Opinion ID: 2068232
Heading Depth: 1
Heading Rank: 5

Heading: Purcell's Additional MRPC 1.15(b) Exception

Text: Purcell also contends that the hearing judge erred in finding that he violated MRPC 1.15(b) because he had never held any property of a client or third party to the transaction. MRPC 1.15(b) contemplates scenarios in which a lawyer receives funds from a client or third person. An attorney is in violation of this Rule when the attorney fails to promptly notify the client or third person, deliver funds to the client or third person, or render a full accounting regarding such property. Bar Counsel alleges a delivery violation here because, inter alia, the full disbursement amounts indicated on the HUD-1 were not delivered to Mr. and Mrs. Barnes. According to Purcell's counsel, he is not in violation of MRPC 1.15(b) because his role at settlement was essentially ministerial, primarily encompassing the role of answering any questions about the line items on the HUD-1, and securing the signatures of all the parties subscribing to the HUD-1, and lastly placing his signature on the HUD-1 after all others had approved and signed it. The record demonstrates, however, that Purcell, beyond ministerial tasks, undertook fiduciary responsibilities. Purcell signed a document entitled Closing Certification[,] which stated, pertinently: To the best of my knowledge, the HUD-1 Settlement Statement which I have prepared is a true and accurate account of the funds which were (i) received, or (ii) paid outside closing, and the funds received have been or will be disbursed by the undersigned as part of the settlement of this transaction. (Emphasis added.) Bar Counsel called David Kochanski as an expert witness with regard to real estate transactions and settlement procedures. Kochanski was asked to explain the have been or will be disbursed by the undersigned as part of the settlement of this transaction language in the Closing Certification. He responded that it means [t]he settlement attorney is receiving these funds in trust for the purposes that are set forth on the settlement statement, and it's an agreement by the settlement attorney  and it's a guarantee, really  that the funds are going to be disbursed in this manner. Kochanski concluded that Purcell undertook the responsibility to receive these funds from the lender and also from the buyer in this case and disburse them in accordance with the HUD-1 Settlement Statement. Purcell's signature paired with this testimony provides an ample predicate for the hearing judge's finding that he violated MRPC 1.15(b). By signing this document, Purcell assumed the role of a fiduciary for Mr. and Mrs. Barnes's funds and the corresponding responsibility for the delivery of those funds, per the requirements of MRPC 1.15(b). The subsequent misappropriation of these funds evidences an abdication of Purcell's duties in this regard. Purcell's exception is overruled.