October 22, 2017

Colorado Court of Appeals: Counties Not Liable for Attorney Fees to Defend Disciplinary Action Against District Attorney

The Colorado Court of Appeals issued its opinion in Ruybalid v. Board of County Commissioners of Las Animas County on Thursday, August 24, 2017.

Ruybalid was the District Attorney for the Third Judicial District, and he admitted to serial violations of the Colorado Rules of Professional Conduct during his tenure as District Attorney. Ruybalid believed the counties should have defended him against his disciplinary actions, but the counties refused to pay for his attorney fees and costs. Ruybalid hired an attorney and entered into a settlement, admitting a pattern of discovery violations that led to the dismissal of criminal charges in several cases and stipulating that he did not diligently represent the people and engaged in conduct prejudicial to the administration of justice.

After resolving the disciplinary action, Ruybalid filed a complaint for declaratory relief against the counties, seeking reimbursement of his attorney fees and costs incurred in defending the disciplinary action. The counties moved to dismiss for failure to state a claim, arguing Ruybalid had no right to fees and costs. Ruybalid countered that he had a statutory right to fees and costs, and also an equitable claim. The district court concluded that Ruybalid had failed to state a claim and had no right to fees and costs, and dismissed the complaint. Ruybalid appealed.

The court of appeals noted that the American Rule generally requires parties to pay their own fees and costs. Ruybalid argued that C.R.S. § 20-1-303 required the counties to pay his attorney fees, but the court of appeals disagreed, finding nothing in the rule to require the counties to pay attorney fees or costs. The court refused to infer an exception to the American Rule not explicitly authorized by statute. The court declined to consider the attorney fees and costs incurred in defending Ruybalid’s disciplinary action as “expenses necessarily incurred” in discharging a district attorney’s official duties. The court also noted that Ruybalid failed to allege any facts that tended to support that the expenses incurred were for the benefit of the counties.

The court of appeals affirmed the trial court’s motion to dismiss for failure to state a claim.

Why Good Lawyers Do Bad Things – Think It Can’t Happen to You?

High-Profile Lawyer Charged with Punching Client in Court,” Above the Law, October 30, 2015.

Storied Plaintiffs Lawyer Disbarred in Kentucky Over Excessive Fees,” National Law Journal, March 21, 2013.

Lawyer Charged with Forging Signatures of 7 Judges on Over 100 Court Documents,” Above the Law, February 24, 2016.

Biglaw Partner and Associate Destroyed Evidence, Suborned Perjury,” Above the Law, June 24, 2015

Headlines like these grab our attention, but they don’t give us much cause for concern. After all, we would NEVER do anything like that. But what about these?

“[Lawyer] agreed to represent a client in his immigration and criminal matters. On [Lawyer]’s advice, his client pleaded guilty to felony sexual assault. The client later regretted his decision to plead guilty, hired other counsel, successfully withdrew his plea, went to trial, and was acquitted.” People v. Romero, 16PDJ057, December 9, 2016.

“[Lawyer] was convicted five times of driving under the influence (DUI) or driving while ability impaired (DWAI). His most recent conviction took place in 2011. Through this conduct, [Lawyer] violated Colo. RPC 8.4(b) (a lawyer shall not commit a criminal act that reflects adversely on the lawyer’s honesty, trustworthiness, or fitness as a lawyer in other respects).” People v. Condon, 16PDJ050, December 23, 2016.

“In October 2015, [Lawyer] sought a $1,000.00 loan from a client to address cash flow problems. The client agreed, so [Lawyer] executed a promissory note in favor of the client, providing for 8% per annum interest and providing that the principal and interest would be due one month hence, in November 2015. The terms of the loan were fair and reasonable. But [Lawyer] did not advise the client in writing of the desirability of seeking independent legal counsel as to the transaction. Nor did he obtain the client’s written, informed consent to [Lawyer]’s role in the transaction, including whether [Lawyer] was representing the client in the transaction. [Lawyer] failed to pay the client by the agreed-upon date, though [Lawyer] did fully repay the client in March 2016. At that time, the client had not yet reported [Lawyer] to disciplinary authorities.” People v. Foster, 17PDJ018, March 15, 2017.

