanish.
35. See Ex. R. According to Respondent, Flores-Garcia said his father had applied for special agricultural worker status, in which case 8 U.S.C. § 1160(c)(2)(B)(i) could waive Flores-Garcia’s inadmissibility.
36. See Ex. E. Respondent cites a former version of 22 C.F.R. § 41.1(g). While that rule was in effect, it provided that a Mexican national entering the United States in order to apply for an official Mexican document at a Mexican consulate was not required to present a visa or passport when crossing the border. See Documentation of Nonimmigrants Under the Immigration and Nationality Act, as Amended—Border Crossing Identification Cards, 63 Fed. Reg. 16892, 16893 (April 7, 1998).
37. Exs. 1 - 3.
38. Ex. 4. Even though DHS had superseded INS on March 1, 2003, the FOIA response was written on INS letterhead.
39. Ex. 5.
40. See Ex. 6.
41. See id.
42. Ex. 9. Rivas also paid Respondent $935.00 for filing fees. Compl. ¶ 53; Answer ¶ 42. Respondent’s records show he incurred charges for time he later spent on the I601 hardship waiver, see Ex. 23, but it appears he never billed Rivas for that time.
43. "Notaria" is a term commonly used to refer to licensed notaries who assist the Mexican immigrant community.
44. Ex. 11.
45. Answer ¶ 8.
46. Evelyn McCormick testified that Rivas was disappointed with Respondent’s prognosis for Flores-Garcia’s case and repeatedly called the office in hopes of receiving a different answer. She said that Rivas’s frequent calls to Respondent were difficult for the office staff to handle and "borderline abusive."
47. Because Flores-Garcia had remained in the United States for less than 180 days after his 2003 re-entry, he also would not be subject to the three-year bar pursuant to 8 U.S.C. § 1182(a)(9)(B)(i)(I).
48. Exs. 10-11. The I-129F is dated June 18, 2004, but Respondent recalls he filed it in July 2004.
49. Ex. 14; see also Exs. 17 - 18.
50. Ex. 16.
51. Ex. 19.
52. Ex. 22.
53. Ex. 25.
54. Ex. 26.
55. Ex. 27. Respondent’s letter asserts that Flores-Garcia is eligible for a waiver under "Section 601 of the INA." The Hearing Board assumes he meant a waiver to be filed using Form I-601, as there is no section 601 in the INA. The People observe that Respondent’s letter to the senator’s office does not fully explain his I-601 strategy, but Respondent testified that he discussed this issue in detail with an aide to the senator.
56. Ex. 28.
57. Ex. 29.
58. Compl. ¶ 52; Answer ¶ 41.
59. See Ex. G.
60. We note that under Matter of Lozada, 19 I. & N. Dec. 637, 639 (BIA 1988), an alien may only reopen removal proceedings based upon a claim of ineffective assistance of counsel if the former counsel has been informed of the allegations and has had an opportunity to respond. See also Matter of Compean, 25 I. & N. Dec. 1, 1 - 2 (A.G. 2009) (reaffirming validity of Lozada). The filing of a disciplinary grievance may provide former counsel the requisite notice and opportunity to respond.
61. See 9 FAM 41.81 N9.1 ("A K visa is a nonimmigrant visa (NIV), and, therefore, K nonimmigrants are generally eligible for [8 U.S.C. § 1182(d)(3)(A)] waivers. However, processing an [8 U.S.C. § 1182(d)(3)(A)] waiver would not be appropriate unless an immigrant waiver is also available when the K visa holder applies to adjust status to legal permanent resident. To determine whether a waiver is available for a K applicant, the consular officer must, therefore, first examine whether the particular [8 U.S.C. § 1182(a)] ineligibility is waiveable for immigrant spouses of U.S. citizens, under either [8 U.S.C. § 1182(g), (h), (i), (a)(9)(B)(v), (d)(11) or (12)] or similar provisions."); 9 FAM 41.81 N9.2 ("If the K visa applicant is ineligible for a visa on an [8 U.S.C. § 1182(a)] ground for which no immigrant waiver is or would be possible after marriage to the petitioner, then the case should not be recommended for an [8 U.S.C. § 1182(d)(3)(A)] waiver and no waiver request should be submitted to USCIS.").
62. See 9 FAM 40.301 N1 ("Congress, in enacting [8 U.S.C. § 1182(d)(3)(A)], conferred upon the Secretary of State and consular officers the important discretionary function of recommending waivers of nonimmigrant visa . . . ineligibilities to [DHS] for approval").
63. The Hearing Board was unable to independently review this language, so we rely on the transcription provided in Respondent’s closing statement. Respondent asserts the regulation was amended from that form in 2007. The current parallel regulation, 8 C.F.R. § 212.7(a)(1), provides: "Any alien who is inadmissible under [8 U.S.C. § 1182(g), (h), or (i)] who is eligible for a waiver of such inadmissibility may file on the form designated by USCIS . . . . When filed at the consular section of an embassy or consulate, the Department of State will forward the application to USCIS for a decision after the consular official concludes that the alien is otherwise admissible." The sections of the INA cited in 8 C.F.R. § 212.7(a)(1) pertain to inadmissibility on grounds relating to health, criminal activity, and fraud, so the revised regulation does not directly pertain to the ten-year bars on admissibility.
64. The only exception to this provision applies to aliens who are inadmissible on national security grounds. 8 U.S.C. § 1182(d)(3)(A).
