June 19, 2019

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.

Attorney at Work—Mixing Cocktails with Legal Advice: Don’t

Editor’s note: This article originally appeared on Attorney at Work on April 19, 2016. Reprinted with permission.

Mark3By Mark Bassingthwaighte

I can appreciate a well-crafted cocktail. But when I am in a situation where such beverages are being served, I never get involved in a conversation about someone’s legal problems. And I strongly encourage you to do the same.

Here’s a short story that explains why.

An associate at a law firm — not a litigator in any way — attended a social function and had a few more than she should have. She got involved in a conversation with another guest about a personal injury matter. In addition to sharing some generic advice, the associate also let the guest know there was still plenty of time to deal with the matter, saying the statute of limitations in that jurisdiction was two years. Unfortunately, unbeknownst to our heroine, there was an exception to the statute in play and the actual time to file suit was six months. The guest, relying on the advice, did not obtain legal counsel until after the filing deadline had passed.

The young lawyer and her firm were eventually sued for malpractice.

The Accidental Client

We all know drinking and driving can have serious consequences — when your judgment and reflexes are impaired, accidents can happen. Mixing cocktails and legal advice is similarly problematic. It’s too easy for a casual setting, coupled with a few adult beverages, to cloud your thinking. You may then find yourself dealing with an accidental client.

Malpractice claims can easily arise out of these situations, but the risk isn’t limited to cocktail parties. Casual conversations online with extended family members or friends and gatherings with members of your church congregation or other community organizations are all situations where you should proceed with caution.

You can’t overlook the office setting, either.

Should you be concerned about passing along a little casual advice in a conversation with a corporate constituent while representing the entity itself? How about discussing issues with beneficiaries while representing the estate, trying to help a prospective client out during that first meeting when you know you are going to decline the representation? Or what about being a good Samaritan by making a few suggestions on the phone to someone who clearly has a problem but really can’t afford an attorney? How about answering a few questions from an unrepresented third party?

The answer is, of course, yes — these are all situations that can easily lead to an accidental client.

“No Good Deed Goes Unpunished”

Old sayings became old sayings because they have a ring of truth to them.

I am always surprised by what attorneys say when they have to deal with a claim brought by an accidental client. Comments like “I never intended to create an attorney-client relationship,” “There was no signed fee agreement,” and “No money was exchanged so how could this be?” are common.

Guess what: It’s not about you! Typically, it is more about how the individual you interacted with responded to the exchange. If they happened to respond as if they were receiving a little legal advice from an attorney, and that response was reasonable under the circumstances, it can start to get muddy. Worse yet, if it was reasonably foreseeable that this individual would rely or act on your casual advice — and then, in fact, did so to their detriment — you may have a serious problem on your hands.

I share this not with a desire to convince you to keep quiet and never try to help someone. By all means, be helpful. The world could use a few more good Samaritans, and a desire to help others is a good thing as long as you stay the course. I share this because I want you to be cognizant of the risk involved whenever you decide to step into those waters.

Here’s the Bottom Line

Accidental clients are for real and there is no such thing as “legal lite.” So if you are enjoying a wonderful evening at a party, cocktail in hand, and find yourself conversing with another guest who has just learned you are an attorney and wants to “pick your brain,” don’t talk about legal issues you are not well-versed in. If you feel compelled to pass along a little advice, then remember to ask questions so you understand the entire situation. Just know that you may be held to the accuracy of that advice later on, so you might want to jot down a few notes as soon as you can.

Finally, know that it’s okay to say you’re not the right person to be asking, particularly after you’ve had a few.

That said, salute!

Mark Bassingthwaighte, Esq. has been a Risk Manager with ALPS, an attorney’s professional liability insurance carrier, since 1998. In his tenure with the company, Mr. Bassingthwaighte has conducted over 1150 law firm risk management assessment visits, presented numerous continuing legal education seminars throughout the United States, and written extensively on risk management and technology.  Mr. Bassingthwaighte is a member of the ABA and currently sits on the ABA’s Law Practice Division’s Professional Development Board, the Division’s Ethics and Professionalism Committee, and he serves as the Division’s Liaison to the ABA’s Standing Committee on Lawyers Professional Liability. Mr. Bassingthwaighte received his J.D. from Drake University Law School and his undergraduate degree from Gettysburg College.

