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Commonwealth of Massachusetts

Public Reprimand No. 2006-11



KEARONS J. WHALEN III

Order (public reprimand) entered by the Board July 18, 2006.

SUMMARY1


In and after May 1969, the respondent represented a client in various matters including two divorce proceedings, the probate of her late husbandís estate, corporate matters and other matters involving her real estate holdings. From 1969 to May 2005, the client considered the respondent to be her attorney and requested legal advice on an as-needed basis regarding multiple matters.

On July 18, 2005, the respondent asked the client for a $20,000.00 loan to pay his sonís law school tuition. The respondent informed her that he expected to receive the proceeds from the sale of a houseboat on December 15, 2005 and would repay the loan immediately upon receipt of the proceeds. The respondent showed the client a copy of a purchase and sale agreement for the houseboat.

On July 18, 2005, the client agreed to loan the respondent $20,000.00. The respondent drafted a handwritten document entitled ďpromissory noteĒ. The note acknowledged receipt of $20,000.00 and contained the respondentís promise to pay in full on December 15, 2005 with interest at 8% per year. The note was not secured and contained no provision for penalties, attorney fees or costs in the event of default, or collection. The terms were not fair or reasonable to the client.

At the time the respondent presented the client with the note, he did not instruct her to seek the advice of independent counsel and did not ask or cause her to consent to the conflict of interest in writing.

The client did not provide the respondent with $20,000.00 or any sum of money on July 18, 2005. On July 20, 2005, the client wrote to the respondent and expressed reservations regarding the amount of the loan and the prospects that the houseboat would be sold within four months. She also expressed concern that she could find herself short of funds in the declining real estate market. She told the respondent that she was uncomfortable with the proposal.

After receipt of the letter, the respondent called the client on one or more occasions between July 20 and July 22, 2005 and repeated his request for a loan. He did not instruct her to seek the advice of independent counsel and did not ask or cause her to consent to the conflict of interest in writing.

On July 22, 2005, the client handed the respondent a treasurerís check in the amount of $15,000.00 with the understanding that the terms of the note that the respondent previously drafted would constitute the agreement between the parties. The respondent did not draft a new note reflecting the adjusted amount of the loan.

The respondent did not pay the note or any sum of money on December 15, 2005. The sale of the respondentís houseboat on December 15, 2005 netted less than expected. The respondent used the net proceeds to pay other obligations.

On December 23, 2005, the client wrote to the respondent and demanded payment. She told the respondent that it was a large sum of money and she needed it repaid. On January 12, 2006, the client filed a complaint with bar counsel and on February 23, 2006, she retained counsel. Counsel sent to the respondent a demand letter under the provisions of G.L. c. 93A.

On March 6, 2006, the parties reached an agreement. The respondent executed a mortgage on his house in favor of the client to secure his promise to pay and on April 28, 2006, the respondent paid the sum of $15,800.00 to the client.

The respondentís conduct in borrowing funds from his client in circumstances where the client did not receive the advice that she would have received if represented by independent counsel, the terms of the transaction were not fair and reasonable to the client, the client was not given a reasonable opportunity to consult with independent counsel and the client did not consent to the conflict of interest in writing, was in violation of Mass. R. Prof. C. 1.8(a).

In aggravation, the respondent received an admonition in January 2001 for use of an IOLTA account as a personal checking account. AD no. 01-05, 17 Mass. Att'y Disc. R. 664 (2001).

The parties stipulated that the appropriate sanction was a public reprimand. On July 11, 2006, the Board of Bar Overseers voted to adopt the partiesí stipulation and proposed sanction, and the respondent was publicly reprimanded.

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



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