Do these still sound too far-fetched to you? How about these ones?

“Lawyer accepts $5,000 ‘flat fee,’ expecting a complex dispute, but skillfully resolves the matter in one hour. He then keeps the entire fee.”

“While [Lawyer] served as county attorney, he worked on legal issues involving third parties’ management of dirt track racing at El Paso County’s fairgrounds. He was involved with drafting a memorandum of understanding between the County and one of those third parties to address issues that exposed the County to liability. After [Lawyer] left the employ of El Paso County, the County faced ongoing legal issues with that same third party. In 2013, [Lawyer] began representing that party against El Paso County.”

“[Lawyer] is subject to several orders entered in Arapahoe County requiring him to pay child support, various child-related expenses, and child support arrearages. [Lawyer] paid just over half of the child support obligations he owed between June 2015 and November 2016. [Lawyer]’s failure to satisfy these obligations violated Colo. RPC 3.4(c) (a lawyer shall not knowingly disobey an obligation under the rules of a tribunal) and Colo. RPC 8.4(d) (a lawyer shall not engage in conduct prejudicial to the administration of justice).”

“[Lawyer] failed to obey a court order to pay monthly child support and to satisfy child support arrearages. Her failure to honor her court-mandated obligations tarnished the integrity of the legal system and harmed her child. Her conduct violated Colo. RPC 3.4(c) (a lawyer shall not knowingly disobey an obligation under the rules of a tribunal) and Colo. RPC 8.4(d) (a lawyer shall not engage in conduct prejudicial to the administration of justice).”

“[Lawyer] was retained by a client in March 2016 in a paternity case. Because he failed to pay registration fees, [Lawyer] was placed on administrative suspension on May 2, 2016. While suspended, [Lawyer] participated in a telephone conference with the court and set a status conference for June 2016.”

“[Lawyer], a bankruptcy attorney, was retained by a lawyer who had been disbarred for knowing conversion. The lawyer’s disbarment order required him to pay restitution to several former clients, as well as more than $220,000 to a medical lienholder. On the client’s behalf, [Lawyer] filed a Chapter 13 bankruptcy petition. He did so to stall a foreclosure sale on the client’s house in the hopes of protecting from creditors up to $105,000 in equity under the homestead exemption, and to avoid entangling the client’s second property in Crested Butte in a Chapter 7 bankruptcy. The petition showed that the client’s debt was over 99% of the allowable limit for Chapter 13 cases. The petition did not, however, list the $220,000 debt to the lienholder; instead, it characterized the amount of the debt as “unknown,” “unliquidated,” and “disputed.” Had that debt to the lienholder been included in the client’s total debt, the amount would have exceeded the Chapter 13 debt limit.”

Are you starting to feel uncomfortable? These situations and others are published monthly in The Colorado Lawyer. Although many of the disciplinary situations are too egregious to relate to, others could happen to anyone – even good lawyers like you.

If you ask any random group of people to rank how ethical they are on a scale of one to one hundred, responses will average about 75, meaning almost everyone is misjudging how they would react to actual ethical dilemmas. Studies regularly show a gap between an ethical goal (how ethical we aspire to be) and ethical judgment (what we actually do). This has been called “bounded ethicality,” and it examines why individuals fail to recognize that external influence and self-interest impact their ethical thinking.

Ethical decisions can be hard for anyone, but the stakes are higher for lawyers because the Colorado Rules of Professional Conduct dictate lawyers’ ethical responsibility. The preamble to the Rules states, “Virtually all difficult ethical problems arise from conflict between a lawyer’s responsibilities to clients, to the legal system, and to the lawyer’s own interest in remaining an ethical person while earning a satisfactory living. . . . The Rules do not . . . exhaust the moral and ethical considerations that should inform a lawyer, for no worthwhile human activity can be completely defined by legal rules.” There are plenty of shades of grey in determining the ethical path, in other words.

On May 15, 2017, Christopher P. Montville of Wheeler Trigg O’Donnell will present a one hour lunch program, “Why Good Lawyers Do Bad Things (And What to Do About it).” This can’t-miss program will explore the reasons why good people sometimes make bad choices, and how to avoid becoming a disciplinary summary in The Colorado Lawyer. Register today by calling (303) 860-0608 or clicking the links below.

