Opinion
Case Number: 17PDJ004
06-22-2017
The PEOPLE of the State of Colorado, Complainant v. Stacy B. SPURLOCK, Respondent
OPINION AND DECISION IMPOSING SANCTIONS UNDER C.R.C.P. 251.19(c)
WILLIAM R. LUCERO, PRESIDING DISCIPLINARY JUDGE Stacy B. Spurlock ("Respondent") committed misconduct in two client matters. In one of those matters, she signed a settlement agreement while her law license was administratively suspended. She then abandoned the other client's case when she left the firm and failed to return the case file despite being ordered by the district court to do so. Respondent also neglected to pay a process server's invoice for more than two years. Her misconduct warrants suspension for one year and one day, with the condition that she undergo an independent medical examination ("IME") before seeking reinstatement of her law license.
I. PROCEDURAL HISTORY
On January 10, 2017, Alan C. Obye of the Office of Attorney Regulation Counsel ("the People") filed a complaint in this matter with Presiding Disciplinary Judge William R. Lucero ("the Court"), and sent copies the same day to Respondent at her registered home and business addresses. Respondent failed to answer, and the Court granted the People's motion for default on March 21, 2017. Upon the entry of default, the Court deemed all facts set forth in the complaint admitted and all rule violations established by clear and convincing evidence.
See C.R.C.P. 251.15(b) ; People v. Richards , 748 P.2d 341, 346 (Colo. 1987).
On May 25, 2017, the Court held a sanctions hearing under C.R.C.P. 251.15(b). Obye represented the People; Respondent appeared and presented evidence and testimony regarding the appropriate sanction. The People's exhibits 1-2 and Respondent's exhibit A were admitted into evidence. The Court SUPPRESSES Respondent's exhibit A as it contains her confidential health information.
II. ESTABLISHED FACTS AND RULE VIOLATIONS
The Court adopts and incorporates by reference the averments in the admitted complaint, presented here in condensed form. Respondent took the oath of admission and was admitted to the bar of the Colorado Supreme Court on June 16, 2003, under attorney registration number 34752. She is thus subject to the Court's jurisdiction in this disciplinary proceeding.
See C.R.C.P. 251.1(b).
Courier Matter
At Respondent's request, Courier Process Service, Inc. served documents on March 6 and 7, 2014. Courier billed Respondent $300.00 for its services. Courier Service sent Respondent past-due invoices on January 1, 2015, and on August 31, 2015. On January 29, 2016, Courier sent Respondent a certified letter requesting payment of the $300.00 invoice within ten days and informed her that if she did not pay the invoice, it would report her conduct to the People. Respondent or her husband paid Courier in full on April 12, 2016.
In failing to pay the process server for more than two years, Respondent violated Colo. RPC 8.4(d), which prohibits a lawyer from engaging in conduct prejudicial to the administration of justice.
Martin Matter
In 2015, while working at The Law Center, Respondent represented Dallas Martin in an estate litigation matter styled Edward D. Jones & Company v. Martin , case number 2015CV030767, El Paso District Court. In December 2015, Respondent ceased communicating with Martin.
Opposing counsel in the Martin case, William Kelly, indicated to the People that Respondent initially appeared in the case and communicated with him but then "went dark." Kelly called The Law Center on April 6, 2016, and was told Respondent no longer worked there.
Compl. ¶ 20.
Martin eventually hired new counsel, Michael W. Callahan, who entered an appearance on April 14, 2016. In that filing, Callahan stated that Respondent had not communicated with Martin since December 2015, that Respondent might have certain medical problems, that she left The Law Center in October 2015, that Martin did not have a copy of his case file or contingency fee agreement, and that Martin wanted to terminate Respondent's representation. Kelly provided all nonprivileged case documents to Callahan. Callahan has never been able to reach Respondent since entering his appearance.
Respondent never withdrew from the Martin case and failed to take any action in the case from December 2015 to July 2016. Callahan was able to obtain a continuance of the trial, however, and he completed discovery. In July 2016, the district court directed Callahan to file a motion for substitution of counsel and a motion to compel Respondent to produce Martin's file and fee agreement, which he did. Callahan's motion was granted on July 27, 2016. In that order, the court stated that Respondent "has effectively abandoned her representation of Defendant Dallas Martin." The court ordered Respondent to forward all original files and a copy of the fee agreement to Callahan and to provide a written waiver or confirmation of the basis for any contingent fee or other claim with respect to the Martin case within ten days. Respondent was served with this order by U.S. mail on July 27, 2016. Callahan emailed Respondent on October 22, 2016, to inquire about her compliance with the court's order and called her three to six times, but he never heard from her. Respondent did not comply with the court's order to return the file and fee agreement.
