Opinions

• Jurisdiction: Colorado,United States
• Citation: Vol. 30 No. 5 Pg. 125
• Pages: 125
• Publication year: 2001

30 Colo.Law. 125 Colorado Lawyer 2001.

2001, May, Pg. 125. Opinions

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125

Vol. 30, No. 5, Pg. 125

The Colorado Lawyer
May 2001
Vol. 30, No. 5 [Page 125]

From the Courts
Colorado Disciplinary Cases
Opinions

The Colorado Supreme Court has adopted a series of changes to the attorney regulation system, including the establishment of the Office of the Presiding Disciplinary Judge, 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 Presiding Disciplinary Judge presides over attorney regulation proceedings and issues orders together with a two-member hearing board at trials and hearings. The Rules of Civil Procedure and the Rules of Evidence apply to all attorney regulation proceedings before the Presiding Disciplinary Judge. See C.R.C.P. 251.18(d)

The Colorado Lawyer publishes the summaries and full-text Opinions of the Presiding Disciplinary Judge, Roger L Keithley, and a two-member hearing board, whose members are drawn from a pool appointed by the Supreme Court.

These Opinions may be appealed in accordance with C.R.C.P.

The full-text Opinions, along with their summaries, are available on the CBA homepage at http://www.cobar.org/tcl/index.htm. See page 141 for details.Opinions and summaries are also available on Lexis-Nexis at www.lexis.com/research by clicking on States Legal U.S./Colorado/Cases and Court Rules/By Court/Colorado Supreme Court Disciplinary Opinions.

Case No. 00PDJ028

Complainant:

THE PEOPLE OF THE STATE OF COLORADO,

Respondent:

LARRY W. SCHMEISER.

ORIGINAL PROCEEDING IN DISCIPLINE BEFORE
THE OFFICE OF THE PRESIDING DISCIPLINARY JUDGE

March 15, 2001

REPORT, DECISION, AND IMPOSITION OF SANCTION

Opinion by Presiding Disciplinary Judge Roger L. Keithley and Hearing Board members, B. LaRae Orullian, a representative of the public, and Sisto J. Maza, a member of the bar.

SANCTION IMPOSED: ATTORNEY SUSPENDED FOR ONE YEAR AND ONE DAY

A sanctions hearing pursuant to C.R.C.P. 251.15(b) was held on September 18, 2001, before the Presiding Disciplinary Judge ("PDJ") and two hearing board members, B. LaRae Orullian, a representative of the public, and Sisto J. Maza, a member of the bar. Terry Bernuth, Assistant Regulation Counsel represented the People of the State of Colorado (the "People"). Larry W. Schmeiser ("Schmeiser"), the respondent, did not appear either in person or by counsel.

The Complaint in this action was filed March 23, 2000. Schmeiser did not file an Answer to the Complaint. On May 4, 2000, the People filed a Motion for Default. Schmeiser did not respond. On June 27, 2000, the Presiding Disciplinary Judge issued an Order granting default, which established that all factual allegations set forth in the Complaint were deemed admitted pursuant to C.R.C.P. 251.15(b). The default Order also established that all violations of The Rules of Professional Conduct ("Colo. RPC") alleged in the Complaint were deemed admitted with the exception of the alleged violations of Colo. RPC 8.4(c) arising from the factual allegations set forth in the Complaint at paragraphs 64, 65, 66 and 67. See People v. Richards, 748 P.2d 341, 345 (Colo. 1987).

At the sanctions hearing, the people presented evidence from Lesley Godley, Janice Montano, Robert Safranek and Joseph Montano. Exhibits 1 through 5 were offered by the People and admitted into evidence. The PDJ and Hearing Board considered the People's argument of counsel, the facts established by the entry of default, the exhibits admitted, and made the following findings of fact which were established by clear and convincing evidence.

I. FINDINGS OF FACT

Schmeiser has taken and subscribed to the oath of admission, was admitted to the bar of the Supreme Court on May 25, 1983 and is registered upon the official records of this court, registration number 12922. Schmeiser is subject to the jurisdiction of this court pursuant to C.R.C.P. 251.1(b).