Contact Information:
Mark Bassingthwaighte, Esq.
ALPS Property & Casualty Insurance Company
Risk Manager
PO Box 9169 | Missoula, Montana 59807
(T) 406.728.3113 | (Toll Free) 800.367.2577 | (F) 406.728.7416
mbass@alpsnet.com | www.alpsnet.com

ALPS offers up to a 10% premium credit for each attorney in a firm who receives 3 CLE credits annually in the areas of ethics, risk management, loss prevention, or office management. ALPS is a lawyers’ malpractice carrier endorsed by the CBA. Learn more at try.alpsnet.com/Colorado

Colorado Supreme Court Adopts Changes to Colorado Rules of Professional Conduct, Colorado Appellate Rules

The Colorado Supreme Court adopted Rule Change 2016(04), 2016(05), and 2016(06) last week, approving changes to the Colorado Rules of Professional Conduct and the Colorado Appellate Rules.

Rule Change 2016(04), adopted and effective April 6, 2016, enacts substantial changes to the Colorado Rules of Professional Conduct. Many of the changes were to the Comments to the Rules, and language was added to many comments about lawyers contracting outside their own firms to provide legal assistance to the client. Additionally, a new model pro bono policy was added to the Comment to Rule 6.1. The changes are extensive; a redline and clean version is available here.

Rule Change 2016(05) amended Rules 35, 40, 41, 41.1, and 42 of the Colorado Appellate Rules, adopted and effective April 7, 2016. The changes to the affected rules were extensive, and the Comments to those rules generally explain the changes. Rule 41.1 was deleted and incorporated into Rule 41. A redline and clean version of the rule change is available here.

Rule Change 2016(06), adopted and effective April 7, 2016, amended the Preamble to the Rules Governing the Practice of Law, Chapters 18 to 20 of the Colorado Rules of Civil Procedure. The Preamble addresses the Colorado Supreme Court’s exclusive jurisdiction and its ability to appoint directors of certain legal programs to assist the court. The Preamble also sets forth the court’s objectives in regulating the practice of law. A clean version of the newly adopted Preamble is available here.

For all of the Colorado Supreme Court’s adopted and proposed rule changes, click here.

Public Comment Period Open for Changes to Colorado Rules of Professional Conduct

The public comment period is now open for proposed changes to the Colorado Rules of Professional Conduct. Most of the proposed changes amend the Comments to the Rules. Some of the proposed changes are minor, such as updating cross-references or contemplating electronic communications, while others are extensive, such as changes regarding how much disclosure of client information is appropriate during conflict checks or use of lawyers and nonlawyers outside the firm.

Comments regarding the proposed changes may be submitted to Christopher Ryan, Clerk of the Supreme Court, via email, mail, or hand-delivery. Comments must be received no later than 5 p.m. on October 15, 2015. A public hearing will be held on November 4, 2015, at 2:30 p.m. in the Colorado Supreme Court courtroom, and anyone wishing to participate in the hearing must notify Mr. Ryan no later than October 26, 2015.

For a redline of the proposed changes, click here.

The Colorado Lawyer: Screen Clients First—Avoid Problems Later

Editor’s Note: This article originally appeared in the December 2014 issue of The Colorado Lawyer. Reprinted with permission.

By J. Randolph Evans, Shari L. Klevens, and Lino S. LipinskyEvans-Klevens-Lipinsky

Authors’ Note
Readers’ comments and feedback on this series of “WhoopsLegal Practice Malpractice Prevention” articles are welcomed and appreciated. References in the articles to “safest courses to proceed,” “safest course,” or “best practices” are not intended to suggest that the Colorado Rules require such actions. Often, best practices and safest courses involve more than just complying with the Rules. In practice, compliance with the Rules can and should avoid a finding of discipline in response to a grievance or a finding of liability in response to a malpractice claim. However, because most claims and grievances are meritless, effective risk management in the modern law practice involves much more. Hence, best practices and safer courses of action do more; they help prevent and more quickly defeat meritless claims and grievances. Other than billing, there is virtually nothing that attorneys dread more than addressing potential conflicts of interest. After all, resolving conflicts issues requires and attorney to focus on why not to take on a new representation rather than how to get the business in the door. However, unidentified or unresolved conflict issues cost lawyers more—in both clients and money—than most attorneys realize.

