Opinion ID: 1169136
Heading Depth: 1
Heading Rank: 3

Heading: Misrepresentations Regarding Foreclosure of Farm Property

Text: In approximately July 1979, Ida Mae and Ben Marquez met with the respondent to discuss the difficulty experienced by Mr. and Mrs. Marquez in making the mortgage payments on a $675,000 farm-equipment loan that they had obtained from Prudential Life Insurance Company. The respondent offered to manage or sell their farm at a profit or to obtain additional financing. In mid-1981, the respondent arranged for one of his business clients, Bill O'Brate, to purchase the land and the machinery in exchange for cash to be paid in the future and for O'Brate's promise to satisfy the debts of Mr. and Mrs. Marquez, including the Prudential loan. The respondent then prepared a sales agreement which provided in part that Buyer is not assuming and agreeing to pay any indebtedness on the property but takes all of the property subject to said indebtedness and agrees that if the buyer does not pay any such indebtedness, then all of the subject property will be reconveyed to the sellers with no additional liens or interest attaching to the subject property. In July 1981, Mr. and Mrs. Marquez signed the sales agreement and transferred the land and the machinery to O'Brate by warranty deed and bill of sale. They believed, in reliance upon representations made to them by the respondent, that this sale would preclude foreclosure of the property. On November 20, 1981, however, Prudential began foreclosure proceedings on the land and the machinery, claiming that Mr. and Mrs. Marquez had failed to make their mortgage payments when due, that they had failed to pay all taxes before the taxes became delinquent, and that they had abandoned the property. After foreclosure, Mr. and Mrs. Marquez were unable to redeem the property. The respondent's conduct in this matter violated DR1-102(A)(1) (violating a disciplinary rule), DR1-102(A)(4) (engaging in conduct involving dishonesty, fraud, deceit, or misrepresentation), DR1-102(A)(6) (engaging in conduct that adversely reflects on fitness to practice law), DR5-105(B) (continuing employment by multiple clients who have differing interests), DR7-101(A)(2) (intentionally failing to carry out a contract of employment), and DR7-101(A)(3) (intentionally prejudicing or damaging client), and thus grounds for discipline exist under C.R. C.P. 241.6(1) (any act or omission that violates the provisions of the Code of Professional Responsibility) and C.R.C.P. 241.6(3) (any act or omission that violates the highest standards of honesty, justice, or morality).