2019
ANNUAL
REPORT
Presented to Supreme Court of New Mexico and
the State Bar of New Mexico Board of Bar Commissioners
C
LIENT
P
ROTECTION
FUND
State Bar of New Mexico
Client Protection Fund
2019 Client Protection Fund Annual Report 3
Table of Contents
Introduction
History and Purpose ..............................................................................................................................4
Revenues ......................................................................................................................................................4
Eligible Claims ..........................................................................................................................................5
Processing a Claim ................................................................................................................................5
2019 Annual Report Highlights and Commission Activities ................................. 6
2019 Client Protection Fund Commission ............................................................................7
2019 Commission and Liaisons ...............................................................................................10
Former Commissioners and Administrators ....................................................................11
2019 Financial Information
Balance Sheet (Pre-Audit) as of December 31, 2019 ................................................11
Statement of Revenues and Expenditures (Pre-Audit) for
Year Ending December 31, 2019 ................................................................................................12
2019 Claims and Respondent Lawyers .............................................................................13
Annual Statistics 2006–2019 ....................................................................................................... 14
2006–2019 Statistical History
Dollar Amounts of Claims Reimbursed by Year ............................................................. 15
Dollar Amounts of Claims Reimbursed by Category ............................................... 15
4 State Bar of New Mexico
Introduction
History and Purpose
e purpose of the Client Protection Fund (CPF) is to
promote public condence in the administration of justice
and the integrity of the legal profession by reimbursing
losses caused by the dishonest conduct of lawyers
admitted and licensed to practice law in the courts of this
jurisdiction. e Client Protection Fund Commission was
established by order of the New Mexico Supreme Court
eective Dec. 13, 2005, as a permanent commission of the
State Bar of New Mexico Board of Bar Commissioners.
e Supreme Court adopted a modied version of
the American Bar Association’s model rules for client
protection funds and codied them at Rules 17A-001 et
seq. of the New Mexico Rules Annotated. e Commission
oversees the CPF and is charged with receiving, holding,
managing, and disbursing money from the Fund according
to the rules. e State Bar is responsible for administering
the Commission, developing and approving the budget,
and managing operations and stang. Since January 1,
2014, the New Mexico Disciplinary Board has assisted in
the technical administration of the Commission’s tasks,
including the processing of claims under the Commission’s
direction.
Revenues
e initial resources for the Fund were provided in
2005 by a Supreme Court order transferring funds from
accumulated nes against lawyers who failed to comply
with the Court’s Minimum Continuing Legal Education
requirements. In 2008 the Supreme Court ordered an
additional transfer of funds from MCLE to the Fund. In
2009 the Supreme Court ordered a $15 annual assessment
of every active New Mexico attorney pursuant to Rule
17A-003 (B) NMRA. In 2010, 2012, 2016, and 2018
additional monies were also transferred from MCLE
to the Fund by Supreme Court Orders. e State Bar
provides in-kind support to the Fund and the Commission
through sta support, oce and meeting space, and scal
administration. (See 2019 Financial Information, page 11).
From time to time, the Fund receives monies from court-
ordered sanctions directed to the fund at the discretion of
the judge.
2019 Client Protection Fund Annual Report 5
Eligible Claims
To qualify for a reimbursement from the Fund, a client must have incurred a nancial loss caused by the dishonest conduct
of a New Mexico-licensed lawyer who was counseling, advising, or representing the client or serving in another duciary
capacity such as a trustee. e claim must be led no later than ve years aer the client knew or should have known of the
lawyer’s dishonest conduct. Dishonest conduct is specically dened under the CPF rules as wrongful acts such as the or
embezzlement of money or the wrongful taking or conversion of money, property, or other things of value; e.g., failing to
refund unearned fees or borrowing money from a client without the intention to repay or disregarding the lawyer’s inability
or reasonably anticipated inability to repay. A typical CPF claim involves a lawyer who collected a retainer from a client,
performed some legal work, and then became unable or unwilling to nish the work or refund the unearned amount.
e rules also include a hardship exception which allows the Commission, in cases of extreme hardship or special and unusual
circumstances, to recognize a claim that was led late or would not otherwise be reimbursable. is exception has only been
used for two of the 247 claims approved in the Commission’s thirteen-year history. e maximum reimbursable amount was
increased in 2012 from $10,000 to $20,000 per individual claim, and, eective January 1, 2016 from $20,000 to $50,000.
