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Keywords

lawsuitattorneytrustcivil rights
contractlawsuitattorneytrustcivil rights

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In re Sather, 3 P.3d 403, 2000 CJ C.A.R. 2664

Facts

Larry D. Sather represented Franklin Perez in a civil rights lawsuit against the Colorado State Patrol. Sather charged a flat fee of $20,000, which he labeled as 'non-refundable.' After receiving the fees, Sather failed to place them in a trust account and spent the money before earning it. Upon being discharged by Perez, Sather did not promptly return the unearned portion of the fee, leading to the disciplinary proceedings against him.

Sather agreed to represent Franklin Perez in a lawsuit against the Colorado State Patrol and certain individual troopers. Perez alleged that the troopers violated his civil rights during a traffic stop on December 7, 1995. Almost a year after the stop, on November 15, 1996, Sather and Perez entered into a written agreement for legal services, captioned 'Minimum Fee Contract.'

Issue

Did Larry D. Sather violate the Colorado Rules of Professional Conduct by failing to return unearned fees and misrepresenting advance fees as 'non-refundable'?

Did Larry D. Sather violate the Colorado Rules of Professional Conduct by failing to return unearned fees and misrepresenting advance fees as 'non-refundable'?

Rule

An attorney earns fees only by conferring a benefit on or performing a legal service for the client, and advance fees must be placed in a trust account until earned. Attorneys cannot label advance fees as 'non-refundable' as it misleads clients regarding their rights.

An attorney earns fees only by conferring a benefit on or performing a legal service for the client. Thus, under Colo. RPC 1.15 an attorney cannot treat advance fees as property of the attorney and must segregate all advance fees by placing them into a trust account until such time as the fees are earned.

Analysis

The court found that Sather's actions violated the Colorado Rules of Professional Conduct because he treated the advance fees as his own property and failed to segregate them in a trust account. By labeling the fees as 'non-refundable,' Sather misled Perez about his rights to a refund of unearned fees. The court emphasized that attorneys must protect client funds and cannot misrepresent the nature of fees.

The court found that Sather's actions violated the Colorado Rules of Professional Conduct because he treated the advance fees as his own property and failed to segregate them in a trust account.

Conclusion

The court suspended Larry D. Sather from the practice of law for six months due to his misconduct in handling client funds and misrepresenting fees.

The court suspended Larry D. Sather from the practice of law for six months due to his misconduct in handling client funds and misrepresenting fees.

Who won?

The Colorado Supreme Court prevailed in the disciplinary action against Sather, emphasizing the importance of ethical conduct in the legal profession.

The Colorado Supreme Court prevailed in the disciplinary action against Sather, emphasizing the importance of ethical conduct in the legal profession.

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