In re Montoya

• Decision Date: 09 November 2011
• Docket Number: No. 32,397.,32,397.
• Citation: 2011 -NMSC- 042,266 P.3d 11,150 N.M. 731
• Parties: In the Matter of Dennis W. MONTOYA,An Attorney Suspended from the Practice of Law in the Courts of the State of New Mexico.
• Court: New Mexico Supreme Court

150 N.M. 731

2011 -NMSC- 042

266 P.3d 11

In the Matter of Dennis W. MONTOYA,An Attorney Suspended from the Practice of Law in the Courts of the State of New Mexico.

No. 32,397.

Supreme Court of New Mexico.

Nov. 9, 2011.

William D. Slease, Joel L. Widman, Albuquerque, NM, for Disciplinary Board.

Rodey, Dickason, Sloan, Akin & Robb, P.A., Charles J. Vigil, Brenda M. Saiz, Theresa W. Parrish, Albuquerque, NM, for Respondent.

OPINION

PER CURIAM.

{1} Almost three years ago, a state district judge initiated a disciplinary complaint against attorney Dennis Montoya alleging numerous, serious ethical violations arising out of Montoya's legal representation of several clients in regard to an accidental death. Over time, that one disciplinary complaint became many, as several federal judges in separate proceedings publically reprimanded Montoya for numerous, well-documented ethical lapses. When considered as a whole, all these complaints set forth a deeply troubling mosaic of ethical misconduct that, for reasons set forth herein, unquestionably calls for discipline and seriously calls into question Montoya's fitness to practice law. For reasons beyond the scope of this Opinion, resolution of these complaints was delayed inexcusably before the Disciplinary Board, which enabled Montoya to claim an appearance of innocence for far too long. As a result, this Court has undertaken substantial revisions to our disciplinary process to ensure that no such delays will reoccur.

BACKGROUND

{2} In 2010, counsel for the New Mexico Disciplinary Board charged Montoya with seventy-four violations of the Rules of Professional Conduct. Disciplinary counsel consolidated the charges into three disciplinary actions. Eventually, Montoya stipulated to facts and violations charged in each of the three actions. Based on the stipulations, disciplinary counsel and Montoya came to conditional agreements regarding discipline and made a joint motion to consolidate the three disciplinary actions into one. This Court adopted the consolidated agreement with some significant modifications to the proposed discipline that will be discussed later in this Opinion. The following recitation of events and violations derives from facts outlined in the stipulations that support the admissions made in the conditional agreements and reasonable inferences drawn therefrom.

{3} We divide this Opinion into three parts: the state cases, the federal cases, and the discipline.

THE STATE CASES

{4} The first disciplinary action against Montoya derived from several state claims (the state cases) related to a tire failure that killed a New Mexico resident (Decedent). The state cases involved recovery of Decedent's life insurance proceeds, workers' compensation benefits, and wrongful death proceeds. The woman with whom Decedent lived at the time of his death (Girlfriend) retained Montoya for legal representation in the state cases.

{5} As a preliminary matter, it is important to understand the relationships between Decedent, Girlfriend, and the two children. Decedent and Girlfriend lived together for a time in Utah. Though they never married, Decedent and Girlfriend held themselves out to be common-law spouses. Girlfriend had a daughter (Girlfriend's Daughter) from a previous relationship who Decedent never adopted. At some point, Decedent, Girlfriend, and Girlfriend's Daughter moved from Utah to reside in New Mexico, where Decedent and Girlfriend had a son (Son). When Decedent died, Son was approximately three years old.

{6} During the state cases, Montoya represented not only Girlfriend, but also Girlfriend's Daughter and Son. As we shall discuss, these parties' legal interests were hopelessly conflicted. While it is not clear at exactly what point Montoya knew that Girlfriend was not Decedent's wife, it is clear that Montoya should have known before he recovered funds in any of the state cases.

Insurance Case

{7} Decedent died intestate and had a life insurance policy that did not list any beneficiaries. In order to convince the life insurance company to allocate proceeds to Girlfriend, Montoya filed an application for Informal Appointment of Personal Representative with the Eleventh Judicial District Court. In that application, he asserted that Decedent died intestate, that Girlfriend was Decedent's wife, and that Girlfriend's Daughter was Decedent's issue. Neither of the latter assertions were true. Based on Montoya's misrepresentations, the district court appointed Girlfriend as the personal representative of Decedent's estate and, without a hearing, issued an order. Portions of that order, prepared by Montoya, declared that Girlfriend was Decedent's wife, that Son and Girlfriend's Daughter were Decedent's minor children, and that Girlfriend was Decedent's “heir-in-law.” Only the statement regarding Son was true.