Processing a Claim
e claimant must complete a prescribed claim form and
have it notarized. e claimant must provide a copy of any
written agreement pertaining to the claim and copies of any
checks, money orders, receipts, or other proof of payment. e
claimant is responsible for completing the form and providing
evidence of a reimbursable loss up to the maximum amount
payable per claim.
e CPF gives notice of a claim to the lawyer against whom
it is led (or the lawyer’s representative) and allows 20 days
for a response. e Disciplinary Board is also notied of the
claim. Aer the lawyer’s response and other initial facts and
documents are gathered, the claim is assigned to one of the
CPF commissioners for investigation. e commissioner
investigates and presents a recommendation to the full
Commission. If appropriate under the circumstances, the
recommendation includes the investigating commissioner’s
estimate of any amount that should be allowed as a credit
against the claim for the value of work the lawyer performed
or costs the lawyer properly paid with client funds. e
approval or denial of a claim requires the armative votes of at least ve commissioners.
e claimant and the lawyer are notied of the Commission’s decision. Either party may request reconsideration in writing
within 30 days of the denial or determination of the amount of a claim. If no request for reconsideration is received, the
check for any approved reimbursement is sent aer the notice period expires. If a timely request is received, the check for
any approved reimbursement is sent aer the Commission has reconsidered its decision. Rule 17A-013 NMRA provides that
in either case the Commission’s decision is nal and there is no further right of appeal. Reimbursement is discretionary and
no person has a legal right to reimbursement from the Fund. As part of the claim form, the claimant agrees to assign his/her
claims against the lawyer to the fund in the event that the CPF makes a payment, and the CPF may pursue reimbursement and
recovery from the lawyer or the lawyer’s successor (e.g., an estate).
6 State Bar of New Mexico
2019 Annual Report Highlights and
Commission Activities
e Client Protection Fund Commission nished its thirteenth full year of operation in 2019 paying just over $43,053 in 11 claims
against 5 lawyers. To date, the Commission has paid just over $920,000 in cumulative reimbursements for clients’ nancial losses
involving 63 lawyers. Year-by-year and cumulative statistics appear later in this report.
e Commission met 4 times in 2019. Commissioners Leigh Anne Chavez, Sally Galanter and James Reist attended the 35th ABA
National Forum on Client Protection in early June, 2019 in Vancouver, Canada.
e Commission reminds everyone that Rule 17A-018(A) protects the condentiality of information on claims, claimants, and
respondent lawyers with exceptions for approved claims and other limited purposes as set forth below:
A. Publicizing awarded claims. Claims, proceedings and reports involving claims for reimbursement are condential until the
commission authorizes reimbursement to the claimant, except as provided below, unless provided otherwise by law. Aer payment of
the reimbursement, the commission shall publicize the nature of the claim, the amount of reimbursement, and the name of the lawyer.
e name and the address of the claimant shall not be publicized by the commission unless specic permission has been granted by the
claimant. e commission may provide a waiver to the claimant which authorizes disclosure.
B. Exceptions. is rule shall not be construed to deny access to relevant information by the disciplinary board, other professional
discipline agencies or other law enforcement authorities as the commission shall authorize, or the release of statistical information
that does not disclose the identity of the lawyer or the parties, or the use of such information as is necessary to pursue the fund’s
subrogation rights under Rule 17A-015 NMRA.
Visit the State Bar website at
www.nmbar.org/cpf
for further information on the
Client Protection Fund.