Compl. ¶ 29.
As established in the admitted complaint, Respondent violated four rules in this matter: (1) Colo. RPC 1.3, which requires a lawyer to act with reasonable diligence and promptness in representing a client; (2) Colo. RPC 1.4(a)(4), which requires a lawyer to promptly comply with reasonable requests for information; (3) Colo. RPC 1.16(d), which requires a lawyer to protect a client's interests upon termination of the representation; and (4) Colo. RPC 3.4(c), which prohibits a lawyer from knowingly disobeying an obligation under the rules of a tribunal.
Wasden Matter
In 2015, Respondent agreed to represent the defendant, Monica Wasden, in Arrowood Indemnity Company v. Wasden , case number 2015C34581, Douglas County Court. Respondent appeared for mediation on behalf of Wasden in April 2016, and trial was set for August 2016.
On May 2, 2016, Respondent was administratively suspended for failing to pay attorney registration fees. Respondent knew about the suspension. Nevertheless, Respondent signed a settlement stipulation on July 20, 2016, which required Wasden to make a lump sum payment to the plaintiff on or before August 20, 2016. The stipulation was filed with the court on July 22, 2016, and the court granted the stipulation on July 25.
Wasden did not make the lump sum payment. The plaintiff filed a motion for default judgment on September 6, 2016, which was granted by the court the next day. The court awarded judgment to the plaintiff in the amount of $9,407.57. On November 17, 2016, attorney Jackson K. Gardner entered his appearance and moved to set aside the default judgment on Wasden's behalf.
In that motion, Gardner stated in part that Respondent did not provide the settlement terms for her client to review and only discussed the possibility of settlement in July 2016. Thus, Wasden had no information about when and where to provide the funds in accordance with the settlement, stated Gardner. Gardner also claimed that Wasden received no correspondence from Respondent about the settlement and first learned of it in November 2016 when she was contacted by her bank regarding garnishment of her accounts. Additionally, Gardner indicated that Respondent's husband told Wasden, when she tried to reach Respondent about the garnishment, that Respondent was no longer an active attorney and was undergoing medical treatment that rendered her unavailable indefinitely. Gardner further stated that Respondent had a number of medical issues that prevented her from fulfilling her duties as counsel, and he said that Wasden was unable to reach Respondent to ask her about the motion for default.
The court ordered Wasden to set a hearing on motion to set aside the default. The parties were able to reach a settlement on terms similar to the original settlement. Wasden paid the plaintiff in full.
In this matter, Respondent violated Colo. RPC 3.4(c) and Colo. RPC 5.5(a), which prohibits a lawyer from practicing law in this jurisdiction without a license or other authority to do so.
Respondent's Testimony
Despite defaulting in this proceeding, Respondent appeared at the sanctions hearing and offered testimony and evidence in mitigation.
According to Respondent, she was working as a solo practitioner in March 2014 when she hired Courier to serve a trial subpoena. She explained that her client was an insurance company that used preferred vendors. Because she had to serve a trial subpoena right away, she instead used Courier, a nonpreferred vendor. She believed that the insurance company would pay the vendor's invoice. She acknowledged that she did not communicate with Courier about how to get reimbursed from her client, nor did she provide the vendor with her forwarding address when she begin working with a law firm.
In April 2014, Respondent said, she was diagnosed with multiple sclerosis ("MS"), but up until then she was asymptomatic. Her condition, she conceded, did not cause her failure to pay the process server. At the time of her diagnosis, Respondent experienced overwhelming fatigue, loss of vision, paralysis on one side of her body, and loss of alertness. She described her cognitive abilities as "slowing down." She was prescribed intravenous prednisone infusions but that treatment did not work, she stated.
Meanwhile, Respondent testified, she began working at The Law Center in January 2015, where she inherited the Martin case. Around that time, her doctors discovered fast-growing lesions on her spine and brain, which were surgically removed in July 2015. The tumors returned, however, along with several other nonmalignant tumors on her spine.
In December 2015, while handling the Martin matter, Respondent left The Law Center due to a dispute with a partner over her lengthy absence from work. Respondent acknowledged that while working there she felt "so sick," and work was not her primary focus. Respondent testified that she had never been sick like that before and she was unprepared to handle her work. She said that she continued intravenous treatment without much improvement and her physical condition was deteriorating.
