Title: People v. Pernell

State: colorado

Issuer: Colorado Supreme Court

Document:

86 P.3d 429 The PEOPLE of the State of Colorado, Complainant, v. Kevin Derek PERNELL, Respondent. No. 03PDJ951. Supreme Court of Colorado. February 12, 2004. Opinion issued by a Hearing Board consisting of Presiding Officer EDWARD L. ZORN, and Hearing Board members CORINNE MARTINEZ-CASIAS and MARK D. SULLIVAN, both members of the bar. A sanctions hearing pursuant to C.R.C.P. 251.15 was held on January 15, 2004, before a Hearing Board consisting of Presiding Officer Edward L. Zorn, and two Hearing Board members, Corinne Martinez-Casias and Mark D. Sullivan, both members of the bar. James S. Sudler, Assistant Attorney Regulation Counsel, represented the People of the State of Colorado (the "People"). Respondent Kevin Derek Pernell ("Pernell") did not appear either in person or by counsel. The Complaint in this action was filed July 22, 2003. The Citation and Complaint were sent by regular and certified mail to Pernell on July 22, 2003. A proof of service was filed August 14, 2003, establishing that service was effected via regular and certified mail to Pernell's registered business and home addresses. Service was therefore proper pursuant to C.R.C.P. 251.32(b). Pernell did not file an Answer to the Complaint. On August 15, 2003, the People filed a Motion for Default. Pernell did not respond. On October 15, 2003, the PDJ issued an Order granting the Motion in part and denying the Motion in part. Default was denied on claim five and claim fourteen both alleging violations of Colo. RPC 1.16(d), which were thereafter dismissed.[1] Default was granted on the remaining claims, which were deemed established, and establishing all factual allegations. See People v. Bichards, 748 P.2d 341 (Colo. 1987). At the sanctions hearing, exhibits 1 through 3 were offered by the People and admitted into evidence. The Hearing Board considered the People's argument, the facts established by the entry of default, the exhibits admitted, assessed the testimony and credibility of the witnesses and made the following findings of fact which were established by clear and convincing evidence. Pernell has taken and subscribed to the oath of admission, was admitted to the bar of the Supreme Court on December 17, 1993, and is registered upon the official records of this court, registration number 23626. Pernell is subject to the jurisdiction of this court pursuant to C.R.C.P. 251.1(b). Pernell was administratively suspended from the practice of law effective June 13, 2003 for failing to comply with his Continuing Legal Education requirements. All factual allegations set forth in the Complaint were deemed admitted by the entry of default. The facts set forth in the Complaint are therefore established by clear and convincing evidence. See Complaint attached hereto as exhibit 1. The within disciplinary matter arises from Pernell's representation of five separate clients. The entry of default established the following violations of the Colorado Rules of Professional Conduct ("Colo.RPC") involving the five clients: claims one, nine, and seventeen alleged three separate violations of Colo. RPC 1.1 (an attorney shall provide competent representation to a client); claim two, six, ten, thirteen, and eighteen alleged five separate allegations of Colo. RPC 1.3 (an attorney shall not neglect a legal matter entrusted to that attorney)[2]; claims three, seven, and eight, alleged three separate violations of Colo. RPC 1.4(a)[3] (an attorney shall keep a client reasonably informed about the status of a matter and promptly comply with reasonable requests for information); claim four alleged a violation of Colo. RPC 1.15(a)(in connection with a representation, an attorney shall held property of clients or third persons that is in the attorney's possession separate from the attorney's own property); claims four, eleven, twelve, and sixteen alleged four separate violations of Colo. RPC 8.4(c)(engaging in dishonesty, deceit, fraud or misrepresentation), and claim fifteen alleged a violation of Colo. RPC 3.4(c)(an attorney shall not knowingly disobey an obligation under the rules of a tribunal) and Colo. RPC 8.1(b)(an attorney in connection with a disciplinary... matter shall not knowingly fail to respond reasonably to a lawful demand for information from an admission or disciplinary authority) constituting grounds for discipline pursuant to C.R.C.P. 251.5(d). In the Thomas-Criswell Matter (claims one, two, three, and four), the client hired Pernell to represent her in an adoption matter against a state entity. She paid Pernell an advance cost retainer. Pernell filed a notice of claim and sent it to the state authorities but did not advise the client that he had done so. The client endeavored to communicate with Pernell without success for five months. Approximately five months following his acceptance of the case, Pernell met with the client and informed her that he would file the complaint within the next two weeks. At no time did