65. See, e.g., Atunnise, 523 F.3d at 834 (noting that the Board of Immigration Appeals (the appellate body designated to review immigration court decisions) has taken the position that a "K-3 visa is unambiguously a nonimmigrant visa").
66. Respondent testified that another advantage to recommending Flores-Garcia proceed to a K3 interview despite his two entries into the United States is that FOIA requests do not capture consular records. Any consular record of removal orders for Flores-Garcia would come to light at the K3 interview, and the lack of such records would bolster his claim of prior lawful entry.
67. Respondent did not offer Rodriguez as an expert in immigration law, but she testified that she has represented clients in approximately 300 consular processing cases, most of which involved the U.S. consulate in Juarez.
68. Compl. ¶¶ 25, 27; Answer ¶¶ 23 - 24.
69. Ex. A.
70. The Hearing Board recognizes that administrative and judicial review of consular decisions is limited. See, e.g., Saavedra Bruno v. Albright, 197 F.3d 1153, 1156, 1159-60 (D.C. Cir. 1999) (noting that consular denials of visa applications are generally nonreviewable) (citing 8 U.S.C. §§ 1104(a), 1201(a)). But not all appeals of consular practices are futile. See, e.g., Patel v. Reno, 134 F.3d 929, 932-33 (9th Cir. 1997) (finding jurisdiction to consider a claim concerning a consulate’s authority to suspend visa applications).
71. Respondent testified that he did not charge Rivas for time he spent working on the I-601 strategy. Rodriguez’s and Elkind’s testimony indicated that Respondent’s legal fee was reasonable, particularly given the frequent nature of his meetings with Rivas.
72. Some authorities suggest that legal challenges to existing practices are particularly appropriate in the immigration context. See Andrew T. Chan and Robert A. Free, The Lawyer’s Role in Consular Visa Refusals, Immigration Briefings (April 2008) (opining that in the consular process, lawyers should be "very persistent," "use the opportunities that do exist to present visa applications and to obtain limited review of visa denials," and "press for legislation that at least creates an opportunity for administrative review of visa denials").
Case No. 10PDJ064
THE PEOPLE OF THE STATE OF COLORADO
STEVEN JAY ROZAN
August 26, 2011
OPINION AND DECISION IMPOSING SANCTIONS
PURSUANT TO C.R.C.P. 251.19(b)
On June 14, 2011, a Hearing Board composed of William R. Gray and Bruce W. Sattler, members of the bar, and William R. Lucero, the Presiding Disciplinary Judge ("the PDJ"), held a hearing pursuant to C.R.C.P. 251.18. Adam J. Espinosa appeared on behalf of the Office of Attorney Regulation Counsel ("the People"), and Michael D. Gross appeared on behalf of Steven Jay Rozan ("Respondent"), who also appeared. The Hearing Board now issues the following "Opinion and Decision Imposing Sanctions Pursuant to C.R.C.P. 251.19(b)."
Respondent accepted a $30,000.00 retainer to file a post-conviction petition on behalf of his client, who was serving a sentence in federal prison. He then used the funds for his own purposes without obtaining his client’s approval or earning those fees. The PDJ previously granted two motions for partial judgment on the pleadings, determining as a matter of law that Respondent violated Colo. RPC 1.15(b), 1.16(d), and 8.4(c). In light of the serious nature of Respondent’s misconduct and the extensive aggravating factors present here, including a lengthy record of discipline for similar infractions, the Hearing Board determines that the appropriate sanction is disbarment.
II. PROCEDURAL HISTORY
On June 8, 2010, the People filed a complaint in this matter, alleging that Respondent violated Colo. RPC 1.3, 1.4(a), 1.5(a), 1.15(b), 1.16(d), and 8.4(c). Respondent filed an answer on July 12, 2010, and filed a supplemental answer on August 6, 2010.
The People filed a motion seeking partial judgment on the pleadings on December 10, 2010, to which Respondent responded on February 3, 2011. The PDJ granted the People’s motion on March 9, 2011, determining that Respondent violated Colo. RPC 8.4(c) (Claim VI).
The People then filed a second motion requesting partial judgment on the pleadings on March 23, 2011, to which Respondent did not respond. On May 18, 2011, the PDJ granted the People’s motion and concluded that the conduct underlying Respondent’s violation of Colo. RPC 8.4(c) also contravened Colo. RPC 1.15(b) and 1.16(d) (Claims IV and V).
Respondent filed a motion to resign his law license in lieu of prosecution on May 13, 2011, to which the People objected on May 16, 2011.1 Shortly thereafter, Mr. Gross entered his appearance on behalf of Respondent, who previously had been acting pro se. On May 20, 2011, the People filed a motion seeking to dismiss Claims I, II, and III of the complaint (Colo. RPC 1.3, 1.4(a), and 1.5(a)) and to convert the trial scheduled in this matter to a sanctions hearing. The PDJ granted that motion on May 28, 2011.
During the sanctions hearing on June 14, 2011, the Hearing Board heard testimony and considered the People’s exhibits 1-3, 5-6, and 9-10.
III. ESTABLISHED FACTS AND RULE VIOLATIONS
Representation of Mark Allen
The established rule violations in this matter concern Respondent’s representation of Mark Allen ("Allen"), an inmate at the United States Penitentiary Administrative Maximum Facility ("ADMAX") in Florence, Colorado.2 In the summer of 2008, Allen hired Respondent to file a habeas corpus petition under 28 U.S.C. § 2241 or a motion challenging Allen’s conviction or sentence under 28 U.S.C. § 2255. He had been convicted over ten years earlier of assault of a postal employee, possession of a firearm by a convicted felon, and related charges.
