Case Title: In the Matter of David J. Colman

Citation: 

Docket Number: 53S00-0607-DI-248

State: indiana

Court: Indiana Supreme Court

Date: 2008-05-14T00:00:00Z

Document:
ATTORNEY FOR THE RESPONDENT 
Paul J. Watts 
Spencer, Indiana 
 
 
ATTORNEYS FOR THE INDIANA SUPREME COURT  
DISCIPLINARY COMMISSION 
Donald R. Lundberg, Executive Secretary 
Seth T. Pruden, Staff Attorney 
Indianapolis, Indiana 
 
______________________________________________________________________________ 
 
2BIn the 
3BIndiana Supreme Court  
_________________________________ 
 
No. 53S00-0607-DI-248 
 
IN THE MATTER OF: 
 
 
 
 
 
 
 
 
 
DAVID J. COLMAN, 
 
 
 
 
 
 
 
 
Respondent. 
_________________________________ 
 
Attorney Discipline Action 
_________________________________ 
 
 
1BMay 14, 2008 
 
Per Curiam. 
This matter is before the Court on the report of the hearing officer appointed by this 
Court to hear evidence on the Indiana Supreme Court Disciplinary Commission's "Verified 
Complaint for Disciplinary Action," and on the post-hearing briefing by the parties. We find that 
Respondent, David J. Colman, engaged in attorney misconduct by participating in preparation of 
a will for a non-relative that would give Respondent or his son a substantial gift, by representing 
a client when there was a conflict of interest due to Respondent's personal interests, by failing to 
hold property of a client separate from Respondent's property and failing to keep a client’s funds 
in a clearly identified trust account, by entering into an improper business transaction with a 
client, and by charging an unreasonable fee. 
 
 
The Respondent's 1970 admission to this state's bar subjects him to this Court's discipli-
nary jurisdiction.  
USeeU IND. CONST. art. 7, § 4.  For his misconduct, we find that Respondent 
should be suspended from the practice of law in this state for at least three years. 
FILED
CLERK
of the supreme court,
court of appeals and
tax court
May 14 2008, 2:02 pm
 
2
 
UBackground 
 
On July 6, 2006, the Indiana Supreme Court Disciplinary Commission filed a Verified 
Complaint against Respondent in three counts.  The hearing officer appointed in this case, Leslie 
C. Shively, conducted a hearing, and on May 18, 2007, he filed a report containing the following 
findings of fact, which this Court concludes are supported by the evidence and therefore accepts.    
 
UCount 1U.  Respondent first became acquainted with G.A., an elderly man who lived alone 
in a trailer, when Respondent represented him in a civil lawsuit.  In 2004, G.A. fell, broke his 
hip, and was hospitalized.  While in the hospital, G.A. called Respondent, who came to the 
hospital and discussed G.A.'s desire to have a will.  G.A. told Respondent he wanted Respondent 
to be his beneficiary.   
 
Respondent contacted his friend, attorney Paul Watts, to prepare the will.  Respondent 
gave Watts the information to include in the will, including naming Respondent as primary 
beneficiary and Respondent's son as contingent beneficiary.  Watts prepared the will according to 
the information provided by Respondent.  Watts did not discuss the contents of the will with 
G.A., nor did he charge G.A. for his services.  Watts' entire file for G.A. consisted of an empty 
file folder and a post-it note.  Watts did not attempt to ascertain G.A.'s mental competence.  
Respondent, however, obtained a written statement from a psychiatrist stating he found G.A. to 
be competent to sign the will.  On April 28, 2004, a paralegal for Watts came to the hospital with 
the draft of the will.  Respondent consulted privately with G.A.  Then the paralegal went over the 
will with G.A., and with the paralegal's approval, he initialed a handwritten notation on the will 
indicating he could change the will if he desired.  He then executed the will.   
 
