In Re Sather

3 P.3d 403 (2000)

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Nature of the Case

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Facts

D agreed to represent Perez in a lawsuit against the Colorado State Patrol for alleged a violation of his civil rights during a traffic stop. D and Perez entered into a written agreement for legal services. Perez was required to pay D $20,000 plus costs to represent Perez. The $20,000 was referred to as a 'minimum fee,' a 'non-refundable fee,' and a 'flat fee.' The contract stated that Perez understood his obligation to pay this fee 'regardless of the number of hours attorneys devote to legal matter' and that no portion of the fee would be refunded 'regardless of the time or effort involved or the result obtained.' The contract informed Perez that in no circumstance would any of the funds paid be refunded. The contract stated that Perez has been advised that this is an agreed flat fee contract. Perez acknowledged that the minimum flat fee is the agreed upon amount of $20,000, regardless of the time or effort involved or the result obtained. Perez paid $5,000 on November 17, 1996. He paid the remaining $15,000 on December 16th. D spent the $5,000 soon after receiving the money. D kept the second payment of $15,000 for approximately one month before spending these funds. None of these funds were placed in his trust account. P filed suit against the State Patrol and three troopers. The complaint included a claim for attorney's fees. The Attorney General's Office offered Perez a $6,000 settlement, which Perez refused. D was suspended from the practice of law for thirty days, effective May 21, 1997. D notified Perez of his suspension. Perez requested an accounting by May 30, but D replied that he would be unable to provide this information until the third week of June. Perez discharged D because of the suspension. Perez accepted the Attorney General's the offer of $6,000. D claimed that his fees, his paralegal assistant's fees, costs, and expenses as of the date of discharge totaled $6,923.64. D did not refund any money because at the time of discharge D had spent Perez's funds. D eventually paid in full five months after the discharge. D never told Perez that he had declared bankruptcy. Perez hired an attorney to pursue a claim against D in the bankruptcy proceeding for a refund of the fees ($6,923.64). P recommended that D be suspended for a year and a day for violating 1.16(d) by failing to return Perez's funds for nearly five months after Perez discharged him. P concluded that because D admitted that he knew he had an ethical obligation to refund any unearned fees to Perez, the characterization of Perez's fee as 'non-refundable' constituted a material misrepresentation; a violation of RPC 8.4(c) by engaging in conduct involving dishonesty, fraud, deceit, or misrepresentation. P found that D violated RPC 1.15(a) by negligently failing to keep his client's funds separate from his own.