Justices hear arguments in colleague’s decision over law firm sanctions

Posted June 13, 2011, at 10:29 p.m.

BANGOR — The Maine Supreme Judicial Court considered Monday whether a Portland law firm should have notified the Board of Overseers of the Bar about possible unprofessional conduct by a colleague sooner than they did.

Scott Davis, attorney for the board, is asking the full court to overturn the decision of Justice Donald Alexander not to sanction six attorneys at Verrill Dana for allegedly failing to take swift and appropriate action against former partner, John Duncan.

Peter J. Rubin, a Portland attorney, represented the six attorneys at Monday’s hearing held at the Penobscot Judicial Center.

Duncan, who has been disbarred, was convicted in 2008 and served two years in prison for two counts of theft, totaling nearly $300,000. He admitted to stealing from clients’ trust accounts for years.

Alexander, along with Justice Warren Silver, who handled an appeal over the subpoena of the law firm’s records, and Chief Justice Leigh I. Saufley, recused themselves from the case.

Justices Jon Levy, Andrew Mead, Ellen Gorman and Joseph Jabar questioned Davis and Rubin for about 30 minutes.

“Beyond a reasonable time there is time limit required under the rule, is there?” Jabar asked Davis.

“I think immediate and prompt action should have been taken,” Davis said, emphasizing that managing partners learned Duncan had not deposited checks into the firm’s account as he should have in early July. They did not notify the Board of Overseers that Duncan possibly had behaved unprofessionally until early November.

Alexander found the attorneys had acted out of concern for Duncan’s mental state because he appeared to be suicidal and refused to discuss what had happened.

“If he was not well enough to talk about why he’d taken the checks, how did the partners know he was well enough to practice law?” Gorman asked.

“Well, he wasn’t standing out on a ledge and he didn’t have a gun in his desk drawer he took out and played with,” Rubin said. “He was working but seemed depressed.”

Mead, who was a Superior Court justice for many years before going on the Supreme Court, read the theft statute loud, then asked, “How is what he did not theft?”

The managing partners concluded and Alexander in his decision issued in December agreed that Duncan’s transactions involving one client uncovered in July 2007 were an “isolated, aberrational event and that no other accounts were or would be affected” and he had returned the $77,500 he had taken.

That turned out to be wrong. An audit conducted later found Duncan had stolen hundreds of thousands of dollars from the firm and its clients.

In an unrelated case, all seven justices considered an appeal brought by a man serving a five-year sentence for drunken driving.

Caitlin Fullerton, who three weeks ago graduated from the University of Maine School of Law, represented Terry W. Chesnel, 56, of Lewiston. She took on his case as a student working in the Cumberland Legal Aid Clinic run by the law school.

“This was a really good opportunity,” Fullerton of Portland said after the 30-minute session in which the seven high court justices peppered her with questions.

The case involved Chesnel’s challenge to a law that allows prisoners’ accounts to be garnished by up to 25 percent to pay fines, surcharges, victims’ compensation fees, restitution and child support. Chesnel, who is serving a mandatory five-year sentence on a drunken driving conviction, receives about $200 a month from family and friends. That money is placed into his prisoner account.

Through Fullerton, Chesnel maintained that the judge ordered that he begin paying his fine on Oct. 8, 2013, after his scheduled release.

“This cases involves the wrongful infringement of executive power, represented by the Bureau of Prison,” Fullerton told the justices.

She argued that Chesnel was not informed at sentencing or while incarcerated that his prison account could be garnished. The judge’s ruling that payment should begin on a specific date should have trumped the garnishing law, she argued.

Chesnel was sentenced in July 2008 to five years in prison for continuing to drive after having his license revoked and for drunken driving, according to a brief filed in the case. In addition, he was ordered to pay $4,505 in fines including surcharges. The sentence and the fine were the mandatory penalties passed by the Legislature.

During his incarceration, money has been deducted from his prison account to help pay the fine. As of April 21, a total of $1,595, an average of $49 per month, had been collected toward Chesnel’s fines in that manner, according to a brief filed by Assistant District Attorney Susan Pope.

There is no timeline under which the justices must issue decisions.

The state’s high court will hear appeals Tuesday and Wednesday at the Penobscot Judicial Center.

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