In re Colosi

• Decision Date: 20 July 2022
• Docket Number: A21-0152
• Citation: 977 N.W.2d 802
• Parties: IN RE Petition for DISCIPLINARY ACTION AGAINST Geoffrey Robert COLOSI, a Minnesota Attorney, Registration No. 0336026.
• Court: Minnesota Supreme Court

977 N.W.2d 802

IN RE Petition for DISCIPLINARY ACTION AGAINST Geoffrey Robert COLOSI, a Minnesota Attorney, Registration No. 0336026.

A21-0152

Supreme Court of Minnesota.

Filed: July 20, 2022

Susan M. Humiston, Director, Nicole S. Frank, Senior Assistant Director, Office of Lawyers Professional Responsibility, Saint Paul, Minnesota, for petitioner.

Benjamin E. Myers, Dallas, Texas, for respondent.

OPINION

PER CURIAM.

The Director of the Office of Lawyers Professional Responsibility filed a petition for disciplinary action against respondent Geoffrey Robert Colosi. The petition alleged that Colosi breached his fiduciary duties while serving as trustee and attorney-in-fact for G.C., a vulnerable person, and then attempted to conceal his activities during district court proceedings; failed to cooperate during the Director's investigation; and misused his trust account. After a

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hearing, the referee concluded that Colosi committed the alleged misconduct and that four aggravating and no mitigating factors were present. The referee recommended that Colosi be disbarred. We conclude that the referee did not abuse his discretion when making evidentiary rulings and that his factual findings and conclusions that Colosi committed misconduct are not clearly erroneous. Based on Colosi's misconduct, we disbar him from the practice of law.

FACTS

Colosi was admitted to practice law in Minnesota in 2004. He has no prior disciplinary history. The Director filed a petition for disciplinary action against Colosi, alleging that he committed professional misconduct in one specific client matter and another general matter. The client matter involved a pattern of dishonesty as a fiduciary to a vulnerable adult and obstruction, bad faith, and noncooperation during the Director's investigation. The general matter involved Colosi's misuse of his trust account and additional noncooperation.

The client matter involved G.C., who retained Colosi in August 2007 to modify her trust and to act as the trustee and her attorney-in-fact via a statutory short form power of attorney. Colosi and G.C. executed a written fee agreement in which G.C. accepted that Colosi would charge a fee of $175 per hour for performing legal services. The fee agreement did not specify how much Colosi would charge for non-legal services. The fee agreement required Colosi to provide G.C. with monthly billing statements. Additionally, the power of attorney required Colosi to provide quarterly accountings. On August 31, 2007, G.C. signed a trust amendment, naming Colosi as the trustee and Wells Fargo as the successor trustee. On the same day, she sold all her assets to the trust.¹

Although G.C. lived independently in her Edina home when Colosi first assumed his fiduciary role, this changed after G.C. fell in September 2008. As a result of the fall, G.C. was admitted to the hospital and then into a senior living community. G.C.’s condition worsened over her first year in the senior living community, and by June 2009, she was diagnosed with dementia. In May 2010, she was moved into the memory care unit of a different care center after another fall and hip replacement surgery. G.C.’s condition continued to deteriorate.

When Colosi took control of G.C.’s finances in September 2008, she had a checking and a savings account with a combined balance of more than $100,000. G.C. had sold a business property in February 2008 for $337,500. Colosi represented her in that transaction, but he failed to maintain an accounting of where the approximately $300,670 in net proceeds went between the time of sale in February 2008 and the time Colosi took over G.C.’s accounts in September.

In addition to the business property, G.C. owned her home in Edina. Soon after G.C. moved into the senior living community, Colosi hired S.M., an attorney who had an office in the same building as Colosi, to conduct a market analysis on G.C.’s home. The market analysis valued the house at $264,000. Colosi recommended that G.C. rent out the property, and G.C. agreed. Starting in fall 2008, M.J., Colosi's former law school classmate, began renting the house for $800 per month.