Pernell file the complaint. One month later the client wrote to Pernell requesting to know his intentions with regard to his representation, stating that if he did not intend to represent her he should return her file and the cost retainer. Following the client's filing a Request for Investigation with the Office of Attorney Regulation Counsel, Pernell called the client and left a message stating that he needed additional help on the case and admitting that he did not have the cost retainer she had paid him. The client subsequently terminated Pernell's representation and requested the return of her advance cost retainer and file by a date certain. Approximately one month later, Pernell refunded the cost retainer to the client and returned her file. By failing to associate with competent co-counsel or decline representation, by failing to file a complaint and remaining the client's attorney when he knew he lacked the necessary skills to represent her, Pernell violated Colo. RPC 1.1. By failing to fully investigate the matter and failing to file a complaint, Pernell violated Colo. RPC 1.3. By failing to respond to the client's attempts to contact him and failing to respond to her letters and advise her of the status of the case, Pernell violated Colo. RPC 1.4(a). By accepting a cost deposit, failing to perform the agreed upon tasks over an extended period of time, including the filing of a complaint, and failing to return the funds to the client when requested, Pernell engaged in knowing conversion of the client's funds in violation of Colo. RPC 8.4(c).[4] Pernell failed to hold the client funds separate from his own in violation of Colo. RPC 1.15(a). In the Green Matter, the client hired Pernell to have certain liens removed from the client's property. The client tendered a fee retainer to Pernell. Thereafter, over a period of two months, the client attempted to contact Pernell by various means. He left Pernell approximately fifteen voicemail messages and Pernell did not respond to them. Following the client's filing a Request for Investigation, Pernell returned the full fee retainer to the client. By neglecting to take the legal action requested by the client, Pernell violated Colo. RPC 1.3. By failing to communicate with the client following his acceptance of the case, Pernell violated Colo. RPC 1.4(a). In the Mason Matter, the client first hired Pernell to represent him in a C.R.Crim. P. 35(b) matter and paid him a fee retainer. Pernell filed a motion on the client's behalf to request that, the court reconsider the sentence. The court ruled on the motion but Pernell was unaware that the court had ruled because he had moved his offices and failed to advise the court. The client tendered an additional amount of funds after Pernell affirmed that additional funds would assist him in resolving the matter. Pernell promised to provide an itemized bill of his services. He failed to do so. For the next six months, Pernell informed the client that he had not heard from the court. The client finally wrote directly to the court and found out that the motion had been denied some six months earlier. During Pernell's representation of the client on the 35(b) motion, Pernell agreed to handle a paternity matter for the client. Pernell accepted an additional amount for the paternity matter. The client requested that Pernell confirm to the authorities that the client was not contesting paternity. Pernell assured the client that he would take care of the matter. Thereafter, an order issued stating that the client had defaulted in the proceeding. The client attempted to reach Pernell over several weeks, requesting return of his funds. Pernell confirmed that he would return the amount requested by the client. Pernell did not return the funds and never contacted the client. Pernell's failing to adequately communicate with the client in both the criminal action and the paternity action constituted a violation of Colo. RPC 1.4(a). Pernell's failing to check the court's file to determine what action was taken in the criminal case and failing to take any action in the paternity case constituted a violation of Colo. RPC 1.1. Pernell's failing to take any action in the paternity case, and to take the necessary steps to determine whether there had been a ruling in the criminal case constituted neglect in violation of Colo. RPC 1.3. Pernell accepted additional funds in the criminal matter to assist him in resolving the case for his client, accepted funds in the paternity action, performed no services for the amount tendered, and failed to return the funds when requested. Pernell's handling of the client's funds constituted knowing conversion in violation of Colo. RPC 8.4(c). In the Roundtree Matter, the client hired Pernell to defend his company in a lawsuit. Pernell filed an answer and counterclaim on behalf of Artistic. Four days prior to the trial date, Pernell moved for a continuance based on his busy calendar and his inability to adequately prepare. At the same time, Pernell moved