For many attorneys in today’s difficult economic world, screening clients seems like a far-fetched concept, akin to telling a starving man to watch what he eats. Many firms are just glad to have clients; screening the few they have appears to be the least of the firm’s worries.

However, according to the data, problem clients are often worse than no clients at all. Clients who pay fees, but who also bring legal malpractice claims, only hurt—not help—the attorney and can result in a large net loss for the firm. The challenge comes in screening out the problem clients during the intake process.

Screening clients has a different meaning depending on the size, type, and location of a law practice. For solo practitioners, it will mean identifying the risk factors for new clients (preferably through use of a checklist) and then balancing the risks against the potential rewards of the representation. For smaller and mid-size firms, screening involves identifying standard practices and procedures suitable for the needs and expertise of the law practice, and ensuring that all of the lawyers in the practice consistently follow those rules. For larger firms, effective screening includes systems to ensure consistent compliance with the firm’s policies.

Every representation, whether for a paying client or for a pro bono client, requires that the attorney exercise good judgment about acceptance of the new client; and because it involves judgment, there is no formula for every decision regarding whether to accept a new client. However, there are some practices and procedures attorneys can implement when creating checklists and developing systems for screening prospective new clients.

Developing a Screening Method

Some indicators for problem clients seem obvious. Others are the product of data about legal malpractice claims and the risks of the modern-day law practice. The most important part of client screening is to adopt and follow a set of standard practices and procedures, including referring to a screening checklist, that apply to every new client and matter.

1. Ask the right questions.

Common sense goes a long way in detecting and avoiding problem clients. For example, one of the most telling questions to ask a new client is: “How many attorneys have previously represented you in this matter?” If the answer to that question is “seven,” the attorney will want to think long and hard about becoming the eighth. Clients who have been unhappy enough to hire and fire seven attorneys are unlikely to be happy with the eighth. Of greater concern is that, if their case or transaction does not go well in their eyes, they just might hire a ninth to sue the eighth for malpractice.

The lawyer should ask prospective clients other common-sense questions. For example: How many times have you been a party to litigation? Potential clients who have been parties to several prior cases should raise red flags. This is especially true for potential clients who have made a career of suing other people. Eventually, these serial plaintiffs make their way to also suing their attorney.

The realities of the proposed representation are also relevant when deciding to take on a new client. In making this assessment, consider when the work must get done. This involves calculating the first deadline for the new matter. Representations often do not end well if they begin on the eve of (1) the expiration of the statute of limitations for a plaintiff’s claim; (2) a scheduled closing for completion of a transaction or deal; or (3) any other imminent deadline. Unrealistic deadlines are red flags for a new representation.

Sometimes, there are good reasons a client reaches out to an attorney to undertake a representation on the eve of a pressing deadline. However, they are sometimes the same reasons an attorney should have second thoughts about accepting the representation. It could be that an earlier attorney fired the client because the client did not pay, or there could be insurmountable problems that have left the client desperate for immediate representation. Whatever the reason, the most significant questions attorneys should ask are: (1) When is the earliest deadline? and (2) Why is the client just now reaching out? The answers to these questions are important in deciding whether to accept the representation.

Another good question to ask is whether the prospective client can afford to pay the attorney fees associated with the representation. If there is no realistic chance of getting paid and the attorney takes the case anyway, the attorney assumes the risks of liability with no opportunity for compensation. This is a lose–lose proposition. Thus, a prospective client’s ability to pay is an important pre-representation topic that attorneys should candidly address.

Other things to consider when screening prospective clients include (1) possible conflicts with other clients; (2) whether the attorney has the expertise required to effectively handle all of the client’s issues; and (3) the role the client expects the attorney to play in the context of the client’s overall situation. These determinations are of particular concern, because they relate to an attorney’s ethical obligations toward the client.

