Opinion
Docket No. BCD-CV-13-48 Docket No. BCD-CV-14-14
06-05-2017
CLAIRE DEAN PERRY, Plaintiff, v. WILLIAM T. DEAN, JR., et al.„ Defendants PAMELA W. VOSE, Personal Representative of the Estate of William T. Dean, Jr., Plaintiff, v. JAMES P. TAYLOR, et al., Defendants
Claire Dean Perry Plaintiff Cynthia Dill, 511 Congress St PO Box 9711 Portland, ME 04104-5011 William T. Dean, Jr. Defendant David Jenny, Esq. 11 Shell St PO Box 252 Owls Head, ME 04854 James P. Taylor Defendant Zachary Greenfield, Esq. 361 US Route 1. Falmouth, ME 04 State of Maine, DHHS Janice Archer David Vaughn Barbara Cardone, Esq. Defendants Christopher Taub, AAG 111 Sewall Street 6 State House Station Augusta, ME 04333-0006 David Thistle Defendant Thomas Bell, Esq. 2 Main St Topsham, ME 04086
STATE OF MAINE Cumberland, ss. BUSINESS AND CONSUMER COURT ORDER ON PLAINTIFF VOSE'S MOTION FOR RECONSIDERATION AND MOTION TO ALTER OR AMEND
Plaintiff Pamela W. Vose has filed a Motion for Reconsideration of certain issues addressed in the court's orders on the summary judgment motions filed by Plaintiff Vose, the State Defendants and Defendant James Taylor. See Perry v. Dean, Order on State Defendants' Motion for Summary Judgment (Dec. 3, 2015); Vose v. Taylor, Order on Cross-Motions for Summary Judgment of Plaintiff and Defendant (Dec. 3, 2015).
Also still pending is Plaintiff Vose's Motion to Alter or Amend Order of Summary Judgment in Perry v. Dean, which is dated December 17, 2014, and which was not fully briefed due to the filing of the State's appeal from that summary judgment order. The Motion to Alter or Amend Order of Summary Judgment raises the same issue regarding Plaintiff's claim against attorney Barbara Cardone that is now raised in Plaintiff Vose's Motion for Reconsideration.
Oral argument on the Motion for Reconsideration was held June 1, 2017.
Plaintiff Vose's Motion for Reconsideration and previously filed Motion to Alter or Amend ask the court to reinstate Counts IX and X of Plaintiff Vose's cross-claim, which allege that attorney Cardone is liable for violating 42 U.S.C. § 1983 and for breach of fiduciary duty to Mr. Dean. Attorney Cardone represented the Maine Department of Health and Human Services (DHHS) in its capacity of temporary conservator for William Dean at the time DHHS arranged for the sale of Mr. Dean's Owls Head property to Defendant Taylor.
The Motion for Reconsideration also asks the court to reconsider its denial of summary judgment to Plaintiff Vose on her claim for a declaratory judgment that the deed to Mr. Taylor for the Owls Head property was void ab initio.
Claims Against Attorney Cardone
The Court's Order on State Defendants' Motion for Summary Judgment in Perry v. Dean addressed Mr. Dean's claims against attorney Cardone at pages 52-63 (Count X) and 65-66 (Count IX), and the court sees no reason to revisit its analysis and conclusions set forth therein.
Further discussion of one issue not reached by the court in that Order merits further discussion because it was a primary focus of the oral argument. The breach of fiduciary duty claim in Cross-Claim Count X is premised on the view that attorney Cardone owed a fiduciary duty to Mr. Dean, the ward, as well as a duty to her client, DHHS. Plaintiff Vose points out that Maine recognizes that an attorney may owe a duty to a non-client "when an attorney's actions are intended to benefit a third party and where policy considerations support it . . ." Estate of Cabatit v. Canders, 2014 ME 133, ¶ 21, 105 A.3d 439, 446. An example of such a situation is when an attorney is negligent in preparing an estate plan and the court allows the client's estate to bring a malpractice action against the attorney. In fact, the Cabatit opinion cites to a New York case involving such circumstances. Id., citing Schneider v. Finmann, 15 N.Y.3d 306, 933 N.E.2d 718 (2010). In such a situation, the attorney's duty extends to the non-client estate because the estate is the foreseeable beneficiary of the attorney's services and because there is no potential conflict between the attorney's duty of reasonable care to the estate planning client and the duty of care with respect to the estate. See id., 933 N.E.2d at 720-21 (noting that a decedent's estate "stands in the shoes of the decedent").
