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People v. Derose9/22/1997
Original Proceeding in Discipline
EN BANC
PER CURIAM
This is a lawyer discipline proceeding where a hearing panel of the supreme court grievance committee approved the findings and recommendation of a hearing board that the respondent be suspended from the practice of law for a period of two years, with reinstatement conditioned on the making of certain restitution and the satisfaction of other requirements. We issued an order to show cause why more severe discipline, including disbarment, should not be imposed. After considering the responses of the parties, we have concluded that the respondent should be suspended for three years. However, one member of the court would disbar the respondent.
I.
The respondent has been licensed to practice law in this state since 1966. The hearing board heard the testimony of the complainant's and respondent's witnesses, including the respondent himself, and considered a stipulation between the parties and other exhibits introduced at the hearing. The board then made the following findings and Conclusions by clear and convincing evidence.
A. The Melissa Doll Matter
Melissa Doll was injured in an automobile accident in which she was a passenger on June 2, 1992. She was twenty-four years old at the time and sustained head injuries to the extent that she was in a coma for an extended period of time. Doll incurred substantial medical expenses, some of which were paid by insurance and some by Medicaid.
Doll was an acquaintance of Russell Edward Vigil, whom she met at the athletic club where she worked. Vigil, who is the respondent's son-in-law, was a lawyer at that time. Following the accident, Vigil petitioned the probate court and he was appointed Doll's temporary conservator. In June 1992, in his capacity as conservator, Vigil hired the respondent to handle Doll's personal injury claim. Vigil and the respondent had known each other for several years and had shared office space. In June 1992, Vigil was dating the respondent's daughter, whom Vigil married in October 1992. The respondent and Vigil signed a contingency fee agreement, whereby the respondent would receive 20% of any settlement amount recovered. The respondent's normal contingency fee rate is 33%.
Following her release from the hospital in early August 1992, Doll moved to Pennsylvania to stay with her father, where she incurred further medical expenses.
The respondent settled Doll's personal injury claim for $220,000 in September 1992. Around September 9, the respondent prepared a trust agreement for the purpose of managing the settlement funds, which was signed by Vigil as conservator. The respondent agreed to serve as the trustee. After the settlement proceeds were received on October 9, 1992, Doll endorsed the settlement check and the respondent deducted his $44,000 contingency fee. He Doll $12,000 as she had requested and deposited the remaining funds in his trust account, opening a bank account for the trust a week later.
The trust agreement prepared by the respondent failed to include language which would shield the settlement proceeds from Medicaid claims, although he knew at the time that his client and her father intended to seek Medicaid benefits. Medicaid, which in 1992 was administered in Colorado by the department of social services, paid Doll's medical expenses that were not covered by insurance.
The respondent failed to notify the department of social services of the settlement of his client's personal injury claim as required by section 26-4-403(4), 11B C.R.S. (1996 Supp.). About six months after she settled, the department of social service
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