A little more than a week later, on May 6, 2004, Respondent, as petitioner, filed a petition 
for appointment of a guardian over the person and estate of G.A., alleging him to be 
incapacitated.  Filed with the petition was a "Consent to the Appointment of Guardian," prepared 
by Respondent and signed by G.A.  Respondent was the only attorney to advise G.A. about 
giving his consent to the guardianship.  Respondent was appointed guardian on May 10, 2004.  
Respondent moved G.A. from the hospital to a nursing facility.  About three weeks after the 
 
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guardianship was established, however, G.A. decided he wanted to leave the facility.  At some 
point, G.A. retained new counsel through the assistance of a friend and challenged his 
guardianship.  Respondent was an adverse party against G.A. at the hearing on this matter.  
 
UCount 2U.  The hearing officer found in Respondent's favor on this count.   
 
UCount 3U.  In the 1970's, M.M. was convicted of armed robbery and served time in the 
state prison at Michigan City. M.M. later graduated from college and began graduate school in 
Bloomington, Indiana, where he owned a condominium.  In late 1994 or early 1995, M.M. was 
arrested in Evansville on a possession of marijuana charge.  Around that same time, M.M. was 
involved in a dispute with Indiana University regarding his grade in a course he had taken.  
Respondent represented M.M. in both of these matters.   For both of these matters, Respondent 
had no written fee agreement with M.M., the terms of the representation were not clearly 
established, Respondent did not submit a bill for his services to M.M., and he never told M.M. 
what he was owed.  
 
On March 31, 1995, M.M. was again arrested after a confidential informant made a 
controlled purchase of marijuana from M.M.  Federal and State authorities discovered 100 
pounds of marijuana and between $150,000 and $200,000 in cash on M.M.'s property.  The 
authorities failed to discover approximately $20,000 in cash hidden in his condominium and 
$30,000 in cash in a bank safe deposit box.   
 
When Respondent visited M.M. in the Monroe County jail shortly after he was arrested, 
M.M. told him about the undiscovered money, and Respondent volunteered to recover the cash.  
It was understood that Respondent would handle the state criminal charges and attorney R.K. 
would handle the federal charges.  
 
On or about April 3, 1995, Respondent retrieved the undiscovered cash and deposited the 
entire sum ($50,700) into his personal account at the Indiana University Credit Union. The 
account was not an attorney trust account and contained Respondent's own funds at the time he 
deposited M.M.'s funds into it.  
 
 
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Respondent suggested that M.M. transfer ownership of his condominium to him to avoid 
a forfeiture due to the criminal charges.  One purpose was to use equity from the condominium 
to help pay legal fees.  M.M. testified that a second purpose was to allow him eventually to 
reclaim the condominium.  On April 21, 1995, Respondent presented to M.M. at the Marion 
County jail a "Sale Agreement" that he had prepared.  Paragraph 1 of the Sale Agreement stated: 
 
[The] purchase price shall be constituted by David J. Colman's assumption of the 
existing balance due on the condominium . . . in the amount of $44,857.80.  In 
addition, David J. Colman will forego attorney's fees for representing [M.M.'s] 
interests in relation to Indiana University, criminal charges in Monroe County, 
and assisting in a pending Federal Criminal Prosecution, and will forego all fees 
incurred in the future concerning these matters. 
 
The Sale Agreement also provided for the transfer of the condominium's contents to 
Respondent.  The Sale Agreement stated M.M. would reimburse Respondent for all his 
expenditures concerning the condominium if it were subject to successful forfeiture.   
 
Respondent did not request an appraisal of the condominium or its contents.  At the time 
of the Sale Agreement, M.M. had not been given any estimate of the future legal fees, and the 
hearing officer found that the amount of Respondent's future legal fees was entirely speculative.  
According to M.M., the condominium was worth approximately $95,000 to $98,000 and the 
value of the contents was $15,000, yielding a net equity of both of about $65,000.  Respondent 
did not advise M.M. to seek independent counsel regarding the transaction.  Respondent told 
M.M. not to tell anyone about it, and M.M. did not even mention the Sale Agreement to attorney 
R.K.  Respondent did not formally assume the mortgage on the condominium, nor did he make 
timely payments.   
 
