SUFFOLK, SS. SUPREME JUDICIAL COURT
FOR SUFFOLK COUNTY
NO. BD-96-077
 

    The respondent, Stanley D. Komack, a member of the bar since 1976, is charged with violation of Canon One, DR I-102 (A) (5), and (6); Canon Five, DR 5-105 (A), (B), (C), and (D); and Canon Seven, DR 7-101 (A) (1), (2), and (3), and DR 7-102 (A) (1), (3), (5), and (7) and B (1), and DR 7-104 (A) (2).
THE FACTS. The facts are as follows. In 1990, there was an agreement by a person to purchase a residence in Granby, Massachusetts. The purchase and sales agreement set forth a purchase price of $84,000 with a mortgage of $67,500. The purchase thus would have paid twenty percent (20%) of the purchase price. The purchaser applied to the Boston Five Cents Savings Bank for the first mortgage of $67,500. The bank agreed and specifically specified that there was to be "no secondary financing" unless the bank so agreed. The purchaser chose the respondent, Stanley D. Komack, from a list of attorneys provided by the bank. The bank also chose the respondent. The purchaser knew the respondent also would be representing the bank. Up to this point, the respondent had no knowledge of the transaction. The respondent did not become aware that the purchaser had a separate agreement for secondary financing until the afternoon before the closing.

    At the closing, the respondent knew the bank was unaware of the second mortgage. The respondent did not disclose the second mortgage to the bank. At the closing, the respondent directed the purchaser to fill out the papers for the bank's mortgage. Additionally, the respondent directed the purchaser to execute the papers for the second mortgage, as well as a HUD-I Settlement Statement. That document incorrectly stated that the purchaser price over and above the mortgage loan was provided in cash by the purchaser. The respondent did not include in the HUD-I document the purchaser's closing costs a fee charged by the purchaser by the respondent for the second mortgage. The HUD-T document was forwarded to the bank after the closing.

    Additionally, at the request of the seller's attorney, the respondent obtained hazard insurance. The respondent arranged for two (2) separate hazard insurance binders. One binder listed the bank as the only additional insured, and the second listed the bank and the second mortgagor. The respondent forwarded to the bank the binder showing only the bank as an additional insured. The respondent had both mortgages recorded at the Registry of Deeds.

    The respondent is a sole practitioner with four (4) children. He had an unblemished record. The respondent cooperated with the United States Attorney's investigation. He paid a ten thousand dollar ($10,000) fine.

    THE VIOLATIONS. The respondent represented both the bank and the purchaser without having obtained the informed consent of the other. See Canon Five, DR 5-105. The respondent assisted the purchaser in not revealing the second mortgage to the bank. See Canon One, DR 7-101 (A) (1) and (3), DR 7-102 (A) (7), and DR 7-102 (B) (1). The respondent also violated Canon One, DR 1-102 (A) (4), (5), and (6), and Canon Seven, DR 7-102 (A) (5) and (7) by preparing and executing the secondary financing documents and an inaccurate HUD-I form.

    The Board of Bar Overseers (board) recommended a suspension of six (6) months. The respondent seeks a public reprimand. The board and Bar Counsel primarily rely on the Matter of Eastwood, 10 Mass. Att'y Disc. R. 70 (1994). The respondent relies on the Matter of Diamond, 12 Mass. Att'y Disc. R. 85 (1996), and the Matter of Fine, 12 Mass. Att'y Disc. R. 149 (1992). I conclude that the closest case is Matter of Eastwood. Although Eastwood's conduct was more egregious than the respondent's (two closings representing three parties), the board took that into consideration in imposing the six month suspension rather than one (1) year.

    I do not view the Matter of Diamond, supra, as precedent for the respondent. In Diamond, after the closing, "it was learned that the buyer and seller had overstated the purchase price of the property so that the buyer could obtain one hundred percent (100%) financing. There was no evidence that the respondent participated in this fraud. . . . The respondent's lack of awareness of the fraud or participation in it distinguishes [Diamond's] offense from the other cases. . . ." (Emphasis supplied.) Here, the respondent was not unaware of the fraud and filled out an incorrect HUD-I form.

    Although I think Matter of Fine, 12 Mass. Att'y Disc. R. 149 (1996), is close, I conclude that the violations at issue require some period of suspension. See Matter of Connolly, 11 Mass. Att'y Disc. R. 43 (1995) (false HUD-I showing points paid to bank to facilitate purchaser being reimbursed from his employer required a three-month suspension). Because the respondent's conduct is more egregious than Connolly's, the board's decision to suspend for six (6) months does not differ markedly from other bank cases.

By the Court,

____________________________
RUTH I. ABRAMS
Associate Justice
Supreme Judicial Court

DATED: 19 February 1 1998