Colorado Supreme Courtroom weighs self-discipline for divorce lawyer: ‘I’ve by no means seen something like that’ | Subscriber-Solely Content material

Irina Baranova

Outstanding household regulation lawyer Brenda L. Storey mentioned she was wrongly punished for merely asking a consumer in a divorce case to pay her, and for in the end utilizing cash from the wedding towards her invoice — a typical observe in such proceedings.

The Workplace of Lawyer Regulation Counsel, which prosecutes lawyer-discipline circumstances, took a vastly completely different view of Storey’s choice to simply accept a $47,578.43 tax refund verify — unknown to the husband within the case — and use it to pay her personal regulation agency for Storey’s illustration of the spouse.

“Ms. Storey didn’t interact within the usually accepted observe,” Assistant Regulation Counsel Justin P. Moore advised the Colorado Supreme Courtroom final week. He referred to the choice of a three-member disciplinary board, which concluded Storey acted with “a egocentric and dishonest motive.”

The justices heard the uncommon oral arguments in an attorney-discipline case on June 21, wherein Storey is interesting the board’s discovering of a number of violations of the foundations {of professional} conduct. Final yr, the board decided Storey had disregarded her duties to her consumer, Cynthia Sullivan, and hid the existence of the Inner Income Service verify to her consumer’s husband, Patrick Caldwell Sullivan.

The board’s ruling suspended Storey from the observe of regulation for one yr plus at some point.

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Storey’s lawyer Michael T. McConnell characterised the listening to board’s choice as disciplining Storey based mostly on the opinions of a single knowledgeable witness, with no precedent placing his consumer on discover that utilizing the IRS verify to pay her authorized charges was unethical.

“What’s onerous for me in excited about that argument,” countered Justice Melissa Hart, “is the board, when it encounters a brand new set of details, goes to undertake requirements we have by no means utilized earlier than, as a result of we have simply by no means heard this set of details earlier than. Are you saying a lawyer can solely be disciplined underneath circumstances we have already thought of?”

It was undisputed in Storey’s disciplinary proceedings that she had a optimistic fame amongst Colorado’s household regulation attorneys and no disciplinary historical past. Attorneys who testified towards her in the course of the listening to acknowledged they’d referred shoppers to her or sought her experience up to now. They expressed shock about Storey’s conduct within the Sullivans’ divorce case.

Cynthia Sullivan employed Storey in June 2018. Though there was substantial marital property at stake — $3.3 million, Storey mentioned — Patrick Caldwell Sullivan was the only earner. Just about all the belongings have been marital, which means they’d in the end be divided between the Sullivans by a choose.

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Storey’s settlement with Cynthia said the consumer would pay Storey month-to-month, and that Storey had the fitting to stop work on or withdraw completely from the case for nonpayment. Cynthia Sullivan initially paid Storey via the marital belongings, which Caldwell Sullivan offered. 

In late Could 2019, Caldwell Sullivan positioned a cap on the American Categorical card Cynthia Sullivan was utilizing to pay her lawyer charges. She was now delinquent in her funds to Storey.

If Caldwell Sullivan “doesn’t pay my invoice by the twentieth, please begin promoting furnishings and furnishings,” Storey directed her consumer in a June 18 e-mail. Two days later, she ordered Cynthia Sullivan to promote furnishings on Fb and Craigslist. Storey additionally threatened Caldwell Sullivan’s lawyer Jordan Fox with contempt over the choice to chop off Cynthia Sullivan’s credit score.

By July 20, Cynthia Sullivan owed Storey greater than $37,000. Storey suggested Cynthia Sullivan she would withdraw from the case, and as soon as once more advised her to promote the couple’s possessions. Solely after a listening to earlier than Arapahoe County District Courtroom Choose Peter Michaelson did Caldwell Sullivan authorize $25,000 for his spouse to pay Storey. However a stability remained, and Storey as soon as once more vented to her consumer.

“You shouldn’t have a selection as as to if you pay me in full. To me, my invoice is the very best precedence over your sprinkler invoice, faculty provides, or in any other case. It ought to be for you as effectively, as I’ll stop representing you,” Storey advised her.