R.K. represented M.M. in a federal forfeiture proceeding, which was eventually resolved 
by agreement.  In the federal criminal action, M.M. entered into a plea agreement and went to 
prison.  M.M. has asked Respondent to either return the condominium or make some payment 
for the net value, and Respondent has refused.  
 
UAggravating factorsU.  The hearing officer found the following aggravating facts:  (a)  
Respondent has demonstrated a pattern of misconduct; (b) Respondent's conduct in part was 
 
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based upon selfish and dishonest motives; (c) Respondent engaged in multiple violations; (d) 
Respondent was dealing with a vulnerable client in the case of G.A.; and (e) Respondent has 
refused to acknowledge any wrongdoing.  In addition, Respondent has the following disciplinary 
history: 
UMatter of  ColmanU,  476 S 55 (Ind. 1978).  Respondent received an agreed private 
reprimand for communicating directly with a represented party in a personal 
injury action.  
 
UMatter of  ColmanU, 53S00-9410-DI-981 (Ind. September 29, 1995).  The Court 
approved an agreed private reprimand for lending a client $3000 with annual 
interest between 9 and 12 percent without advising the client of her option of 
seeking independent counsel before signing the promissory note.1      
 
UMatter of  ColmanU, 53S00-9606-DI-457.  On June 14, 1996, the Respondent pled 
guilty to one count of filing a false tax return, a federal felony.  On Respondent's 
consent to discipline, the Court suspended Respondent from the practice of law 
for at least 18 months.  See 691 N.E.2d 1219 (Ind. 1998).  Respondent was 
reinstated on February 10, 1999.  See 714 N.E.2d 125 (Ind. 1999).   
 
UMitigating factorsU.  The hearing officer noted Respondent's legal skill and the fact that 
M.M. was not an innocent victim of the transaction involving the condominium.  Indeed, M.M. 
testified in the federal forfeiture action that he no longer had any interest in the condominium.  
His position in the current case—that he and Respondent had a side deal to shield the 
condominium from forfeiture and allow M.M. to reclaim it later if they were successful—seems 
to be a confession of fraud and perjury in the forfeiture action.   
 
UDiscussion 
 
UCount 1—Will PreparationU.   Although attorney Watts actually put G.A.'s will to paper, 
the circumstances of how this came about support a finding that Respondent actively participated 
in the preparation of the will, under which he was the primary beneficiary and his son was the 
contingent beneficiary.  The Court concludes Respondent violated Professional Conduct Rule 
1.8(c), which prohibits a lawyer from preparing an instrument for a non-relative that gives the 
lawyer or a person related to the lawyer a substantial gift. 
 
                                                 
1 As a fact in mitigation, the conditional agreement stated Respondent had no prior disciplinary action 
since his admission to the bar in 1970, which is untrue in light of his 1978 private reprimand. 
 
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UCount 1—Guardianship ProceedingU.  Respondent contends his participation in the 
guardianship proceeding was as G.A.'s guardian, not as his attorney.  Respondent, however, 
obtained G.A.'s consent to the guardianship and initiated the action just a few days after G.A. 
executed the will—an action G.A. initiated by contacting Respondent as his lawyer.  In the 
guardianship petition, Respondent explicitly states he is G.A.'s attorney.  These and other 
circumstances, such as Respondent's handling of other legal matters for G.A., indicate G.A. 
considered Respondent to be his attorney during this period.  By becoming G.A.'s guardian, 
Respondent was put in charge of property he stood to inherit under G.A.'s will, which could have 
provided an incentive to preserve the property rather then expending it for G.A.'s care and 
comfort.   Even though the court in the guardianship matter found Respondent had not acted 
improperly as G.A.'s guardian, Respondent violated Rule 1.7(b), which prohibits an attorney 
from representing a client when there is a concurrent conflict of interest due to the lawyer's 
personal interests. 
 
UCount 3—Handling of Client's FundsU.  By failing to deposit M.M.'s funds in a designated 
trust account and by commingling M.M.'s funds with his own funds, the Court concludes 
Respondent violated Professional Conduct Rule 1.15(a) and Admission and Discipline Rule 
23(29)(a), which require a lawyer to hold property of a client separate from the lawyer’s own 
property and to keep a client’s funds in a clearly identified trust account.   
 
