People v. Fulton
| Decision Date | 24 September 2021 |
| Docket Number | Case Number: 21PDJ006 |
| Citation | 501 P.3d 857 |
| Parties | The PEOPLE of the State of Colorado, Complainant, v. David Kenniston FULTON Sr., #33729, Respondent. |
| Court | Colorado Supreme Court |
David Kenniston Fulton Sr. ("Respondent") provided over $75,000.00 to his clients in a series of transactions without first obtaining the clients’ written and informed consent to his role in the transactions, including whether he represented them in the transactions, thereby creating conflicts of interest. He deprived the clients of written advisements about the transactions and of opportunities to seek independent counsel. He also failed to communicate in writing the basis or rate of his fee and expenses before he began representing the clients. Respondent's misconduct warrants suspension from the practice of law for a period of six months, all to be stayed upon Respondent's successful completion of a two-year period of probation.
On January 26, 2021, David Shaw of the Office of Attorney Regulation Counsel ("the People") filed a complaint against Respondent with Presiding Disciplinary Judge William R. Lucero ("the PDJ"), alleging violations of Colo. RPC 1.5(b) (Claim I) and Colo. RPC 1.8(a) (Claim II). After securing an extension of time, Respondent answered the complaint on March 2, 2021, and the parties scheduled a hearing for August 10 and 11, 2021.
On July 26, 2021, the parties jointly filed a stipulation to all facts and rule violations alleged in the complaint. In the stipulation, Respondent admitted to violating Colo. RPC 1.5(b) and Colo. RPC 1.8(a). The next day, the PDJ granted the stipulation and converted the two-day disciplinary hearing to a one-day hearing on the sanctions.1
On August 10, 2021, a Hearing Board comprising the PDJ, citizen member Professor Matthew T. Daly, and lawyer Darla Scranton Specht held a remote hearing on the sanctions under C.R.C.P. 251.18 via the Zoom videoconferencing platform. Alan C. Obye represented the People,2 and Respondent appeared pro se. During the hearing, the Hearing Board heard the testimony of Respondent and his partner, Elizabeth Fulton. The complaining witness, Jonathan Gorst, also testified.3 Respondent argued that Mr. Gorst's counsel, Ryan Jarvis, should not be allowed to observe the hearing, as Jarvis is opposing counsel in the ongoing civil litigation between Respondent and the Gorsts.
The PDJ allowed Jarvis to observe the hearing, which is open to the public.4
During the hearing, the Hearing Board considered stipulated exhibits 4, 5, and 7.5 Following the hearing, on August 17, 2021, the People submitted additional exhibits after conferring with Respondent:6
On August 20, 2021, the PDJ denied Respondent's request to introduce additional posthearing exhibits.10
The Hearing Board finds the following facts and rule violations established by clear and convincing evidence based on the parties’ stipulation to the facts and rule violations.
Respondent was admitted to practice law in Colorado on May 14, 2002, under attorney registration number 33729.12 He is thus subject to the jurisdiction of the Colorado Supreme Court and the Hearing Board in this disciplinary proceeding.13
Respondent was a solo practitioner and real estate agent in Glenwood Springs before recently moving to Lakewood.14 During the relevant timeframe, Jonathan and Marisa Gorst lived in Glenwood Springs.15 The Gorsts began using Respondent for legal matters and real estate transactions in 2016.16 That year, Respondent represented Mr. Gorst and his entity, Riviera Supper Club, Inc., in a deal to purchase a local piano bar.17 Respondent charged Mr. Gorst and Riviera Supper Club $1,500.00 for his services.18 He did not provide a written statement to Mr. Gorst or to Riviera Supper Club setting forth the basis of his fee or his expenses before representing them in the transaction.19 Nor did he provide such a statement within a reasonable time after commencing the representation.20
In connection with the representation, Respondent lent $30,100.00 to Mr. Gorst and to Riviera Supper Club.21 The parties used a deed of trust to secure the loan.22 Respondent drafted a loan agreement and a deed of trust, which he attached to an email containing the following language:
Respondent included nothing in the loan agreement, the deed of trust, or the accompanying email that stated whether he was representing the Gorsts in the transaction.24
