Post-Suspension Misconduct Draws Disbarment

The Colorado Presiding Disciplinary Judge has disbarred an attorney

While Respondent was suspended from the practice of law, he and another lawyer entered a fee agreement to represent a client in an open criminal matter and, separately, in a criminal appeal. Respondent deposited the client’s $20,000.00 retainer in his business account before he performed any legal work for the client. Though the other lawyer earned $6,700.00 of the retainer, Respondent failed to refund to the client the unearned portion of the retainer.

Facts

On July 29, 2019, Respondent was suspended from the practice of law. He never reinstated from his suspension. On October 8, 2019, Respondent entered a fee agreement to represent Patrick Peschong. The fee agreement was part of a document titled “Client Information Data and Fee Agreement.” Respondent and another lawyer, Tim Lindstrom, signed the agreement. The agreement provided that $10,000.00 would be earned for work on Peschong’s criminal case in El Paso County and $10,000.00 would be earned separately for appealing another of Peschong’s criminal matters. At the time Respondent signed the agreement, he knew he was suspended from the practice of law and knew he could not provide legal services.

Peschong’s father, Alan Peschong, wrote a check in the amount of $20,000.00. Respondent did not put the money in a trust account because he did not have a trust account; instead, Respondent deposited the $20,000.00 in his business account. Respondent knew he had not earned the funds at the time.

Respondent paid Lindstrom $6,700.00 to start Peschong’s case. Lindstrom completed several tasks during the representation, including handling sentencing in one of Peschong’s cases and moving to set aside a verdict. Though Lindstrom was initially successful in his request to set aside the verdict, the prosecution appealed, and the matter was remanded to the trial court for an evidentiary hearing. Peschong’s conviction was reinstated.

In late 2022, Lindstrom prepared and filed a notice of appeal of Peschong’s reinstated conviction. But Respondent did not pay or disburse any amounts for the appeal to Lindstrom or anyone else. In fact, Lindstrom did not bill for his work on Peschong’s appeal. He did not intend to bill for the work, as he had agreed to charge nothing for the work and to handle the matter pro bono. Lindstrom’s invoices confirm he zeroed out fees owed for various tasks, and there is no indication he billed for work on the appeal. Linstrom’s representation in Peschong’s case ended in January 2023.

On June 30, 2023, Peschong and Respondent spoke on the telephone. Respondent acknowledged that no work had been done on the appeal. During the call, Peschong asked Respondent to refund $10,000.00 to Peschong’s father. During the same call, Respondent informed Peschong that Lindstrom was no longer involved in Peschong’s case and that another lawyer was handling the appeal. Accordingly, the representation—for which Peschong’s father paid Respondent in advance—terminated.

On July 19, 2023, Peschong tried calling Respondent but was unable to leave a message. The same day, he sent Respondent a letter requesting a partial refund of the retainer; specifically, Peschong asked for a refund of the money to fund an appeal. Peschong made additional efforts to contact Respondent by telephone and text message about the refund. On August 7, 2023, Peschong again called Respondent and renewed his request for a $10,000.00 refund. During that call, Respondent said he was trying to earn money but described himself as “broke.”  Respondent offered to make installment payments and indicated that he wanted to verify amounts he owed Lindstrom. But neither Respondent nor Lindstrom earned any money for the appeal other than $915.00 at most, and Peschong did not owe Lindstrom any fees for work on the appeal.

Respondent combined the remainder of Peschong’s retainer with $50,000.00 of his own funds in an account that was not a trust account. Respondent has not refunded any portion of the money Peschong’s father paid to appeal Peschong’s case, even though Respondent knew that Lindstrom did not claim he was entitled to those funds, and even though neither Peschong nor Peschong’s father authorized Respondent to continue to exercise control over the funds.

Harm to profession

Respondent’s failure to refund money to the Peschongs also harmed the reputation of the legal profession. Peschong testified credibly that he felt “scammed” because Respondent held himself out to the Peschongs as a reputable lawyer but then failed to return their money, despite the many opportunities he had to do the right thing. The experience with Respondent, Peschong said, “destroyed” his view of lawyers and the legal profession. He expressed disbelief and anger that Respondent—a seasoned lawyer—claimed to be broke, particularly because Peschong learned that Respondent was living in Belize. In addition, Peschong’s father, who already distrusted lawyers, testified that Respondent’s conduct was consistent with his general negative view of the legal profession.

Footnote

Although Peschong’s father spoke fondly spoke of a former South Dakota Supreme Court justice, a former fishing buddy who inspired high respect for the legal profession, Peschong’s father also explained that he had negative experiences when working with lawyers.

Sanction

When a lawyer knowingly converts client money, disbarment is presumed. When many factors aggravate—and no circumstances mitigate—that misconduct, disbarment is “virtually automatic.”  For these reasons, disbarment is the only appropriate sanction here.

(Mike Frisch)