For example, the Colorado Rules of Professional Conduct (Rules or Colo. RPC) require an attorney to avoid conflicts with current and past clients or, alternatively, to take special care when entering into an engagement that could create potential conflicts.[1] The Rules also address attorney competence, requiring that an attorney has the “legal knowledge, skill, thoroughness and preparation reasonably necessary for the representation.”[2] Additionally, the Rules allow an attorney to limit the scope of representation at the outset of an engagement, if reasonable.[3] Thorough screening may reveal whether limiting the scope of representation from the outset is a prudent option under the circumstances, as opposed to declining the engagement, based on the client’s stated objectives. If the attorney has captured in writing the scope of the mutually agreed representation at the beginning of the engagement, that attorney will be in a far better position should the client later challenge the attorney on this front.

Certain types of engagements may be permitted under the Rules, but not under the Standards of Professional Conduct of the U.S. District Court for the District of Colorado. Attorneys should be aware that the U.S. District Court has declined to adopt the state’s “unbundling” rule, Colo. RPC 1.2(c), which allows the provision of limited representation to pro se parties, as described in Colo. RPC 11(b) and Rule 311(b) of the County Court Rules of Civil Procedure.[4] For example, in state court matters, an attorney may provide assistance to a pro se litigant without entering an appearance. The same attorney, however, is prohibited from “ghost writing” a pro se party’s filings in federal court. The attorney should turn away a potential client who is seeking the type of behind-the-scenes assistance that the U.S. District Court does not permit.

On October 10, 2014, the U.S. District Court promulgated proposed amendments to its local rules that include an opt-out from comment 14 to Colo. RPC 1.2(d). The comment, which the Colorado Supreme Court adopted on March 24, 2014, states that a Colorado attorney may counsel clients “regarding the validity, scope, and meaning” of the medical marijuana and recreational marijuana provisions of the state constitution, and “may assist a client in conduct that the lawyer reasonably believes is permitted by these constitutional provisions” and the laws implementing them, as long as the attorney also “advise[s] the client regarding related federal law and policy.” If the District of Colorado ultimately decides not to adopt comment 14, attorneys admitted to practice in that court would need to carefully consider whether they could accept engagements involving advice regarding the state’s marijuana laws.

In sum, thorough screening provides a double benefit to the prudent attorney. It decreases the attorney’s exposure to malpractice suits and fulfills several ethical obligations.

2. Consider what’s expected.

An attorney should inquire about the prospective client’s expectations—of both the representation and the attorney. Some clients simply expect their attorney to achieve a successful result on their behalf, without consideration as to how that end is achieved. These attorney-client relationships rarely end well. A candid conversation about what is possible, along with a description of what the attorney can and cannot do, is an important part of the screening process. If there are things the prospective client expects that the attorney is unable or unwilling to do, the attorney should decline the representation.

One other thing to watch for is a client who is “too good to be true.” Often, these are the same clients who expect an attorney to bend (or ignore) the rules. Their stories are full of contradictions, and they expect results regardless of means. Avoid the temptation of agreeing to represent them without conducting a thorough investigation; these may turn out to be problem clients, too.

3. Conduct some background research.

The Internet provides attorneys cost-effective tools for conducting fast preliminary background research on prospective clients. The research might turn up little, or it might disclose a prospective client with a history of problems that often extend to anyone and everyone around the client. Credit checks (with the consent of the prospective client) could reflect someone who either cannot or does not pay. A simple litigation search might reflect a prospective client who has sued his or her attorney before. These possible clients require a long look before an attorney would agree to the representation.

4. Create a client-screening system.

Inevitably, the client who creates the most problems is the one who escaped the screening filters. Effective systems make it next to impossible for potential problem clients to slip through the cracks. This means that a file cannot be opened or a matter billed unless the screening questions have been asked and the data collected. Hence, the certainty of the system is as important as the content of the screening itself.


[1] See Colo. RPC 1.7 and 1.8. Comment 3 to Rule 1.7, which addresses conflicts with current clients, states, in part, “[a] conflict of interest may exist before representation is undertaken, in which event the representation must be declined, unless the lawyer obtains the informed written consent of each client . . .” under the conditions provided in the rule.

[2] See Colo. RPC 1.1.

[3] Colo. RPC 1.2, cmts. 6 and 7.

[4] See D.C.Colo.L.Atty.R. 2(b)(1).


