In the Matter of Kevin P. Phillips

(S.J.C. Judgment of Reinstatement entered by Justice Spina on July 29, 2008.)

SUMMARY²

The respondent, Kevin P. Phillips, Esq., is an attorney duly admitted to the Bar of the Commonwealth on December 19, 1975.

On August 15, 2000, the mother of a minor child filed a complaint in the Plymouth Probate Court against the father of the minor child for support, custody and visitation. In 2001, the father engaged the respondent to represent him in the support action. The respondent continued to represent the father in that action through the end of 2004.

A trial in the matter took place on March 18 and 19, 2002. On May 21, 2002, the probate court issued a court order that directed the father to pay the mother $250 per week in child support, to pay the mother an additional $1600 per month for housing for her and the child, and to place $200,000 in trust for the child’s education. With respect to the trust, the court order specified:

• that the father prepare the trust instrument in a form reasonably acceptable to the mother;
• that the mother be a trustee or designate another person as trustee;
• that the basic support payments not be paid from the trust unless the mother agreed thereto in writing;
• that the trustees pay the “additional child support” (the monthly housing payments) from the trust if the father did not pay it on time, or if he notified the trustees in advance to make the payment;
• that the trustees invest the principal in a reasonably prudent manner;
• that the trustees accumulate and add to principal such income as was not distributed or paid by the trustees for the purposes of the trust.

After the issuance of the order, the respondent drafted a trust instrument that created the trust. In violation of the court order, the respondent took no steps to ascertain that the trust instrument was acceptable to the mother prior to the father’s execution of the trust instrument on June 20, 2002. In violation of the court order, neither the mother nor any person designated by her was named as a trustee.

After the father executed the trust instrument, the respondent did not in a timely manner send a copy to the mother or to her attorney. In violation of the court order, the trust permitted the father to pay his basic support obligation from the trust, allowed the father to revoke the trust or withdraw trust funds at any time, and allowed the trustee to use trust funds for the father in the event the father became incapacitated. The respondent knew at the time that he drafted the trust, and at the time that the father executed the trust, that several of its provisions violated the court order.

The respondent included provisions in the trust that violated the court order so that he and the father could readily access the trust funds under the terms of the trust itself. In violation of the court order, the father funded the trust with no more than $166,000. Between July 1, 2002, and January 15, 2005, the respondent, as trustee, made total payments from the trust as follows:

$23,250 in basic child support payments
$10,752 in housing allowance payments
$ 8,950 in payments of credit card debt owed by the father
$83,837 in loans to the father
$27,500 in legal fees owed by the father, mostly to the respondent

The respondent knowingly violated the court order by making basic child support payments from the trust; by paying the father’s credit card debt from the trust, by making loans to the father from the trust, and by paying legal fees that were owed to him by the father from the trust. In violation of the court order, the respondent knowingly failed to make the “additional child support payments” to the mother in the months that the father failed to make them.

Having agreed to be the trustee of the trust, the respondent had a fiduciary duty to the child to prudently and properly safeguard the trust funds. By allowing funds to be transferred from the trust for purposes other than the housing and education of the child, the respondent knowingly violated the court order and violated his fiduciary duty as trustee to prudently and properly safeguard the trust funds. The respondent’s ability to fulfill his fiduciary duties as trustee of the trust was materially limited by his simultaneous representation of the father in the probate court and other matters, and by his own interests in collecting attorney’s fees owed to him by the father. The respondent could not and did not obtain the informed consent of the beneficiary of the trust or of his legal guardian to the conflict.

By knowingly violating the order of the probate court concerning the establishment of an educational trust for the client’s child, the respondent violated Mass. R. Prof. C. 3.4(c) and engaged in conduct prejudicial to the administration of justice, in violation of Mass. Prof. C. 8.4(d), and in conduct adversely reflecting on his fitness to practice law, in violation of Mass. R. Prof. C. 8.4(h).

By counseling and assisting his client in violating the order of the probate court concerning the establishment of an educational trust for the client’s child, which conduct the respondent knew was illegal and fraudulent, the respondent violated Mass. R. Prof. C. 1.2(d), and failed to exercise reasonable diligence in representing a client, in violation of Mass. R. Prof. C. 1.3.

By intentionally creating a trust that he knew violated the order of court, for the purpose of facilitating access to the trust funds by him and by his client, the respondent engaged in conduct involving dishonesty, fraud, deceit or misrepresentation, in violation of Mass. R. Prof. C. 8.4(c).

By collecting legal fees owed to him by his client from the trust that was established for the benefit of the client’s son, in violation of the probate court order, the respondent collected an illegal fee, in violation of Mass. R. Prof. C. 1.5(a).

By violating his obligation under the court order and his fiduciary duty to the beneficiary of the trust to prudently and properly safeguard the trust funds, the respondent engaged in conduct prejudicial to the administration of justice and conduct adversely reflecting on his fitness to practice law, in violation of Mass. R. Prof. C. 8.4(d) and 8.4(h).

By continuing to serve as trustee of the educational trust, when his duties as trustee might have been materially limited and were limited by his own interests and by his responsibilities to his client, the respondent engaged in a conflict of interest in violation of Mass. R. Prof. C. 1.7(b).

In mitigation, the respondent has returned to the trust all of the attorney’s fees that he received from trust funds, as a consequence of which he received no payment for his legal services. No permanent harm occurred to the trust because all of the funds that had been loaned by the trust to the respondent’s client have been restored.

This matter came before the Board of Bar Overseers on a stipulation of facts and disciplinary violations and an agreed recommendation for discipline by suspension for three months, conditioned upon the respondent’s taking and passing the Multistate Professional Responsibility Examination. On March 10, 2008, the Board voted to accept the parties’ stipulation and impose the agreed suspension. On March 27, 2008, the Supreme Judicial Court for Suffolk County entered an order suspending the respondent for three months, effective thirty days from the date of the order.

 

FOOTNOTES:

¹ The complete Order of the Court is available by contacting the Clerk of the Supreme Judicial Court for Suffolk County.

² Compiled by the Board of Bar Overseers based on the record before the Supreme Judicial Court.

 

Related to No. BD-2008-034

• S.J.C. Judgment of Reinstatement entered by Justice Spina, 07/29/2008