Vol. 29, No. 7
From the Courts
Matters Resulting in Diversion
Colorado Supreme Court Office of Regulation Counsel
Editor's Note: Articles describing diversion agreements as part of the Attorney Regulation System are published on a quarterly basis. These articles are contributed by the Colorado Supreme Court Office of Regulation Counsel.
On April 20, 2000, the Colorado Supreme Court amended and adopted Colo. RPC 1.4 and Colo. RPC 1.5. The new rules become effective July 1, 2000. [See "Court Business," 29 The Colorado Lawyer 114 (June 2000).]
Amendments to the Colorado Rules of Professional Conduct
Colo. RPC 1.5(b) was revised by deleting the word "preferably." Beginning July 1, 2000, a lawyer, who has not regularly represented a client, must explain the basis or rate of the fees to the client, in writing, before or within a reasonable time after commencing the representation. Even in cases where the client has been regularly represented, when there is a change in the fee, the lawyer is obligated to communicate that change in writing. The written communication need not be a formal engagement letter or agreement, and it does not have to be signed by the client.
The Comment to Colo. RPC 1.4 was amended by making clear that when communicating with a client, information regarding fees charged, costs, expenses, and disbursements also should be provided. Additionally, the comment provides that a lawyer should promptly respond to a client's reasonable request concerning these matters.
Background Information Regarding Diversion
Diversion as an alternative to discipline can be offered. See C.R.C.P. 251.13. Pursuant to the rule, Attorney Regulation Counsel ("Regulation Counsel"), the Attorney Regulation Committee ("ARC"), the Presiding Disciplinary Judge ("PDJ"), the hearing board, the Appellate Discipline Commission, or the Supreme Court may offer diversion as an alternative to discipline, depending on the stage of the proceeding. For example, Regulation Counsel can offer a Diversion Agreement when the complaint is at the central intake level in the Office of Attorney Regulation Counsel. Thereafter, ARC or some other entity must approve the agreement.
From February 1, 2000, through May 15, 2000, at the intake stage, Regulation Counsel entered into 28 Diversion Agreements. From February 12, 2000, through May 13, 2000, ARC approved 15 Diversion Agreements. The PDJ approved 3 Diversion Agreements from February 1, 2000, through May 15, 2000.
Before Regulation Counsel decides whether to offer a diversion agreement, Regulation Counsel reviews the following factors to determine if diversion is appropriate: (1) there is little likelihood that the attorney will harm the public during the period of participation; (2) Regulation Counsel can adequately supervise the conditions of diversion; and (3) the attorney is likely to benefit by participation in the program.
Regulation Counsel will consider diversion only if the presumptive range of discipline in the particular matter is likely to result in a public censure or less. However, if the attorney has been publicly disciplined in the last three years, the matter generally will not be diverted under the rule. See C.R.C.P. 251.13(b). Other factors Regulation Counsel considers that may preclude Regulation Counsel from agreeing to diversion are set forth in C.R.C.P. 251.13(b). For example, if the misconduct involves dishonesty, misrepresentations, domestic violence, or is a pattern of misconduct, the presumption is against diversion.
The purpose of a diversion agreement is to educate and rehabilitate the attorney so that the attorney does not engage in such misconduct in the future. It also is hoped that a diversion agreement will address some of the systemic problems an attorney may be having. For example, if an attorney engaged in minor misconduct (neglect), and the reasons for such conduct were the result of poor office management, then one of the conditions of diversion may be a law office management audit and/ or practice monitor. The time period for a diversion agreement is generally no less than one year or greater than two years.
Types of Misconduct
The type of misconduct dictates the conditions of the diversion agreement. Although each diversion agreement is factually unique and different from other agreements, often the requirements are similar. Generally, the attorney is required to attend Ethics School that is organized and taught by attorneys from the Office of Attorney Regulation Counsel. An attorney also may be required to fulfill any of the following conditions: law office audit; practice monitor; financial audit; restitution; payment of costs; evaluation by Colorado Lawyer's Health Program ("CLHP"), including treatment; attend CLE courses, and any other conditions that may be appropriate for the particular type of misconduct.
After the attorney successfully completes the requirements of the diversion agreement, Regulation Counsel will close its file, and the matter will be expunged pursuant to C.R.C.P. 251.33(d). If Regulation Counsel has reason to believe that the attorney has breached the Diversion Agreement, then Regulation Counsel must follow the steps provided in C.R.C.P 251.13 before an agreement can be revoked.
