Opinion ID: 2068232
Heading Depth: 1
Heading Rank: 8

Heading: Purcell's MRPC 8.4 Exceptions

Text: With respect to a violation of Rule 8.4(c), Purcell contends that the only nexus between this conclusion in [sic] the hearing court's Finding of Fact and Conclusions of Law appears to arise from the signature certification by the Respondent as to the accuracy of the HUD-1. Purcell argues that he had nothing to do with the entire transaction, short of appearing at settlement and answering questions that arose from any of the items that were enumerated in the HUD-1. Purcell maintains that [e]ven presuming that [Purcell] was aware of the `lease/buy-back,' as found by the hearing court, that would still have no impact on Respondent's responsibilities as a settlement agent. As previously discussed with respect to Purcell's exceptions to the MRPC 1.15 violation, Purcell did have substantial fiduciary obligations that went beyond merely ministerial tasks related to the closing. By signing the HUD-1 and the settlement statement, Purcell took on responsibility for the fraudulent transaction. The HUD-1 was a clear misrepresentation with respect to the distribution of funds. It did not report the payment of $18,000.00 to Michal Johnson. Nor did it report the withholding of $28,917.00 from the sellers' proceeds and the subsequent disbursement of $27,168.00 made by Cheryl Bruce upon Michal Johnson's instruction. In addition, Purcell violated MRPC 8.4(c) by knowingly utilizing at the closing a false Statement of Occupancy signed by Thompson-Burnett. Kochanski testified: [T]he occupancy affidavit ... essentially says that the buyer of the property will move in the property within ... 60 days after closing and will occupy the property for one year. The purpose for that is that loans were being made for people to occupy the property at a certain rate and, if you're buying a piece of property to rent out to others, then you would have a higher interest rate and you'd never get 100 percent financing[.]    What happened here is that the parties defrauded the lender. And, from the testimony I've heard today, it appears that everyone knew at closing, when these documents were being signed, that the buyer had no intention of occupying the property. The evidence in the record shows that Purcell conducted the closing where the lease/buyback arrangement was discussed with Mr. and Mrs. Barnes with the understanding that they would remain in their home. Indeed, it was at the closing that Thompson-Burnett signed the false occupancy affidavit, misrepresenting her intention to occupy Mr. and Mrs. Barnes's home. Purcell also excepts to the hearing judge's finding that he violated MRPC 8.4(a). This exception depends on the success of his defense to the charge that he violated MRPC 1.15, which we have rejected. In the words of his exception: Rule 8.4(a) is the Rule which essentially says that it is a violation of the Rules of Professional Conduct to violate a Rule of Professional Conduct. If this Court overrules Respondent's contention that this case should be dismissed, then the effect of this Rule should be subsumed in any other violation found. Because we do find Purcell to have violated MRPC 1.15, this exception is overruled.