2019 Client Protection Fund
Commission
Andrew J. (Drew) Cloutier, Chair
Supreme Court Appointee
Drew Cloutier was appointed to the Commission by the Supreme Court of New Mexico eective Jan. 1,
2015. Drew previously served in the Commission ex ocio as an ocer of the State Bar of New Mexico
in 2010 and 2011. He is partner in the Roswell oce of Hinkle Shanor LLP. He practices primarily in the
areas of oil and gas law and commercial litigation. Cloutier has litigated and tried a number of oil and gas
issues in state and federal courts. He also assists oil and gas clients with a wide variety of issues with state
and federal agencies. Cloutier served on the Board of Bar Commissioners of the State Bar of New Mexico
from 2006 through 2014 and as its President in 2013. He has volunteered for the Conquistador Council
of the Boy Scouts of America for many years and is serving as President of the Council’s Executive Board.
Cloutier is a Trustee of the Rocky Mountain Mineral Law Foundation. He was named “Member of the
Year” by the Independent Petroleum Association of New Mexico.
Leigh Anne Chavez, Chair Elect
Supreme Court Appointee
Leigh Anne Chavez grew up in Las Vegas, Nevada, and received her B.A. in English from UNLV. She
received her J.D. from UCLA, and taught paralegals at CNM for 24 years. She also has a A.A.S. in
Accounting and is working on her Master’s Degree in Accounting at Anderson School of Management at
UNM. Leigh Anne is the Recycled Metals Prosecutor and Manufactured Housing Division Counsel for the
New Mexico Regulation and Licensing Department.
Matthew Sanchez, Secretary/Treasurer
Supreme Court Appointee
Matthew C. Sanchez, an Albuquerque native, currently serves as General Counsel and Director
of Enterprise Risk Management to the Jaynes Companies, a collection of construction companies
headquartered in Albuquerque, NM. Before joining Jaynes, Mr. Sanchez was a senior associate attorney
with the Sheehan & Sheehan law rm where he represented not only Jaynes, but other clients such as
the New Mexico Department of Transportation, the Public Schools Facilities Authority, contractors,
suppliers, counties, municipalities, and various school districts. Mr. Sanchez’s private practice centers on
construction, employment, and commercial law. Mr. Sanchez obtained both his Masters and law degree
at the University of New Mexico and completed his undergraduate studies at Santa Clara University
in California. In early 2016, he was recognized as a Fellow of the American Bar Association Forum on
Construction Law. In 2018, he completed the Leadership New Mexico - Core Program.
From its inception in 2006 through 2012 the Commission consisted of seven lawyers—four appointed by the Supreme Court, two
appointed by the Board of Bar Commissioners, and formerly the vice president of the BBC, now the Secretary-Treasurer of the BBC. In
2013, the number of Commissioners was increased to nine. e 2019 commissioners and ocers are listed here. All members except
the BBC Secretary-Treasurer serve staggered three-year terms. e BBC Secretary-Treasurer serves for one year before advancing
to become the State Bar president-elect and is succeeded on the Commission by the incoming Secretary-Treasurer. e six original
commissioners were appointed for part of 2006 aer the Commission was created and for staggered terms of one, two, and three years
that began in 2007. Each of the six original commissioners were appointed to two full three-year terms. e CPF ocers, elected
annually by the Commission, consist of a chair, vice-chair or treasurer, and secretary. Program assistance and administrative support is
provided by the State Bar Oce of General Counsel and the New Mexico Disciplinary Board.
2019 Client Protection Fund Annual Report 7
Erin O’Brien Anderson
State Bar of New Mexico Appointee
Erin Anderson has been a trial attorney in criminal and civil cases in New Mexico for 16 years. She has
served as an Administrative Law Judge and Special Commissioner. She currently serves as a board member
of the New Mexico Women’s Bar Association. A graduate of McGill University, and Suolk University Law
School she currently practices as an attorney in environmental and security matters for the United States
Coast Guard in New Orleans, Louisiana. While away from New Mexico she pines for green chile.