However, the court in Cabatit noted that "[a]n attorney will never owe a duty of care to a nonclient, however, if that duty would conflict with the attorney's obligations to his or her clients." 2014 ME 133 at ¶ 21, 105 A.3d at 446, citing Ramsey v. Baxter Title Co., 2012 ME 113, ¶ 11, 54 A.3d 710. Here, attorney Cardone's client wanted to sell the Owls Head property to Mr. Taylor, and was willing to thwart the efforts of Mr. Dean's family members to stop it. Plaintiff Vose says that attorney Cardone had a fiduciary duty to Mr. Dean and should not have assisted her client in selling the property to Mr. Taylor. Plainly, attorney Cardone could not have fulfilled her duty to her client and also fulfilled the duty to Mr. Dean that the Motion for Reconsideration asks the court to impose as a matter of law.
Whether the attorney for a conservator can ever owe a fiduciary duty to a protected person need not be decided here. At least under the circumstances of this case, to impose upon the attorney for a conservator a separate fiduciary duty toward the protected person would subject the attorney to conflicting obligations. The third-party beneficiary theory does not apply in this instance because to apply it would create a conflict between attorney Cardone's duty to her client and any separate duty to Mr. Dean, the protected person.
Accordingly, because both the Motion for Reconsideration and the Motion to Alter or Amend Order of Summary Judgment focus on the same issue, they will be denied regarding that issue.
Claim Regarding Taylor Deed Being Void Ab Initio
The gist of Plaintiff Vose's summary judgment motion and now her motion for reconsideration on the issue of the validity of the deed from DHHS as temporary conservator to James Taylor is that the deed is void because, under the Maine Probate Code, DHHS was required to obtain authorization from the Probate Court to convey Mr. Dean's Owls Head real estate to Mr. Taylor for less than fair market value. See 18-A M.R.S. § 5-408(6). The court denied Plaintiff Vose's summary judgment motion, and now denies her motion for reconsideration on this issue, because whether the DHHS conveyance to Mr. Taylor required prior Probate Court authorization raises disputed material issues of fact and law. The primary issue of fact is whether the sale to Mr. Taylor was indeed for less than fair market value. The primary issue of law is whether, assuming prior Probate Court authorization was required, an issue that the court has not had to address, whether the absence of prior authorization for the sale invalidates the deed.
As discussed at oral argument, the court views the effect of section 5-408 of the Maine Probate Code upon the transaction to involve issues of law that the court has not been called on to address because of the material factual dispute regarding the fair market value of the property at the time of the sale.
IT IS ORDERED AS FOLLOWS: Plaintiff Pamela W. Vose's Motion for Reconsideration is denied. Plaintiff Pamela W. Vose's Motion to Alter Or Amend Order of Summary Judgment also is denied.
Pursuant to M.R. Civ. P. 79(a), the Clerk is hereby directed to incorporate this Order by reference in the docket.
Dated June 5, 2017
/s/_________
A. M. Horton, Justice Claire Dean Perry
Plaintiff Cynthia Dill,
511 Congress St
PO Box 9711
Portland, ME 04104-5011 William T. Dean, Jr.
Defendant David Jenny, Esq.
11 Shell St
PO Box 252
Owls Head, ME 04854 James P. Taylor
Defendant Zachary Greenfield, Esq.
361 US Route 1.
Falmouth, ME 04 State of Maine, DHHS
Janice Archer
David Vaughn
Barbara Cardone, Esq.
Defendants Christopher Taub, AAG
111 Sewall Street
6 State House Station
Augusta, ME 04333-0006 David Thistle
Defendant Thomas Bell, Esq.
2 Main St
Topsham, ME 04086 STATE OF MAINE
CUMBERLAND, ss BUSINESS AND CONSUMER COURT
Location: Portland
Docket No.: BCD-CV-13-48 CLAIRE DEAN PERRY, Plaintiff, v. WILLIAM T. DEAN, JR., DEPARTMENT OF HEALTH AND HUMAN SERVICES, as Conservator and Guardian of William T. Dean, Jr., KEYBANK, N.A. as successor to KEY TRUST COMPANY OF MAINE and Trustee of the ALICE DEAN REVOCABLE TRUST, JANICE ARCHER, DAVID VAUGHAN, DAVID G. THISTLE, and BARBARA A. CARDONE, Defendants
ORDER ON PENDING MOTIONS
The court held oral argument on March 5, 2014, on three pending issues: 1) Defendant William T. Dean, Jr.'s motion to hold an evidentiary hearing on the motion of Defendant Department of Health and Human Services (the Department) to disqualify; 2) the Department's motion to disqualify Mr. Dean's counsel; and 3) KeyBank, N.A.'s motion to sever. As indicated on the record at the hearing, the court denied Mr. Dean's motion to hold an evidentiary hearing because the Department and KeyBank stipulated to the testimony that the potential witnesses would have provided and thus the evidentiary hearing was unnecessary.