977 N.W.2d 807

On July 1, 2010, Colosi and M.J. entered into a contract for deed for the sale of G.C.’s home for $150,000. The contract required M.J. to make payments of $800 per month toward the purchase price with a closing date in June 2012. It also provided that if the balloon payment was not made, M.J. would not be entitled to the property. The contract provided that the home would be sold as-is.

Despite the contractual requirement that the house was sold in "as-is" condition, Colosi used G.C.’s funds to pay to replace the roof of the house. He hired S.M., the same attorney who conducted the market analysis of the home, to take care of the roof repairs and paid him almost $12,000 for this work. Colosi also paid S.M. $1,750 in April 2012, but the record does not explain what services or goods S.M. provided. In addition, S.M. received $12,000 in deferred commission and $1,500 in attorney fees when the sale of G.C.’s home closed. In total, Colosi paid S.M. over $25,000 from G.C.’s trust for multiple business dealings related to G.C.’s home.

The sale of the home to M.J. did not close until December 2012, even though the contract terms mandated a June 2012 closing date. At closing, M.J. paid approximately $175,000 for the home, despite it being valued on the loan application at $300,000. The net proceeds from the sale were about $130,000, which Colosi did not deposit into the trust until February 2013.

Throughout the time that Colosi served as G.C.’s trustee and attorney-in-fact, he billed G.C. for time to perform mostly non-legal and non-fiduciary services at his legal services rate of $175 per hour. He paid himself directly from G.C.’s bank accounts via cash or check. In total, Colosi received over $260,000 in payments from G.C. between September 2008 and some time in 2016, when G.C.’s accounts were depleted. Payments to Colosi averaged about $35,000 per year and $3,000 per month. At Colosi's legal services rate, the amount billed would have reflected about 1,500 hours of legal service, averaging over 15 hours per month. But Colosi provided no evidence that he actually did any legal work for G.C. over this time period. Rather, the types of services for which he billed G.C. consisted primarily of his time visiting her at the facility where she was living.²

In December 2016, G.C.’s healthcare agent, D.R., discovered that G.C. did not have enough money in her account to pay for a simple haircut. After unsuccessful attempts to contact Colosi, D.R. filed a petition in district court as G.C.’s healthcare agent to compel an accounting of the estate. The district court held a hearing on February 7, 2017, in which the court ordered Colosi to provide, within 30 days, a complete accounting of G.C.’s estate starting from August 2007.

In response to the order, Colosi provided D.R. and G.C.’s court-appointed attorney with his accounting, an inventory of G.C.’s personal property, and his billing narratives, which started in September 2008. The accounting failed to show starting balances, included deposits from unknown sources, and omitted transactions, including the sale of G.C.’s key assets—her business property and residence. The inventory did not thoroughly describe G.C.’s property, nor did it attach any values to the properties. The diary-like billing narratives consistently detailed non-legal services, mostly hours-long social visits with G.C. or errands on behalf of G.C. By February

977 N.W.2d 808

2009, Colosi stopped typing his narratives, and instead handwrote them until 2016, after which point no entries exist. The narratives do not describe any legal services Colosi performed on G.C.’s behalf.

The repetitive nature of the narratives and the lack of quarterly reconciling of accounts suggest that Colosi completed the accounting after the fact and failed to provide both the invoices required by his retainer agreement with G.C. and the quarterly accounting required by the power of attorney. Colosi failed to provide any bank statements, tax returns, receipts, title transfers, recorded documents, or any other documents to account for G.C.’s estate. After several unsuccessful attempts to communicate with Colosi directly, in June 2017, G.C.’s court-appointed attorney copied Colosi on a letter to the court requesting documentation of the sale of G.C.’s properties and copies of her tax returns. Colosi never provided these documents.

In October 2017, Integrity Financial Solutions, LLC, a professional fiduciary, petitioned for appointment as G.C.’s guardian and conservator. The petition was granted in February...