Summary
The Colorado attorney-discipline Hearing Board disbarred Gary L. Gustafson after finding that he knowingly converted approximately $80,000 in estate settlement funds for personal and business purposes and failed to return the balance for nearly two years. The Board treated disbarment as the appropriate sanction despite restitution, lack of prior discipline, cooperation, and mitigating character evidence, and ordered Gustafson to pay proceeding costs.
Topics
Practice areas
Questions Presented
- Whether Gustafson knowingly converted client or estate funds in violation of Colo. RPC 8.4(c).
- Whether Gustafson failed without good cause to respond to requests for information from the Office of Attorney Regulation Counsel in violation of C.R.C.P. 251.5(d).
- Whether disbarment was the appropriate sanction for knowingly converting approximately $80,000 in client funds and failing to cooperate with disciplinary authorities.
Holdings
- Gustafson knowingly converted funds belonging to the Sorenson Estate by using the settlement proceeds for his own purposes without authorization, violating Colo. RPC 8.4(c).
- Gustafson violated C.R.C.P. 251.5(d) by failing without good cause to respond to requests for information from the Office of Attorney Regulation Counsel.
- Disbarment was warranted because Gustafson knowingly converted substantial client funds, caused prolonged deprivation, acted with a dishonest and selfish motive, and had substantial experience in the practice of law; the mitigating circumstances did not overcome the presumption of disbarment.
Key quotations
“Misappropriation of client funds almost always calls for disbarment absent extraordinary mitigating factors.” (at 793)
“Here, no such factors exist.” (at 793)
Factual background
Gustafson was retained to establish an ancillary Colorado estate and negotiate the sale of the estate's partnership interest. He received an $80,000 settlement check payable to him as attorney for the estate, deposited it into his trust account, transferred at least part of it to his operating account, and used the funds for personal and business purposes without authorization. He delayed returning the funds for nearly two years, ultimately making full restitution shortly before the sanctions hearing, and failed initially to respond to requests from the Office of Attorney Regulation Counsel and a show-cause order.
Procedural history
The People filed disciplinary charges alleging violations of Colorado Rules of Professional Conduct 8.4(c), 3.4(c), and 8.1(b), and C.R.C.P. 251.5(d). The court granted summary judgment as to the knowing-conversion and failure-to-cooperate violations, dismissed the remaining claims with prejudice, and held a hearing on aggravating and mitigating circumstances. The Hearing Board imposed disbarment and costs.