{8} Montoya's paralegal submitted the court order and an affidavit signed by Girlfriend, each representing to the life insurance company that Decedent and Girlfriend had a common-law marriage pursuant to Utah law. Montoya admits that these documents were submitted for the purpose of establishing Girlfriend's claim to the insurance proceeds. As a result, the life insurance proceeds, $73,806.97, were paid directly to Girlfriend, rather than to Decedent's estate.

{9} If the life insurance proceeds had been designated to Decedent's estate, rather than to Girlfriend in her individual capacity, the proceeds would have passed according to the New Mexico's intestate succession statute. See NMSA 1978, § 45–2–101(A) (1993) (“Any part of a decedent's estate not effectively disposed of by will passes by intestate succession to the decedent's heirs as prescribed in the Uniform Probate Code, except as modified by the decedent's will.” (citation omitted)). Under the intestate succession statute, if a decedent has issue but no spouse, the estate will pass to the decedent's descendants. NMSA 1978, § 45–2–103 (1993) (amended 2011); see also NMSA 1978, § 45–2–102 (1975) (“Share of the spouse.” (emphasis omitted)). Thus, Son was Decedent's only statutory beneficiary.

{10} Rather than setting aside proceeds for Son through Decedent's estate, Girlfriend received the entire amount in her individual capacity. Girlfriend then paid $25,000 of that amount directly to Montoya for payment of costs of litigation of the state cases. Some unquantified and unaccounted for portion of the remaining $48,806.97 was used for Son's clothing, education, and basic needs. Girlfriend never accounted for any of the $48,806.97.

Workers' Compensation Case

{11} Montoya filed a workers' compensation claim for the “Estate of [Decedent],” which named Girlfriend as both Decedent's personal representative and wife and named Girlfriend's Daughter and Son as Decedent's children. The Workers' Compensation Act “ only ” permits persons prescribed as dependents therein to receive compensation benefits. NMSA 1978, § 52–1–17 (1989). The only persons prescribed are dependent children of certain ages, widows or widowers, dependent parents, and dependent grandchildren. See id. Montoya never advised the Workers' Compensation Administration that Girlfriend's Daughter was not Decedent's child.

{12} Montoya's representation in the workers' compensation case resulted in a lump-sum workers' compensation settlement of $55,000. From that amount, Montoya distributed $23,135.25 directly to Girlfriend in her individual capacity. No part of the settlement was set aside for Son or paid to Decedent's estate. Montoya apparently retained the remainder of the settlement, $31,864.75, for costs and fees.

Wrongful Death Cases

{13} Montoya also brought a lawsuit against the tire manufacturer and tire vendor that made and sold the tire that failed during the accident that caused Decedent's death. He brought the suit on behalf of the Wrongful Death Estate of the Decedent and on behalf of Girlfriend, Son, and Girlfriend's Daughter for individual loss-of-consortium claims. The Wrongful Death Act provides that proceeds from a judgment shall be distributed entirely to a decedent's child, if there is a child and no “surviving spouse.” NMSA 1978, § 41–2–3(A), (B) (2001). The complaint and the amended complaint signed by Montoya specifically alleged that Girlfriend was Decedent's lawful wife. In the course of the lawsuit, Montoya made representations about Decedent's “wife and two children.” The pleadings never advised the court that Girlfriend's Daughter was not Decedent's child or that Montoya was relying on any theory of Girlfriend being a common-law wife under Utah law.

{14} Montoya settled the wrongful death claim against the tire vendor for a substantial sum. Montoya retained approximately $22,250 of the total amount under a 33.33% contingency agreement. The remainder, $45,000, was distributed entirely to Girlfriend in her individual capacity; none of that amount went to Decedent's estate or Son. It is stipulated that a portion of the proceeds, unquantified and unaccounted for, was used for the clothing, education, and basic needs of Son.

{15} Subsequently, Montoya negotiated a settlement of the claim against the tire manufacturer for $550,000. He initially proposed allocating $450,000 of that amount to Girlfriend and $100,000 to Son. This settlement was the first for which Montoya sought court approval. From the total $550,000, Montoya initially planned to receive 40% as a contingency fee, but eventually lowered that amount. The settlement proposal was brought before District Judge Linda Vanzi, who appointed a guardian ad litem (GAL) to represent Son's interests. GAL began to investigate the proposed settlement and to question the previous settlements (life insurance, workers' compensation, and the wrongful death claim against the tire vendor) from which no money had been specifically set aside for Son.

{16} Although Montoya had consistently represented Girlfriend as Decedent's wife in his wrongful death pleadings, he later...