On August 27, 2008, Allen’s mother, Joan Allen, wired a $30,000.00 retainer to Respondent’s bank account. Respondent then hired a forensic psychiatrist to perform an evaluation of Allen, which was conducted on October 5, 2008. Having sent Respondent numerous letters inquiring about the status of his matter, Allen terminated Respondent’s services and demanded the return of his retainer and client file on March 30, 2009. Respondent then spoke with Allen, stating that he was awaiting several pending judicial decisions that might bear on the proper procedural route for Allen’s matter.
On June 16, 2009, Allen again sent Respondent a letter demanding the refund of his retainer and the return of his client file. In response, Respondent promised to visit Allen within two to three weeks. On July 8, 2009, Allen filed a request for investigation with the People. Allen reiterated his desire to terminate Respondent in late 2009 after Respondent cancelled his scheduled visits with Allen, requesting that Respondent return his retainer and client file. Allen agreed to allow Respondent to continue working on his matter when Respondent pledged in December 2009 that he would soon file a motion on his behalf. But in January and February 2010, Allen once more demanded the return of his retainer and client file. Respondent’s license to practice in Texas was suspended for two years for misconduct in unrelated client matters, effective January 1, 2010, and his license to practice in Colorado was suspended in reciprocal discipline on April 22, 2010.
Respondent admits he never filed a pleading on Allen’s behalf under 28 U.S.C. § 2241 or 28 U.S.C. § 2255. Respondent indicates he delayed in doing so because he was awaiting relevant case law and having difficulties in obtaining a new medical expert witness report. Respondent has not returned any portion of Allen’s retainer and has spent that sum of money. An accounting Respondent provided to the People on October 21, 2009, stated that Respondent had earned $15,750.00 of the $30,000.00 retainer.
Respondent admits, for the "purposes of accounting," that as of the date of an accounting he provided to the People,3 he "owed" Allen and Allen’s mother at least $9,687.00.4 He also concedes that he "exercised dominion or ownership over such funds held for Allen’s benefit."5 However, Respondent denies knowing "that he was keeping at least $9,6870.00 [sic] of funds he had not earned, knowing that such funds should be returned to his client because he had not earned them and knowing that keeping such funds was not authorized."6 Instead, Respondent claims he "believed that the fee arrangement with Allen was a flat-fee and as a Texas attorney, he did not need to deposit same into a trust account."7 In addition, he denies the People’s allegation that he "did not have permission from the client to use the funds for his personal purposes," arguing instead that he "did not believe that he needed such permission from Allen inasmuch as he was acting in the capacity as a Texas attorney and that the fee was a flat fee deemed earned upon receipt and that he need not deposit same into a trust account."8
Jurisdiction and Choice of Law
Respondent has taken and subscribed to the oath of admission, was admitted to the Colorado bar on September 16, 1980, and is registered upon the official records under attorney registration number 10381. Although Respondent was licensed to practice law in Texas, where he maintained his office, he is currently suspended from the practice of law in both states.
Respondent contends that the PDJ and the Hearing Board lack jurisdiction in this matter and that his conduct should be judged under Texas disciplinary rules, rather than Colorado disciplinary rules.9 The basis for both arguments is that (1) he practiced from an office in Texas and (2) his client was housed at ADMAX, which he claims is a federal enclave that is not part of the State of Colorado. The PDJ first considers the jurisdictional and choice of law issues in light of Respondent’s argument regarding his Texas-based practice; the PDJ then examines whether the federal nature of ADMAX alters his conclusions.10
C.R.C.P. 251.1(b) provides that "[e]very attorney licensed to practice law in the State of Colorado is subject to the disciplinary and disability jurisdiction of the Supreme Court in all matters relating to the practice of law." In addition, Colo. RPC 8.5(a) states that "[a] lawyer admitted to practice in this jurisdiction is subject to the disciplinary authority of this jurisdiction, regardless of where the lawyer’s conduct occurs." Here, Respondent is licensed to practice law in Colorado and this proceeding concerns his practice of law. As such, the fact that Respondent practiced from an office in Texas does not divest the Colorado Supreme Court, the PDJ, or the Hearing Board of jurisdiction over this matter.
The choice of law in Colorado disciplinary proceedings is governed by Colo. RPC 8.5. Where the conduct of a lawyer licensed in Colorado is not connected with a matter pending before a tribunal, as here, Colo. RPC 8.5(b) requires the PDJ to apply
the rules of the jurisdiction in which the lawyer’s conduct occurred, or, if the predominant effect of the conduct is in a different jurisdiction, the rules of that jurisdiction shall be applied to the conduct. A lawyer shall not be subject to discipline if the lawyer’s conduct conforms to the rules of a jurisdiction in which the lawyer reasonably believes the predominant effect of the lawyer’s conduct will occur.
Here, Respondent practiced from an office in Texas and was considering filing a motion on Allen’s behalf in the Fourth Circuit Court of Appeals. But in other respects, Respondent’s representation of Allen involved substantial connections to the State of Colorado: Allen is housed in a correctional facility in Colorado, Respondent traveled to Colorado to meet with Allen, Respondent arranged for a psychiatrist to meet with Allen in Colorado, and Respondent communicated with Allen through telephone calls and letters to Colorado.