The types of misconduct resulting in diversion for the time period described above, generally involve the following: an attorney's neglect of a matter and/or failure to communicate in violation of Colo. RPC 1.3 and Colo. RPC 1.4 where the client is not harmed or restitution is paid to redress the harm; conflicts of interest in violation of Colo. RPC 1.7(b) or Colo. RPC 1.9; violating a court order in violation of Colo. RPC 3.4; and threatening criminal or administrative action to gain an advantage in a civil case against the opposing party or attorney in violation of Colo. RPC 4.5.
Diversion agreements also have addressed misconduct such as violating criminal laws, respecting rights of third parties' unprofessional conduct, failing to comply with Chapter 23.3 regarding contingent fees, and conduct that was prejudicial to the administration of justice.
Many cases resulted from personal problems the attorney was experiencing at the time of the misconduct. In these situations, the diversion agreements include a requirement for an evaluation by CLHP and, if necessary, counseling to address the underlying problems of depression, alcoholism, or other mental illnesses that may be affecting the attorney's ability to practice law.
Random Samples of Diversion Agreements
Conflict of Interest
- The respondent was appointed guardian ad litem for the minor children in connection with post-decree proceedings in a dissolution of marriage action. While meeting with the children at their mother's home, the respondent accepted a gift from the mother. The respondent did not return the gift until her acceptance of the gift was challenged by the father. The rules implicated were Colo. RPC 1.7(b), Colo. RPC 8.4(d), and Colo. RPC 8.4(g).
- The respondent represented the wife in a dissolution of marriage case. He also represented the wife and ex-husband in a bankruptcy case. The respondent told the ex-husband that he would not represent the former wife in any post-dissolution proceeding. A year-and-a-half later, the respondent's former client asked him to write to her former husband on a post-dissolution matter, and the respondent did so at no charge. The respondent claims he forgot about the bankruptcy case and took no further action on behalf of his former client after being contacted by the former husband concerning the conflict. The rule implicated is Colo. RPC 1.7(b).
- The lawyer was contacted by a former client concerning a new matter. Thereafter the client decided to go pro se. About a month later, the adverse party to the former client retained the respondent and paid a retainer. The respondent withdrew from representing the adverse party, but only after the former client obtained counsel who then raised the issue with the respondent. The respondent agreed to refund the remaining retainer to his new client. The rule implicated is Colo. RPC 1.9.
- The respondent struck another car, a concrete support column, and a sign, while attempting to park his car in a parking garage. The respondent then moved his car to another location in the garage without reporting the incident or leaving any information on the other vehicle. Police arrested the respondent at the scene. The respondent's BAC measured .156. The respondent pled guilty to DWAI. The rules implicated were Colo. RPC 8.4(b) and C.R.C.P. 251.5(b).
- The respondent was arrested for driving under the influence. He pled guilty to one count of DWAI and was sentenced to three to twelve months' unsupervised probation, completion of Level II alcohol education, twenty-four hours of community service, payment of fines, and attendance at a presentation of the victim impact panel. The rule implicated is Colo. RPC 8.4(b).
- The respondent was charged with driving under the influence. The respondent's BAC was .192. The respondent pled guilty to DWAI. The respondent had a previous DWAI from 1993. The rules implicated are Colo. RPC 8.4(b) and C.R.C.P. 251.5(b).
- The respondent became involved in a physical altercation with his sixteen-year-old son at their home. The police were called and the respondent was charged with assault in the third degree, a Class I misdemeanor. The respondent pled guilty to a charge of harassment. He received a deferred judgment with unsupervised probation, and completion of a parenting class. He voluntarily sought counseling. The rule implicated is Colo. RPC 8.4(b).
Failure to Communicate
- The respondent was retained by another attorney to pursue a claim against a kennel in New Jersey for the sale of a dog which developed hip dysplasia at an early age. The respondent wrote a comprehensive demand letter. Counsel for the kennel promptly responded that their client was not subject to jurisdiction in Colorado, refuted many of the claims, and offered to refund the cost of the dog. The respondent engaged in little or no communication with the client for seven (7) months. The rules implicated were Colo. RPC 1.3 and Colo. RPC 1.4(a).