At oral argument, the court indicated an intention to deny KeyBank's motion to sever without prejudice because although the time periods in question are different, the court concludes there may be common issues of fact regarding Defendant Dean. See M.R. Civ. P. 20(a), 21. However, as indicated at a discovery conference April 1, 2014, the court is reserving decision on KeyBank's motion to sever in light of a related case, Vose v. Taylor, recently docketed as Maine Business & Consumer Court Docket No. BCD-CV-14-14.
The last motion for the Court's determination is the motion of the Department to disqualify Attorney David Jenny. KeyBank joins the motion to disqualify. The Law Court has recently clarified the standard for disqualifying an attorney:
First, disqualification must serve the purposes supporting the ethical rules. A party moving to disqualify an attorney has the burden of demonstrating more than mere speculation that an ethics violation has occurred; she must establish in the record that continued representation of the nonmoving party by that party's chosen attorney results in an affirmative violation of a particular ethical rule. . . .Morin v. Me. Educ. Ass'n, 2010 ME 36, ¶¶ 9-11, 993 A.2d 1097.
Second, [there must be] a showing that continued representation by the attorney would result in actual prejudice to the party seeking that attorney's disqualification. [C]ourts will not assume the existence of prejudice to the moving party just by the mere fact that an ethical violation was committed[.] Rather, the moving party must point to the specific, identifiable harm she will suffer in the litigation by opposing counsel's continued representation. Indeed, to allow disqualification with proof of anything less than such actual prejudice would be to invite movants to employ tins obvious vehicle for abuse.
[Third], if the moving party produces evidence of both an ethical violation and actual prejudice, any court order disqualifying the attorney must include express findings of that ethical violation and resulting prejudice.
The Department asserts that M.R. Prof. Conduct 1.7 is being violated by Attorney Jenny's representation of Mr. Dean because Attorney Jenny formerly represented Ms. Perry in a probate proceeding related to DHHS's guardianship of Mr. Dean. (See DHHS Exh. E.) That same guardianship is part of the present controversy between the parties. (See Amend. Compl. ¶¶ 16-17.) In the guardianship proceeding, after Attorney Dill succeeded Attorney Jenny as counsel, Ms. Perry submitted a claim to the Probate Court for $120,000 against Mr. Dean, (DHHS Exhs. I-J.)
Rule 1.7 prohibits the representation of a client if the representation is a concurrent conflict of interest; in this case, "a significant risk that the representation of one or more clients would be materially limited by the lawyer's responsibilities to another client, a former client or a third person or by a personal interest of the lawyer." M.R. Prof. Conduct 1.7(a)(2). The only exception is if "(1) the lawyer reasonably believes that the lawyer would be able to provide competent and diligent representation to each affected client; and (2) each affected client gives informed consent, confirmed in writing." M.R. Prof. Conduct 1.7(b). The Department asserts that Attorney Jenny's representation of Mr. Dean will be materially limited both by his prior representation of Ms. Perry and his personal friendship with Ms. Perry.
It is worth noting that the Department is a third party to the attorney-client relationship. Nevertheless, at least one case in Maine has addressed the motion of a third party to disqualify a law firm based on that firm's prior representation of a client. See In re Compact Disc Minimum Advertised Price Antitrust Litigation, 2001 WL 64775 (D. Me. Jan. 26, 2001) (Hornby, J.). The fact that the Compact Disc case involving a motion to disqualify class counsel does, in this court's view, materially distinguish that case from this on the merits of the disqualification issue, but the Compact Disc decision is authority supporting the Department's and KeyBank's standing to pursue the motion.
The court has serious doubts about the representation of Mr. Dean by Attorney Jenny based on the concurrent conflict of interest issue. Although Mr. Dean and Ms. Perry may settle their portion of this case, their interests are clearly adverse to one another. Adversity of interests is not affected by settlement.
Attorney Jenny asserts that he has analyzed the rule and is confident that he can provide competent representation to each client. It is the court's understanding that Ms. Perry consents to Attorney Jenny's representation of Mr. Dean, but the record does not indicate that she has given informed consent in writing to Attorney Jenny's representation of Mr. Dean. This Order thus requires proof of such consent as a condition to Attorney Jenny's continued representation of Mr. Dean.
The record includes the affidavit of Pamela Vose, Mr. Dean's conservator, who consents to the representation of Mr. Dean by Attorney Jenny (Mr. Dean Exh. D. at 2) and whose authority as conservator includes the power to "[p]ay, settle, prosecute or contest any claim involving [Mr. Dean]" (Ms. Perry Exh. 1 at 3).