The PDJ determined in his first motion granting partial judgment on the pleadings that, although it was debatable whether Respondent’s conduct "occurred" in Colorado or in Texas, the "predominant effect" of Respondent’s representation of Allen was in Colorado.11 Given that Allen was incarcerated in Colorado and had hired Respondent to obtain his release from prison, Respondent’s conduct in this matter primarily affected Allen, who is located in Colorado. Under these facts, there is no basis for Respondent to have "reasonably believe[d] the predominant effect of [his] conduct" would occur elsewhere. Accordingly, the PDJ applied Colorado law in considering both of the People’s motions for partial judgment on the pleadings.
At the disciplinary hearing, the People introduced additional evidence of the relationship between Respondent’s conduct and the State of Colorado, in the form of an August 8, 2008, letter from Respondent soliciting Allen’s business. In the letter, Respondent recommends filing a petition under 28 U.S.C. § 2241 in federal court in Denver and claims: "I am also a full member of the Colorado Bar, the U.S. District Court in Denver, the U.S. Court of Appeals for the Tenth Circuit and know most of the Denver AUSAs [Assistant United States Attorneys] and District Court judges in whose courts I have regularly practiced since becoming a licensed member of that Bar since [sic] 1980." Yet at the disciplinary hearing, Respondent testified that his legal experience in this state is limited to one sentencing matter in U.S. District Court in Denver and one argument before the Colorado Supreme Court. Respondent offered the untenable argument that his letter referred to his appearance in a Tenth Circuit case in Wyoming, during the course of which he gained some familiarity with Tenth Circuit judicial opinions and spoke by telephone with an AUSA about extensions for filing legal briefs. The PDJ finds that Respondent’s reference to purportedly significant legal connections and practice in Colorado in the course of soliciting Allen’s business provides further support for applying Colorado disciplinary rules in this matter.
Respondent argued at the sanctions hearing for the first time that the PDJ and the Hearing Board lack jurisdiction and the Colorado Rules of Professional Conduct do not apply here because Allen resides in a federal enclave, which is not part of the State of Colorado. The PDJ is reluctant to address this argument for several reasons: Respondent did not raise it earlier, he cited no supporting legal authority, and the PDJ already determined that Colorado law applies in this matter. However, the PDJ briefly analyzes this argument for purposes of judicial economy.
A federal enclave is defined as "a portion of land over which the United States government exercises exclusive federal jurisdiction."12 Although the PDJ is unaware of any case law explicitly addressing whether state disciplinary rules govern the provision of legal services in federal enclaves, Colorado case law suggests that the Colorado Rules of Professional Conduct apply to legal services provided to ADMAX inmates.
In a 1960 decision, the Colorado Supreme Court determined that the federal government’s "‘exclusive legislative’ jurisdiction" over the Fort Logan military reservation "does not operate as an absolute prohibition against state laws but has for its purpose protection of federal sovereignty . . . ."13 As such, the court rejected the argument that Arapahoe County, which encircles Fort Logan, could avoid making public assistance payments to an otherwise qualifying individual who lived on the reservation.14 In that decision, the court found that federal purchase or a state’s cession of territory under Article I, Section 8, Clause 17 of the United States Constitution does not establish "a unique and unreservedly exclusive sovereignty within the federal enclave."15 As noted in decisions from other jurisdictions, federal jurisdiction over federal enclaves is intended to "protect the federal government against conflicting regulations."16 As a result, states generally may enforce on federal enclaves state laws concerning topics over which the federal government has failed to exercise jurisdiction, such as certain voting, public education, and welfare matters, because such laws do not infringe upon federal sovereignty.17
Here, applying state disciplinary rules to representation of an ADMAX inmate poses no apparent conflict with federal jurisdiction. The regulation of attorney conduct is a matter of state sovereignty,18 and no federal code of attorney conduct exists. As such, the Colorado Rules of Professional Conduct do not conflict with federal laws or regulations. Moreover, if lawyers counseling inmates in federal prisons were not bound by the disciplinary rules of the surrounding state, a dangerous vacuum of attorney oversight would form.19 Accordingly, the fact that Allen is incarcerated in a federal facility does not alter the PDJ’s conclusion that the PDJ and the Hearing Board have jurisdiction over this matter and that application of Colorado’s disciplinary rules is appropriate here.
First Order Entering Partial Judgment on Pleadings
As noted above, the People initially sought partial judgment on the pleadings as to Colo. RPC 8.4(c), which provides that it is professional misconduct for a lawyer to engage in conduct involving dishonesty, fraud, deceit, or misrepresentation. A lawyer knowingly misappropriates client funds and thus violates Colo. RPC 8.4(c) by taking client funds entrusted to him, knowing the client has not authorized such a taking.20 Intent to permanently deprive a client of funds is not a necessary element of the rule,21 but the element of scienter must be shown.22
Under Colorado law, a lawyer does not earn advance funds, including "advance fees" or "flat fees," upon receipt.23 Rather, "an attorney earns fees only by conferring a benefit on or performing a legal service for the client."24 Only under narrow circumstances embodied in an "engagement" or "general" retainer may an attorney earn a fee upon receipt. Under this type of retainer, the attorney earns a fee either by consenting to forgo other possible employment opportunities, by agreeing to make the client’s work a top priority, or by virtue of the attorney’s unavailability to represent an opposing party.25 Unless a fee agreement explicitly designates an engagement retainer as such and explains that the retainer is earned upon receipt, it is presumed that an advance fee is a deposit that is not earned upon receipt.26
In this matter, Respondent has not made any assertions to rebut the presumption under Colorado law that Allen’s $30,000.00 retainer was an advance payment of fees. The evidence shows that the retainer was not an "engagement retainer" but rather that it was designed to compensate Respondent for future legal services. As such, the retainer belonged to Allen or Allen’s mother until such time as Respondent earned the legal fees. Respondent admits he did not earn the entire $30,000.00 retainer and that he "exercised dominion or ownership over . . . funds held for Allen’s benefit." Although Respondent denies he lacked Allen’s permission to use the funds for his personal purposes, he only denies that allegation on the basis that he did not believe he required such permission.