Randy Evans is an author, litigator, columnist and expert in the areas of professional liability, insurance, commercial litigation, entertainment, ethics, and lawyer’s law. He has authored and co-authored eight books, including: The Lawyer’s Handbook; Georgia Legal Malpractice Law; Climate Change And Insurance; Georgia Property and Liability Insurance Law; Appraisal In Property Damage Insurance Disputes; and California Legal Malpractice Law. He writes newspaper columns (the Atlanta Business Chronicle, the Recorder, and the Daily Report) and lectures around the world. He served as counsel to the Speakers of the 104th – 109th Congresses of the United States. He co-chairs the Georgia Judicial Nominating Commission. He serves on the Board of Governors of the State Bar of Georgia. He handles complex litigation throughout the world. He has been consistently rated as one of the Best Lawyers in America, Super Lawyer (District of Columbia and Georgia), Georgia’s Most Influential Attorneys, and Georgia’s Top Lawyers for Legal Leaders. Along with numerous other awards he has been named the “Complex Litigation Attorney of the Year in Georgia” by Corporate International Magazine, and Lawyer of the Year for Legal Malpractice Defense in Atlanta. He is AV rated by Martindale Hubble.

Shari Klevens is a partner in the Atlanta and Washington, D.C. offices of McKenna Long & Aldridge LLP. Shari represents lawyers and law firms in the defense of legal malpractice claims and advises and counsels lawyers concerning allegations of malpractice, ethical violations, and breaches of duty. In addition, Shari is the Chair of the McKenna’s Law Firm Defense and Risk Management Practice and is a frequent writer and lecturer on issues related to legal malpractice and ethics. Shari co-authored Georgia Legal Malpractice Law and California Legal Malpractice Law, which address the intricacies and nuances of Legal Malpractice law and issues that confront the new millennium lawyer. She also co-authored The Lawyer’s Handbook: Ethics Compliance and Claim Avoidance, which is an easy-to-use desk reference offering practical solutions to real problems in the modern law practice for every attorney throughout the United States.

Lino Lipinsky de Orlov is a litigation partner in the Denver office of McKenna Long & Aldridge, LLP.  He represents clients in all aspects of commercial litigation, mediation, arbitration, and appeals.  He has developed particular experience in complex business cases, particularly those involving creditor’s rights, real estate, trade secrets, and employment disputes.  Mr. Lipinsky also frequently speaks and writes on legal issues relating to technology, employment law, and ethics.   He is a member of the Colorado Bar Association’s Board of Governors and serves on the Board of the Colorado Judicial Institute.  He is a former President of the Faculty of Federal Advocates.  Among his honors, Chambers USA has recognized Mr. Lipinsky as one of Colorado’s leading general commercial litigators, and he has been included in The Best Lawyers in America.  He received his A.B. degree, magna cum laude, from Brown University and his J.D. degree from New York University School of Law, where he was a member of the New York University Law Review.


The opinions and views expressed by Featured Bloggers on CBA-CLE Legal Connection do not necessarily represent the opinions and views of the Colorado Bar Association, the Denver Bar Association, or CBA-CLE, and should not be construed as such.

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.

Comment Period Open for Proposed Changes to Rules of Professional Conduct and Rules of Civil Procedure

The Colorado Supreme Court has announced proposed changes to the Colorado Rules of Professional Conduct. The public comment period for proposed changes to Comment [2A] of Colo. RPC 8.4 and a proposed new Rule 8.6 is now open. Written comments should be submitted to Christopher Ryan, Clerk of the Supreme Court, no later than 5 p.m. on February 25, 2014. There will be a public hearing on these proposed changes on March 6, 2014, at 1:30 p.m. at the Colorado Supreme Court courtroom.

Proposed changes to the Colorado Rules of Civil Procedure were also announced. Changes to C.R.C.P. 54(d) and C.R.C.P. 121, § 1-22 are submitted for public comment. Comments should be submitted in writing to Christopher Ryan by 5 p.m. on April 15, 2014, and the public hearing on the proposed changes will be held on April 29, 2014, at 1:30 p.m. in the Colorado Supreme Court courtroom.

Additional changes to the Colorado Rules of Professional Conduct were also announced, concerning the repeal and readoption of Colo. RPC 1.15. Comments regarding this proposed change are due no later than 5 p.m. on Tuesday, May 20, 2014, and should be submitted in writing to Christopher Ryan. The public hearing regarding this change will be held on June 5, 2014, at 1:30 p.m. in the Colorado Supreme Court courtroom.

