Is a contract formed between an attorney and client that violates Rule 1.8(a) void, or merely voidable? The Colorado Supreme Court has taken up the issue to decide a case that has seen a disbarred attorney suing his former client over loaned money and the Court of Appeals ruled that the violation of Rule 1.8(a) renders the contract unenforceable.
David Calvert filed suit to recoup more than $100,000 he had loaned former client Diane Mayberry. He claimed they had an oral contract for repayment by her giving him a security interest in her house. Calvert had lost his law license in 2009 for ethical violations, including failing to follow sections of Colorado Rule of Professional Conduct 1.8(a) governing transactions with clients when he loaned money to Mayberry. The attorney disciplinary hearing board had determined Mayberry was a particularly vulnerable client because of mental illness and a chemical dependency.
In 2016, The Court of Appeals up-held summary judgment by a trial court in Mayberry’s favor. The court determined issue preclusion prohibited Calvert from bringing up factual issues that had been decided by the attorney disciplinary hearing board, because he had violated Rule 1.8(a) when he engaged in the same conduct that he claimed was the substance of the oral contract. The appeals court also determined Rule 1.8(a) is a matter of public policy because it protects the public, rather than the legal profession.
The Court of Appeals remanded the case to determine whether the attorney brought the appeal solely to harass the former client and her daughter or to delay the proceedings’ resolution and if so, award Mayberry reasonable attorney’s fees for the appeal.