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Commonwealth of Massachusetts

Public Reprimand No. 2008-23



ROBERT E. KELLEY

Order (public reprimand) entered by the Board December 8, 2008.

SUMMARY1


The respondent received a public reprimand for failing to competently and diligently represent clients in two unrelated real estate transactions.

Count One of the petition for discipline arose from the respondentís representation of a mortgage lender in connection with a buyerís purchase of residential property. The respondent ordered a title search for the property, and without reviewing the title search documents, certified that the title was clear and ordered an associate to conduct the closing. However, the title was not clear. Prior owners included two deceased tenants in common only one of whose estate had been probated. The respondentís associate conducted the closing on the property, and the buyer received two mortgages from the mortgage lender to finance the purchase.

Approximately one year later, the buyer sought to sell the property, but learned that she did not have clear title and was unable to proceed with the sale. Shortly thereafter, certain heirs with an alleged interest in the property filed suit against the buyer, the mortgage lender and others to assert their interest as tenants in common of the property. By failing to review the title examination and negligently certifying clear title in the property, the respondent failed to competently and diligently represent his client in violation of Mass. R. Prof. C. 1.1 and 1.3.

Count Two of the petition for discipline arose from the respondentís representation of a buyer of two commercial properties. The respondent ordered title searches, which revealed an outstanding mortgage on one of the properties. The respondent proceeded with the closing knowing that the outstanding mortgage had been paid off but that the discharge had not been recorded. The respondent intended to obtain and record the mortgage discharge after the closing but neglected to do so.

For the closing, the respondent prepared a HUD-1 settlement statement that included charges for title insurance for the lenderís coverage and the buyerís coverage. However, the respondent neglected to pay the title company for the coverage and to remit the policies until after a complaint was filed with bar counsel.

In addition, the respondent erroneously had the deeds signed on behalf of the seller, an organization, by an individual who was not properly authorized by the organization to sign the deeds. Also, the respondent withheld from the closing proceeds funds to pay water and sewer charges, but failed to pay the charges until three months after the closing, causing interest to accrue.

Approximately one year later, the buyer sought to refinance, and a title examination disclosed the defect in the deeds and the outstanding mortgage. Through counsel, the buyer requested the respondent obtain and record the mortgage discharge and provide a copy of the ownerís title insurance policy. The respondent did not respond. After a period of time, the respondent secured and recorded the discharge. The buyer incurred legal fees and expenses to correct the title defect and for the accrued interest on the water and sewer charges. The respondentís conduct in failing to competently and diligently represent his client in connection with the closing violated Mass. R. Prof. C. 1.1 and 1.3.

In mitigation and contributing to his neglect in the first matter, the respondent suffered the loss of his long term paralegal and associate at the same time that he was required to spend time at home with his family due to the birth of his third child. In mitigation as to the second matter, the client and her new lender obtained title insurance allowing her to refinance the properties.

This matter came before the Board of Bar Overseers on an agreed recommendation for discipline by public reprimand based upon a stipulation of the parties. On October 20, 2008, the Board 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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