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Commonwealth of Massachusetts

NO. BD-2007-063

IN RE: THORNTON E. LALLIER

S.J.C. Judgment Accepting Resignation As A Disciplinary Sanction entered by Justice Spina on July 18, 2007, with an effective date of August 17, 2007.1

SUMMARY2

The respondent resigned as a disciplinary sanction for misconduct related to business transactions with clients and acquiring an ownership or other pecuniary interest adverse to the clients in violation of Mass. R. Prof. C. 1.8(a).

In early 2001, two elderly clients of the respondent, a brother and sister, met with the respondent on several occasions concerning about an estate plan and problems that they were having with a tenant. The clients, both in their 80ís, lived together in one of the apartments in a two-family home they owned outright. Their primary goal was to live in this home for the rest of their lives. At the time, their home was in need of repair and the tenant was not paying rent. They had no other substantial assets and no close relatives.

The clients transferred their home to the respondent, expecting he would manage and maintain the property, deal with their tenant and care for them; in exchange, they could live there for the rest of their lives.

In July of 2001, the clients both executed wills that the respondent had prepared. The wills were identical in that each left their property to the other. The second-to-die provisions left their entire estate to the local public library. On the same day, the clients executed a deed that the respondent had prepared, transferring their interest in their home to the respondent as the general partner of a partnership, but reserving life estates for themselves. The respondent created this partnership and was the sole general partner. The limited partners were the respondentís wife and a trust of which the respondentís wife and children were beneficiaries.

The conveyance of clientsí home to the respondent was on terms that were not fully disclosed to the clients; they were not given a reasonable opportunity to seek the advice of independent counsel in the transaction; and they did not consent in writing to the transaction at the time they signed the deed.

The respondentís conduct in acquiring an ownership interest in clientsí home on terms that were not fully disclosed and transmitted in writing in a manner that the clients could reasonably understand, and where the clients were not given any opportunity to seek the advice of independent counsel and did not consent to the transaction in writing, was in violation of Mass. R. Prof. C. 1.8(a).

The respondent told the clients that he would take out a loan, using their home as collateral, so he could have the home repaired, evict their tenant and take care of their other legal matters, and assume the duty of caring for the property and for them. He also told the clients he intended to lend himself some of the loan proceeds for personal expenses. The clients agreed that the respondent could use their home as collateral for a loan for such purposes so long as he assumed sole responsibility to repay the loan.

In November of 2001, a local bank agreed to loan the respondent $60,000 secured by a first mortgage on the clientsí home (now owned by the respondent). Prior to the closing of the loan and in order to provide the bank with an unencumbered first mortgage on the property, the respondent prepared, and had the clients execute, another deed, which he also executed as general partner of the partnership. This deed transferred the clientsí entire interest in their home, as well as the partnershipís remainder interest, to the respondent individually. This deed was recorded in the Registry of Deeds.

The closing of the bank loan occurred on April 12, 2002. The respondent executed a first mortgage on the home to the bank, which was recorded in the Registry of Deeds. Thereafter the respondent also executed a quitclaim deed transferring a life estate in the clientsí home back to the clients, with a remainder interest to the respondent as general partner of the partnership. This deed was recorded in the Registry of Deeds after the bankís mortgage.

After the closing of the bank loan, the respondent placed net proceeds of $49,695.90 in a bank account in the name of the partnership at the bank. Within ten days, the respondent borrowed $22,245.00 of the net proceeds for personal purposes, including his personal tax obligation and to make a tuition payment for his son.

Between August of 2002 and March of 2003, the respondent paid various additional personal and business expenses unrelated to the clients or their home with funds from the bank loan proceeds.

The respondentís conduct in using Herbert and Sarahís home as collateral for a loan, and in borrowing from the loan proceeds to pay his own personal and business expenses, all on terms that were not fully disclosed and transmitted in writing in a manner that the clients could reasonably understand, and where the clients were not given any opportunity to seek the advice of independent counsel and did not consent to the transaction in writing, was in violation of Mass. R. Prof. C. 1.8(a).

After the brotherís death, a claim representative of the Social Security Administration filed a complaint with the Office of the Bar Counsel concerning the respondentís dealings with the clients. In June of 2003, the respondent remitted $20,000.00 to the sister and in October of 2003, he remitted another $4,978.79 to the sister. These amounts (together with amounts separately repaid by the respondent) represented the bank loan proceeds expended by the respondent other than for the benefit of the clients.

This matter came before the Board of Bar Overseers on a stipulation of facts and disciplinary violations and a joint recommendation for resignation from the practice of law as a disciplinary sanction. On July 9, 2007, the Board voted to accept the stipulation and the joint recommendation. On July 18, 2007, the Court entered an order, accepting the respondentís resignation from the practice of law as a disciplinary sanction, effective August 17, 2007.


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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