to withdraw based on a conflict of interest with the client. The court granted the motion to continue but did not rule on the motion to withdraw. Eight months later, a few days before the trial was set to commence, Pernell filed another motion to continue raising again the issue he initially raised in the motion to withdraw. The motion was granted and the trial was rescheduled. The court granted the request for an award of attorney's fees against Pernell and his client based on Pernell's waiting to raise the conflict of interest issue until a few days before trial and causing the opponent's costs of trial preparation. By failing to prepare for trial and failing to move to withdraw until shortly before the second trial setting, Pernell neglected the client's matter in violation of Colo. RPC 1.3. By failing to respond to a request for information from a disciplinary agency, Pernell knowingly disobeyed an obligation under the rules of a tribunal in violation of Colo. RPC 3.4(c) and Colo. RPC 8.1(b). In the Barrington Matter, the client hired Pernell to represent him in a case involving his receiving a citation for driving under the influence of alcohol. Pernell agreed to perform the services for a certain sum, and the client tendered that amount. A date had been set requiring the client to appear in court. Pernell informed the client that he would change the date, and assured him he did not need to appear. The client did not appear. Thereafter the client made repeated attempts to contact Pernell without success. He finally discovered from the court that it had issued a bench warrant for his arrest. The client was fined and ordered to perform community service. The client requested that Pernell return his funds. Pernell has not refunded to the client the funds he was paid. Pernell's accepting funds from the client, failing to perform the requested work, and failing to refund the monies paid to him by the client when requested amounts to knowing conversion in violation of Colo. RPC 8.4(c). Pernell failed to provide competent representation to the client in violation of Colo. RPC 1.1. He neglected the client's matter in violation of Colo. RPC 1.3 by failing to take any action on the client's behalf. The ABA Standards for Imposing Lawyer Sanctions (1991 and Supp.1992) ("ABA Standards") are the guiding authority for selecting the appropriate sanction to impose for lawyer misconduct. In re Roose, 69 P.3d 43, 47 (Colo.2003), modified, reh'g denied. ABA Standards § 4.11 provides: Pernell's knowing conversion of funds in the Thomas-Criswell matter, the Mason matter, and the Barrington matter meets the criteria for disbarment under ABA Standard § 4.11. Colorado case law is consistent with the ABA Standards in holding that disbarment is the presumed sanction for knowing conversion of the client's property. See People v. Varallo, 913 P.2d 1, 11 (1996). See also, People v. Wiedman, 36 P.3d 785, 788 (Colo.1999) (holding that a lawyer's knowing misappropriation of funds, whether belonging to a client or a third party, warrants disbarment except in the presence of extraordinary factors in mitigation). In each of the three incidents, Pernell accepted client funds, failed to perform the work the client had requested and failed to return the funds. In each of the three cases, the client suffered injury or potential injury. In the Thomas-Criswell matter, the client's claim was barred by the statute of limitations. Pernell's failing to reasonably pursue her matter, including filing a complaint on her behalf, forever barred her ability to pursue the matter.[5] In the Mason matter, Pernell's actions resulted in the court's entering a default against the client in a paternity proceeding with financial consequences that may have been impacted if the client were adequately represented. In the Barrington matter, a bench warrant issued for the client's arrest due to Pernell's failing to change a court date and advising the client that it was unnecessary that he appear. The remaining violations of the Rules of Professional Conduct do not impact the sanction of disbarment based on Pernell's three incidents of knowing conversion of client funds. They do, however, underscore that disbarment is warranted. See ABA Standard 4.41(b)(stating that disbarment is generally appropriate where a lawyer knowingly fails to perform services for a client and causes serious or potentially serious injury to a client); ABA Standard § 6.22(stating that suspension is generally appropriate when a lawyer knowingly violates a court order or rule, and there is injury or potential injury to a client or a party, or interference or potential interference with a legal proceeding). Determination of the appropriate sanction requires the Hearing Board to consider aggravating and mitigating factors pursuant to ABA Standards 9.22 and 9.32 respectively. Since Pernell did not participate in these proceedings, no mitigating factors were established, although the People confirmed that Pernell did not have a prior disciplinary