Opinion ID: 1198162
Heading Depth: 2
Heading Rank: 1

Heading: The Melissa Doll Matter

Text: Melissa Doll was injured in an automobile accident in which she was a passenger on June 2, 1992. [1] She was twenty-four years old at the time and sustained head injuries to the extent that she was in a coma for an extended period of time. Doll incurred substantial medical expenses, some of which were paid by insurance and some by Medicaid. Doll was an acquaintance of Russell Edward Vigil, whom she met at the athletic club where she worked. Vigil, who is the respondent's son-in-law, was a lawyer at that time. Following the accident, Vigil petitioned the probate court and he was appointed Doll's temporary conservator. In June 1992, in his capacity as conservator, Vigil hired the respondent to handle Doll's personal injury claim. Vigil and the respondent had known each other for several years and had shared office space. In June 1992, Vigil was dating the respondent's daughter, whom Vigil married in October 1992. The respondent and Vigil signed a contingency fee agreement, whereby the respondent would receive 20% of any settlement amount recovered. The respondent's normal contingency fee rate is 33%. Following her release from the hospital in early August 1992, Doll moved to Pennsylvania to stay with her father, where she incurred further medical expenses. The respondent settled Doll's personal injury claim for $220,000 in September 1992. Around September 9, the respondent prepared a trust agreement for the purpose of managing the settlement funds, which was signed by Vigil as conservator. The respondent agreed to serve as the trustee. After the settlement proceeds were received on October 9, 1992, Doll endorsed the settlement check and the respondent deducted his $44,000 contingency fee. He gave Doll $12,000 as she had requested and deposited the remaining funds in his trust account, opening a bank account for the trust a week later. The trust agreement prepared by the respondent failed to include language which would shield the settlement proceeds from Medicaid claims, although he knew at the time that his client and her father intended to seek Medicaid benefits. Medicaid, which in 1992 was administered in Colorado by the department of social services, paid Doll's medical expenses that were not covered by insurance. The respondent failed to notify the department of social services of the settlement of his client's personal injury claim as required by section 26-4-403(4), 11B C.R.S. (1996 Supp.). About six months after she settled, the department of social services started to inquire about the status of the claim and sought reimbursement for the medical expenses that were covered by Medicaid. In April and October 1993, a Colorado Senior Assistant Attorney General sent letters to the respondent regarding the state's claims. The respondent did not reply. The attorney general then sent letters to Vigil asking him about the status of the personal injury matter. Thereafter, the attorney general contacted the respondent who told her the case had been settled a year earlier. The state initially claimed it was entitled to be reimbursed in the amount of $55,000, although it was later agreed that the estate should reimburse the state for $47,000. The amount was not paid at the time. Doll, now represented by another lawyer on a pro bono basis, brought an action against the respondent and Vigil in the District Court for the City and County of Denver and sought additional relief from the Denver Probate Court. In July 1994, the probate court ordered the respondent to reimburse the state $47,000 from the settlement trust funds, and he complied. [2] Under the terms of the Doll trust agreement, the respondent was given uncontrolled discretion to make investments, purchase property, make loans, mortgages, leases, and acquire or dispose of property. On or about December 30, 1992, the respondent, acting as trustee, made a loan in the amount of $25,656.66 to one of his son-in-law's former dissolution of marriage clients who needed the money to pay her former spouse for his interest in their marital residence. The loan was secured by a piece of real estate owned by the former client. The borrower made all of the scheduled payments as required under the promissory note. On or about February 17, 1993, the respondent loaned his daughter $70,000 from the Doll trust. The daughter executed a promissory note that carried a 9% interest rate, comparable to the prevailing rates at the time. The loan was secured by a first deed of trust on real property owned by the daughter in Denver, and had a value in excess of the amount of the loan. This property had previously been owned by the respondent's daughter's grandmother and great aunt, and $48,000 of the loan was used to pay off the outstanding mortgage and promissory note. The remaining $22,000 was in the form of a check to the daughter. The respondent's daughter did not make all of the scheduled payments on the note on time. On or about April 8, 1993, the respondent used funds from the trust to purchase a house from a bank which had obtained the house through foreclosure. The previous owners of the house were Vigil's parents, and, after purchasing the house as trustee, the respondent leased it back to his son-inlaw's parents. The lease was for a period of five years. The Vigils failed to make any lease payments on the house, but the respondent took no legal action against them. Because he did not receive the lease payments, the respondent did not make payments to Doll as she anticipated. In July 1994, Doll's lawyer asked the probate court for an accounting and liquidation of the investments the respondent had made. The respondent liquidated the three foregoing investments and Doll was paid all sums she was due, including interest. The action that Doll brought against the respondent individually, and as trustee of her trust, was settled in September 1996. Without admitting liability, the respondent agreed to pay her $25,165. He made an initial $5,000 payment, but the hearing board found that as of the time of the hearing in this case, the remainder, which was to have been paid by October 25, 1996, had not been paid. The hearing board found that the respondent's conduct had violated the following provisions. His failure to include language in the trust which would shield it from Medicaid liability violated DR 6-101(A)(2) (handling a legal matter without adequate preparation). The respondent's failure to notify the department of social services of the settlement of his client's personal injury claim also violated DR 6-101(A)(2). By loaning money from the trust to his daughter, purchasing Vigil's parents' former residence for the purpose of leasing it back to them, and by then failing to take any legal action against the Vigil's when they did not make lease payments, the respondent violated Colo. RPC 1.7(b) (representing a client if the representation of that client may be materially limited by the lawyer's responsibilities to another client or to a third person, or by the lawyer's own interests), and Colo. RPC 8.4(h) (engaging in conduct that adversely reflects on the lawyer's fitness to practice law). [3] Finally, the respondent's failure to make sufficient efforts to ensure that his client received timely payments from the trust violated DR 6-101(A)(3) and Colo. RPC 1.3 (neglecting a legal matter).