Moreover, given Respondent’s admission that he "knew" he owed Allen or Allen’s mother at least $9,687.00 for the purposes of accounting, the requisite mental state for a violation of Colo. RPC 8.4(c) has been demonstrated here. The evidence shows that Respondent knew he was using Allen’s retainer for his own purposes before having performed $30,000.00 of legal services. It is not necessary to establish that Respondent knew Colorado law did not authorize him to use the retainer for his own purposes.27 In accordance with the foregoing analysis and the standards provided in C.R.C.P. 12(c), the PDJ determined as a matter of law that Respondent exercised unauthorized dominion over Allen’s retainer in contravention of Colo. RPC 8.4(c).
The PDJ also observed that Texas law appears to accord with Colorado law as to how an attorney earns a flat fee. Under Texas law, a non-excessive "true" retainer that functions "to secure a lawyer’s services, and remunerate him for loss of the opportunity to accept other employment" is earned at the moment it is received, "[i]f the lawyer can substantiate that other employment will probably be lost by obligating himself to represent the client. . . ."28 But "[i]f a fee is not paid to secure the lawyer’s availability and to compensate him for lost opportunities, then it is a prepayment for services."29 In Texas, such a prepayment "belongs to the client until the services are rendered and must be held in a trust account."30 Here, the evidence shows that Allen’s retainer was not a "true" retainer that was earned upon receipt, but rather was an advance payment that Respondent did not earn upon receipt under Texas law.
Second Order Entering Partial Judgment on Pleadings
In an order dated May 18, 2011, the PDJ concluded that the factual findings and legal determinations made in his March 9, 2011, order granting partial judgment on the pleadings also established that Respondent violated Colo. RPC 1.15(b) and 1.16(d). Colo. RPC 1.15(b) requires a lawyer who has received funds in which a client or a third party has an interest to deliver to that person, promptly or as otherwise permitted by law or agreement, any funds he or she is entitled to receive. The PDJ’s March 9, 2011, order granting partial judgment as to Colo. RPC 8.4(c) established that (1) Respondent received an advance fee in which Allen or Allen’s mother had an interest, (2) Respondent had not delivered those funds to Allen or Allen’s mother, and (3) Allen or Allen’s mother was entitled to receive at least $9,687.00 of those funds. Therefore, the PDJ determined in his May 18, 2011, order that Respondent had violated Colo. RPC 1.15(b).
Colo. RPC 1.16(d) provides that, "[u]pon termination of representation, a lawyer shall take steps to the extent reasonably practicable to protect a client’s interests," including "refunding any advance payment of fee or expense that has not been earned or incurred." The PDJ’s order of March 9, 2011, establishes that (1) Respondent’s representation of Allen terminated when Respondent’s suspension took effect on April 22, 2010, (2) Respondent had not refunded the advance fee he received for the representation, and (3) Respondent had not earned at least $9,687.00 of that advance fee. Accordingly, the PDJ concluded in his May 18, 2011, order that Respondent also had violated Colo. RPC 1.16(d).
The American Bar Association Standards for Imposing Lawyer Sanctions (1991 & Supp. 1992) ("ABA Standards") and Colorado Supreme Court case law govern the selection and imposition of sanctions for lawyer misconduct. ABA Standard 3.0 mandates that, in selecting the appropriate sanction, the Hearing Board consider the duty breached, the injury or potential injury caused, Respondent’s mental state, and the aggravating and mitigating evidence.
ABA Standard 3.0—Duty, Injury, and Mental State
Duty: By using Allen’s retainer for his own purposes without authorization and by failing to return funds that did not belong to him, Respondent breached the duties of loyalty and honesty that he owed to his client. Respondent also neglected the duties he owed as a professional by failing to protect Allen’s interests upon termination of the representation.
Injury: Joan Allen testified by telephone that the retainer she gave Respondent represented her "life savings," which she needs to pay for nursing home care in the near future. In addition, Joan Allen lost interest on those funds and the Allens incurred costs in notifying the authorities of Respondent’s misconduct. Respondent’s failure to return unearned funds thus has caused serious injury. On a less tangible level, Allen testified that he has suffered "extreme" emotional harm as a result of Respondent’s misconduct. According to Allen, Respondent’s neglect of his case and breach of promises exacerbated his bipolar disorder. In a similar vein, Joan Allen said it has been hard for her to accept that someone she had judged to be honest, honorable, and trustworthy betrayed her trust. Finally, Respondent’s misconduct calls the legal profession into disrepute, as indicated by Allen’s testimony that he will never again hire a lawyer.
Mental State: As noted in the PDJ’s motion granting partial judgment as to Colo. RPC 8.4(c), Respondent admitted in his answer that he "knew" he owed Allen or Allen’s mother at least $9,687.00. Yet he exercised dominion or ownership over those funds held for Allen’s benefit. The Hearing Board finds that Respondent’s admissions also indicate he engaged in knowing violations of Colo. RPC 1.15(b) and 1.16(d).