history, considered a mitigating factor pursuant to ABA Standard 9.32(a). The lack of a prior disciplinary history does not lessen the Hearing Board's decision that disbarment is warranted. In aggravation, Pernell engaged in a pattern of misconduct, ABA Standard 9.22(c); he engaged in multiple offenses, see id, at 9.22(d); he has demonstrated indifference to making restitution, see id. at 9.22(j), and he failed to cooperate in the disciplinary proceeding, see id. at 9.22(e). The Hearing Board further finds that restitution is warranted. The entry of default established that Pernell was paid $5,750 for his representation in the criminal matter and the paternity matter. Of this amount, the People request that Pernell pay Mr. Carlos Mason $3,250 of this amount. The People further request the amount of $500 to be paid as restitution to Mr. Scott Barrington, an amount that is supported in the Complaint. It is therefore ORDERED: James S. Sudler, # 08019 Assistant Regulation Counsel John S. Gleason, # 15011 Regulation Counsel Attorneys for Complaint 600 17th Street, Suit 200-South Denver, Colorado 80202 THIS COMPLAINT is filed pursuant to the authority of C.R.C.P. 251.9 through 251.14, and it is alleged as follows: General Allegations in Thomas-Criswell Matter Paragraphs 1 through 16 are incorporated herein as if fully set forth. Each of these failures by the respondent constitutes a separate incident of failure to provide competent legal representation, as do all of them together. WHEREFORE, the complainant prays at the conclusion hereof. [A Lawyer Shall Act With Reasonable Diligence and Promptness in Representing a Client and Shall Not Neglect a Legal Matter Entrusted to that Lawyer Colo. RPC 1.3] Paragraphs 1 through 16 are incorporated herein as if fully set forth. The respondent was required to complete each of the specific tasks described above. Each of these failures by the respondent constitutes a separate incident of lack of diligence and promptness, and/or neglect, as do all of them together. WHEREFORE, the complainant prays at the conclusion hereof. [A Lawyer Shall Keep A Client Reasonably Informed About the Status of a Matter, Promptly Comply With Reasonable Requests for Information, and Explain a Matter to the Extent Reasonably Necessary to Permit the Client to Make Informed Decisions Regarding the RepresentationColo. RPC 1.4(a) and (b)] Paragraphs 1 through 16 are incorporated herein as if fully set forth. The respondent was required to complete each of the specific tasks described above. Each of these failures by the respondent constitutes a separate incident of lack of diligence and promptness, and/or neglect, as do all of them together. WHEREFORE, the complainant prays at the conclusion hereof. [A Lawyer Shall Keep A Client Reasonably Informed About the Status of a Matter, Promptly Comply With Reasonable Requests for Information, and Explain a Matter to the Extent Reasonably Necessary to Permit the Client to Make Informed Decisions Regarding the RepresentationColo. RPC 1.4(a) and (b)] Paragraphs 1 through 16 are incorporated herein as if fully set forth. Each of these failures to communicate adequately with the client constitutes a separate violation of Colo. RPC 1.4(a) as do all of them together. WHEREFORE, the complainant prays at the conclusion hereof. (Failure to Keep Client or Third Party Funds Separate From the Lawyer's Own Property and Conversion of Client or Third Party FundsColo. RPC 1.15(a) and Conversion Colo. RPC 8.4(c)) Paragraphs 1 through 16 are incorporated herein as if fully set forth. WHEREFORE, the complainant prays at the conclusion hereof. [Upon Termination, a Lawyer Shall Take Steps to Protect a Client's Interest and Surrender Papers and Property to the ClientColo. RPC 1.16(d)] Paragraphs 1 through 16 are incorporated herein as if fully set forth. WHEREFORE, the complainant prays at the conclusion hereof. [A Lawyer Shall Act With Reasonable Diligence and Promptness in Representing a Client and Shall Not Neglect a Legal Matter Entrusted to that Lawyer Colo. RPC 1.3] Paragraphs 52 through 59 are incorporated herein as if fully set forth. WHEREFORE, the complainant prays at the conclusion hereof. [A Lawyer Shall Keep A Client Reasonably Informed About the Status of a Matter, Promptly Comply With Reasonable Requests for InformationColo. RPC 1.4(a)] Paragraphs 52 through 59 are incorporated herein as if fully set forth. Each of these failures to communicate adequately with the client constitutes a separate violation of Colo. RPC 1.4(a) as do all of them together. WHEREFORE, the complainant prays at the conclusion hereof. [A Lawyer Shall Keep A Client Reasonably Informed About the Status of a Matter, Promptly Comply With Reasonable Requests for Information, and Explain a Matter to the Extent Reasonably Necessary to Permit the Client to Make Informed Decisions Regarding the RepresentationColo. RPC 1.4(a)] Paragraphs 72 through 95 are incorporated herein as if fully set forth. Each of these failures to communicate adequately with the client