People v. Schindelar, 92SA413
| Decision Date | 01 February 1993 |
| Docket Number | No. 92SA413,92SA413 |
| Citation | 845 P.2d 1146 |
| Parties | The PEOPLE of the State of Colorado, Complainant, v. Kathryn A. SCHINDELAR, Attorney-Respondent. |
| Court | Colorado Supreme Court |
Linda Donnelly, Disciplinary Counsel, James C. Coyle, Asst. Disciplinary Counsel, Denver, for complainant.
Kathryn A. Schindelar, pro se.
A hearing panel of the Supreme Court Grievance Committee approved the hearing board's recommendation that the respondent in this attorney disciplinary proceeding be disbarred for multiple violations of the Code of Professional Responsibility. 1 We accept the panel's recommendation except as to restitution.
The respondent was admitted to the bar of this court on March 10, 1976, is registered as an attorney upon this court's official records. The respondent objected at the hearing panel level to the hearing board's finding that she was subject to the jurisdiction of the grievance committee. She claims that the board's finding of jurisdiction 2
C.R.C.P. 241.1(b) states in part, "Every lawyer licensed to practice law in the State of Colorado is subject to the disciplinary and disability jurisdiction of the Supreme Court in all matters relating to the practice of law." (Emphasis added.) A lawyer licensed to practice in Colorado who has not paid the required registration fee, or who has not satisfied continuing legal education requirements, is nevertheless subject to the jurisdiction of this court and its grievance committee for the attorney's failure to comply with the Code of Professional Responsibility. See People v. Koransky, 830 P.2d 490, 491 (Colo.1992); People v. Richards, 748 P.2d 341, 343-44 (Colo.1987).
Moreover, an attorney who is a member of the bar of this state must answer for her professional misconduct even if the misconduct occurs in another jurisdiction. See People v. Breingan, 820 P.2d 1115 (Colo.1991) (); Office of Disciplinary Counsel v. Cashman, 63 Haw. 382, 629 P.2d 105, 108-09 (1981) (). 3 We conclude that the respondent is subject to the jurisdiction of this court and its grievance committee.
In May 1991, the hearing board entered an order of default against the respondent. This order was subsequently set aside, however, when the respondent entered an appearance by counsel and answered the formal complaint filed by the assistant disciplinary counsel. The respondent sought and received a continuance in January 1992, stating that she could not afford to travel to Colorado. Three days before the date of the rescheduled hearing, the respondent moved for another continuance, stating again that she could not afford to travel to Colorado, and asserting that she had been denied discovery because she could not afford to purchase a copy of a deposition. The hearing board denied the motion for continuance, finding the grounds insufficient, and pointing out that the respondent could have pursued alternative avenues of discovery but had not. The respondent did not attend the hearing. After listening to the testimony of the complainant's witness and considering the exhibits introduced into evidence, the board found that the following facts were established by clear and convincing evidence.
Betty Debenham of Salt Lake City, Utah, retained the respondent to act as her attorney and as the attorney for Debenham's deceased husband's estate, in late 1984. The respondent, who is a licensed attorney in Utah, received fees of approximately $12,000 for her legal services. The respondent was also appointed a personal corepresentative of the estate along with Debenham.
When she retained the respondent, Debenham was seventy-eight years of age and had relied completely on her husband to manage their business and financial matters. After her husband's death, Debenham grew reclusive and was especially vulnerable, becoming particularly dependent upon the respondent for advice. Beginning in April 1985, the respondent borrowed or otherwise obtained money from Debenham in the principal amount of at least $73,700.92, in the following series of transactions as reflected in the hearing board's report:
(a) On or about April 20, 1985, respondent borrowed $7,000, purportedly to provide funds to help respondent maintain telephone service to her office, which respondent said had been disconnected for nonpayment;
(b) On or about June 28, 1985, respondent borrowed an additional $25,000 from Ms. Debenham, purportedly to provide working capital for respondent and to provide Ms. Debenham with a safe, interest bearing investment;
(c) To document the first two loans, respondent drafted a promissory note. This note was secured by an Assignment of Accounts, which indicates that $12,700 would be forthcoming within sixty to ninety days of the June 28, 1985 assignment; the remainder of the Assignment of Accounts refers to three pending suits from which the respondent stated that she expected to receive proceeds, all of which were malpractice claims of respondent's family members. Respondent did not provide the original, signed notes to Ms. Debenham.
(d) On or about August 30, 1985, respondent borrowed an additional $11,700.92 from Ms. Debenham. For this loan, respondent signed a promissory note, secured by the same Assignment of accounts dated June 28, 1985. Respondent did not provide the original, signed notes to Ms. Debenham.
(e) On or about January 1, 1986, respondent borrowed an additional $30,000 from Ms. Debenham to allegedly purchase a condominium. Respondent represented that the funds would be returned within a few days. A promissory note was eventually drafted, and secured by the same Assignment of Accounts dated June 28, 1985. The promissory note did not accurately reflect the terms of repayment agreed upon, and the original of such note was not delivered to Ms. Debenham. Further, respondent drafted and promised to sign and deliver a mortgage to secure payment of the note. It is unknown whether such mortgage was in fact executed by respondent; however, no executed original of such mortgage was delivered to Ms. Debenham, nor properly recorded in the appropriate clerk and recorder's office. Additionally, respondent purportedly secured Ms. Debenham's interest by naming Ms. Debenham, an elderly and ailing woman, as beneficiary in respondent's will.
Debenham has not seen the respondent since January 1986, and the attorney-client relationship was terminated on or about October 26, 1986. The only payment on the total principal amount of $73,700.92 was $334, which was paid on or about July 3, 1985. No interest, costs of collection, or attorney fees for such loans have been paid.
In May 1987, Debenham, by counsel, filed a civil action in Utah against the respondent, alleging nonpayment of indebtedness, breach of fiduciary duty, fraud, and attorney malpractice. The civil action was subsequently stayed after the respondent filed for bankruptcy, and in January 1990, all loans made by Debenham to the respondent were discharged in the bankruptcy proceeding.
When the respondent obtained the loans in question, she failed to disclose to Debenham that the likelihood of repayment was remote at best. The respondent also failed to disclose, with respect to at least some of the transactions, the basis for her need for the funds, the use that would be made of the funds, the terms of repayment to be included in the promissory notes, the adequacy of the security purportedly given to secure the loans, and the adequacy of the legal documentation to protect Debenham's rights. The respondent at no time suggested that independent counsel review the terms of the loans, she did not disclose the possible conflicts of interest inherent in such transactions with her client, and Debenham did not consent to the possible conflicts of interest.
We agree with the hearing board that the respondent's failure to disclose the inadequacy of the security for the loans and the failure to provide Debenham with the appropriate legal documents to ensure repayment of the loans constitute violations of DR 1-102(A)(4) (). See People v....
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