According to Respondent, she began working on the Wasden case around January 2016. Wasden was a friend of her husband's who disputed a medical bill. Respondent testified that she signed the settlement agreement for her client, knowing she was administratively suspended from the practice of law. She believed it was in her client's best interest to get the case settled, however. Respondent did not think her client was harmed in any way because the second settlement was nearly identical to the one Respondent had signed on her behalf. While representing Wasden, Respondent said, she was experiencing overwhelming fatigue and was not focused on her work, causing her to neglect the Rules of Professional Conduct.
In August 2016, Respondent testified, she was diagnosed with Neuromyelitis optica, otherwise known as NMO or Devic's disease, an immunological disorder. After this diagnosis, Respondent began chemotherapy every three months beginning in October 2016. She did not undergo chemotherapy in January 2017, however, because the side effects were severe and she experienced no improvement.
See Ex. A (suppressed) (indicating diagnoses).
In September 2016, Respondent met with the People during their investigation into these three matters. They told her to provide Martin's file and fee agreement to his new counsel. Respondent testified that around that time she called Martin's lawyer and left him a voicemail message about retrieving the file. She also said she spoke with a lawyer at The Law Center to see if the firm could forward Martin's electronic file to his new counsel. She admitted that she did not follow up with Martin's new lawyer or The Law Center to ensure that Martin's file was returned even though she knew he wanted the file. She has since returned his file.
Respondent explained that she was so sick when most of her misconduct occurred that it was "overwhelming to do anything, even to just get out of bed," and she never thought she would be able to practice law again. Respondent acknowledged that her misconduct in these three matters was serious but said that she could not participate in this disciplinary proceedings because to respond to anything was "so overwhelming" in light of her serious illness.
In May 2017, Respondent underwent a second round of chemotherapy and this time the treatment helped. She said that there is a "noticeable difference" in how she feels and functions today, and she is progressively getting better. She said that there is no known cure for her diagnoses—only medication to halt the symptoms—but she now believes that she can resume the practice of law as long as the treatments provide a benefit.
III. SANCTIONS
The American Bar Association Standards for Imposing Lawyer Sanctions ("ABA Standards ") and Colorado Supreme Court case law guide the imposition of sanctions for lawyer misconduct. When imposing a sanction after a finding of lawyer misconduct, the Court must consider the duty violated, the lawyer's mental state, and the actual or potential injury caused by the misconduct. These three variables yield a presumptive sanction that may be adjusted based on aggravating and mitigating factors.
Found in ABA Annotated Standards for Imposing Lawyer Sanctions (2015).
See In re Roose , 69 P.3d 43, 46-47 (Colo. 2003).
ABA Standard 3.0—Duty, Mental State, and Injury
Duty : Respondent violated obligations she owed to her clients, including lack of diligence and communication. In failing to abide by a court order, she violated her duty to the legal system to operate within the bounds of the law. The ABA Standards designate Respondent's practice of law while administratively suspended and her failure to return her client's file after she was terminated as violations of her duty as a professional.
Mental State : The Court's order entering default establishes that Respondent knowingly violated Colo. RPC 3.4(c) and Colo. RPC 5.5(a). The evidence otherwise strongly suggests that Respondent acted knowingly when she failed to act diligently in Martin's case, did not communicate with him, and neglected to return his file.
Injury : Respondent caused Martin potential injury by abandoning his case. She also intangibly harmed the legal system by signing Wasden's settlement agreement while administratively suspended and by failing to timely pay the process server.
In their hearing brief, the People concede that Respondent's unauthorized practice of law did not cause Wasden actual harm. Rather, they contend that Respondent's lack of diligence and communication resulted in a default judgment being entered against Wasden, causing her actual injury. The Court does not find that this injury has been established, however, because the admitted complaint contains only charges concerning Respondent's unauthorized practice of law in the Wasden matter, not claims for lack of diligence or communication.
ABA Standards 4.0-7.0—Presumptive Sanction
The presumptive sanction for Respondent's misconduct in this case is suspension, as established by ABA Standard 4.42(a), which provides that suspension is generally appropriate when a lawyer causes a client injury or potential injury by knowingly failing to perform services for the client. Likewise, ABA Standard also counsels that suspension is generally appropriate when a lawyer knows that he or she is violating a court order or rule and causes injury or potential injury to a client or third party. Finally, under ABA Standard 7.0, suspension is the presumptive sanction when a lawyer knowingly engages in conduct that violates a duty owed as a professional and causes injury or potential injury to a client, the public, or the legal system.