In late 2017, the Gorsts retained Respondent for both real estate and legal services related to locating and purchasing a new home.25 Respondent represented the Gorsts continuously from that time through late 2018.26 He did not provide them with a written basis or rate of his fee and expenses before representing them in the matter.27 Nor did he do so within a reasonable time after commencing the representation.28
On September 10, 2017, Respondent sent an email to a real estate agent conveying the Gorsts’ offer to purchase a home.29 In the email, Respondent wrote, "[a]s I am [the Gorsts’] attorney also, you may consider this a binding offer by me as their attorney in fact."30 Respondent's signature line in the email read, 31
In January 2018, Respondent drafted and entered into an agreement and restatement to the loan agreement with Mr. Gorst and Riviera Supper Club.32 The new loan balance was $23,985.47 and the terms of repayment changed from the previous agreement.33 Respondent did not advise Mr. Gorst or Riviera Supper Club in writing that the advice of independent counsel was desirable for the transaction.34 Neither Mr. Gorst nor Riviera Supper Club gave informed consent in writing to Respondent's role in the transaction, including whether Respondent was representing them in the matter.35
On February 4, 2018, Respondent gave the Gorsts a draft letter of intent to purchase a home.36 The letter stated that "[b]uyer is represented [by] David K. Fulton Sr.[,] a licensed Real Estate Agent and Attorney."37
On March 3, 2018, the Gorsts contracted to sell their home at 1108 Minter Avenue in Glenwood Springs.38 Respondent did not represent the Gorsts in the sale.39 The Gorsts also owned a vacant lot next to the home.40 Bank of Colorado held a deed of trust on the vacant lot.41 The balance on the deed of trust was $17,239.93.42 On March 22, 2018, Respondent went to Bank of Colorado and paid off the balance.43 He has claimed this was a loan to the Gorsts.44 There was, however, no written agreement for the transaction.45 Further, Respondent did not inform the Gorsts in writing that the advice of independent counsel was desirable for the transaction.46 He also did not give them a reasonable opportunity to seek the advice of independent counsel before he paid off the deed of trust.47 The Gorsts did not give informed consent in writing to the essential terms of the transaction and to Respondent's role in the transaction, including whether he was representing them in the transaction.48
Also on March 22, 2018, the prospective buyers of the Gorsts’ property at 1108 Minter Avenue raised inspection objections.49 Even though Respondent was not representing the Gorsts in connection with the home sale, he gave $18,000.00 to the buyers’ real estate agent to resolve the objections.50 Respondent claimed that the payment was a loan.51 There was no written agreement for the transaction, however.52 Respondent did not advise the Gorsts in writing that the advice of independent counsel was desirable for this transaction.53 Nor did he provide them a reasonable opportunity to seek the advice of independent counsel before he paid the funds to the buyers’ real estate agent for the purposes of resolving the objections.54 In addition, the Gorsts did not give informed consent in writing to the essential terms of the transaction and to Respondent's role in the matter, including whether Respondent was representing them.55 The prospective buyers eventually cancelled the contract and returned the $18,000.00.56
Respondent was, however, representing the Gorsts in the potential purchase of a new home at 48 Creekside Court in Glenwood Springs.57 The Gorsts contracted to buy the home on March 3, 2018.58 On March 20, 2018, Respondent signed an inspection objection notice on their behalf.59 His signature described him as 60 On March 27, 2018, Respondent sent an inspection resolution form to the home's real estate agent.61 Respondent signed the inspection resolution form as the Gorsts’ "Attorney in Fact."62 On March 30, 2018, Respondent sent Mr. Gorst a lease that he had prepared for the property at 1108 Minter Avenue.63 Respondent included a line at the end of the lease that stated, "Prepared by David K. Fulton, Esq."64
On April 17, 2018, the Gorsts cancelled their contract to purchase 48 Creekside Court.65 The seller's realtor refused to return $10,000.00 in earnest money until the Gorsts signed a release form.66 Respondent objected to the form and advised the Gorsts not to sign it.67 He also gave the Gorsts $10,000.00 and told them they could repay him when the matter was resolved.68 There was no written agreement for the transaction.69 Respondent did not advise his clients in writing that the advice of independent counsel was desirable for the transaction.70 Nor did he give them a...
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