ABA Standard 3.0—Aggravating Factors
Aggravating circumstances are any considerations or factors that may justify an increase in the degree of discipline to be imposed. The Hearing Board considers evidence of the following aggravating circumstances in deciding the appropriate sanction.
Prior Disciplinary Offenses—9.22(a): The People presented evidence of extensive discipline imposed upon Respondent in multiple jurisdictions:
• On November 23, 2004, the State Bar of Texas imposed upon Respondent an agreed judgment of private reprimand for neglect of a legal matter and charging or collecting an illegal or unconscionable fee.
• On October 12, 2005, the State Bar of Texas imposed upon Respondent an agreed judgment of private reprimand for failing to keep a client reasonably informed and failing to explain a matter to a client.
• On October 31, 2007, the State Bar of Texas publicly reprimanded Respondent and ordered him to pay restitution of $10,000.00 for failing to carry out obligations owed to a client, failing to keep a client reasonably informed, and failing to refund unearned fees.
• On October 31, 2007, in a separate client matter, the State Bar of Texas publicly reprimanded Respondent and ordered him to pay restitution of $1,000.00 for failing to keep a client reasonably informed, failing to explain a matter to a client, and failing to refund unearned fees.
• On August 28, 2009, the State Bar of Texas suspended Respondent for a year and ordered him to pay restitution of $2,500.00 for neglecting a legal matter and failing to refund unearned fees.
• On December 29, 2009, the State Bar of Texas suspended Respondent for five years, with three years of the suspension stayed, and ordered him to pay restitution of $40,120.00 for neglecting a client matter, failing to keep a client reasonably informed, and failing to refund unearned fees. The discipline concerned misconduct in ten client matters.
• On April 6, 2011, the Supreme Court of North Dakota barred Respondent from practice in North Dakota and ordered him to pay restitution for misconduct involving lack of competence and diligence, inadequate communication, charging an unreasonable fee, and failing to return unearned fees.
• On April 22, 2011, the Colorado Supreme Court suspended Respondent for two years. This reciprocal discipline was premised upon Respondent’s five-year suspension by the State Bar of Texas.
Dishonest or Selfish Motive—9.22(b): The Hearing Board finds that Respondent acted selfishly by using Allen’s retainer for his own purposes without having fully earned it.
Refusal to Acknowledge Wrongful Nature of Conduct—9.22(g): Although Respondent briefly commented that he felt "ashamed" of his conduct, the general tenor of his testimony reflected a lack of remorse for his actions. Respondent demonstrated neither a recognition of his obligation to learn the Colorado Rules of Professional Conduct nor an awareness of the impact his misconduct had on his client and his client’s mother. In addition, Respondent refuses to recognize that an advance payment of fees is not earned upon receipt under Texas law. Finally, Respondent did not acknowledge to the Hearing Board that his August 8, 2008, letter to Allen misrepresented his level of legal experience in Colorado.
Vulnerability of Victim—9.22(h): Allen had limited access to legal services and restricted earning capacity as a prison inmate, and he relied upon Respondent to assist him with a legal matter of immense importance to him. In addition, Allen’s mother, who is in her 70s, testified that she spent her "life savings" on Respondent’s retainer.
Substantial Experience in the Practice of Law—9.22(i): Respondent was licensed to practice law in Texas in 1970 and in Colorado in 1980. This lengthy experience in the practice of law should have instilled in Respondent an understanding of his professional obligations and a commitment to upholding those duties.
ABA Standard 3.0—Mitigating Factors
Mitigating factors are any considerations or factors that may justify a reduction in the degree of discipline imposed. The Hearing Board considers the following mitigating circumstance in deciding the appropriate sanction.
Personal or Emotional Problems—9.32(c): The Hearing Board views Respondent’s recent personal and emotional difficulties as a mitigating factor. Respondent’s mother died in 2006, and the following year his brother also passed away. Respondent declared bankruptcy around the same time, and his home was foreclosed upon about a year ago. Although Respondent sought assistance from the Texas lawyers’ assistance program in 2010 and started seeing a psychologist, he suffered a nervous breakdown in January 2011. Respondent believes that the breakdown resulted from the cumulative effect of his separation from his wife and other stressors. During at least one period, Respondent was despondent and felt unable to work. Respondent testified that these problems explain his failure to fully cooperate with the People in the course of this disciplinary process.
Sanctions Analysis under ABA Standards and Case Law
As noted above, the PDJ already determined as a matter of law, based upon Respondent’s admissions, that Respondent knowingly violated Colo. RPC 8.4(c). ABA Standard 4.11 and Colorado case law make clear that the presumptive sanction for knowing misappropriation of client funds is disbarment.31 For example, in People v. Torpy, the Colorado Supreme Court disbarred a lawyer who knowingly misappropriated $9,000.00 from his clients, overruling a hearing board’s recommendation of a three-year suspension.32 Even though the lawyer had misappropriated client funds in just one instance and several mitigating factors applied, the court deemed disbarment the appropriate sanction, commenting that "to allow deviation [from the presumption of disbarment for knowing misappropriation of client funds] without an extraordinary reason to do so would create uncertainty and inevitably lead to even less equitable results than adherence to the rule would."33 Here, aggravating factors far outweigh mitigating factors, making disbarment the mandatory sanction.
