February 16, 2020
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Maine supreme court justice reverses reprimand of Portland lawyer in connection with foreclosure ‘robo-signing’ scandal

PORTLAND, Maine — A Maine Supreme Judicial Court judge has reversed and dismissed the public reprimand of a Portland lawyer in connection with the foreclosure “robo-signing” scandal.

Justice Andrew Mead said in his 12-page decision dated Thursday, Jan. 15, that a three-member panel of the Maine Board of Overseers of the Bar incorrectly found that Paul E. Peck of Portland had violated bar rules in 2010 because he did not “take immediate and effective action” to stop foreclosure proceedings that were based on faulty affidavits.

“[The] panel’s decision is founded upon a ‘should have known’ standard rather than actual knowledge,” Mead wrote. “The distinction is critical.”

The judge said the rules the panel concluded Peck had violated “are clearly predicated upon conscious malfeasance, not negligence or recklessness.”

The board of overseers issued its reprimand on April 10. Peck, who works for the law firm Drummond & Drummond , immediately appealed it to the state supreme court and it was assigned to Mead.

“The panel issued the lowest level of discipline that is available if they are going to issue discipline,” James Bowie, Peck’s Portland attorney, told the Bangor Daily News in June. “Despite that, we feel the factual findings don’t support the imposition of any discipline at all.”

The process leading to Peck’s reprimand began in 2011 with the filing of a grievance by lawyer Thomas Cox, who while working as a volunteer for Pine Tree Legal Assistance, picked up the case of a Denmark woman facing foreclosure from GMAC Mortgage. For that case and others, Cox is credited with prompting a multi-state freeze on foreclosures that were based on sworn statements that had not actually been reviewed. That practice became known as robo-signing.

The break in that case, and the central reason Peck received the reprimand from the board of overseers, was a 2010 statement Cox took under oath from Jeffrey Stephan, who was a team leader of the GMACs “document execution team,” according to court records.

Stephan said during that deposition that some statements he signed in foreclosure documents for the company were untrue and that he did not review the documents or sign sworn affidavits with a notary present.

Cox’s case was not the first time a court had acknowledged GMAC’s affidavit processing problems. The company had previously been sanctioned for the same kind of problem in Florida in 2006, which Cox noted in his initial complaint, according to a previously published report.

In the April reprimand order, the board of bar overseers determined Peck became aware of his client’s wrongfully signed documents sometime in June 2010 but did not take the appropriate action as head of the firm’s foreclosure practice to make the problem known to judges deciding foreclosure cases that relied on falsely signed affidavits. The oversight board ruled that Peck should have filed motions to amend the Stephan deposition when he thought the statements Cox submitted to the court would be altered.

Peck argued in his appeal that he would not have been able to file such motions without approval from the client, making that an unreasonable expectation of the board. He also argued that because he believed the Stephan deposition would be altered and Stephan’s statements “could not be true,” he did not knowingly offer false evidence, in the form of signed foreclosure documents, to the court.

Bowie said Sunday in an email that Peck and the firm were pleased with Mead’s decision.

“The steps taken by Mr. Peck and his firm, faced with a unique situation without parallel, acted on their own to solve the problem posed by robo-signers in a way that was not only appropriate, but became a template for other professional ethics and disciplinary authorities nationally dealing with the problem with much more time to coolly and dispassionately address these issues,” Bowie said. “We are gratified that the court recognized that Mr. Peck, faced with a problem of national proportions and not of his own making, acted appropriately.”

In addition to Peck, Philip Mancini, the ethics officer for Drummond & Drummond, and associate Alexander Saksen went before the board. The complaint against Mancini was dismissed, according to information posted on the board’s website. The one against Saksen was dismissed with a warning.

BDN writer Darren Fishell contributed to this report.

 

Correction: A previous version of this story erroneously stated that Philip Mancini, the ethics officer for Drummond & Drummond, received a warning. The complaint against Mancini was dismissed, according to information posted on the board’s website.

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