 

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CLE Program: Why Good Lawyers Do Bad Things

This CLE presentation will occur on May 15, 2017, at the CLE Large Classroom (1900 Grant St., 3rd Floor) from noon to 1 p.m. Register for the live program here and the webcast here. You may also call (303) 860-0608 to register.

Can’t make the live program? Order the homestudy here — Video OnDemandMP3 Audio

Colorado Court of Appeals: Contract that Violates Rules of Professional Conduct Unenforceable

The Colorado Court of Appeals issued its opinion in Calvert v. Mayberry on Thursday, April 21, 2016.

Disciplinary Proceeding—Oral Contract—Colo. RPC 1.8(a)—Issue Preclusion—Void Agreement—Equitable Lien—Unclean Hands.

In a question of first impression, the Colorado Court of Appeals decided that an attorney who enters into a contract with a client that violates Colo. RPC 1.8(a) cannot later enforce the contract against the client.

The Colorado Supreme Court disbarred the attorney after a hearing board determined he had committed ethical violations, including some against the former client in this case. Specifically, the hearing board found that the attorney had loaned the former client over $100,000 and secured his interest in the loan funds by recording a false deed of trust in the chain of title on her house. The hearing board also found that the attorney had not complied with Colo. RPC 1.8(a) when he made the loans to the former client. The attorney then filed this case to recoup money he had loaned to the former client, claiming that he had an oral agreement with the client for repayment of the loans, and alternatively asserting that the trial court should impose an equitable lien on the former client’s house. The trial court granted summary judgment for the former client and her daughter (to whom she had quitclaimed her interest in the house), finding that because the oral contract between the former client and the attorney violated Colo. RPC 1.8(a), the attorney was ethically prohibited from enforcing that agreement.

The attorney appealed. On appeal, the former client contended that the doctrine of issue preclusion barred the attorney from relitigating factual issues that were litigated during the disciplinary proceeding. The court agreed; therefore, the hearing board’s factual findings bind the attorney in this case, including its finding that the attorney violated Rule 1.8(a) when he entered into the oral contract with the former client, and the oral contract between the attorney and the former client is void and unenforceable. The attorney contended that the trial court erred in applying the doctrine of unclean hands to bar his request for an equitable lien. Based on the attorney’s misconduct, the court disagreed. The attorney also asserted a fraud claim against the former client’s daughter, but his allegations did not support this claim, and it failed as a matter of law. The district court properly entered summary judgment.

The judgment was affirmed and the case was remanded to the trial court to determine whether fees should be awarded to the former client and her daughter.

Summary provided courtesy of The Colorado Lawyer.

Application Period Open for Vacancies on U.S. District Court Committee on Conduct

The U.S. District Court for the District of Colorado announced on Monday, July 13, 2015, that it is seeking applications for three vacancies on its Committee on Conduct. The Committee on Conduct investigates and acts upon complaints against members of the U.S. District Court bar, considers applications for reinstatement or readmission, and addresses matters concerning attorney disability.

Eligible applicants for the committee vacancies must have practiced law for ten years or more and have no disciplinary record; be licensed to practice by the Colorado Supreme Court; have been a member in good standing of the U.S. District Court bar for at least five years with no disciplinary record; and possess experience that makes the applicant especially qualified to investigate matters governed by the U.S. District Court’s disciplinary rules.

Applicants must submit the application packet in PDF format to COC_submissions@cod.uscourts.gov.

Colorado Supreme Court: Public Censure Appropriate Remedy Where Attorney Engaged in Negligent Conduct

The Colorado Supreme Court issued its opinion in In the Matter of Olsen on Monday, June 2, 2014.

Attorney Discipline—Colo. RPC 3.1 and 8.4(d).

In this attorney discipline proceeding, The Supreme Court held that the hearing board’s order suspending attorney John R. Olsen for six months with the requirement of reinstatement was unreasonable. The hearing board found that Olsen engaged in negligent conduct, not knowing falsehood. After reviewing prior decisions and the American Bar Association’s Standards for Imposing Lawyer Sanctions, the Court concluded that the appropriate sanction against Olsen was public censure. Accordingly, the Court affirmed the hearing board’s conclusions that Olsen violated Colo. RPC 3.1 and 8.4(d), but reversed its imposition of a six-month suspension with the requirement of reinstatement and instead ordered that Olsen be publicly censured for his misconduct.

