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Commonwealth of Massachusetts

NO. BD-2007-025

IN RE: DONALD BOYD YOUNG

S.J.C. Judgment of Resignation as A Disciplinary Sanction entered by Justice Cowin on November 25, 2008.1

SUMMARY2

This matter came before the Court on the respondentís affidavit of resignation pursuant to S.J.C. Rule 4:01, ß 15. The respondent admitted in his affidavit that sufficient evidence existed to warrant findings that the facts alleged in bar counselís statement of disciplinary charges could be proved, as follows.

The respondent was admitted to practice in the Commonwealth of Massachusetts on December 12, 2003. He was temporarily suspended from the practice of law on April 30, 2007.

The respondent represented a lender in a closing scheduled to take place on December 8, 2006. He was also the agent for the title insurance company in the transaction.

On December 7, 2006, the respondent received in his IOLTA account a total of $331,841.82 from the lender for the buyerís loan proceeds. That same day, he received a payoff statement from the sellerís mortgagee listing $286,843.07 as the payoff figure. The respondent used this payoff figure to prepare a HUD-1 settlement statement for the closing.

On December 8, 2006, the sellerís mortgagee faxed to the respondent a corrected payoff statement that included a prepayment penalty in the amount of $4,685.53, and listed a total amount due of $291,528.60. The respondent did not see the corrected payoff statement before the closing. He therefore miscalculated the amount due the seller, and at the closing on December 8, 2006, the respondent distributed $4,685.53 too much to the seller.

After the closing, the respondent returned to his office and discovered the corrected payoff statement. The respondent then realized that he had overpaid the seller and did not have sufficient funds to pay off the sellerís first mortgage. The respondent did not make any payment to the sellerís mortgagee. The respondent also did not notify the lender that the sellerís first mortgage loan had not been paid off and that the lender was not in first position.

From approximately July 1, 2004, until April of 2007, the respondent failed to keep and maintain adequate records of his receipt and disbursement of client funds and to reconcile his accounts as required by Mass. R. Prof. C. 1.15. At the time the closing funds were deposited on December 7, 2006, there were insufficient funds in the IOLTA account to cover outstanding checks for unrelated closings. Due to his failure to maintain adequate records for the account and to properly reconcile the account, the respondent was not aware of the deficiency in the account.

Between December 11, 2006, and December 31, 2006, the respondent negligently misused $172,994.37 on deposit for the closing to fund outstanding checks and make payments in connection with unrelated loans closed by the respondent prior to and after December 8, 2006. Because the respondent was unaware of the deficiency in the account, other than the overpayment to the seller at the December 8, 2006 closing, the respondent did not know that funds being held for that closing were being depleted by other closings he handled.

By no later than the end of December 2006, the respondent knew that the funds deposited to his account for the December 8th closing had been misused to fund other closings. The respondent did not inform the lender or the seller that the funds were not available to pay off the sellerís mortgage loan.

In December 2006 and January 2007, the respondent paid from the IOLTA account monthly mortgage payments of $1,919.64 and $3,839.28 due on the sellerís mortgage loan. On or about January 9, 2007, the seller contacted the respondent, and asked him why the loan had not been paid off. The respondent informed the seller that he was trying to take care of the problem. The respondent did not inform the seller that he had not safeguarded the loan payoff funds in the account and that they had been negligently used to fund other closings.

In about February of 2007, the seller contacted the respondent, and expressed her concern that her mortgage loan had still not been paid off. The respondent intentionally misrepresented to the seller that the mortgagee had agreed to waive the prepayment penalty and that he would be paying off the loan within the week. The respondent also informed the seller that she should not worry because the monthly payments were being made on time. The respondent did not tell the seller that he had negligently misused most of the funds entrusted to him to pay off the loan and was using what funds remained to make monthly payments on the loan.

On or about February 22, 2007, the seller contacted her lender and was told that her mortgage loan had not been paid off, that there was no agreement to waive the prepayment fee, and that they would not waive the fee. To date, the respondent has not fully repaid the amount misused from the December 8, 2006 closing.

The respondentís failure to safeguard the funds received in connection with the closing, his failure to promptly pay the first mortgagee the funds the company was entitled to receive, and his negligent misuse of client funds violated Mass. R. Prof. C. 1.1, 1.3, and 1.15(b) and (c). The respondentís failure to maintain required records for his IOLTA account and to properly reconcile the account violated Mass. R. Prof. C. 1.15(f). The respondentís intentional misrepresentations to the seller violated Mass. R. Prof. C. 8.4(c). The respondentís failure to notify the lender that he had not paid off the mortgage and the lender did not have a first mortgage violated Mass. R. Prof. C. 1.4(a) and (b).

On November 10, 2008, the Board voted to recommend that the affidavit of resignation be accepted as a disciplinary sanction, and that the resignation be retroactive to April 30, 2007, the effective date of the respondentís temporary suspension. On November 25, 2008, the Supreme Judicial Court for Suffolk County so ordered.


FOOTNOTES:

1 The complete Order of the Court is available by contacting the Clerk of the Supreme Judicial Court for Suffolk County.

2 Compiled by the Board of Bar Overseers based on the record filed with the Supreme Judicial Court.



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