People v. Miller
| Decision Date | 10 July 2015 |
| Docket Number | No. 14PDJ080.,14PDJ080. |
| Citation | 354 P.3d 1136 |
| Parties | The PEOPLE of the State of Colorado, Complainant, v. Paul Farris MILLER, Respondent. |
| Court | Colorado Supreme Court |
While serving as a shareholder and director of his family's corporation, Respondent violated rules governing conflicts of interest by acting both as counsel to the corporation and as an interested party in two interested transactions. Respondent did not obtain the necessary consent from the corporation to enter into the transactions but rather concealed them from the board of directors in order to obtain a personal benefit. Given the facts and circumstances of this case, the Hearing Board concludes that Respondent should be suspended for six months and shall be required to take and pass the Multistate Professional Responsibility Exam before seeking reinstatement pursuant to C.R.C.P. 251.29(b).
The People filed a complaint in this case on September 24, 2014, alleging violations of Colo. RPC 1.7(a)(2), 1.8(a), and 8.4(c). Respondent filed his answer on October 20, 2014. The PDJ held a scheduling conference on October 28, 2014, and set the hearing for April 22–24, 2015.
During the hearing, the Hearing Board considered the stipulated facts and testimony from Respondent, Mary Chapman, Peggy Levinson, Lamont Miller, Steve Miller, Anthony Van Westrum, Gayle Young, and David Zen. The PDJ admitted stipulated exhibits S1–S9.
After the close of the People's evidence, Respondent moved for a directed verdict on all of the People's claims. Examining the evidence in the light most favorable to the People, the PDJ denied Respondent's motion.1 Respondent renewed his motion on April 28, 2015, and the PDJ denied it on May 6, 2015.
Respondent took the oath of admission and was admitted to the bar of the Colorado Supreme Court on October 25, 1989, under attorney registration number 18925.2 He is thus subject to the jurisdiction of the Colorado Supreme Court and the Hearing Board in these disciplinary proceedings.3
The Hearing Board considered the testimony of each witness, the stipulated facts, and all admitted exhibits and finds the following facts were established by clear and convincing evidence. Where not otherwise indicated, these facts are drawn from testimony provided at the hearing.
Respondent and his four siblings—Mary Chapman (formally Hiner), Lamont Miller, Steve Miller, and Peggy Levinson (formally Miller)—are the children of the late Margaret Patricia Miller (known as Patricia Miller). Together, they owned and operated a family business, Shamrock, Inc. Shamrock was incorporated in 1978, and the bylaws were enacted that same year.4 Ms. Miller and her five children were the sole shareholders of Shamrock and members of its board of directors (“the Board”).5 Ms. Miller was the president and Respondent the vice president of Shamrock.6
Shamrock's principal assets were a mobile home park, a duplex, and a TD Ameritrade investment account. Ms. Miller's residence was located on the mobile home park property. Ms. Miller's lot also included two small studio apartments, both with a bedroom and a bath but no kitchen. These units rented for $300.00 per month. Steve Miller has lived in one half of the duplex for over twenty years, and at various times other siblings, including Respondent, have resided in the other half.
Shamrock's articles of incorporation, enacted in July 1978, permit an individual director to be a party to or to be financially interested in a contract or transaction with Shamrock “provided that the fact that he ... is so interested shall be disclosed or shall have been known to the board of directors, or a majority thereof.”7
Respondent, a certified public accountant, was admitted to the Colorado bar in 1989. Thereafter, he served as Shamrock's attorney.8 Respondent never entered into a written fee agreement with Shamrock.9 In 1999, Respondent moved to American Samoa and opened a law practice. He remained there until 2003, when he returned to Colorado to help his mother with Shamrock. Respondent testified that once he returned, he and his mother entered into an oral agreement under which he would manage Shamrock.
Until late 2010, Ms. Miller managed Shamrock's day-to-day operations.10 According to Mary Chapman, these duties included accounting, preparing checks, managing the mobile home park, supervising tenants, and collecting rents. Mary Chapman said that her mother refused to pay herself a salary for this work, despite her children's urging. Ms. Miller's health declined in September 2010, and she had trouble reading documents and preparing checks due to macular degeneration
. Steve Miller acted as his mother's fulltime caretaker after she became ill.
Steve Miller testified that in September and October 2010, his mother's memory was bad and, due to bone and muscle deterioration, she was bedridden.
As of October 7, 2010, Ms. Miller could not manage Shamrock. At this point, Mary Chapman testified, her siblings who lived nearby “pitched in to help” with Shamrock's operations, including by collecting rent and making deposits. None of her siblings, as far as Mary Chapman knew, were able to manage Shamrock fulltime, nor did Ms. Miller or the Board appoint anyone in an official capacity as Shamrock's manager. Ms. Miller passed away on December 13, 2010.11
On September 4, 2010, Respondent, Steve Miller, and Mary Chapman had a heated argument concerning the contents of their mother's estate, including a safe at their mother's house, which they planned to inventory. Respondent's and his siblings' testimony made clear that by this time their relationship was hostile.
Three days later, on September 7, 2010, Respondent executed an agreement appointing himself as Shamrock's manager. The management agreement was signed by Respondent as vice president and by Ms. Miller as president.12 It was also signed by a witness, who was one of Ms. Miller's caregivers at the time.13 Respondent drafted the management agreement as Shamrock's attorney. He did not disclose this agreement to his siblings.
The terms of the management agreement included in part:
On October 14, 2010, Respondent transferred $8,000.00 from Shamrock's TD Ameritrade account into his COLTAF account.15 Over time, he paid himself this $8,000.00 as bonuses under the terms of the management agreement.16
On March 15, 2011, Respondent advised his brother Lamont Miller via email that Ms. Miller had promised he could manage Shamrock for a period of five years.17 In response, Lamont Miller asked Respondent to show him the “written instrument documenting a five-year contract engaging and authorizing [him] to manage Shamrock.”18 Respondent did not produce the management agreement.19
Respondent then paid himself another bonus on March 31, 2011. On that day, Respondent transferred $4,312.81 to his COLTAF account from Shamrock's TD Ameritrade account.20 Respondent contends that he earned $1,100.00 of these funds as bonuses under the management agreement.21
Each of Respondent's siblings testified persuasively at the hearing that they were unaware of the management agreement until April 2011. They first saw the agreement on April 4, 2011, when Respondent gave their attorney a copy of the agreement. Respondent's siblings stated that the management agreement was never received,...
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