- The respondent was retained to assist a client in post-dissolution matters concerning parenting time and custody issues. The parties were unable to agree on final parenting time and a custody arrangement. A final hearing was set, and that hearing was continued at the request of the respondent's client. The respondent had no contact with his client for two months, did not respond to correspondence from opposing counsel, and made no efforts to resolve the issue prior to the hearing. The rules implicated were Colo. RPC 1.3 and Colo. RPC 1.4.
- The respondent represented a client in a personal injury case resulting from a car accident. The client left messages for the respondent to return calls on the respondent's voice mail. The client went to the respondent's office and found that the respondent had moved his office location without notifying the client. The respondent indicated that he had no documentation or evidence in his file of communications with the client other than a letter to the insurance adjuster providing medical records. The respondent stated that his file was purged, although he had no explanation as to why he has the above-mentioned correspondence and not other parts of the file. The rules implicated were Colo. RPC 1.3 and Colo. RPC 1.4.
- The client contacted the respondent concerning a personal injury case in the fall of 1998. The respondent mailed out a fee agreement in January 1999 that was returned in March 1999. The defendant was a public entity. The respondent failed to do any research regarding the defendant's status, and failed to file a notice of claim pursuant to the governmental immunity statute. There was a dispute as to when the attorney-client relationship began. The rules implicated are Colo. RPC 1.3 and Colo. RPC 1.4.
- In a divorce and child support dispute, the respondent sent two letters to opposing counsel which contained threats to file a grievance unless the opposing party agreed to settle the civil matter. The rule implicated is Colo. RPC 4.5.
- The respondent wrote a demand letter on behalf of a client. When he received no response, he wrote a letter threatening that his client might pursue criminal charges and/or seek other remedies. The rule implicated is Colo. RPC 4.5.
- The respondent was retained to represent a client in a temporary restraining order case and subsequent dissolution of marriage case. A stipulation and settlement was reached. Based on the respondent's request, the court entered an order requiring the separation agreement be filed within thirty (30) days. The respondent did not prepare the draft agreement until a month after it was due and did not file the written agreement with the court until two months later. The rule implicated is Colo. RPC 1.3.
- The respondent represented a client before the Colorado State Personnel Board concerning a random drug test. The board rendered a decision that was not favorable to the respondent's client. The respondent informed his client of his appellate rights. The client continually expressed his desire to the respondent to appeal the decision, even though the respondent told him there were no grounds. The respondent tried to negotiate with the state's personnel board, but did not file the appeal and did not inform the client of his failure to do so until several days after the deadline. The rule implicated is Colo. RPC 1.3.
- The respondent failed to appear at a hearing in a criminal case on behalf of his client. The hearing was scheduled in order to obtain a continuance. The only harm to the client was her anxiety when the respondent failed to appear. The rule implicated is Colo. RPC 1.3.
- The respondent represented the client in a personal injury matter pursuant to a contingent fee agreement. However, the contingent fee agreement did not comply with the requirements of C.R.C.P. Chapter 23.3. During the representation, the respondent did not return telephone calls from the client promptly. The respondent also failed to pursue the client's claims diligently. After the respondent was asked to withdraw from the case, the respondent asserted a charging lien improperly. The respondent also insisted that the respondent be paid a percentage of the last settlement offer in the case, even though the offer was not accepted and there was no provision in the fee agreement that allowed him to recover the fee based on such contingency. In mitigation, at the time of the conduct, the respondent was suffering from a variety of very serious health problems. The rules implicated are Colo. RPC 1.3, Colo. RPC 1.4(a), Colo. RPC 1.4(b), and Colo. RPC 1.5(c).
- The respondent was appointed as a guardian ad litem in a dissolution of marriage action. Approximately ten (10) months later, permanent orders were heard and a stipulation was reached by the parties at that time. The respondent was ordered to reduce the stipulation to writing, and obtain the relevant signatures within six weeks from the date of the permanent orders. In fact, the stipulation was not signed until approximately fifteen (15) months later, and the document was drafted by the wife's counsel, not the respondent.
In addition to the diligence issue, a dispute regarding the respondent's fees was raised by one of the parties because the respondent charged for work relating to the stipulation. Finally, the respondent was using letterhead that indicated the respondent had associates, when in fact the respondent was a solo practitioner. The rules implicated were Colo. RPC 1.3, Colo. RPC 3.2, and Colo. RPC 7.5.
