452 P.3d 203 (Colo.O.P.D.J. 2019), 18PDJ055, People v. Halling

Docket Nº:18PDJ055
Citation:452 P.3d 203
Opinion Judge:WILLIAM R. LUCERO, PRESIDING DISCIPLINARY JUDGE
Party Name:The PEOPLE of the State of Colorado, Complainant, v. Dale B. HALLING, #25320, Respondent.
Case Date:March 20, 2019
Court:Office of the Presiding Disciplinary Judge of the Supreme Court of Colorado
 
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452 P.3d 203 (Colo.O.P.D.J. 2019)

The PEOPLE of the State of Colorado, Complainant,

v.

Dale B. HALLING, #25320, Respondent.

No. 18PDJ055

Office of the Presiding Disciplinary Judge of the Supreme Court of Colorado

March 20, 2019

Page 204

OPINION AND DECISION IMPOSING SANCTIONS UNDER C.R.C.P. 251.19(c)

WILLIAM R. LUCERO, PRESIDING DISCIPLINARY JUDGE

Dale B. Halling ("Respondent") was hired by three separate clients to patent their inventions. Respondent failed to diligently pursue the patents and to keep each client informed about the status of those patents. He neglected to hold client funds in trust and, most critically, he abandoned two clients and converted two clients’ funds earmarked as filing fees. Respondent failed to participate in the disciplinary investigation into his conduct and to participate in this disciplinary proceeding. Respondent’s conduct in violation of Colo. RPC 1.3, 1.4(a)(3), 1.15A(a), 1.16(d), 8.1(b), and 8.4(c), warrants disbarment.

I. PROCEDURAL HISTORY

On April 6, 2018, the Colorado Supreme Court immediately suspended Respondent from the practice of law for his failure to cooperate in the disciplinary investigation. Bryon M. Large, Office of Attorney Regulation Counsel ("the People"), filed a complaint with Presiding Disciplinary Judge William R. Lucero ("the Court") on September 5, 2018. That same day, the People sent copies of the complaint and citation by certified mail to Respondent’s registered business address.1 Respondent failed to file an answer. By order dated November 5, 2018, the Court entered default, thereby deeming admitted the allegations and claims in the complaint.

On February 21, 2019, the Court held a sanctions hearing under C.R.C.P. 251.15(b). Large represented the People; Respondent did not appear. During the hearing, the

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Court considered telephone testimony from Chris Howell2 and in-person testimony from Marcus Caldwell and Scott Densmore, and admitted the People’s exhibits 1-2.

II. ESTABLISHED FACTS AND RULE VIOLATIONS

The Court adopts and incorporates by reference the averments in the admitted complaint, presented here in condensed form. Respondent was admitted to practice law in Colorado on March 16, 1995, under attorney registration number 25320. He is thus subject to the Court’s jurisdiction in this disciplinary proceeding.3

Caldwell Matter

In July 2011, Marcus Caldwell hired Respondent to patent his invention known as the SuperVee. On July 8, 2011, Respondent executed and sent a fee letter to Caldwell.

On August 25, 2011, Respondent filed with the United States Patent and Trademark Office ("the USPTO") Caldwell’s patent application as well as a notice and power of attorney, identifying himself as Caldwell’s representative and designating himself as the point of contact with the USPTO. On September 8, the USPTO sent Respondent a notice to correct Caldwell’s application, citing deficiencies. Two months later, the USPTO deemed Caldwell’s application abandoned for failing to respond to its correction notice.

On May 18, 2012, the USPTO emailed and mailed the abandonment notice to Respondent, reiterating that Caldwell’s application had been abandoned for failure to reply to the notice of September 2011. Respondent offered to revive the application and to file for a provisional patent at no cost to Caldwell.

On February 13, 2014, Respondent petitioned the USPTO to revive Caldwell’s application. On February 25, the USPTO notified Respondent that his petition had been granted and that it would continue to process Caldwell’s application. On May 1, the USPTO sent Respondent a notification, requiring a response.