ABA Standard 9.0—Aggravating and Mitigating Factors
Aggravating circumstances include any considerations or factors that may justify an increase in the degree of the presumptive sanction to be imposed, while mitigating circumstances may warrant a reduction in the severity of the sanction. One aggravating factor is present here: Respondent committed six different rule violations. The Court applies three mitigating factors: Respondent does not have a disciplinary record, she acted without a dishonest or selfish motive, and she experienced a physical disability during the Martin and Wasden representations.
See ABA Standards 9.21 & 9.31.
ABA Standard 9.22(d).
ABA Standard 9.32(a)-(b), (h). Respondent's undisputed testimony and some of the facts in the admitted complaint, see Compl. ¶¶ 19 & 64, support the application of ABA Standard 9.32(h) as they establish some causal link between Respondent's MS and Devic's disease and her misconduct. But because no expert testimony or other medical reports were submitted, the Court chooses only to apply average weight to this factor in mitigation.
Analysis Under ABA Standards and Colorado Case Law
The Court is aware of the Colorado Supreme Court's directive to exercise discretion in imposing a sanction and to carefully apply aggravating and mitigating factors, mindful that "individual circumstances make extremely problematic any meaningful comparison of discipline ultimately imposed in different cases." Though prior cases are helpful by way of analogy, the Court is charged with determining the appropriate sanction for a lawyer's misconduct on a case-by-case basis.
See In re Attorney F. , 285 P.3d 322, 327 (Colo. 2012) ; In re Fischer , 89 P.3d 817, 822 (Colo. 2004) (finding that a hearing board had overemphasized the presumptive sanction and undervalued the importance of mitigating factors in determining the needs of the public).
In re Attorney F. , 285 P.3d at 327 (quoting In re Rosen , 198 P.3d 116, 121 (Colo. 2008) ).
Although the People request imposition of suspension for three years in their hearing brief, the People stated at the sanctions hearing that they would be satisfied with a suspension of one year and one day. Due to the serious nature of her ongoing medical problems, the People ask that Respondent be required to petition for reinstatement and undergo an IME following her suspension.
Cases involving abandonment of clients without any associated conversion of client funds have typically yielded lengthy suspensions. For instance, in People v. Shock , the Colorado Supreme Court suspended a lawyer for three years for effectively abandoning two clients. In the first case, the lawyer was hired to remove a lien on a client's house. After receiving the court order discharging the lien, the lawyer neglected to record the order and the lien was never released. In the second case, the lawyer was retained in a dissolution matter yet the lawyer failed to take any action in the matter. In addition, the lawyer failed to notify his clients that his law license had been administratively suspended. He then defaulted in the disciplinary proceeding. The Colorado Supreme Court took into account several aggravating factors, including dishonest or selfish motive, multiple offenses, a pattern of misconduct, and indifference to making restitution.
In their hearing brief, the People assert that Respondent abandoned Wasden's case, yet the admitted complaint does not contain any such allegations. Thus, the Court declines to find that Respondent abandoned Wasden's case.
970 P.2d 966, 968-69 (Colo. 1999).
Id. at 966.
Id.
Id. at 967.
Id. at 967.
Id. at 966.
Id. at 968.
The Colorado Supreme Court suspended a lawyer in People v. Rishel for one year and one day for abandoning two clients. In the first client matter, a child custody matter, the lawyer failed to notify the client of a hearing, stopped communicating with her, and never refunded unearned fees. In the second client's case, which involved debt and possible bankruptcy, the lawyer never responded to the client's request to return his file and unearned funds. The Colorado Supreme Court identified eight aggravating factors and one mitigator, and also noted that there was "more than a suggestion [that the lawyer] ... misappropriated [the clients'] funds," though no conversion was established.
956 P.2d 542, 544 (Colo. 1998).
Id . at 543.
Id .
Id . at 543-44. Suspension for one year and one day was also imposed in People v. Regan , 831 P.2d 893, 895-96 (Colo. 1992), where the lawyer neglected but did not abandon several clients, where mitigators outweighed aggravators, and where the parties stipulated to the suspension.
Likewise, Colorado cases identify suspension as appropriate when a lawyer knowingly disregards a court order by practicing law after a suspension, even when no actual harm has been shown. The Colorado Supreme Court often imposes less severe sanctions for violations of administrative suspension orders than for violations of disciplinary suspension orders. In People v. Kargol , the Colorado Supreme Court suspended a lawyer for one year and one day for practicing law on thirteen occasions while administratively suspended. Although the clients suffered no harm, the lawyer continued to represent clients despite being contacted by the People's investigator.