The Hearing Board also notes that, even were a Colo. RPC 8.4(c) violation not present here, Respondent’s transgressions of Colo. RPC 1.15(b) and 1.16(d) would merit disbarment in light of the applicable aggravating factors. Although suspension is the baseline sanction for Respondent’s violations of Colo. RPC 1.15(b) and 1.16(d) pursuant to ABA Standards 4.12 and 7.2, ABA Standard 8.1(b) provides that disbarment is generally appropriate when a lawyer has been suspended for the same or similar misconduct and knowingly engages in further misconduct that causes injury to a client. Here, the State Bar of Texas publicly reprimanded Respondent twice in 2007 for failing to refund unearned fees, suspended him in August 2009 for the same infraction, and once again suspended him in December 2009 for similar rule violations in multiple client matters. Yet in 2010, Respondent failed anew to refund client fees in Allen’s matter. The balance of aggravating and mitigating circumstances presented in this case bolsters our conclusion that disbarment is the appropriate sanction.
In this matter, Respondent breached his professional duties by failing to return unearned client funds. Respondent violated Colo. RPC 1.15(b), 1.16(d), and 8.4(c) when he used a client’s $30,000.00 retainer for his own purposes without authorization and without having earned the retainer. Given the serious nature of Respondent’s misconduct, his lengthy disciplinary record in Texas for similar misconduct, and the substantial risk he presents to the public, we find that disbarment is warranted.
The Hearing Board therefore ORDERS:
1. STEVEN J. ROZAN, attorney registration number 10381, is DISBARRED. The DISBARMENT SHALL take effect only upon issuance of an "Order and Notice of Disbarment."34
2. Respondent SHALL file any post-hearing motion or application for stay pending appeal with the PDJ on or before September 15, 2011. No extensions of time will be granted. If Respondent files a post-hearing motion or an application for stay pending appeal, the People SHALL file any response thereto within five days, unless otherwise ordered by the PDJ.
3. Respondent SHALL pay the costs of these proceedings. The People SHALL submit a "Statement of Costs" within fifteen days from the date of this order. In that statement, the People should indicate whether they seek an award of restitution in this matter and, if so, in what amount. The Hearing Board encourages the People to request restitution if the information available to the People supports such a request. Respondent must submit any response to the People’s statement within ten days.
1. The PDJ is issuing a separate order denying that motion concurrent with the issuance of this decision.
2. The recitation of established facts and rule violations in this section of the decision is primarily drawn from the PDJ’s orders granting partial judgment on the pleadings, which contain citations to applicable averments in the People’s complaint and Respondent’s answers.
3. The date of this accounting is not specified, but given the amount Respondent indicates he owed, it presumably occurred after the accounting filed on October 21, 2009.
4. Complaint ¶ 99; Answer ¶ 99.
5. Complaint ¶ 100; Answer ¶ 100.
6. Complaint ¶ 101; Answer ¶ 101.
7. Answer ¶ 101.
8. Complaint ¶ 102; Answer ¶ 102.
9. As Respondent correctly observes, an argument that a court lacks jurisdiction over the subject matter of a case may be raised at any time. See C.R.C.P. 12(h)(3).
10. The PDJ, rather than the Hearing Board, addresses Respondent’s jurisdictional and choice of law arguments pursuant to C.R.C.P. 251.18(b)(2), which provides that the PDJ "shall rule on all motions, objections, and other matters presented after a complaint is filed and in the course of a hearing."
11. See In re Tonwe, 929 A.2d 774, 776-78 (Del. Supr. 2007) (holding that Del. RPC 8.5 governed the conduct of an attorney licensed solely in Pennsylvania who represented Delaware residents in personal injury cases from a Pennsylvania office, because she had been physically present in Delaware to represent clients on three occasions, physical presence is not required to establish that a person is providing legal services in a state, and she did "everything short of appearing in Delaware courts").
12. Benjamin v. Brookhaven Science Assocs., LLC, 387 F. Supp. 2d 146, 157 (E.D.N.Y. 2005) (internal quotation omitted). The federal enclave concept derives from U.S. Const. Art. I, § 8, cl. 17, which empowers Congress to exercise "exclusive Legislation" over land acquired from a state for the "Erection of Forts, Magazines, Arsenals, dock-Yards, and other needful Buildings. . . ." While Respondent’s argument that ADMAX qualifies as a federal enclave is plausible, he has not cited any authority demonstrating that the United States exercises exclusive federal jurisdiction over ADMAX. Nevertheless, the PDJ assumes for the sake of argument here that ADMAX is a federal enclave. But see Roll v. Tracor, Inc., 140 F.Supp.2d 1073, 1078 (D.Nev. 2001) (finding that a portion of Nellis Air Force Base in Nevada was not under exclusive federal jurisdiction and accordingly was not a "federal enclave").
13. Bd. of County Comm’rs of Arapahoe County v. Donoho, 144 Colo. 321, 332, 356 P.2d 267, 273 (1960).
14. Id. at 332, 273-74.
15. Id. at 327, 270-71.
16. See State ex rel. Children, Youth & Families Dep’t v. Debbie F., 905 P.2d 205, 207-08 (N.M. App. 1995) (holding that the State of New Mexico could protect children living on federal enclaves from abuse and neglect under the authority of the New Mexico Children’s Code).
