Running On Empty

Reinstatement has been granted to a Colorado attorney who was suspended for advising clients with conflicting interests in a marijuana business.

The principle issue was whether a single phone call violated his suspension

In our view, Respondent’s short-lived conversation with Schelwat, which was thrust upon him while he was distracted, should not meaningfully detract from the bigger picture: throughout the period of his suspension, Respondent made consistent efforts to abide by his suspension order and the disciplinary rules by winding down his practice, notifying his remaining client, and steering well clear of the practice of law. Further, his representations during this brief call occasioned no real harm, and protection of the public is not jeopardized, in our estimation, by Respondent’s reinstatement. Accordingly, we do not find that this technical violation of Respondent’s suspension order should prevent him from being reinstated.

The story

Respondent testified that he began the process of winding down his law practice as early as June 2013 in anticipation of his suspension, such that by December 2015 he maintained only one active case—that of Patterson—and had arranged with Kristi Smith, one of his former associates, to hand off that pending matter. He pivoted away from law, screened his calls heavily, and launched a new bespoke expediting business with his brother-in-law to deliver quickly “unique shipments for cargo of value,” making more money doing so in one year than he had in any other while practicing law. During one such delivery run, while refueling at a Nevada truck stop, Respondent fielded a telephone call of three or four minutes. It is this telephone call alone that forms the basis for the People’s objection to Respondent’s reinstatement.

The call concerned a dispute brewing at Wee Katie’s, a restaurant controlled by Galleit, Inc. Wee Katie’s operated in a Denver LoHi building owned by Veronica Carmosino through Roni’s Enterprises, Inc. In 2012, Carmosino hired Respondent to draft, among other documents, a lease for Wee Katie’s. He did so, then terminated the representation. From time to time, however, Carmosino called Respondent to give him updates. The last such call came in mid-February 2016, when Carmosino recounted that the doors to the restaurant had been chained shut by the Department of Revenue because Wee Katie’s had failed to pay sales taxes. Respondent explained to Carmosino that he had been suspended from the practice of law, that he could not help her, and that Smith was available to represent her if she needed legal assistance. Carmosino declined Respondent’s offer to put her in touch with Smith because, at that point, Carmosino “didn’t think [she] needed an attorney” and “wanted to do this on [her] own.” Carmosino testified that soon thereafter, the Department of Revenue removed its locks, which she immediately replaced with her own locks; she was concerned, she said, that her tenants might vacate the building quickly and remove certain fixtures that belonged to her.

Attorney Schelwat had contacted Smith, who gave her petitioner’s phone number

Early that same afternoon, Respondent was traveling eastbound in Nevada on one of his delivery runs, exiting the freeway to fuel up. A call came in from a unknown number on his personal phone; the phone identified the caller as “Krist S.” Respondent testified that he believed it was Kristi Smith. He would not have answered it, he said, but for the fact that he did not recognize the number, and he wondered if Smith had called him to discuss some important matter. But it was not Smith on the line; it was Schelwat.

 Schelwat and Respondent have very different memories of the call. According to Schelwat, Respondent answered the phone, sounding “disheveled”; she introduced herself, told him that Carmosino had put chains on the doors to Wee Katie’s, and insisted that the chains be removed. Respondent asked, “Is there anything else?,” and Schelwat reiterated her demand that Carmosino remove the chains from the door, after which they could work out any other issues based on provisions of the lease.11 Because Schelwat heard a lot of background noise on the phone, she asked if he needed a copy of the lease. He responded that he had a copy but that his client “wasn’t going to do anything” about the chains. In that case, Schelwat stated, Galleit would have to file suit to gain access. He answered, “that will just delay everything, but that’s fine with my client.” Schelwat then inquired whether he was representing Carmosino and whether he would accept service for her, and he said “yes.” At some point during the exchange, Schelwat had searched the internet for Respondent’s name; one of the first results was Respondent’s order of suspension, which she glanced at.  Surprised by what she saw, she inquired again as to whether he was representing Carmosino, and he replied in the affirmative. Schelwat then mentioned the suspension order, and Respondent backtracked, saying, “Well, I guess I’ll have to refer this out.”

 Respondent, on the other hand, says that Schelwat adopted a rushed, aggressive attitude from the outset. According to Respondent, she introduced herself as an attorney for Galleit, but the connection was bad, he was distracted, and he did not have the context to understand who she was or why she was calling. She mentioned chains on doors and a violation of a lease. After some back and forth, he heard her ask, “Aren’t you familiar with what’s going on at Wee Katie’s?” The tone of her question, he thought, implied that he was “stupid.” He started to reply that Roni’s Enterprises was a former client and that he had drafted the lease for Wee Katie’s, but Schelwat interrupted him and demanded that Carmosino get rid of the chains. Respondent was irritated that she cut him off in a “rude” way, and he resolved to hang up. He said, “Is there anything else?” She repeated the demand and asked whether the chains would be removed, and he answered, “I don’t know anything about this.” Schelwat then asked, “Are you representing Carmosino?,” and Respondent replied, “Look, you called me. I don’t know what you’re talking about.” Schelwat retorted, “I have it right here that you are a suspended attorney.” He acknowledged that was true, and he volunteered to pass on her contact information to Smith.

We are called upon to decide which of these two very dissimilar versions of this exchange more accurately reflects what actually occurred. We have carefully weighed each witness’s testimony, motive, state of mind, demeanor, and manner while on the stand, coupled with what little corroborative evidence we have available. We do not doubt that Respondent was distracted and unprepared for the conversation, the telephone connection was imperfect, and Schelwat’s tone was confrontational. But we are compelled, after examining the evidence, to adopt Schelwat’s account as credible. Schelwat initiated the call while she was in her office and focused on the conversation, and thus better positioned to remember what happened. Schelwat was less emotionally involved in a personal sense, and thus better able to objectively recall the exchange. Schelwat had no motive to present the facts in a manner other than in the way she remembered them, and thus was less likely to mold her story to suit a particular narrative. And Schelwat’s testimony is substantiated by the email that she sent to Carmosino almost immediately after her exchange with Respondent, and thus given more credence in our assessment.

 The majority

Respondent identified Carmosino as his client and made representations on her behalf during a brief and unanticipated telephone call, thereby engaging in the practice of law and violating his order of suspension. But those fleeting, unplanned representations, while foolish, did not cause any harm, and thus we conclude that Respondent should be reinstated to the practice of law.

A hearing board member concurred and dissented

Given the incontrovertible conclusion that Respondent failed to meet his burden of proof by clear and convincing evidence that he did not violate his suspension order, and considering his past disciplinary history, I must respectfully dissent from the majority opinion lifting Respondent’s suspension order and reinstating him to the practice of law

(Mike Frisch)