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People v. Stern.

No. 22PDJ007. 9/7/2022. Opinion Imposing Sanctions.

September 7, 2022

A hearing board suspended James Stern (attorney registration number 36157) for six months, effective November 15, 2022. To be reinstated to the practice of law in Colorado, Stern must prove by clear and convincing evidence that he has been rehabilitated, has complied with all disciplinary orders and rules, and is fit to practice law.

In January 2019, Stern agreed to represent a seller’s broker, the broker’s agent, and a buyer’s agent to recover a fee commission for a failed real estate transaction, which fell through after the seller refused to sell. Stern did not obtain his clients’ written informed consent to the representation despite the risk that his representation of one or more of his clients would be materially limited by his responsibilities to the other clients or by his own personal interests. Stern filed a complaint against the seller in July 2019, and the seller filed counterclaims against the seller’s broker and the broker’s agent. After the broker’s agent retained separate counsel to defend against the counterclaims, Stern ceased advocating for her interests regarding the fee commission, effectively abandoning his representation of her. But Stern never notified the broker’s agent that he was withdrawing as her counsel and would no longer represent her in the fee commission matter.

Meanwhile, Stern negotiated an aggregate settlement with the seller’s lawyer. Stern did not inform his clients of the material terms of the settlement, however, nor did he disclose to his clients the risks involved in the settlement or obtain his clients’ written informed consent to settle their claims together. During the negotiations, Stern worked to increase his portion of the settlement to be paid as attorney fees. Though Stern’s contingency fee agreement entitled him to one-third of the gross settlement amount, Stern attempted to collect $60,000 as specially awarded attorney fees plus one-third of the remaining portion of the settlement funds. The buyer’s agent terminated Stern’s representation soon after, and Stern continued to represent the seller’s broker against his two former clients in the dispute over his attorney fees that followed.

Through his conduct, Stern violated Colo. RPC 1.5(a) (a lawyer must not charge an unreasonable fee); Colo. RPC 1.7(a) (a lawyer must not represent a client if the representation involves a concurrent conflict of interest); Colo. RPC 1.8(g) (a lawyer must obtain informed consent in writing when settling an aggregate claim); Colo. RPC 1.9(a) (a lawyer who has formerly represented a client in a matter must not later represent another person in the same or a substantially related matter in which that person’s interests are materially adverse to those of the former client unless the former client gives written informed consent); and Colo. RPC 1.16(d) (a lawyer must protect a client’s interests upon termination of the representation).

Official Office of the Presiding Disciplinary Judge proceedings can be found at the Office of the Presiding Disciplinary Judge website.

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