All factual allegations set forth in the Complaint were deemed admitted by the entry of default. The facts set forth therein were therefore established by clear and convincing evidence. See Complaint attached hereto as Exhibit

The testimony offered during the sanctions hearing supported the factual allegations established by the entry of default. In addition to the allegations in the Complaint, the testimony established that Schmeiser's clients, the personal representatives of an estate having an approximate value of $750,000, suffered additional attorney's fees, costs and other expenses as the direct result of Schmeiser's misconduct in the amount of $7,589.47.1

II. CONCLUSIONS OF LAW

The entry of default in this disciplinary action established violations of Colo. RPC 1.3(neglect of a legal matter), Colo. RPC 1.4(a)(failure to keep the clients reasonably informed), Colo. RPC 1.16(d)(failure to surrender the clients' property after termination), Colo. RPC 1.5(a)(charging an unreasonable fee), Colo. RPC 8.4(c)(engaging in conduct involving dishonesty, fraud, deceit or misrepresentation), and provided grounds for discipline pursuant to C.R.C.P. 251.5(d)(failure to cooperate and respond to requests from the Office of Attorney Regulation Counsel).

Schmeiser engaged in a long term pattern of misconduct involving neglect, failing to maintain contact with his clients, making misstatements to his clients regarding material facts, charging excessive fees for the minimal services he provided and, after termination by the clients, failing to either protect his clients' interests or return documents and property belonging to the client. As a direct result of his misconduct, there was a substantial delay in the resolution of an estate matter, tax returns were filed late, penalties were assessed by the taxing authorities, and the clients suffered financial losses directly related to Schmeiser's misconduct of at least $7,589.47.

The PDJ and Hearing Board, however, cannot conclude by clear and convincing evidence that the specific factual misconduct alleged and admitted by the entry of default in paragraphs 64, 65, 66 and 67 of the Complaint, along with the other admitted facts contained in the Complaint and the evidence introduced at the sanctions hearing established additional violations of Colo. RPC 8.4(c).

Paragraph 64 in the Complaint reads:

On April 26, 1998, the respondent knowingly and intentionally engaged in misrepresentation and deceived clients regarding his work to close the estate, to file the tax returns and obtain a federal tax identification number.

The reference in this paragraph to the events of April 26, 1998, is explained in paragraphs 32 and 33 of the Complaint. Paragraphs 32 and 33 state:

32. On April 26, 1998, Ms. Montano called the respondent at his home and asked why the work had not been done and why he had not responded to her messages. Ms. Montano was told by the respondent that the filing of the tax returns had not been accomplished and the respondent denied receiving the April 16, 1998 letter from Mr. Montano.2

33. During that same conversation, the respondent promised to obtain the tax identification number for the estate immediately and to finalize the work on the estate including the preparation and filing of the tax returns.

Schmeiser did not thereafter either obtain the tax identification number or finish the other tasks he promised to complete. Paragraphs 65, 66 and 67 state:

65. On July 24, 1998, the respondent knowingly and intentionally engaged in misrepresentation and deceived clients by stating that he would pay any penalties and interest assessed as a result of his failure to file estate tax returns on a timely basis.

66. On July 24, 1998, the respondent knowingly and intentionally engaged in misrepresentation and deceived clients by stating that he would do what was necessary to file the returns and close the estate.

67. On July 28, 1998, the respondent knowingly and intentionally engaged in misrepresentation and deceived clients by stating he would copy the file for them which he never did.

The only other facts set forth in the Complaint regarding these events are located at ¶¶ 41, 42 and

41. At the meeting on July 24, 1998, the respondent agreed to pay any penalties and interest incurred because of his failure to file the tax returns in a timely manner.

42. At that meeting on July 24, 1998, the respondent promised to do what needed to be done to close the estate quickly.

43. At that meeting on July 24, 1998, the respondent also agreed to provide Ms. Montano with a copy of the file.

The factual statements contained in each of those paragraphs is a representation by Schmeiser that he will undertake certain acts in the future. When a violation of Colo. RPC 8.4(c)3 alleging conduct involving misrepresentation is premised upon the making of a specific factual statement, the evidence must show, at least, that the factual representation in the statement was false when made.4

Although cases interpreting the civil claim of misrepresentation are not necessarily controlling in a disciplinary action, the logic of those decisions are of assistance in explaining the falsity requirement. A claim for negligent misrepresentation applies only if there has been a misrepresentation of an existing fact; such claim cannot be based solely on the nonperformance of a promise to do something at a future time. Branscum v. American Community Mut. Ins. Co., 984 P.2d 675, (Colo. App. 1999). [A] promise relating to future events without present intent not to fulfill the promise is not actionable...