Pugliese malpractice claims await judges’ rule
Judges are expected to decide within weeks whether some or all of the claims for legal malpractice currently pending against Mesa County Commissioner Rose Pugliese should be dismissed.
The case entered the summary judgment phase recently after those who sued filed responses to several motions to dismiss submitted by Pugliese’s lawyers.
The family dispute playing out in Mesa County District Court pits estranged sisters against Pugliese in two lawsuits alleging erroneous legal advice she gave caused them damage.
The sisters sued over legal advice Pugliese gave following the death of their mother. The trio seeks money damages in separate lawsuits filed earlier this year, court records show.
One lawsuit claims Pugliese was professionally negligent as a lawyer and helped two of the sisters breach duties they owed to a third. The third sister, Jeanne Hostetler, filed that lawsuit, which is pending before District Judge Richard Gurley.
The other lawsuit claims Pugliese was professionally negligent when she gave incorrect legal advice to two of the sisters following their mother’s death. Marie and Karol Ramstetter filed that lawsuit, which is pending before District Judge Valerie Robison.
Hostetler has been estranged from her sisters, the Ramstetters, for years, court documents show.
The lawsuits expose Pugliese to monetary damages and injury to her reputation as a private attorney. She denies wrongdoing.
Pugliese’s motion to combine the two lawsuits into one is pending.
Mesa County District Judge David Bottger already ruled in a separate case, which is now sealed, that Pugliese gave incorrect legal advice to the Ramstetters. He invalidated a settlement agreement Pugliese prepared based on the bad advice.
The findings were part of a probate court ruling that in February resulted in the firing of the Ramstetters as personal representatives for their mother’s estate. Hostetler sued in that case to have them removed.
“Marie and Karol (Ramstetter) have failed to timely administer this estate, have failed to properly inventory estate assets, commingled assets and have made improper distributions of personal property,” Bottger ruled.
Less than a week later, the Ramstetters sued Pugliese for legal malpractice.
Pugliese’s reputation as a public official could also suffer as the litigation process exposes new information about her yearslong friendship with Marie Ramstetter, one of the three women now suing her.
Pugliese voted in favor of a tax break for Ramstetter at a tax abatement hearing last year that saved Ramstetter $3,565 on her 2014 property tax bill. Pugliese did not disclose her friendship with Ramstetter or the potential lawsuit prior to the vote, nor was she required to do so, the Mesa County Attorney’s Office has said.
In coming weeks, the courts could dismiss some or all of the claims against Pugliese as the latest phase in the litigation — known as summary judgment — unfolds.
Summary judgment allows a judge to take decisions away from a jury and find for one side or the other before trial when there is no real disagreement about the most important facts or the governing law of the case.
Through her lawyer, Pugliese filed several motions for summary judgment asking the claims against her be dismissed.
One summary judgment motion argues Colorado law does not recognize Hostetler’s claim for “aiding and abetting breaches of fiduciary duty.” Other motions argue Pugliese did not represent the sisters as their lawyer when it counted and therefore can’t be sued for legal malpractice.
Among the dozens of exhibits filed in conjunction with the motions, snippets of Pugliese’s sworn testimony in the underlying probate case are perhaps the most revealing about the legal predicament she now finds herself in.
According to Pugliese’s testimony during a July 26, 2013, deposition, Pugliese has known Marie Ramstetter as a family friend and business associate for nearly a decade. In 2006, Ramstetter was the real estate broker for Pugliese and her husband, John, when they moved to Grand Junction.
John Pugliese hired Ramstetter as his real estate broker to handle several commercial real estate transactions negotiated since then, Rose Pugliese testified.
Pugliese prepared estate plans for Marie and Karol Ramstetter. In exchange, Marie Ramstetter prepared tax returns for the Puglieses.
The Puglieses considered the Ramstetters “family friends.”
In 2007, Marie Ramstetter introduced Pugliese to her mother, Louise Ramstetter, who hired Pugliese to draft a will. It took nearly a year to complete.
Louise Ramstetter died in April 2009. Her will left each of the daughters an equal interest in her estate, which consisted primarily of a 500-acre ranch near Golden.
Pugliese spoke by telephone with all three sisters shortly after their mother’s death to explain the contents of the will and to notify them she was declining to act as personal representative for the estate.
A personal representative is the person responsible for carrying out the intentions of the deceased according to their will. Marie and Karol Ramstetter were ultimately appointed to act as co-personal representatives.
Probate of the estate by the Ramstetters dragged on nearly six years due in part to problems caused by Pugliese’s legal advice, according to the sisters.
The will Pugliese drafted created a joint tenanacy in the ranch property for the sisters. Joint tenancy is a form of ownership where joint tenants are deemed to own an equal share of the whole. When one joint tenant dies, their share of the property automatically goes to the remaining joint tenants in equal shares.
Hostetler did not want to leave her share of the estate to her sisters. Instead, she wanted to break the joint tenancy so she could leave her share to her children. She hired another attorney, who has since died, to accomplish that.
Meanwhile, Pugliese drafted a faulty “Agreement and Release” to settle the dispute between the sisters. The agreement was based on Pugliese’s incorrect legal understanding about how to break a joint tenancy. It gave Hostetler 35 acres of the ranch property as opposed to the more than 100 acres she was entitled to under the will.
The agreement was never carried out and caused protracted litigation over four days in December 2014, starting about 60 days after Pugliese voted to give Ramstetter the tax break.
According to an expert opinion written by Walter Kelly, a Denver attorney hired by Hostetler to review the case, Pugliese failed numerous times to act as a competent attorney should when representing multiple clients. Pugliese allegedly:
■ Failed to obtain a fee agreement from the sisters outlining the scope of her representation and the identity of her clients.
■ Failed to disclose potential conflicts involved with her prior representation of the Ramstetter sisters, including business dealings she had with Marie Ramstetter and her husband and the social friendships she enjoyed with Karol and Marie.
■ Failed to adequately supervise and oversee Karol and Marie’s preparation of the estate inventory and any accountings.
■ Failed to provide proper legal advice about Colorado joint tenancy law or to investigate or research it.
■ Failed to suggest her clients consult with a second attorney to verify her advice.
■ Failed to obtain a title commitment. Had she done so, she would have learned the ranch property was owned by entities other than the Louise Ramstetter estate.
■ Failed to take into account a conservation easement that encumbered the property.
■ Failed to draft a mutual release of the parties. The one Pugliese drafted fully released Marie and Karol Ramstetter from liability to Jeanne Hostetler but failed to release Hostetler from liability to the Ramstetters, according to court documents.