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People v. Dalton

Supreme Court of Colorado, Presiding Disciplinary Judge

January 15, 2016

THE PEOPLE OF THE STATE OF COLORADO, Complainant
v.
JOHN W. DALTON, Respondent

Page 127

WILLIAM R. LUCERO, PRESIDING DISCIPLINARY JUDGE. LUKE J. DANIELSON, HEARING BOARD MEMBER, DAVID A. HELMER, HEARING BOARD MEMBER.

Page 128

OPINION AND DECISION IMPOSING SANCTIONS PURSUANT TO C.R.C.P. 251.19(b)

WILLIAM R. LUCERO; LUKE J. DANIELSON; DAVID A. HELMER

John W. Dalton (" Respondent" ) violated Colo. RPC 1.5(b) by failing to explain his fee in writing to a new client. Respondent's misconduct warrants public censure.

I. PROCEDURAL HISTORY

On May 22, 2015, Erin R. Kristofco, Office of Attorney Regulation Counsel (" the People" ), filed a complaint against Respondent, alleging he violated Colo. RPC 1.5(a), 1.5(b), and 4.1(a). Respondent answered the complaint on June 15, 2015.[1] In his answer, Respondent asserted five counterclaims against the People and sought $1,000,000.00 in damages based on their " attempt to extort" him.[2] Presiding Disciplinary Judge William R. Lucero (" the PDJ" ) dismissed Respondent's counterclaims on July 30, 2015. The PDJ then held a scheduling conference on August 6, 2015, setting the disciplinary hearing for November 12, 2015.

During a status conference on September 30, 2015, Respondent announced that he intended to call Kristofco as a witness at the disciplinary hearing to show that she had conspired with a witness and engaged in criminal conduct. The PDJ denied Respondent's request, finding that Kristofco's testimony would be irrelevant to the claims alleged in the complaint. On October 21, 2015, the PDJ granted the People's request to present the absentee testimony of Julie Kersting and Mona Bellantonio.

On November 12, 2015, a Hearing Board comprising Luke J. Danielson and David A. Helmer, members of the bar, and the PDJ held a hearing pursuant to C.R.C.P. 251.18. Kristofco represented the People, and Respondent appeared pro se. During the hearing, the Hearing Board considered testimony from James Foreman, Corrine Rash, Mona Bellantonio, and Respondent.[3] The PDJ admitted stipulated exhibits S1-S14 and the People's exhibit 15.

II. FINDINGS OF FACT AND RULE VIOLATIONS

Respondent took the oath of admission and was admitted to the bar of the Colorado Supreme Court on October 6, 1975, under attorney registration number 06945. He is thus subject to the jurisdiction of the Colorado Supreme Court and the Hearing Board in this disciplinary proceeding.[4]

The Hearing Board finds that the following facts were established by clear and convincing evidence. Where not otherwise indicated,

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these facts are drawn from testimony provided at the hearing.

Findings of Fact

This case centers on Respondent's representation of James Foreman (" Foreman" ) in 2012 and 2013. Respondent is a solo practitioner in Buena Vista who employs Michol Foreman (" Michol" ) as his assistant. Foreman--Michol's relative by marriage--is a retired mechanic who is now seventy-four years old.

Foreman's mother, Leah A. Thompson, passed away in 2011. Medicaid, through Health Management Systems, Inc. (" HMS" ), notified Foreman in February 2012 that it had a claim against Thompson's estate for her nursing home care.[5] The estate's primary asset was Thompson's home in Buena Vista, and the sole heirs were Foreman and his sister. After Thompson's death, Foreman and his daughter Corrine Rash met with Julie Kersting, a local realtor, to discuss selling Thompson's house. Kersting performed a fair market analysis of the property, estimating that it was worth $150,000.00.

In July 2012, Foreman asked Respondent to probate his mother's estate and to negotiate a settlement of the Medicaid claim. Foreman brought Rash to help during this meeting because he is hard of hearing. Rash explained that she has long acted as a kind of " secretary" for her father.

Foreman and Rash, both of whom the Hearing Board found generally credible, recall Respondent saying that his legal fees would be at least $5,000.00. Rash's contemporaneous notes, which state " 5K no less for Dalton," corroborate this testimony.[6] Respondent, on the other hand, testified that he and Foreman agreed to a flat fee of $12,000.00, based on an hourly rate of $250.00. In Respondent's view, he was in fact giving Foreman a " break" because he was related to Michol. Respondent admits he never gave Foreman a written fee agreement or otherwise set forth his fee in writing.

Foreman and Rash both remember telling Respondent at their initial meeting that Kersting should be the listing agent for Thompson's home. According to Rash, Kersting is " family" and has a good reputation. Respondent testified that he understood Foreman wanted to use his own real estate agent and that Respondent did not initially object to the decision.

Respondent filed the probate action, and Foreman was appointed as personal representative of the estate. HMS filed a probate claim in the amount of $90,767.59 to recover the cost of Thompson's nursing home care.[7]

The breakdown in Respondent's relationship with Foreman and Rash appears to have begun in August 2013, after Respondent filed a notice disavowing HMS's lien and sent HMS a settlement offer.[8] The offer listed a sales price of $125,000.00 for Thompson's home, a 10% real estate commission, and attorney's fees of $8,500.00.[9] The offer estimated net proceeds of $102,000.00, to be split evenly three ways among Foreman, his sister, and HMS.[10]

Respondent testified that he listed attorney's fees in the amount of $8,500.00 in the offer because he needed to give HMS a specific number, and even though he had not created an itemized statement, he " knew how much time we had in it." The 10% commission and sale price of $125,000.00, meanwhile, appear to reflect Respondent's communication with Mona Bellantonio, another local real estate agent. By the time Respondent extended the offer of settlement, Bellantonio had performed her own fair market analysis of the Thompson house at Respondent's behest.

Respondent and Bellantonio both testified in some detail about the 10% commission. Bellantonio does not have a set commission

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of 10%. Rather, Respondent and Bellantonio testified that Respondent fixed a commission of 10% to hasten the sale of Thompson's house by motivating brokers to show the house. According to Respondent, the Buena Vista real estate market was depressed at the time, and local properties were not fetching high prices. Since real estate agents have to split commissions multiple ways, Respondent said, a house valued under $200,000.00 needs a significant commission to drive agent interest and effect a prompt sale--an important consideration when an estate is being probated. Indeed, Bellantonio testified that she had worked on several estate matters with Respondent before, each time drawing a 10% commission.

Foreman and Rash testified that Foreman never saw Respondent's settlement offer or discussed the terms with him, including the sale price, ...


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