Source: https://cbaclelegalconnection.com/tag/conflict-of-interest/
Timestamp: 2019-04-22 18:06:34+00:00

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The Colorado Court of Appeals issued its opinion in People v. Villanueva on Thursday, May 5, 2016.
Benjamin Garcia-Diaz’s wife called the police for a domestic violence incident, and authorized a search of the residence. Police found $30,000 worth of cocaine during the search. Garcia-Diaz retained Charles Elliot to defend the domestic violence charges, and although the prosecution moved to add drug charges, the motion was still pending when Garcia-Diaz disappeared in March 2005. His body was found in September 2005, and Martin Villanueva was arrested for the murder.
Villanueva retained Elliot, who had represented him in the past. Elliot advised Villanueva that the prosecution might seek to disqualify him because of his prior representation with Garcia-Diaz, and later Elliot entered into an agreement with the prosecution where neither party would mention his prior representation of Garcia-Diaz. The trial court was never told about the conflict of interest.
At trial in 2006, the prosecution’s theory of the case was that Garcia-Diaz was about to enter into an agreement with the prosecution and would have laid the blame on Villanueva, his supplier, so Villanueva shot him at a crucial time. In fact, as Elliot knew, Garcia-Diaz had not negotiated at all with the prosecution and was not preparing to blame Villanueva, but because of his agreement Elliot could not rebut the prosecution’s theory.
Villanueva was eventually convicted and sentenced to life in prison without the possibility of parole. His conviction was affirmed on direct appeal. He then filed a Crim. P. 35(c) motion alleging that Elliot’s performance was deficient because he had a conflict of interest that adversely affected his trial performance. The district court denied the postconviction motion.
On appeal, the court of appeals evaluated Villanueva’s claims under the framework set forth in West v. People, 2015 CO 5, which clarified the correct standard for evaluating conflict of interest claims. Under West, to show an adverse effect from a conflict of interest, the defendant must identify a plausible defense or strategy, show that the alternative strategy was objectively reasonable, and establish that counsel’s failure to pursue the alternative strategy was linked to the conflict. Villanueva contended that Elliot was ineffective for failing to rebut the prosecution’s theory of the case. The trial court determined that because Villanueva showed only a potential conflict, not an actual conflict, his argument failed. However, under West, Villanueva needed only to show a potential conflict.
The court of appeals remanded for the district court to consider whether Elliot’s duties to Garcia-Diaz were inherently in conflict with Villanueva’s suggested alternative strategy of rebutting the prosecution’s evidence regarding whether Garcia-Diaz was about to snitch on Villanueva.
The Colorado Court of Appeals issued its opinion in Rocky Mountain Exploration, Inc. v. Davis Graham & Stubbs, LLP on Thursday, March 10, 2016.
Rocky Mountain Exploration (RMEI) owned oil and gas interests in leaseholds in North Dakota. In 2006, it sold 80% of its leasehold interest to Tracker. In 2009, Tracker attempted to purchase RMEI’s remaining 20% interest, but it was unsuccessful and relations between Tracker and RMEI became strained. Tracker then agreed to purchase the interest together with Lario, with Lario acting as Tracker’s agent in the purchase so that RMEI would not refuse to deal with Tracker.
Davis Graham & Stubbs (DGS) represented Tracker in the deal but refused to represent Lario due to a conflict of interest. However, DGS handled the negotiations for Lario and Tracker because of its representation of Tracker. Lario variously referred to DGS as its attorney, and DGS made no attempt to correct Lario’s mistake.
After the sale closed and RMEI discovered Tracker’s interest, RMEI sued Lario and Tracker, their officers individually, and DGS. All parties except DGS settled. RMEI asserted fraud and civil conspiracy claims against DGS based on the use of Lario as a “strawman” purchaser in the transaction. DGS moved for summary judgment, contending that RMEI could not establish a duty owed by DGS to support the fraud claims, and that RMEI had failed to establish that Tracker owed RMEI fiduciary duties. The district court agreed with DGS and granted its motion, also ruling that the use of a strawman purchaser is not fraudulent.
The Colorado Court of Appeals affirmed, noting that agents are frequently used in business transactions and there is nothing fraudulent about using a strawman purchaser. The court of appeals noted that RMEI’s situation did not fit the narrow circumstances allowing a third party to avoid a contract, and that RMEI could have insisted on a contractual prohibition on assignment of interests.
The court of appeals affirmed the district court’s grant of summary judgment to DGS.
The Colorado Supreme Court issued its opinion in West v. People on Tuesday, January 20, 2015.
Conflicts of Interest—Post-Conviction and Extraordinary Relief—Ineffective Assistance of Counsel.
In these appeals, defendants alleged that their trial counsel labored under conflicts of interest because counsel concurrently or successively represented trial witnesses against them. The court of appeals remanded both cases to the trial courts to determine whether, under Cuyler v. Sullivan, 446 U.S. 335 (1980), defendants’ attorneys labored under an “actual conflict.” Defendants separately petitioned for review of the court of appeals’ judgments, asking the court to clarify whether the Sullivan standard requires a defendant to demonstrate, in addition to a conflict of interest, that an “adverse effect” arose from the conflict.