In the alternative, KeyBank provides a different basis for disqualification: Attorney Jenny's status as a necessary witness. M.R. Prof. Conduct 3.7 states:
(a) A lawyer shall not act as advocate at a tribunal in which the lawyer is likely to be a necessary witness unless:M.R. Prof. Conduct 3.7(a).
(1) the testimony relates to an uncontested issue;
(2) the testimony relates to the nature and value of legal services rendered in the case; or
(3) disqualification of the lawyer would work substantial hardship on the client.
The comments to the rule instruct:
Whether the tribunal is likely to be misled or the opposing party is likely to suffer prejudice depends on whether it is a bench, jury trial, or other proceeding the nature of the case, the importance and probable tenor of the lawyer's testimony, and the probability that the lawyer's testimony will conflict with that of other witnesses. Even if there is risk of such prejudice, in determining whether the lawyer should be disqualified, due regard must be given to the effect of disqualification on the lawyer's client. It is relevant that one or both parties could reasonably foresee that the lawyer would probably be a witness. . . .
KeyBank states that Attorney Jenny is a factual witness and that it intends to depose Attorney Jenny in the course of the litigation. KeyBank asserts that Attorney Jenny's testimony is necessary because it is relevant, material, and unobtainable from other sources. Specifically, KeyBank asserts that Attorney Jenny has knowledge of Mr. Dean's alleged acknowledgement of draining the trust, Mr. Dean's mental health status, and Mr. Dean's alleged agreement with Ms. Perry to pay her back the money he allegedly misappropriated from the trust. KeyBank contests these issues seriously. Attorney Jenny candidly admitted at the hearing that his testimony was relevant and material, but he disputes that it is unobtainable from other sources.
On the present record, the court is not persuaded that Attorney Jenny is indeed a necessary witness or that disqualification is required. However, whether he is a necessary witness depends on what material testimony he, and only he, can provide—a question that likely will require a comparison of his prospective testimony with that of other witnesses. For that reason, the court will permit any party to take Attorney Jenny's deposition upon oral examination.
Moreover, Attorney Jenny asserts that Mr. Dean would likely not be able to retain substitute counsel if Attorney Jenny is disqualified. The court's limited understanding of Mr. Dean's situation is consistent with that assertion. Thus, there is an issue of "substantial hardship" for purposes of Rule 3.7(a)(3).
On this record, considering all relevant factors, the court will deny the Motion to Disqualify without prejudice to its renewal. Attorney Jenny and Mr. Dean, and Mr. Dean's conservator, Pamela Vose, are clearly on notice of the possibility that the motion to disqualify might be renewed at a later stage of the case, such that, if the motion were granted, Mr. Dean would be disadvantaged even more than if disqualification were to occur now.
IT IS HEREBY ORDERED:
1. The Department's motion, with joinder by KeyBank, to disqualify Attorney Jenny from representing William Dean in this case is hereby denied without prejudice, on the following two conditions:
(a) within 14 days, Attorney Jenny files proof that Claire Dean Perry has provided informed consent in writing to Attorney Jenny's representation of William Dean in this case, and
(b) that Attorney Jenny consent to and participate in a deposition upon oral examination, if noticed by any party, pursuant to M.R. Civ. P. 30. At such a deposition, Attorney Jenny or any other party may object on the ground of attorney-client privilege, attorney work product or any other privilege for refusing to answer. If objection based on privilege or attorney work product is made, the answer need not be given, pending further order of court.
Pursuant to M.R. Civ. P. 79, the clerk is hereby directed to incorporate this order into the docket by reference. Dated April 3, 2014
/s/_________
A. M. Horton
Justice, Business and Consumer Court Claire Dean Perry
Plaintiff
Counsel:
Cynthia Dill, Esq.
511 Congress Street
PO BOX 9711
Portland, ME 04104 Department of Health and Human Services, as Conservator and
Guardian of William T. Dean, Jr., Janice Archer, David Vaughan
Defendants
Counsel:
Katherine Greason, Esq.
6 State House Station
Augusta, ME 04333 William T. Dean, Jr.
Defendant
Counsel:
David Jenny, Esq.
11 Shell St
PO BOX 252
Owls Head, ME 04854 Keybank, N.A. as successor to Key Trust Company of Maine and
Trustee of the Alice Dean Revocable Trust
Defendants
Counsel:
John Aromando, Esq.
Merrills Warf
254 Commercial St.
Portland, ME 04101 David G. Thistle
Defendant
Counsel:
Thomas Bell, Esq.
14 Maine St. Suite 413
Brunswick, ME 04011
M.R. Prof. Conduct 3.7 cmt. [4].