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Commonwealth of Massachusetts

PUBLIC REPRIMAND NO. 2000-1



IN RE: EDWARD J. SHAGORY, ESQUIRE

Order (public reprimand) entered by the Board January 10, 2000.

SUMMARY1


The respondent's father and law partner died in February 1989 after a long and debilitating illness. The respondent was named executor of his father's estate and co-trustee of his father's testamentary trust. He was also co-trustee of a real estate trust, the Seven McLaughlin Street Trust (SMST) which held title to the building in which the respondent's law office was located, and of which he was a 50% beneficial owner.

In August 1990 a former client filed suit against the respondent for malpractice. The respondent did not defend, and a default judgment entered in January 1991. In June 1992 the respondent gave the client a note for $150,000 in settlement of the litigation, and pledged his interest in SMST as collateral on the note. He also signed an installment agreement whereby, if he paid the client $1,000 per month for 75 months, the balance of the note would be forgiven. Although he made the first payment, he did not make a timely second payment. The client accelerated the note, and filed suit to enforce the note against the respondent individually and as trustee of SMST on September 2, 1992.

On September 10, 1992 the respondent signed a stipulation in the suit to enforce the note which provided that he would restrain from alienating his interest in SMST. On December 14, 1992 an interlocutory order on preliminary injunction entered restraining the respondent from alienating any interest of the respondent in SMST as executor of his father's will and trustee of his trust. Neither the stipulation nor the order was recorded in the South Middlesex Registry of Deeds.

On February 28, 1994 findings were made that the balance due on the note from the respondent to the client was $179,594.56, plus interest from November 22, 1993. Final judgment entered in the client's suit on April 26, 1994, confirming the money judgment and ordering the respondent to resign as SMST trustee and to transfer his interest in SMST to the client. The judgment was not recorded at the South Middlesex Registry of Deeds.

Notwithstanding the prior injunctions against mortgaging or otherwise alienating his interest in SMST, on April 29, 1994 the respondent, as trustee of SMST, gave a promissory note for $11,000 to the attorney representing him in connection with a second malpractice suit. This note was secured by a mortgage recorded at South Middlesex Registry of Deeds. In October 1994 the respondent's attorney was paid $13,658.10 from the proceeds of sale of the trust property.

The respondent subsequently compromised at $63,000 the amount owed the client in the first matter. He paid the compromised amount, plus the amount paid his attorney in the second matter, between November 1994 and January 1995.

By executing a note as trustee of the SMST trust payable to his attorney in an unrelated matter at a time when he was under order order in the client's case not to alienate his assets, and by acting as trustee of the SMST trust after he was under court order to resign in favor of the client, the respondent disregarded two lawful court orders, thereby violating DR 1-102(A)(5) and (6), DR 5-101(A) and DR 7-106(A).

In aggravation, the respondent received Private Reprimand 93-4, 9 Mass. Att'y Disc. R. 360 (1993) for neglect of two matters and failure to cooperate with Bar Counsel's investigation. The respondent received Admonition 95-23, 11 Mass. Att'y Disc. R 354 (1995) for neglect of civil litigation.

In mitigation, at the time of the matters at issue here, the respondent was suffering from serious health and family problems. The matters for which he had previously received discipline took place during approximately the same time period. The respondent reimbursed the trust from his own funds for all monies expended in discharge of his attorney's mortgage on the trust property by January 1995, before Bar Counsel's file was opened.

The matter came before the Board of Bar Overseers on a stipulation of facts and disciplinary violations and a joint recommendation for discipline by public reprimand. On January 10, 2000 the Board of Bar Overseers voted to administer a public reprimand to the respondent.

1 Compiled by the Board of Bar Overseers based on the record of proceedings before the Board.



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