See People v. Rivers , 933 P.2d 6, 8 (Colo. 1997) (suspending a lawyer for one year and one day for disregarding an administrative suspension order and for violating multiple rules of professional misconduct); People v. Johnson , 946 P.2d 469, 471 (Colo. 1997) (suspending a lawyer for eighteen months after he violated an administrative suspension order and engaged in other misconduct).
Compare Rivers , 933 P.2d at 8 (suspending a lawyer for one year and one day for violating an administrative suspension order, among other misconduct), with People v. Zimmermann , 960 P.2d 85, 88 (Colo. 1998) (disbarring a lawyer who violated a disciplinary suspension order and engaged in other misconduct, causing actual harm to clients). See also People v. Dover , 944 P.2d 80, 82 (Colo. 1997) (finding public censure appropriate in light of mitigating factors where an attorney violated an administrative suspension order yet informed the court of his suspension at an early stage in court proceedings).
854 P.2d 1267, 1269 (Colo. 1993).
Id .
In this case, Respondent abandoned only one case after leaving The Law Center, yet she failed to return that client's file when asked. Her failure to abide by her administrative suspension caused some intangible injury to the legal system and the profession but did not cause Wasden actual harm. She then defaulted in her disciplinary proceeding but appeared at the hearing to present evidence in mitigation. Respondent's unauthorized practice of law, abandonment of one case, and general failure to participate in this proceeding appear to be somewhat mitigated by the serious health problems she suffered during the time of her misconduct. These circumstances, coupled with a lack of prior discipline and the application of only one aggravating factor, support the imposition of a lengthy served suspension. The Court concludes that suspension for one year and one day is appropriate here. As a condition to filing a petition for reinstatement, Respondent must undergo an IME showing that she is capable of practicing law.
IV. CONCLUSION
Respondent knowingly practiced law while administratively suspended and effectively abandoned one client's case. In so doing, she disregarded her obligations: to be diligent, to communicate with clients, and to notify clients of any suspension. That misconduct is compounded by her disregard of this default in this proceeding. Her failure to observe her duties justifies a one-year-and-one day suspension, with the requirement that she undergo an IME before petitioning for reinstatement.
V. ORDER
The Court therefore ORDERS:
1. STACY B. SPURLOCK , attorney registration number 34752 , will be SUSPENDED FROM THE PRACTICE OF LAW FOR ONE YEAR AND ONE DAY . The SUSPENSION SHALL take effect only upon issuance of an "Order and Notice of Suspension."
2. If applicable, Respondent SHALL promptly comply with C.R.C.P. 251.28(a)-(c), concerning winding up of affairs, notice to parties in pending matters, and notice to parties in litigation.
3. Within fourteen days of issuance of the "Order and Notice of Suspension," Respondent SHALL comply with C.R.C.P. 251.28(d), requiring an attorney to file an affidavit with the Court setting forth pending matters and attesting, inter alia, to notification of clients and other jurisdictions where the attorney is licensed.
4. Should Respondent wish to resume the practice of law, she will be required to file a petition for reinstatement under C.R.C.P. 251.29(c). Her reinstatement is subject to the condition precedent that she undergo an IME, as set forth in the following paragraph, no more than six months before filing her petition.
5. Any IME performed as part of a petition filed under C.R.C.P. 251.29(c) is subject to the following provisions:
a. The IME must address the following issues:
i. Whether Respondent suffers from a physical, mental, or emotional infirmity or illness (including MS or Devic's disease and including addiction to drugs or intoxicants).
ii. The recommended treatment for any infirmity or illness, including the nature, length, and anticipated course of such treatment.
iii. Whether Respondent is able to competently fulfill her professional responsibilities in light of the infirmity or illness, if any.
b. Respondent shall be responsible for paying the cost of any IME.
6. The parties MUST file any posthearing motions on or before Thursday, July 6, 2017. Any response thereto MUST be filed within seven days.
7. The parties MUST file any application for stay pending appeal on or before Thursday, July 13, 2017. Any response thereto MUST be filed within seven days.
8. Respondent SHALL pay the costs of this proceeding. The People SHALL file a statement of costs on or before Thursday, June 29, 2017 . Any response thereto MUST be filed within seven days.
In general, an order and notice of suspension will issue thirty-five days after a decision is entered under C.R.C.P. 251.19(b) or (c). In some instances, the order and notice may issue later than thirty-five days by operation of C.R.C.P. 251.27(h), C.R.C.P. 59, or other applicable rules.
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