The night time of Aug. 1, 2019, Cynthia Sullivan despatched Storey an apologetic e-mail, however talked about a potential resolution that had arrived in her mailbox: a $47,000 verify from the IRS that she might deliver to Storey to pay her invoice.

The next morning, Cynthia Sullivan delivered the verify, which was payable to each of the Sullivans, to Storey’s workplace, the place it was deposited right into a belief account. A number of days later, Storey advised Cynthia Sullivan through e-mail that there was “no motive for him (Caldwell Sullivan) to search out out concerning the tax refund simply but.” The identical day, Storey directed the cash from the IRS verify be moved from the belief account to the regulation agency’s working account.

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Nonetheless, the scenario between Cynthia Sullivan and Storey didn’t enhance, and Storey filed a movement to withdraw from the case. One other lawyer, Jennifer Alldredge, took over for Storey in early September. In an in depth dialog with Alldredge concerning the case, Storey revealed the existence of the IRS verify, and talked about she had not disclosed it to Caldwell Sullivan.

As soon as Alldredge advised Caldwell Sullivan’s lawyer concerning the verify, he filed a movement in courtroom asking for the return of the funds. Michaelson ordered the cash’s return on Sept. 27, giving Storey 48 hours to conform. She didn’t, as an alternative ready for a listening to greater than every week later. Michaelson ended up overturning his order, deciding he didn’t have jurisdiction over Storey.

It was not till March 2 that Storey reached an settlement with the Sullivans’ legal professionals to return the funds. Six months later, her attorney-discipline case started. Proceedings earlier than the listening to board in April 2021 centered on a sequence of misconduct allegations: that Storey’s precedence on being paid represented a battle of curiosity, that she mishandled and hid the couple’s marital property, and that she disobeyed the choose’s order to relinquish the funds.

The board decided Storey had dedicated a number of violations within the case. Particularly, they discovered Storey put her personal fee forward of her consumer’s greatest curiosity by failing to advise Cynthia Sullivan concerning the dangers of promoting furnishings; specifically, the danger of violating a provision of household regulation.

“I’ve by no means seen something like that the place a lawyer advised the consumer to promote furnishings. That is extraordinary,” Steven Lass, an knowledgeable witness for the prosecution, testified.

The board additionally determined Storey violated Michaelson’s order to return the verify, and he or she had “closed her eyes” to her responsibility to reveal the verify.

Alldredge “testified that any belief that remained between the Sullivans was ‘decimated’ by respondent’s dealing with of the IRS verify. Alldredge estimated that every get together paid ‘effectively over $50,000’ in lawyer’s charges to pressure respondent to return the funds from the IRS verify,” wrote then-presiding disciplinary Choose William R. Lucero within the board’s opinion.

Storey appealed to the Supreme Courtroom, the place a number of justices have been uneasy concerning the board labeling a broad swath of Storey’s conduct as unethical.

“It feels at instances as if you happen to’re asking us to have her pilloried in entrance of the courtroom for utilizing language that almost all of us would discover unacceptable,” mentioned Justice William W. Hood III to the prosecution, referring to Storey’s emails.

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Hart was probably the most vocal critic of Storey’s conduct, emphasizing Storey’s failure to reveal the IRS verify was the larger subject, despite the fact that Caldwell’s choice to chop off his spouse’s credit score was “disgusting.”

“Why was it acceptable for Ms. Storey to inform her consumer, ‘You are not speaking to your husband about this tax fee’?” she requested. “What motive might an lawyer have for pondering, underneath our system, that undisclosed marital belongings might be used to pay” authorized payments.

McConnell replied that so long as marital belongings are disclosed earlier than the division of property, “it is OK.”

Though Storey had a number of alternatives to reveal the verify throughout August 2019, together with at a listening to with the trial choose, she had not executed so. One other key alternative of potential disclosure was a settlement proposal Storey despatched to Caldwell’s lawyer, which included tax data. McConnell justified the omission there by calling the proposal merely “an try to start out dialogue.”

“But to start out it with out full data,” Hart mentioned.

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