Je Baker
State Bar of New Mexico Appointee
Je Baker has been a trial lawyer for more than 40 years. He graduated from Harvard College and from
SUNY at Bualo Law School. He was a felony trial lawyer in the Bernalillo County District Attorney’s oce
and the New Mexico Public Defender’s oce. He served as chief of the civil litigation division for the Legal
Department of the City of Albuquerque before going into private practice. He is recognized by Martindale
Hubbell with its highest rating (AV), and by Best Lawyers in America. Je has served as special assistant
disciplinary counsel to the New Mexico Supreme Court, and is a member of the Supreme Court Code of
Professional Conduct Committee. For over 25 years Je has been a board member of the Anti-Defamation
League (3 times serving as president of the New Mexico region), and he is on the board of Albuquerque
Film and Music Experience. He is the Executive Producer of a short anti-bullying lm, e Time at
Remains.
John Caraway
State Bar of New Mexico Appointee
Sally Galanter
State Bar of New Mexico Appointee
Sally Galanter has 38 years of legal experience working in the private and public sectors. Aer being a
sole civil trial practitioner for approximately 22 years, Sally continued her legal career as a hearing ocer
with the Taxation and Revenue Department for over eight years conducting tax, MVD, and numerous
other types of hearings while also supervising attorneys before moving to the Attorney General’s oce and
prosecuting for numerous boards and commissions while also defending state ocials in both state and
federal court for over three years. For the past ve years she has served as legal counsel for the Construction
Industries and Manufactured Housing Divisions of the Regulation and Licensing Department representing
the divisions in both civil and criminal matters in state courts. Recently she has dedicated herself to
representation of the Construction Industries Division for all legal matters.
Carla Martinez
State Bar of New Mexico Secretary-Treasurer 2019
Carla C. Martinez is a native New Mexican and a 1998 graduate of the New Mexico School of Law. Martinez
currently serves as the Chief Administrative Ocer for the Second Judicial District Attorney’s Oce. Prior
to joining the Oce of the Second Judicial District Attorney, Martinez was Chief of Sta for Operations
for the New Mexico Oce of the Attorney General. She served in this capacity for approximately two
years. Immediately preceding, Martinez was the Deputy State Auditor for the New Mexico Oce of the
State Auditor for eight years. She also served for four years as a Board Member and Chair of the New
Mexico Gaming Control Board. Previously, Martinez has worked for an insurance defense law rm and an
international accounting rm. Martinez is also a Certied Public Accountant and a Certied Fraud Examiner.
Carla represents the First Bar Commissioner District which includes Bernalillo County.
8 State Bar of New Mexico
James T. Reist
Supreme Court Appointee
Jim Reist practices law in the small rm of Smidt, Reist & Keleher, P.C., in Albuquerque, New Mexico.
His practice is primarily in the areas of business and commercial law and litigation as well as legal ethics
and professional responsibility matters. He was appointed to the Commission beginning January 1, 2016.
He also serves as chair of the Ethics Advisory Committee of the State Bar of New Mexico and has been a
member of that committee for 20 years. He served as president of the Albuquerque Bar Association in 2015,
and was a member of its board of directors from 2009 through 2016.
EX OFFICIO MEMBERS
Richard B. Spinello
Appointed by Position, Executive Director, State Bar of New Mexico
Richard Spinello attended the University of New Mexico (B.A., 1989) and the omas M. Cooley Law
School (J.D., 1997). Previously in private practice in Rio Rancho, Spinello assisted clients with family law,
estate planning, probate and adult guardianships. He came to the State Bar in 2000 as a sta attorney for the
Lawyer Referral for the Elderly Program. Aer three years as sta attorney and a year as managing attorney
for the LREP program, Spinello was named director of the Public and Legal Services Department for the
State Bar and Bar Foundation where he helped secure funding for and participated in the creation of the
Client Protection Fund rules and CPF Commission, the statewide 10 Step Pro Bono Plan, and the 2007
State Plan for Providing Civil Legal Services to Low Income New Mexicans. In January 2007, Spinello was
named general counsel for the State Bar and in 2019 was named the Executive Director of the State Bar.
Stormy K. Ralstin
Administrator and Sta Counsel, General Counsel, State Bar of New Mexico
Stormy Ralstin joined the State Bar of New Mexico in 2012 as the managing attorney for the Legal
Resources for the Elderly Program. Ms. Ralstin was made the Director of Legal Services for the State
Bar and Bar Foundation in 2014. In January 2018, Ms. Ralstin was named General Counsel for the State
Bar, overseeing the policy and regulatory function of the State Bar and Bar Foundation. Ms. Ralstin is a
graduate of the University of New Mexico School of Law.