Summary and full case available here.

Colorado Supreme Court: Dismissal for Lack of Subject Matter Jurisdiction Improper in Attorney Discipline Case

On Monday, March 24, 2014, the Colorado Supreme Court issued its opinion in In re People v. Kanwal.

Rules of Procedure Regarding Attorney Discipline and Disability Proceedings—CRCP 251.12.

The People petitioned for relief pursuant to CRCP 251.1(d) and CAR 21 from an order of the Presiding Disciplinary Judge (PDJ) dismissing for lack of subject matter jurisdiction a claim of attorney misconduct. The PDJ concluded that the People were not authorized to plead, and the Hearing Board lacked jurisdiction to consider, any claim for the filing of which the Attorney Regulation Committee had not given specific approval. Because it was undisputed that the Committee had not specifically approved the filing of a claim for the violation of Rule 8.4(c) of the Rules of Professional Conduct, the PDJ dismissed Claim III in the People’s complaint alleging a violation of that rule.

The Supreme Court made the rule absolute and remanded the matter with instructions to reinstate Claim III, because it was undisputed that the conduct giving rise to the grounds alleged in this claim was conduct specifically addressed in the report of investigation presented to the Committee, as a result of which it authorized proceedings for public discipline. Because the Rules of Procedure Regarding Attorney Discipline and Disability Proceedings contemplate merely the Committee’s authorization for the initiation of formal proceedings before a tribunal capable of administering public discipline, rather than mandating the Committee’s approval of the specific claims to be filed, including the identification of precise rule violations, the PDJ misinterpreted the controlling rules.

Summary and full case available here.

Tenth Circuit: Reciprocal Attorney Discipline Upheld

The Tenth Circuit Court of Appeals published its opinion in In re Harper on Wednesday, August 7, 2013.

David Harper is an attorney licensed in Florida and admitted to practice in the Colorado federal district court. After being admitted in Colorado, however, he was suspended for 91 days from practicing law in Florida. This suspension prompted the Colorado federal district court to conduct reciprocal disciplinary proceedings under D.C. COLO. LCvR 83.3(E) and impose its own suspension of 91 days. Harper appealed, arguing that the district court’s reciprocal suspension resulted in a denial of due process, the opportunity to confront adverse witnesses, and the right to free speech.

A federal district court can rely on a state court’s judgment unless an “‘intrinsic consideration of the record’ shows: (1) that due process was lacking in the state procedure because the attorney was denied notice and a fair opportunity to be heard; (2) that there was insufficient proof regarding a lack of private and professional character; or (3) that some other ‘grave reason’ makes reciprocal discipline inconsistent with principles of right and justice.” Harper failed to supply the Tenth Circuit with a transcript of his state court disciplinary proceedings, which would ordinarily be fatal to an appeal. The court found, however, that even if it were to accept Harper’s version of events, there was no constitutional violation.

Harper also asserted that Local Rule 83.5 requires an evidentiary hearing. This argument was rejected by the federal district court as Rule 83.5 does not apply to proceedings based on reciprocal discipline. The Tenth Circuit refused to second guess the district court’s interpretation of its own rules and affirmed.

Colorado Supreme Court: In Disciplinary Proceeding, PDJ Erred in Determining Issue Preclusion

The Colorado Supreme Court issued its opinion in In re Matter of Greene on Monday, May 20, 2013.

Attorney Discipline—Claim Preclusion—Identity of Claims—Same Criminal Episode.

The Attorney Regulation Counsel sought review of the Presiding Disciplinary Judge’s (PDJ) order granting summary judgment in favor of respondent David Jerome Greene. The PDJ found that all of the claims in the complaint for attorney discipline should have been joined and adjudicated along with the claims raised in a previous complaint. Therefore, they were barred according to the doctrine of claim preclusion.