In People v. Castro, 657 P.2d 932 (Colo. 1983), the Supreme Court held that an adverse effect was inherent in a “real and substantial” conflict of interest and thus a separate showing was unnecessary. In this consolidated opinion, the Court overruled Castro because the U.S. Supreme Court recently held that an actual conflict, under the Sullivan standard, requires a defendant to show both a conflict of interest and an adverse effect on his or her attorney’s performance.
The Court held that to show an adverse effect, a defendant must (1) identify a plausible alternative defense strategy or tactic that trial counsel could have pursued; (2) show that the alternative strategy or tactic was objectively reasonable under the facts known to counsel at the time of the strategic decision; and (3) establish that counsel’s failure to pursue the strategy or tactic was linked to the actual conflict. The Court therefore affirmed the court of appeals’ judgments in part and instructed the trial courts to consider whether, under this framework, defendants received ineffective assistance of counsel by virtue of their attorneys’ alleged conflicts and are therefore entitled to new trials.
The Colorado Court of Appeals issued its opinion in People in Interest of A.M.C. on Thursday, March 13, 2014.
On October 23, 2013, the Denver Department of Human Health Services (Department) filed a petition in dependency and neglect, asserting that the minor child was dependent or neglected by respondent parents. At a custody hearing eleven days later before a magistrate, the respondent mother denied the allegations and requested a jury trial.
On November 5, 2013, the Department disclosed to mother and her attorney that a paralegal employed by the city attorney’s human services legal staff was the aunt of the father. Even though the father’s whereabouts were unknown and he had not participated in the case, mother asserted to the juvenile court on November 12 that this created a conflict of interest. The juvenile court agreed and ordered appointment of a special prosecutor.
On November 20, the Department filed a motion for reconsideration. The juvenile court orally denied the motion on December 10. The Department filed a motion for certification of the disqualification order for the purpose of interlocutory appeal on December 23, 2013. The juvenile court granted the motion on January 2, 2014, and the Department filed its petition in the Court on January 9, 2014.
The Court of Appeals questioned the timeliness of the motion for certification and requested that the parties provide briefs on the issue. The Department submitted a brief. The Court held that the disqualification order was not timely sought and that the Department had not demonstrated good cause to enlarge the time prescribed in CAR 4.2.
The Department asserted it motion for certification was timely filed because its motion for reconsideration does not toll the time period for filing, the oral order was on November 12, and therefore the motion for certification was due by November 26 but was not filed until December 23. CAR 26(b) allows the deadline in CAR 4.2(d) to be extended “for good cause shown.” To obtain such an extension, a party must establish that its failure to meet the applicable deadline was due to “excusable neglect.” The Court found that the Department’s belief that the motion for reconsideration tolled the time period did not constitute excusable neglect. The interlocutory appeal was dismissed.
The Tenth Circuit published its opinion in United States v. Flood on Thursday, May 9, 2013.
In January 2003, the Securities and Exchange Commission (SEC) filed a civil suit against ClearOne Communications (ClearOne), as well as the company’s CEO, Frances Flood, and CFO, Susie Strohm. The SEC alleged that Ms. Flood and her codefendants had employed a scheme to defraud, falsely filed with the SEC, committed securities fraud, kept false records, and aided and abetted false bookkeeping. The law firm of Snow Christensen & Martineau (SCM) was retained to represent Ms. Flood. The parties were at all times represented by separate counsel. During the SEC proceedings, Ms. Flood, Ms. Strohm, and ClearOne entered into a Joint Defense Privilege and Confidentiality Agreement (Joint Defense Agreement), which enabled them to share documents, litigation strategies, and other information without waiving attorney-client privilege. Ultimately, Ms. Flood settled with the SEC.
In April 2008, ClearOne ceased paying Ms. Flood’s attorney’s fees. Ms. Flood, represented by SCM, brought suit against ClearOne to compel payment. SCM continued to represent Ms. Flood in the criminal proceedings.
In January 2009, the court granted a preliminary injunction against ClearOne, ordering ClearOne to pay Ms. Flood’s attorney’s fees. ClearOne initially complied, but stopped making payments. SCM filed a motion to compel payment. Shortly before the criminal trial concluded, ClearOne made another payment. The jury found Ms. Flood guilty on all counts.
Ms. Flood then filed her § 2255 motion, arguing that she received ineffective assistance of counsel because her attorneys labored under a conflict of interest. The district court denied her motion. Ms. Flood appealed to the Tenth Circuit, arguing that: 1) conflicts of interest adversely affected her trial counsel’s performance; 2) the district court abused its discretion by denying her motions for an evidentiary hearing, discovery, and judicial notice; and 3) she was denied effective assistance of counsel under Strickland.
The Tenth Circuit granted a Certificate of Appealability limited to issues one and two.
The Sixth Amendment guarantees the “right to representation that is free from conflicts of interest.” Wood v. Georgia, 450 U.S. 261, 271 (1981). To prevail on an ineffective assistance claim the defendant must show that her counsel’s performance was deficient and that prejudice resulted. Strickland v. Washington, 466 U.S. 668, 692 (1984). However, “[p]rejudice is presumed only if the defendant demonstrates that counsel ‘actively represented conflicting interests’ and that ‘an actual conflict of interest adversely affected [her] lawyer’s performance.’” Strickland, 466 U.S. at 692.