Direct Contact with Prospective Client
- The respondent had previously been advised, in writing, by the Attorney Regulation Committee that the respondent's advertisement letter was not in compliance. The letter set forth what portions of Colo. RPC 7.3 applied. The respondent then sent an advertisement letter to a prospective client that did not contain the words "this is an advertisement." The rule implicated is Colo. RPC 7.3.
Communication with Person
Represented by Counsel
- The respondent represented a minor child in a personal injury case and obtained a settlement offer. The child's mother submitted the release to her own attorney for his review. The mother's attorney wrote to the respondent, stating that the release was unacceptable, and advised the respondent that the mother was represented by counsel. The respondent approached the mother and discussed the need for her to execute the release. The rule implicated is Colo. RPC 4.2.
- The respondent represented a mother in a dissolution of marriage case. The respondent met and spoke with one of the minor children, a ten-year-old boy. At the time the respondent met with the minor child, the respondent knew that the father had sole custody and that a special advocate was appointed. The respondent met with the minor child without permission, knowledge, or presence of the father or the special advocate. The rule implicated is Colo. RPC 4.2.
- Following an altercation in a gasoline station parking lot, the respondent was arrested. When the police officers arrived at the gas station, the respondent was uncooperative. The respondent was advised that he could be released if he left with his wife. He refused to leave with his wife and started walking toward the police officers in a menacing manner. The respondent's wife attempted to stop him, at which point he slapped her hands away. The respondent was again taken into custody. The respondent eventually entered into a stipulation for deferred judgment to obstructing a police officer.
While the respondent was a party in divorce proceedings, the respondent prepared a deed conveying title to real estate in his name to a separate legal entity. The respondent asked his secretary to notarize the signature on the deed with a back-dated notary verifying that he had signed the deed two weeks earlier. The respondent's secretary did as the respondent requested, but then notified one of the respondent's partners about what had occurred. The respondent's partner confronted the respondent about the deed, and the respondent surrendered the deed to his partner. The deed was never recorded or used in any manner. The rule implicated is Colo. RPC 8.4(c).
- The respondent contacted the emergency room at Swedish Hospital concerning a bill for services rendered at Swedish Hospital for the respondent's daughter. The respondent made four (4) different telephone calls and spoke to three (3) different nurses and a physician regarding the bill. The respondent was verbally abusive. The rule implicated is Colo. RPC 8.4(h). In addition to the other conditions, the respondent was required to undergo an assessment or evaluation by a licensed psychologist or psychiatrist or other licensed mental health professional approved by the Office of Attorney Regulation Counsel. The evaluation or assessment is to focus on the respondent's anger management skills and problems.
Court Orders and Rules
- During the course of post-dissolution proceedings, the respondent issued a subpoena duces tecum to the husband's employer. The subpoena directed the records be provided directly to the respondent at the respondent's law office. The respondent failed to schedule a deposition, and there was no trial or hearing scheduled in the office. The rules implicated were Colo. RPC 3.4(c) and Colo. RPC 4.4.
- The respondent represented a client in a legal malpractice suit against two attorneys that initially was filed pro se. She entered into a fee agreement that required a non-refundable retainer and an additional contingent fee. The agreement did not comply with Chapter 23.3 of the Colorado Rules of Civil Procedure. Counsel for one of the defendants in the case filed a motion to dismiss based on the insufficiency of the certificate of review filed by the respondent. The court dismissed the case based on its determination that the certificate of review was insufficient and because the respondent filed an untimely response to the motion to dismiss. The respondent continued to work on the case for many months after it was dismissed in a futile attempt to find some alternative theory of relief to pursue. There were many problems with the underlying case. The rules implicated are Colo. RPC 1.1, Colo. RPC 1.3, Colo. RPC 1.4(b), Colo. RPC 1.5(a), and Colo. RPC 1.5(c).
- The respondent was hired to end a garnishment of wages by the lender of the client's student loans and to file a bankruptcy proceeding. The respondent advised her client that her student loans would be discharged along with her other debts. The respondent's advice was incorrect. Her client's student loans were not dischargeable in bankruptcy. The law governing dischargeability of student loans was changed in 1998, and the respondent's research failed to reveal that fact. The rule implicated is Colo. RPC 1.1.
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