2019 COMMISSION LIAISONS
Anne L. Taylor
Disciplinary Board Liaison
Anne L. Taylor is Deputy Disciplinary Counsel for the Oce of Disciplinary Counsel of the New Mexico
Supreme Court Disciplinary Board where she has worked since January, 2002. Anne has a J.D. from
Vanderbilt University School of Law in Nashville, Tennessee. She has argued numerous disciplinary cases
before the New Mexico Supreme Court and serves as the liaison between the Disciplinary Board and the
Client Protection Fund. In addition, Anne is responsible for overseeing the Disciplinary Board’s IOLTA.
When she’s not lawyering, Anne is also a level 4/5 gymnastics judge.
2019 Client Protection Fund Annual Report 9
10 State Bar of New Mexico
Commission and Liaisons
2019 Client Protection Fund Commission
Andrew Cloutier, Chair Reappointed January 1, 2017, 3-year term expires 12/31/2019
Leigh Anne Chavez, Chair Elect Reappointed January 1, 2018, 3-year term expires 12/31/2020
Matthew Sanchez, Secretary Reappointed January 1, 2018, 3-year term expires 12/31/2020
Erin O'Brien Anderson Appointed January 1, 2019, 3-year term expires 12/31/2021
Jerey L. Baker Appointed January 1, 2017, 3-year term expires 12/31/2019
John M. Caraway Appointed January 1, 2019, term expires 12/31/2019
Sally J. Galanter Appointed January 1, 2019, 3-year term expires 12/31/2021
Carla Martinez Appointed January 1, 2019, term expires 12/31/2019
James T. Reist Appointed January 1, 2016, 3-year term expires 12/31/2018
Richard Spinello Ex ocio, non-voting, Executive Director, State Bar of New Mexico
Stormy K. Ralstin Ex ocio, non-voting, Administrator and Sta Counsel
General Counsel, State Bar of New Mexico
2019 Client Protection Fund Liaisons
Anne L. Taylor Disciplinary Board Liaison
2019 Financial Information
Assets
Cash and Equivalents $423,751.85
Certicates of Deposit $506,562.78
Dues from State Bar $44,992.82
Prepaid Insurance $140.18
Total Assets $975,447.63
Liabilities and Net Assets
Liabilities
Accounts Payable $3,007.03
Deferred Revenues $37,395.00
Total Liabilities $40,402.03
Net Assets
Fund Balance $836,750.63
Restricted Funds –
Lawyer Succession &
Transition Committee $7,733.17
Current Year Decrease
in Net Assets $90,561.80
Total Net Assets $935,045.60
Total Liabilities
and Net Assets $975,447.63
2019 Financial Information
Balance Sheet (Pre-Audit
As of December 31, 2019
2019 Client Protection Fund Annual Report 11
Expenditures
Statement of Revenues and Expenditures
(Pre-Audit)
For Year Ending December 31, 2019
Actual Budget Variance
Revenue
CPF Assessments $110,340.00 $107,000.00 $3,340.00
CPF Assessments (PHV) $9,255.00 $8,000.00 $1,255.00
Interest Earned $4,913.57 $1,500.00 $3,413.57
Contributions -0- $1,000.00 ($1,000.00)
Restitution $1,700.00 $1,000.00 $700.00
Total Revenue $126,208.57 $118,500.00 $7,708.57
Audit $1,200.00 $1,200.00 -0-
Dues & Subscriptions $225.00 $250.00 ($25.00)
Insurance Allocation $556.86 $500.00 $56.86
Marketing & Advertising $486.05 $1,000.00 ($513.95)
Meetings and Governance $726.06 $1,250.00 ($523.94)
Mileage Reimbursement $1,640.80 $2,000.00 ($359.20)
Personnel -0- $500.00 ($500.00)
Postage Expense Allocation -0- $200.00 ($200.00)
Professional Development $8,719.00 $10,000.00 ($1,281.00)
Total Expenditures $13,553.77 $16,900.00 ($3,346.23)
Revenue Over
Expenditures $112,654.80 $101,600.00 $11,054.80
Claims Approved $22,093.00 -0- $22,093.00
Increase in Net Assets $90,561.80 $101,600.00 $ (11,038.20)
12 State Bar of New Mexico
2019 Client Protection Fund Annual Report 13
2019 Claims and Respondent Lawyers
As required by Rule 17A-018, the Commission reports that 6 claims resolved in 2019 resulted in payments to the
complaining party as a result of the actions of 5 lawyers. The following table summarizes those payments.