For more information on these proposed changes or for the address at which to submit written comments, click here.

U.S. District Court of Colorado Local Rules Changed as of December 1

The United States District Court for the District of Colorado approved amendments to its Local Rules, effective December 1, 2013. The amended rules can be found on the court’s website. The changes are largely stylistic.

Among other changes, the local rules dealing with attorneys have been moved to a new “Attorney Rules” section and the Colorado Rules of Professional Conduct that have not been adopted by the court have been listed in the new rules, rather than in an administrative order.

A new Rule 15.1, “Amended Pleadings,” requires parties to file a strike through and underlined copy of the amended pleading as an exhibit. Another non-stylistic change is that a subsection on confidentiality has been added to Rule 16.6, “Alternative Dispute Resolution.”

Colorado Court of Appeals: Rules of Professional Conduct and Common Law Do Not Establish Standard of Care for Disclosure of Representing Attorney’s Medical and Arrest History

The Colorado Court of Appeals issued its opinion in Moye White LLP v. Beren on Thursday, June 6, 2013.

Law Firm Fiduciary Duty to Disclose Information About Attorneys.

Defendant David I. Beren appealed the trial court’s judgment and order of costs in favor of plaintiff Moye White LLP, denying, as relevant here, Beren’s counterclaim for breach of fiduciary duty. The judgment and order were affirmed.

Moye White sued Beren for recovery of attorney fees incurred during its representation of Beren in a probate matter form 2009 to 2010. Moye White sought $229,118.10 from Beren on a breach of contract claim. Beren counterclaimed, alleging that Moye White breached its fiduciary duty to him by failing to disclose and intentionally concealing material information related to one of the attorneys working on his case (Attorney A), who had a history of disciplinary proceedings, mental illness, alcoholism, and related arrests. The trial court found in favor of Moye White on all claims. As the prevailing party, Moye White moved for an award of costs totaling $76,637.49 and was awarded $69,975.59.

On appeal, Beren asserted it was error to find no duty existed for Moye White to disclose Attorney A’s medical and arrest history, because the duty exists under common law and Colo. RPC 1.4 and 7.1. The Court of Appeals disagreed. Neither party cited cases in Colorado or other jurisdictions addressing this issue. The Court looked to cases involving other professionals’ fiduciary duty to disclose material information to a principal and concluded no duty existed here, because the failure to disclose did not pose a demonstrable risk to the firm’s ability to represent Beren.

Attorney A was added to the team representing Beren at the recommendation of the partner assigned to the case. Attorney A had a longstanding history of marital, alcohol, domestic violence, and other issues. He self-reported to the Office of Attorney Regulation Counsel (OARC), which, following a full investigation, suspended his license to practice law conditioned on his receiving ongoing substance abuse treatment. He was monitored and tested positive several times. From June 2010 until the date of the trial court’s order in this case, he remained sober. Moye White was aware of these issues but allowed him to return to work and instituted a supervision plan under which his legal work was reviewed by another attorney.

Moye White never advised Beren regarding Attorney A’s medical and arrest history, and his stayed suspension. Beren found out about Attorney A’s history after Moye White moved to withdraw from representing Beren in July 2010; however, the information was of public record.

Beren asserted that had he known about Attorney A’s medical and arrest history, he would have objected to his representation. The Court noted that a fiduciary relationship exists as a matter of law between an attorney and his or her client. To prevail on a claim of breach of fiduciary duty against an attorney, a plaintiff must establish that a particular standard of care existed and that the attorney failed to adhere to that standard. Here, Beren asserted that the common law and Colo. RPC 1.4 and 7.1 established a standard of care that required such a disclosure when any such history has a possibility of interfering with the representation. The Court disagreed.

Under the common law, the information has to be material to require disclosure. The Court found that the information was not material, because the presented evidence demonstrated that Attorney A’s medical and arrest history did not adversely affect the quality of Moye White’s representation. The risk was speculative and not material.

The Colorado Rules of Professional Conduct do not create a fiduciary duty, but they may evidence standards of care. Colo. RPC 1.4 was inapposite because it relates to disclosure of information necessary for a client to give informed consent. There is no requirement for a client’s informed consent before a law firm can allow an additional attorney to work on a case. Moreover, the information was not material.