The Supreme Court held that although the doctrine of claim preclusion applies to complaints for attorney discipline, a single claim in that context is analogous to a single “criminal episode” for the purposes of barring sequential prosecutions of the same defendant. Because none of the claims alleged in the instant complaint was identical with any claim that had already been finally adjudicated, according to that standard, the PDJ erred. The Court therefore vacated the order granting summary judgment in favor of Greene and remanded the case for further proceedings on the claims as to which summary judgment was ordered.

Summary and full case available here.

Colorado Supreme Court: Although Retaining Lien on U.S. Passport Improper, Hearing Board’s Decision Affirmed

The Colorado Supreme Court issued its opinion in In the Matter of Attorney G. on Monday, April 22, 2013.

Attorney Discipline—Retaining Lien.

The People challenged the hearing board’s dismissal of a complaint against an attorney who asserted a retaining lien on a U.S. passport. The Supreme Court held that the retaining lien statute does not authorize an attorney to assert a retaining lien on U.S. passports. Accordingly, although the Court will not disturb the hearing board’s order of dismissal, the Court disapproved of its rationale.

Summary and full case available here.

Colorado Supreme Court: Reinstatement of License to Practice Law Inappropriate While Still Serving Parole as Part of Felony Conviction

The Colorado Supreme Court issued its opinion in In the Matter of Miranda on Tuesday, November 27, 2012.

Attorney Discipline—Reinstatement to Practice Law After Suspension for Felony Criminal Conviction—Parole—CRS § 18-1.3-401(3)—CRCP 251.29.

In this appeal, the Supreme Court considered whether the Hearing Board erred in reinstating Michael Miranda to the practice of law. Miranda is currently serving the mandatory parole portion of his felony criminal sentence for vehicular homicide/DUI.

The Hearing Board reinstated Miranda after concluding he had proven by clear and convincing evidence his rehabilitation, fitness to practice law, and compliance with disciplinary orders, as required by CRCP 251.29. However, the Court held that § 18-1.3-401(3) of the Criminal Code bars convicted felons from practicing law while they serve out all components of their sentences, including parole. Therefore, the Court reversed the Hearing Board’s order reinstating Miranda to the practice of law.

Summary and full case available here.

Judicial Ethics Advisory Board Opinion: Judge who Reports Attorney to OARC Must Disclose this When Attorney Before Judge

On Monday, October 15, 2012, the Colorado Judicial Ethics Advisory Board issued Opinion 2012-06.

The Judicial Ethics Advisory Board considered a situation in which a judge had reported an attorney to the police and  Attorney Regulation Counsel. The judge recused from all cases involving the attorney but recently learned that Attorney Regulation Counsel closed the disciplinary proceeding with no action and no police action occurred. The judge feels he can be fair and impartial to the attorney and seeks an opinion regarding whether he is required to disclose his reporting of the attorney, now that the case is closed.

The Judicial Ethics Advisory Board concluded that the judge is only required to disclose his involvement with the attorney’s criminal and disciplinary actions as long as those cases are open. If the cases are closed, the judge has no requirement to disclose his reporting of the attorney. The opinion was based on the Board’s decision in Opinion 2011-01, where the Board determined that a report of misconduct alone is not enough to mandate recusal, unless the facts and circumstances would cause a reasonable person to doubt the judge’s impartiality.

Information about the Colorado Judicial Ethics Advisory Board, as well as all of the Colorado Judicial Ethics Advisory Board Opinions, can be found here,

Colorado Supreme Court: Attorney Sanction Reversed; Board Erroneously Concluded that It Lacked Discretion and Was Compelled to Impose Public Censure

The Colorado Supreme Court issued its opinion in In the Matter of Attorney F on September 10, 2012.

Attorney and Client—Office of Attorney Regulation—Discipline—Public Censure.

The Supreme Court reversed the Hearing Board’s (Board) sanction in this attorney discipline proceeding because the Board erroneously concluded that it lacked discretion in choosing a sanction and was compelled by the Court’s case law to impose a public censure. The Court remanded the case for a redetermination of the appropriate sanction so that the Board may exercise its discretion. The Court affirmed the Presiding Disciplinary Judge’s order denying respondent attorney’s motion to compel removal of the publication of the Board’s disposition posted on the Office of Attorney Regulation Counsel’s website, because the information posted complies with the Court’s rules of procedure regarding attorney discipline proceedings.

Summary and full case available here.