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Commonwealth of Massachusetts

No. BD-1999-078


S.J.C. Order of Term Suspension entered by Justice Greaney on July 31, 2000,
with an effective date of August 30, 2000.1


The respondent was admitted to the Bar of the Commonwealth on June 8, 1977. Between 1991 and 1994, the respondent concentrated his practice in the area of real estate conveyancing, representing lenders and borrowers. During that period, the respondent maintained a non-interest bearing account at BayBank which he used as a conveyancing account to hold funds of various lenders for disbursements in connection with real estate transactions. The account was not an IOLTA account in violation of Canon Nine, DR 9-102(C)(1).

In addition to funds received in connection with real estate transactions, the respondent also retained earned fees in the account for more than a short period of time after the funds had been earned. This constituted commingling in violation of Canon Nine, DR 9-102(A). The respondent also failed to maintain adequate records of his handling, maintenance, and disposition of the funds he deposited in this account in violation of DR 9-102(B)(3).

During the same period of time, the respondent was an agent for a title insurance company. Between 1992 and 1994, the respondent failed promptly to remit to the company $3,473 for thirty title insurance polices the respondent had issued on its behalf. The respondent negligently used these funds to pay his own business and personal expenses. The company discovered the shortage during a routine audit. Although the respondent immediately repaid $2,000 to the company, he was unable to repay the balance for several months. The respondent's negligent use of fiduciary funds violated Canon One, DR 1-102(A)(6), and Canon Nine, DR 9-102(B)(4).

The respondent also was an authorized agent for a second title insurance company. Prior to 1993, both companies charged the same amount for equivalent title insurance premiums. In 1993, the second company raised its premium rate by 25 cents per thousand. The respondent notified the lenders he represented of the increased rates and the lenders, in turn, disclosed to borrowers the higher rate on "Good Faith Estimates", the document which listed the estimated costs of each real estate closing.

Between July 26, 1993, and August 1, 1994, the respondent charged and collected fees from borrowers for title insurance policies issued by the first title insurance company at the higher rate charged by the second title insurance company and disclosed on the Good Faith Estimates. In each of these closings, and without notifying either the lender or the buyer and obtaining their consent, the respondent intentionally overstated the cost of the title insurance policies on the HUD-1 Settlement Statements, which he certified as showing actual costs. The respondent kept for his own use the difference between the actual cost of the premium and the amount listed on the HUD-1, a total of $605.50. The respondent also falsely reported to the first title insurance company that he had charged borrowers for title insurance at the rate allowed by the company when, in fact, he charged a premium above what the company charged.

The respondent also intentionally overcharged borrowers for mortgage plot plans. The respondent located a land surveyor who was willing to charge $40 less than other surveyors for preparation of plot plans. Knowing that the lender's Good Faith Estimates listed the estimated cost of a plot plan as $140, the respondent instructed his paralegal to order plot plans from the surveyor who charged $100, to list $140 on HUD-1 statements, and to charge borrowers $140 for preparation of plot plans. In this manner, between February 1993 and November 1994, the respondent overcharged borrowers in sixty closings a total of $2,400.

The respondent's conduct in intentionally misrepresenting the costs of title insurance and plot plans on the HUD-1's, intentionally overcharging borrowers for these items, and appropriating the amount of the overcharges for his own use violated Canon One, DR 1-102(A)(4) and (6). His failure to disclose to his clients, the lenders, that he had a personal financial interest in the loan closings beyond his disclosed legal fee constituted a violation of Canon Five, DR 5-101(A).

Finally, the respondent unintentionally overcharged borrowers for title exams and rundown and recording services. The respondent overcharged 59 borrowers a total of $3,092.50 for title examinations in connection with closings he conducted between January 5, 1993, and July 28, 1994. In this same period, the respondent also overcharged 86 borrowers a total of $853 for rundown and recording services. This conduct violated DR 1-102(A)(6).

In mitigation, the respondent viewed the disclosures on the Good Faith Estimates as a ceiling on charges and believed the overcharges were accepted practice by the lenders. The respondent considered himself entitled to reap the benefit of having purchased these services at a lower cost. In aggravation, the respondent had a previous public censure for neglecting four separate real estate cases, misrepresenting to his clients the status of their cases, and failing to cooperate with bar counsel. Matter of Lenahan, 7 Mass. Att'y Disc. R 167 (1991).

A hearing committee of the Board of Bar Overseers recommended that the respondent be suspended from the practice of law for a year and a day. On a joint appeal of the hearing committee's recommendation for discipline, the respondent and Bar Counsel stipulated that the appropriate discipline for this misconduct was a term suspension of two and one-half years. The Board of Bar Overseers accepted the parties' stipulation and recommended to the Supreme Judicial Court that the respondent be suspended from the practice of law for two and one-half years. On July 31, 2000, the Supreme Judicial Court for Suffolk County entered an order of term suspension for a period of two and one-half years, effective August 30, 2000.

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 before the Court.

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