On December 15, 2014, the USPTO deemed Caldwell’s application abandoned for failure to respond to its notice dated May 1, 2014. Respondent once again petitioned to revive Caldwell’s application at his own expense. The petition was granted on October 22, 2015. On November 4, 2016, the USPTO emailed Respondent a non-final rejection notice. Later that month, the USPTO received an undeliverable envelope that it had sent to Respondent at his Colorado Springs address.

In January 2017, Caldwell reached out to Respondent regarding the status of his patent application. He was unable to contact Respondent so he contacted the USPTO. He learned for the first time that Respondent had failed to properly process his patent application. Caldwell left several voicemail messages and sent several emails to Respondent between January and March 2017. But Respondent failed to respond.

On June 14, 2017, the People were able to contact Respondent in their investigation of his conduct. On June 20, Respondent— for a third time— sent to the USPTO and paid for a petition to revive Caldwell’s application.

On August 2, 2017, the USPTO notified Respondent that it had once again deemed Caldwell’s application abandoned. The USPTO indicated that the application had been abandoned for failure to properly respond to its notification of November 2016.

In February 2018, the People made several additional attempts to contact Respondent via telephone, mail, and email during their investigation. They were unsuccessful in reaching Respondent.

Respondent’s failures placed Caldwell’s invention at risk in the marketplace because it was not protected by a patent. Caldwell has generated approximately $ 250,000.00 in revenue from his design.

In this matter, Respondent violated three Rules of Professional Conduct:

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• By failing to act diligently in representing Caldwell before the USPTO and by abandoning Caldwell, Respondent violated Colo. RPC 1.3. This rule requires a lawyer to act with reasonable diligence and promptness when representing a client.

• Respondent violated Colo. RPC 1.4(a)(3), which requires a lawyer to reasonably communicate with a client, in two ways: by failing to advise Caldwell that the USPTO generated notices in his case that required a response and by failing to further advise Caldwell that the USPTO had deemed his patent application abandoned.

• By knowingly failing to respond to the People’s numerous requests for information, Respondent violated Colo. RPC 8.1(b). This rule requires a lawyer to respond to a lawful demand for information from a disciplinary authority.

Densmore Matter

On October 31, 2013, an unrelated third party filed a provisional patent application for an invention known as the "Door Deadbolt Reinforcement Device."[4] After that application was filed, Scott Densmore invented a device that would work in tandem with the deadbolt reinforcement device, known as the "Deadbolt Locking Device Manual Safety."5 In July 2014, Densmore communicated with Respondent about possible representation. Respondent agreed to represent Densmore.

On July 31, 2014, Respondent told Densmore that he had filed with the USPTO a provisional patent application. On August 2, Respondent sent Densmore a copy of the provisional application. On September 3, Respondent gave Densmore a fee engagement letter, stating that he would prepare and file Densmore’s patent application for a $ 5,000.00 flat fee plus an additional $ 1,715.00 in filing fees. Densmore paid Respondent the full $ 6,715.00 by September 26.

On October 14, 2014, Respondent filed Densmore’s second application with the USPTO and paid a $ 400.00 filing fee. Respondent and his wife, Kaila Halling, were listed as the filers.

On October 28, 2014, the USPTO notified Respondent that several items were missing from Densmore’s second application and set a deadline of two months to provide the missing items. Respondent did not respond to the notice or inform Densmore of it.

On December 10, 2014, Ms. Halling emailed Densmore copies of the original filing receipt and the formal drawings for his files. The two-month deadline to provide missing items had not yet expired, but Respondent did not inform Densmore that any additional action was required on his application.

On June 11, 2015, Densmore emailed Respondent, advising him that he wanted to add clarifications to his pending application. Respondent responded on June 22 but did not mention the USPTOs notice of missing items. On June 30...

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