After a thorough review of the record, the Tenth Circuit found that Ms. Flood offered no evidence that would suggest SCM served ClearOne’s interests instead of hers. The Court simply could not find a conflict of interest based on the facts.
Further, having carefully reviewed the entire record, including the trial transcript, the Tenth Circuit found no abuse of discretion by the district court in denying an evidentiary hearing. Nor did the Court find any abuse of discretion in the district court’s denial of Ms. Flood’s motions for discovery and judicial notice.
The Colorado Supreme Court issued its opinion in In re People v. Nozolino on Monday, March 25, 2013.
Disqualification—Waiver of Right to Conflict—Free Counsel.
The Supreme Court held that the trial court abused its discretion when it disqualified defendant’s counsel of choice, Rosalie Roy and Kimberly Chalmers, from representing him in this case. The Court analyzed the factors critical to the determination of whether defendant must be allowed to waive conflict-free representation, and found that the balance weighed in favor of defendant’s preference for continued representation by Roy and Chalmers. Accordingly, the Court made the rule absolute and remanded the case for an advisement on the record so that defendant may decide whether to waive conflict-free representation.
The Colorado Supreme Court issued its opinion in In re Liebnow v. Boston Enterprises, Inc. on Monday, February 4, 2013.
Pro Hac Vice Admission—Colo. RPC 1.7 and 1.10—Confidential Client Information.
The Supreme Court affirmed the district court’s order disqualifying plaintiff’s motion for pro hac vice admission of out-of-state counsel, where defense counsel previously had consulted out-of-state counsel at the same firm on the same case. The Court held that the trial court did not abuse its discretion in finding that (1) the consultation between defense counsel and out-of-state counsel concerned confidential information, which created a conflict under Colo. RPC 1.7(a)(2); and (2) the conflict was not waivable under Colo. RPC 1.7(b) because allowing the consulted attorney to represent plaintiff would undermine the fairness of the trial. The Court further held that the district court did not abuse its discretion in imputing the conflict to the rest of the firm under Colo. RPC 1.10 and disqualifying the firm.
The Tenth Circuit published its opinion in United States v. Schneider on Wednesday, January 16, 2013.
Dr. Stephen Schneider was a doctor of osteopathic medicine and his wife, Ms. Schneider, was a licensed nurse (“the Schneiders”). They owned and operated Schneider Medical Clinic in Haysville, Kansas, where they provided pain management treatment, including the prescription of controlled substances. A Kansas grand jury indicted the Schneiders. At trial, they were convicted of several counts of unlawful drug distribution, health care fraud, and money laundering arising from their operation of the Medical Clinic. The district court sentenced Dr. Schneider to 360 months’ imprisonment, and Ms. Schneider to 396 months’ imprisonment. The Schneiders appeal their convictions, alleging that (1) they were denied the right to conflict-free representation; (2) the district court erroneously admitted expert testimony; (3) the district court improperly instructed the jury; and (4) there was insufficient evidence to support the charge of health care fraud resulting in death.
(1) The Schneiders argue they were denied the right to conflict-free representation.
The Tenth Circuit held Dr. and Ms. Schneider waived all potential conflicts voluntarily, knowingly, and intelligently, based on the totality of the circumstances, following two hearings on potential conflicts.
(2) The Schneiders contend the district court erroneously admitted expert testimony.
Dr. Parran, an expert witness for the government, testified “the clinic was at fault” for illegal drug distribution. Dr. Parran also testified that, from his review of the records, the Schneiders ran a “dishonest practice.” Another expert witness for the government, Dr. Jorgensen, opined that the Schneiders’ health care fraud resulted in patients’ deaths, and that he believed the Schneiders filed fraudulent claims. The Schneiders objected to this testimony.
The rules of evidence allow an expert to opine on an “ultimate issue” to be decided by the trier of fact. Fed. R. Evid. 704(a). However, an expert may not simply tell the jury what result it should reach; he or she must explain the basis for any summary opinion. Here, the Tenth Circuit found no error in the admission of Drs. Parran and Jorgensen’s testimony. Neither doctor told the jury to reach a particular verdict, i.e., that Dr. Schneider was guilty. Rather, after explaining at great length their observations from the evidence, they summarized their findings in their testimony.
(3) Defendants allege the district court improperly instructed the jury.
The Tenth Circuit found no abuse of discretion in the jury instructions objected to at trial, considering de novo the instructions as a whole to determine whether they accurately informed the jury of the governing law. The Tenth Circuit found no plain error in the instructions objected to for the first time on appeal.
(4) The Schneiders argue there was insufficient evidence to support the charge of health care fraud resulting in death.
After viewing the evidence in the light most favorable to the verdict to ascertain whether any rational trier of fact could have found the defendant guilty beyond a reasonable doubt, the Tenth Circuit held sufficient evidence supported the convictions on these counts.

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