UCount 3—The Condominium TransactionU.  The hearing officer found that the Sale 
Agreement was unreasonable because it did not set out the value of services Respondent would 
perform, and that Respondent's charge of $65,000 for the representation was unreasonable.  By 
entering into this agreement, Respondent violated Professional Conduct Rule 1.8(a), which 
prohibits a lawyer from entering into a business transaction with a client unless the terms are fair 
and reasonable, the terms are fully and clearly disclosed, the client is given reasonable 
opportunity to seek independent counsel, and the client consents in writing to the transaction.  By 
accepting the condominium and its contents in exchange for the value of legal services that were 
either unknown or substantially less than the value of the transferred property, Respondent 
violated Rule 1.5(a), which prohibits a lawyer from charging an unreasonable fee. 
 
 
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USanctionU.  Respondent's individual ethical violations are troublesome, but in the 
aggregate they raise the larger concern that Respondent fails to understand and honor the 
fundamental principles of the attorney-client relationship.  Rather than seeing the relationship as 
one of undivided loyalty to the client, Respondent appears to view that relationship as a chance 
for personal financial gain wholly apart from compensation for legal services rendered whenever 
the opportunity arises.  Moreover, Respondent displays a cavalier attitude toward the ethics rules 
intended to protect clients in transactions with their lawyers. 
 
"Loyalty and independent judgment are essential elements in the lawyer's relationship to 
a client."  Prof. Cond. R. 1.7 cmt. 1.  If a will provides for an attorney to receive a substantial gift 
from a non-relative, "the client should have the detached advice that another lawyer can 
provide."  Prof. Cond. R. 1.8 cmt. 7.  "A lawyer's legal skill and training, together with the 
relationship of trust and confidence between lawyer and client, create the possibility of 
overreaching when the lawyer participates in a business, property or financial transaction with a 
client . . . ."  Prof. Cond. R. 1.8 cmt. 1.   
 
In the matter involving G.A., Respondent ignored his ethical duties by participating in the 
preparation of a will under which he was the primary beneficiary.  Even if G.A. was competent 
to execute a will, his frailty and vulnerability were demonstrated by Respondent's filing of a 
guardianship proceeding, as G.A.'s attorney, just days after the will's execution.  In the matter 
involving M.M., Respondent entered into an unreasonable business transaction/fee arrangement 
with a client—an ethical violation in itself.  Moreover, Respondent failed to observe ethically 
mandated client safeguards, including failing to ensure the client was given a reasonable 
opportunity to seek independent counsel regarding this transaction and failing to hold the client's 
funds separate from his own in a trust account.  Respondent fails to acknowledge any breach of 
duty in either of these cases.  In addition to the current charges, Respondent has a history of other 
ethical violations, including making an improper loan to a client and committing a federal felony.   
 
The Court concludes Respondent should be suspended from the practice of law in this 
state for at least three years, after which he may be readmitted to the bar only if he proves by 
clear and convincing evidence, among other things, genuine remorse for his misconduct, a proper 
 
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understanding of the ethical standards imposed on members of the bar, and his willingness to 
conduct himself in conformity with such standards.  See Admis. Disc. R. 4(b).   
   
UConclusion 
 
For Respondent's professional misconduct, the Court suspends Respondent from the 
practice of law in this state for a period of not less than three years, beginning July 1, 2008.  
Respondent shall not undertake any new legal matters between service of this order and the 
effective date of the suspension, and Respondent shall fulfill all the duties of a suspended 
attorney under Admission and Discipline Rule 23(26).  At the conclusion of that period, 
Respondent may petition this Court for reinstatement to the practice of law in this state, provided 
Respondent pays the costs of this proceeding, fulfills the duties of a suspended attorney, and 
satisfies the requirements for reinstatement of Admission and Discipline Rule 23(4).   
 
The costs of this proceeding are assessed against Respondent.  The hearing officer 
appointed in this case is discharged. 
 
