Sources say that a well known Colorado lawyer who wrote or co-wrote a number of white papers related to the structured settlement industry, including ” The Use of Medicare Set Aside Trusts in Workers Compensation Settlements” and “Protecting the Disabled Individual Thorugh the Use of a Medicare Set-Aside Trust” has been disbarred.
A divided Colorado Supreme Court disbarred elder law attorney Susan G. Haines for knowingly misappropriating money belonging to her client. In the Matter of Haines (Colo., No. 06SA146, Feb. 25, 2008).
Attorney Susan G. Haines represented the Dorothy Edouart estate. John Erpelding was the personal representative for the estate. Mr. Erpelding and Ms. Haines identified potential litigation and hired attorney Michael Mihm to act as litigation counsel. The estate entered into a contingency fee agreement with Mr. Mihm in which one-third of the judgment would be shared between Ms. Haines and Mr. Mihm, based on the relative proportion of their litigation expenses. The estate settled some of the claims for $200,000. Mr. Mihm agreed to defer his portion of the fee so that he could pursue other litigation for the estate, and the settlement money was deposited in the estate’s account. As her fee, Ms. Haines removed $70,000 from the estate’s account and deposited it into her firm’s operating account. Mr. Erpelding asked for the money back, but Ms. Haines refuse
The state bar filed a claim against Ms. Haines. At the hearing, Ms. Haines testified that Mr. Erpelding authorized the withdrawal of the money. Mr. Erpelding and Mr. Mihm testified that Ms. Haines did not inform them she was going to withdraw $70,000 and that Mr. Erpelding authorized Ms. Haines to withdraw only $5,000. The hearing board found that Ms. Haines knowingly misappropriated money belonging to her client, lied to the hearing board, and misappropriated money belonging to Mr. Mihm. The board ordered $70,000 in restitution payments and disbarred her.
The Supreme Court of Colorado affirms the disbarment, but orders restitution reduced to $65,000 to account for the $5,000 Ms. Haines was authorized to withdraw. According to the court, the evidence supports the conclusion that Ms. Haines did not disclose to her client that she intended to withdraw the $70,000. The court found, however, that the board was wrong to find that Ms. Haines misappropriated funds belonging to Mr. Mihm. Because Mr. Mihm had deferred his fees, the money in the account belonged to the client, not Mr. Mihm.
Two justices dissented from the opinion, noting their concern with “the outcome’s heavy dependence on credibility determinations involving the recollections, understandings, shadings, and motivations of co-counsel with disparate financial interests.”
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