2019 Summary of Claims Approved by Lawyer
Lawyers Lawyer’s Status
as of
12/31/2019
Claims
Approved
in 2019
Dollars
Awarded
in 2019
Reason
John Gregory Camp Deceased 1 $2,500 Unearned Fees
R. Nathan Gonzales Active 1 $2,593 Unearned Fees
Paul Grace Deceased 1 $1,000 Unearned Fees
Bryan Hess Suspended 1 $2,000 Unearned Fees
Daniel Salazar Suspended 2 $14,000 Unearned Fees
Claims paid on lawyers Total approved 6 $22,093
2019 Claims and Respondent Lawyers
2019 Client Protection Fund Annual Report 13
14 State Bar of New Mexico
CLAIMS APPROVED 2006-13 2014 2015 2016 2017 2018 2019 TOTALS
Total number of claims
approved in whole or in part
172 10 25 22 7 11 6 253
Total dollar amount of
claims approved and paid
(revised from prior annual
reports after reconciliation of
cumulative lawyer summary)
$538,412 $59,055 $90,518 $157,917 31,655 $43,054 $22,093 $942,704
CLAIMS DENIED
Total number of claims
denied in whole or part
164 16 16 12 20 20 11 259
Total dollar amount of denials $580,097 $232,303 $73,568 $189,602 $214,704 $147,363 $164,065 $1,601,682
Dollar amount of
reimbursement limit per claim
$10,000
(through
2011)
$20,000
(eective
2012)
$20,000 $20,000 $20,000 $50,000 $50,000 $50,000 -------
Claims made over limit 17 2 1 0 0 0 0 20
Total amount denied
over limit $140,638 150,000 0 0 0 0 0 $290,618
Total amount denied fo other
reasons $439,459 $82,303 $73,568 $189,602 $214,704 $147,363 $164,065 $1,311,064
CLAIMS PENDING AT END OF YEAR
Claims undecided and carried
over to next year
63 6 11 9 14 12 15 -------
Claim amount pending at end
of year
$325,050 $43,524 $59,486 $56,696 $60,269 $102,089 $272,336 -------
ATTORNEY STATISTICS
Total number of attorneys
with claims led
119 19 26 27 24 20 14 -------
Highest number of claims
led for a single attorney
23
(2008)
5 8 3 3 5 7 -------
AMOUNT REIMBURSED
TO FUND
$23,518 $0 13,300 $0 $14735 $795 $ $
2006-2019 Annual Statistics
Annual Statistics 2006-2019
14 State Bar of New Mexico
2019 Client Protection Fund Annual Report 15
2015–2019 Statistical History
$180, 000
$160, 000
$140, 000
$120, 000
$100, 000
$80, 000
$60, 000
$40, 000
$20, 000
$0
$90,518
2015
$157,917
2016
$31,655
2017
$22,093
2019
$43,054
2018
Dollar Amount of Claims Reimbursed by Year 2015–2019
Dollar Amount of Claims Reimbursed by Category
$10, 500
1%
$740,085
79%
$192,119
20%
Hardship Exception Theft Failure to Refund/Unearned Fees
2019 Client Protection Fund Annual Report 15
16 State Bar of New Mexico
5121 Masthead NE, Albuquerque, NM 87109
PO Box 92860, Albuquerque, NM 87199-2860
505-797-6093 • 800-876-6657
Fax: 505-828-3765
www.nmbar.org
