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Commonwealth of Massachusetts

NO. BD-2010-090

IN RE: THOMAS R. MULLEN

S.J.C. Order of Term Suspension entered by Justice Cowin on October 5, 2010, with an effective date of November 4, 2010.1
(S.J.C. Judgment of Reinstatement entered by Justice Cordy on May 6, 2011.)

SUMMARY2

The respondent was admitted to practice in 1977, and specialized in the area of elder law. Between 2004 and 2009, the respondent was licensed to sell insurance in Massachusetts, and was an agent for six life insurance companies.

In about January 2008, the respondent agreed to create an estate plan for a sixty-year-old woman who lived alone, had no children, and suffered from medical conditions that were beginning to affect her mental capacity. The client had monthly income of about $3,500 from a pension, and approximately $774,500 in assets, including approximately $485,000 in retirement funds, $45,000 in annuities, and $40,000 in mutual funds. She owned a condominium where she lived, but anticipated moving to a nursing home in the near future.

The respondent agreed to represent the client, and on March 15, 2008, he met alone with the client at her home to discuss her estate plan. The respondent advised the client to convert her assets to Medicaid-compliant annuities sold by one of the insurance companies for which he was an agent. The respondent did not investigate whether the client would incur surrender charges from the sale of her current assets or explore other more flexible Medicaid planning strategies that were available to the client.

The respondent’s representation of the client was materially limited by his own interest in receiving a commission on her purchase of the annuity policies, but he did not disclose to her that his advice might be affected by his own financial interest in obtaining commissions. The respondent also engaged in a business transaction with a client without disclosing the terms of the transaction to the client in writing, giving her a reasonable opportunity to seek the advice of independent counsel, and obtaining her written consent.

One week later, the client signed forms brought to her by the respondent authorizing him to surrender her existing annuities and sell mutual funds sufficient to pay $530,000 in premiums for four Medicaid-compliant annuities. The respondent arranged for the surrender of the client’s current annuities and mutual funds, and the purchase of four policies, causing the client to incur approximately $5,000 in transfer costs. The respondent’s commissions from the sale totaled approximately $42,000, which were paid directly by the insurance company.

Several weeks later, the client’s brother, who was attorney-in-fact for the client and her caretaker, learned of the transfers and contacted the respondent. The respondent arranged to reverse the transaction.

The respondent’s business transaction with the client in the circumstances violated Mass. R. Prof. C. 1.8(a). The respondent violated Mass. R. Prof. C. 1.7(b) by representing a client when his representation might have been materially limited by his own interests without her consent after consultation. By failing to investigate the surrender charges that his client would incur from selling her current assets, explore whether other Medicaid planning strategies were available to her, and explain the business transaction to the extent reasonably necessary to permit his client to make informed decisions about the matter, the respondent violated Mass. R. Prof. C. 1.1 and 1.4(b).

In aggravation, the respondent received a public reprimand in 2002 for failing to maintain complete records of funds, make timely payments and deposits, and timely render accounts as a conservator. Matter of Mullen, 18 Mass. Att’y Disc. R. 417 (2002). In 1995, the respondent received an admonition for deceptive advertising. Admonition No. AD-95-4, 11 Mass. Att’y Disc. R. 318 (1995). In mitigation, the respondent was not seeking to harm his client, although his advice to her was inadequate and colored by his own personal interest in the transaction. The transactions were completely reversed, the respondent refunded his full fee, and there was no ultimate financial harm to the client. In June of 2009, the respondent let his insurance license expire and ceased acting as an agent for any insurance company.

The case came before the Board of Bar Overseers on a stipulation of facts and disciplinary violations and a joint recommendation that the respondent be suspended for six months, and that his reinstatement be conditioned on passing the Multistate Professional Responsibility Exam (MPRE). On September 13, 2010, the board voted to recommend that the Supreme Judicial Court for Suffolk County accept the parties' stipulation and joint recommendation for discipline. On October 5, 2010, the county court (Cowin, J.), ordered that the respondent be suspended from the practice of law for six months, effective thirty days from the date of the order, and that he take and pass the MPRE prior to reinstatement.


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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