17. See id.; Howard v. Cmm’rs of Sinking Fund of City of Louisville, 344 U.S. 624, 627 (1953) ("The fiction of a state within a state can have no validity to prevent the state from exercising its power over the federal area within its boundaries, so long as there is no interference with the jurisdiction asserted by the Federal Government."); Cobb v. Cobb, 545 N.E.2d 1161, 1164 (Mass. 1989) (holding that a state court had authority to apply a restraining order within the boundaries of a military reservation because the order did not appear to interfere with federal "function"); In re Terry Y., 161 Cal. Rptr. 452, 452-53 (Cal. App. 1980) (holding that a state court had jurisdiction to remove a physically abused child from the custody of his parents, even though the child resided on Ford Ord, a federal enclave, because the state court’s exercise of jurisdiction did not conflict with federal sovereignty); see generally Michael J. Malinowski, Federal Enclaves and Local Law: Carving Out a Domestic Violence Exception to Exclusive Legislative Jurisdiction, 100 Yale L.J. 189, 195 (Oct. 1990) (describing the prevalent approach to determining which state laws apply on federal enclaves as "dictat[ing] that all state laws are valid within federal enclaves unless they interfere with the jurisdiction asserted by the federal government"). We note that, under an older approach, courts upheld application of state law on federal enclaves only where the state law had been in force at the time of the state’s transfer of land to the federal government. See, e.g., Chicago, R.I. & P. Ry. v. McGlinn, 114 U.S. 542, 547 (1885).
18. A.L.L. v. People, 226 P.3d 1054, 1057 (Colo. 2010) (noting that "within the boundaries of due process and equal protection, the details of attorney regulations are left to a state’s sovereign control") (citing Hoover v. Ronwin, 466 U.S. 558, 569 n. 18 (1984) (stating that "regulation of the bar is a sovereign function of the [state]" because "[f]ew other professions are as close to the core of the [s]tate’s power to protect the public . . . [or] as essential to the primary governmental function of administering justice") (internal quotations and citations omitted)).
19. See In re Terry Y., 161 Cal. Rptr. at 454 (noting that if the county encircling Fort Ord did not protect children living at Fort Ord from abuse, those children could be left without any governmental protection).
20. In re Haines, 177 P.3d 1239, 1245 (Colo. 2008).
21. People v. Varallo, 913 P.2d 1, 10-11 (Colo. 1996) (citing People v. Marsh, 908 P.2d 1115, 1119 (Colo. 1996)).
22. People v. Rader, 822 P.2d 950, 953 (Colo. 1992). "[T]he element of scienter is shown with respect to a violation of [the predecessor to Colo. RPC 8.4(c)] when it is established that the attorney deliberately closed his eyes to facts he had a duty to see or recklessly stated as facts things of which he was ignorant." Id. (internal quotation omitted).
23. In re Sather, 3 P.3d 403, 410-11 (Colo. 2000).
24. Id. at 410.
26. Id. at 410-11.
27. See People v. Holmes, 959 P.2d 406, 414 (Colo. 1998) ("Generally speaking, where the law imposes criminal liability for certain conduct, the scienter element requires no more than that the person charged with the duty knows what he is doing. It does not mean that, in addition, he must suppose that he is breaking the law.") (internal quotation omitted); C.R.S. § 18-1-504 ("A person is not relieved of criminal liability for conduct because he engages in that conduct under a mistaken belief that it does not, as a matter of law, constitute an offense."). The case and statute cited above directly concern criminal liability, but we also find them relevant to attorney disciplinary proceedings, particularly in light of the Colorado Supreme Court’s finding that higher standards for conduct may be imposed upon lawyers than upon lay persons. See People v. Morley, 725 P.2d 510, 516 n.2 (Colo. 1986).
28. Tex. Comm’n on Prof’l Ethics, Op. 431, V. 49 Tex. B.J. 1084 (June 1986); Cluck v. Comm’n for Lawyer Discipline, 214 S.W.3d 736, 739-40 (Tex. App. 2007) (citing and quoting Tex. Comm’n on Prof’l Ethics, Op. 431). Even if a retainer is a "true" retainer that is deemed earned upon receipt, the attorney must "promptly refund an equitable portion of the retainer" if the client discharges the attorney for cause or the attorney voluntarily withdraws from representation before having lost other employment opportunities. Tex. Comm’n on Prof’l Ethics, Op. 431.
29. Cluck, 214 S.W.3d at 740.
30. Id. (citing Tex. Disciplinary R. Prof’l Conduct 1.14 cmt. 2). We note that Texas law appears to treat a lawyer’s unauthorized consumption of unearned advance legal fees as a violation of Texas Disciplinary Rule of Professional Conduct 1.15(d) (declining or terminating representation), rather than as dishonest conduct.
31. People v. Lavenhar, 934 P.2d 1355, 1359 (Colo. 1997) ("We have repeatedly held that a lawyer’s knowing misappropriation of funds, whether belonging to a client or third party, warrants disbarment except in the presence of extraordinary factors of mitigation.") (citing People v. Mundis, 929 P.2d 1327, 1331 (Colo. 1996); People v. Motsenbocker, 926 P.2d 576, 577 (Colo. 1996); ABA Standard 4.11).
32. 966 P.2d 1040, 1046 (Colo. 1998).
33. Id. at 1044-46.
34. In general, an order and notice of sanction will issue thirty-one days after a decision is issued pursuant to C.R.C.P. 251.19(b) or (c). In some instances, the order and notice may issue later than thirty-one days by operation of C.R.C.P. 251.27(h), C.R.C.P. 59, or other applicable rules.
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