constitutes a separate violation of Colo. RPC 1.4(a) as do all of them together. WHEREFORE, the complaint prays at the conclusion hereof. Paragraphs 72 through 95 are incorporated herein as if fully set forth. Each of these failure by the respondent constitutes a separate incident of failure to provide competent legal representation, as do all of them together. WHEREFORE, the complaint prays at the conclusion hereof. [A Lawyer Shall Act With Reasonable Diligence and Promptness in Representing a Client and Shall Not Neglect a Legal Matter Entrusted to that Lawyer Colo. RPC 1.3] Paragraphs 72 through 95 are incorporated herein as if fully set forth. The respondent was required to complete each of the specific tasks described above. Each of these failures by the respondent constitutes a separate incident of lack of diligence and promptness, and/or neglect, as do all of them together. WHEREFORE, the complainant prays at the conclusion hereof. [A Lawyer Shall Not Engage In Conduct Involving Dishonesty, Fraud, Deceit Or Misrepresentation (Knowing Conversion) Colo. RPC 8.4(c)] Paragraphs 72 through 95 are incorporated herein. WHEREFORE, the complainant prays at the conclusion hereof. [A Lawyer Shall Not Engage In Conduct Involving Dishonesty, Fraud, Deceit Or Misrepresentation (Knowing Conversion) Colo. RPC 8.4(c)] Paragraphs 72 through 95 are incorporated herein. WHEREFORE, the complainant prays at the conclusion hereof. [A Lawyer Shall Act With Reasonable Diligence and Promptness in Representing a Client and Shall Not Neglect a Legal Matter Entrusted to that Lawyer Colo. RPC 1.3] Paragraphs 136 through 150 are incorporated herein as if fully set forth. WHEREFORE, the complainant prays at the conclusion hereof. [Upon Termination, a Lawyer Shall Take Steps to Protect a Client's Interest and Surrender Papers and Property to the ClientColo. RPC 1.16(d)] Paragraphs 136 through 150 are incorporated herein as if fully set forth. WHEREFORE, the complainant prays at the conclusion hereof. [An Attorney Shall Respond to a Request By the Regulation Counsel for Information Necessary to Carry Out the Performance of Regulation Counsel's DutyC.R.C.P. 251.5(d); A Lawyer Shall Not Knowingly Disebey an Obligation Under the Rules of a TribunalColo. RPC 3.4(c); A Lawyer Shall Not Knowingly Fail to Respond Reasonably to a Lawful Demand for Information From a Disciplinary AuthorityColo. RPC 8.1(b)] Paragraphs 136 through 150 are incorporated herein. By such conduct; the respondent violated C.R.C.P. 251.5(d). WHEREFORE, the complainant prays at the conclusion hereof. [A Lawyer Shall Not Engage In Conduct Involving Dishonesty, Fraud, Deceit Or Misrepresentation (Knowing Conversion) Colo. RPC 8.4(c)] Paragraphs 176 through 185 are incorporated herein. WHEREFORE, the complainant prays at the conclusion hereof. Paragraphs 176 through 185 are incorporated herein as if fully set forth. [A Lawyer Shall Act With Reasonable Diligence and Promptness in Representing a Client and Shall Not Neglect a Legal Matter Entrusted to that Lawyer Colo. RPC 1.3] Paragraphs 176 through 185 are incorporated herein as if fully set forth. WHEREFORE, the people pray that the respondent be found to have engaged in misconduct under C.R.C.P. 2515 and the Colorado Rules/of Professional Conduct as specified above; the respondent be appropriately disciplined for such misconduct; the respondent be required to refund unearned or unreasonable fees to his clients and/or the client protection fund pursuant to C.R.C.P. 252.14(b), and/or provide restitution to third parties; the respondent be required to take any other remedial action appropriate under the circumstances; and the respondent be assessed the costs of this proceeding. [1] A portion of claim nine alleging a violation of Colo. RPC 1.1 was also denied in part. See Paragraph 104(d) of the Complaint. [2] The Complaint did not allege that the extent of Pernell's neglect and/or failure to communicate rose to the level of abandonment; accordingly, the Hearing Board does not address the issue of abandonment. [3] Claim three references a violation of Colo. RPC 1.4(b) but only in the paragraph heading; accordingly it was not addressed in the Order of Default and is not addressed here. [4] In the Thomas-Criswell matter, Pernell did refund the full amount paid to him following the client's filing a Request for Investigation with the Office of Attorney Regulation Counsel. The payment of restitution following a client's filing a Request for Investigation is considered neither as aggravation or mitigation. See People v. Brady, 923 P.2d 887, 890 (Colo. 1996), citing People v. Pittam, 889 P.2d 678, 680 (Colo.1995); ABA Standard 9.4(a). [5] The fact that Ms. Thomas-Criswell suffered this harm was brought to the Hearing Board's attention through Ms. Thomas-Criswell's oral complaining witness statement at the sanction hearing. Although not included in the Complaint or introduced into evidence, the Hearing Board may consider this fact in aggravation in deciding the appropriate sanction.