The Court directs the Clerk to forward a copy of this opinion to the hearing officer, to the 
parties or their respective attorneys, and to all other entities entitled to notice under Admission 
and Discipline Rule 23(3)(d). 
 
 
Sullivan, Boehm, and Rucker, JJ., concur.  Shepard, C.J., and Dickson, J., dissent as to sanction 
with separate opinions. 
 
 
Shepard, Chief Justice, dissenting as to sanction. 
 
0B 
This is respondent David J. Colman’s fourth disciplinary proceeding; three of these have 
occurred since I became a member of this tribunal.  The most recent of these involved very sub-
stantial federal tax evasion, a federal felony conviction, and an eighteen-month suspension of 
Respondent’s license. 
 
 
When Respondent’s application for reinstatement was before us in 1999, I voted to read-
mit him.  I was satisfied with the conclusions reached by all but one of the members of the Dis-
ciplinary Commission that Respondent was genuinely remorseful about his misconduct, that he 
understood the nature of it, and that he could safely be recommended to the public as a person fit 
to represent them.  The present misconduct involves two different clients with very different le-
gal matters, but Respondent’s approach to both of these, as today’s opinion says, suggests that he 
saw the lawyer-client relationship “as a chance for financial gain if the opportunity arises.” 
 
 
I see Respondent’s violations in the two present counts as quite serious, and in light of 
the fact that this is Respondent’s fourth disciplinary proceeding, I have given much thought to 
whether the appropriate sanction is a suspension of three years or disbarment. 
 
 
I spent considerable time going behind the briefs Respondent’s lawyer has filed with us, 
the stern theme of which is that Respondent did not violate any of the Rules of Professional 
Conduct.  Sometimes, one’s advocate advances a position or defense more forcefully than the 
client’s own assessment might reflect.  I hoped to learn that Respondent might harbor some 
doubt about the choices he made. 
 
 
It was not to be so.  Respondent’s testimony before the Hearing Officer, the affidavits he 
made for purposes of this proceeding, and the letters from him and others revealed an insistence 
that he acted in accord with the letter and spirit of the rules. 
 
 
Having had several years to reflect on how he handled the will and guardianship of a man 
in his mid-nineties whom Respondent knew to be infirm, Respondent reasserted on the stand that 
he saw no possibility that this dual role might limit his representation or present any conflict.  
 
2
“Not that I could see or can see.”  “No, absolutely none.”  This posture of total denial is similarly 
reflected in Respondent’s contention that his elderly client’s will was not really handled by Re-
spondent but was rather under the care of attorney Watts, who never met, or spoke, or corre-
sponded with the testator. 
 
 
Respondent has taken a similar position about the client in Count III, himself hardly an 
angel.  The reasonableness of Respondent’s fees for that client’s several matters and the trans-
parency of the fee arrangement seems to be measured only by the value of the assets that could 
be mustered, whether it was by transferring the condominium or retrieving $20,000 in a paper 
bag on top of the client’s water heater (missed by the state and federal officers who searched the 
premises).  Asked on the stand about how the reasonableness of his fee might be analyzed, Re-
spondent finally said a reasonable fee was “[a]nything anybody will pay.” 
 
 
It is difficult to imagine that any future expressions of remorse about these actions could 
be persuasive, such that readmission might occur.  And, it is hard to fashion an argument for the 
public that Respondent’s behavior has been such that we might at some future date want, again, 
to tell clients they can entrust their own dearest matters to him.  I thus vote to disbar. 
 
 
 
Dickson, Justice, dissenting as to sanction. 
 
 
When the respondent was convicted of a federal felony in 1996, this Court unanimously 
voted not to disbar but only to suspend his privilege to practice law for a substantial time.  UMatter 
of ColmanU, 691 N.E.2d 1219 (Ind. 1998).  And we later unanimously agreed to reinstate him.  
UMatter of ColmanU, 714 N.E.2d 125 (Ind. 1999).   
 
On reflection, I should have, but did not, dissent to these per curiam decisions.  I choose, 
however, not to make the same mistake a third time, and agree with Chief Justice Shepard that 
the respondent should be disbarred for his misconduct.