Colo. RPC 7.1(a)(1) also is inapposite. The rule pertains to attorneys’ advertisements of legal services. Even if it were applicable, it would again not impose a duty to disclose because the information was not material to the representation.

Summary and full case available here.

ABA House of Delegates’ Ethics 20/20 Commission Approves Changes to the Model Rules of Professional Conduct

The dawn of the information age has changed life as we know it. Our personal lives and businesses have been affected, and the practice of law is no exception. The ABA House of Delegates’ Ethics 20/20 Commission met in August to decide how best to advise attorneys of their ethical obligations in the global marketplace. The top ten issues addressed by the House of Delegates were:

  1. Protecting client information in electronic communications;
  2. Cloud storage and properly safeguarding protected client information;
  3. How to set up an ethical screen for a new attorney with a shared electronic network;
  4. The importance of competency in a multi-jurisdictional practice;
  5. How attorneys who frequently change jurisdictions can practice law without undergoing rigorous admittance procedures;
  6. Outsourcing to other lawyers and non-lawyers, and potential hazards;
  7. What types of online behaviors could potentially create an attorney-client relationship (including social media, communications on law firm websites, etc.);
  8. The ethical propriety of advertising on the internet, and whether pay-per-click ads constitute improper referral services;
  9. The importance of competency in technology, including some understanding of electronically stored information; and
  10. Advising clients on technology, such as maintaining electronically stored information.

The American Bar Association Model Rules of Professional Conduct are intended to provide guidance to the states, and to encourage adoption of a standard procedure throughout the country for attorney regulation and discipline. However, although resolutions on the above topics were passed by the ABA, they are not binding on Colorado attorneys absent amendments to the Colorado Rules of Professional Conduct.

Join us at CBA-CLE on Wednesday, September 12, for a breakfast seminar where Troy Rackham, a representative of the House of Delegates, and Alec Rothrock, from the Colorado Rules of Professional Conduct committee, will present on the changes adopted by the ABA and what this means for attorneys in Colorado.

CLE Program: Competency and Confidentiality in Lawyers’ Use of Technology – New Changes to Model Rules of Professional Conduct

This CLE presentation will take place on Wednesday, September 12, at 8:30 a.m. Participants may attend live in our classroom or watch the live webcast.

If you can’t make the live program or webcast, the program will also be available as a homestudy in two formats: video on-demand and mp3 download.

Professional Conduct Rules Revised Regarding Impartiality and Ex Parte Communications

On Wednesday, July 11, 2012, the Colorado Supreme Court released amendments to two Colorado Rules of Professional Conduct. Amendments were made to the following rules:

  • CRPC 1.12 – “Former Judge, Arbitrator, Mediator or Other Third-Party Neutral”
    • References within Comment [1] were revised as well as language relating to the Colorado Code of Judicial Conduct requiring judges to disqualify themselves in certain proceedings with lawyer conflicts.
  • CRCP 3.5 – “Impartiality and Decorum of the Tribunal”
    • Subsection (b) was revised to read that an attorney shall not “communicate ex parte with such a person during the proceeding unless authorized to do so by law or court order, or unless a judge initiates such a communication and the lawyer reasonably believes that the subject matter of the communication is within the scope of the judge’s authority under a rule of judicial conduct.
    • Comment [2] was also amended to clarify this revision about ex parte communications.

These amendments were adopted on July 11 and are effective immediately.

Click here to review the red line changes to these civil procedure rules, outlined as Rule Change 2012(12).

Colorado Supreme Court: Attorney Did Not Owe Medical Providers the Duties of Fiduciary to Give Rise to Tort Liability for Failure to Disburse Money from COLTAF

The Colorado Supreme Court issued its opinion in Accident and Injury Medical Specialists, P.C. v. Mintz on June 25, 2012.

Colo. RPC 1.15—Attorney’s Fiduciary Duties as Trustee of COLTAF Account.

The Supreme Court held that the medical providers in this case may not maintain a breach of fiduciary duty tort action against attorney David Mintz based on his obligations as trustee of a COLTAF account. Although Mintz may have had ethical or contractual obligations to disburse money his clients owed to the providers, Mintz did not owe the medical providers the duties of a fiduciary that give rise to tort liability. The judgment of the court of appeals was affirmed.

Summary and full case available here.