Board of Overseers of the Bar v. Alexander W. P. Saksen, Esq.
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Docket No.: GCF# 11-080
Issued by: Grievance Commission
Date: April 10, 2014
Respondent: Alexander W. P. Saksen, Esq.
Bar Number: 004220
Order: Dismissal with Warning
Disposition/Conduct: Candor to the Tribunal; Conduct Prejudicial to the Administration of Justice
DECISION AND ORDER OF GRIEVANCE PANEL D
Panel D of the Maine Board of Bar Overseers Grievance Commission consisting of William Baghdoyan, Esq. (Chair), William Stokes, Esq. and Milton Wright commenced a public hearing on consolidated disciplinary petitions against the above-named respondent attorneys on December 16, 2013. The hearing was held over three days; December 16, and 17, 2013 and January 30, 2014. Phillip P. Mancini, Esq. was represented by James Martemucci, Esq.; Paul E. Peck, Esq. was represented by James Bowie, Esq.; Alexander W.P. Saksen was represented by Peter DeTroy, Esq. The Board of Overseers of the Bar was represented by Assistant Bar Counsel Aria Eee and Assistant Bar Counsel Alan Kelley. The hearing was open to the public pursuant to Maine Bar Rule 7.1(e)(1). However, pursuant to a motion of the respondents, a protective order was issued by the Chair prohibiting the public access to a number of the respondents’ exhibits and to testimony regarding those exhibits in order to protect attorney-client confidences.
The disciplinary petition was brought forward based upon a bar complaint filed on March 7, 2011 by Thomas A. Cox, Esq. and reviewed by a separate panel of the Grievance Commission, on October 25, 2011, which found probable cause that the respondents had engaged in misconduct subject to sanction under the Rules of Professional Conduct.
At the hearing, Board’s Exhibits #1 - 68 were admitted and respondents’ exhibits #1 – 70-A were admitted by agreement. Witnesses called by the Board were Thomas Cox, Esq., Respondents Saksen, Peck and Mancini, D.W., Esq. and A. B.S., Esq. Witnesses called by the Respondents were D.R., Esq. (who testified by video deposition by agreement of the parties) and C.D., Esq.
Testimony was concluded on the afternoon of January 30, 2014 followed by oral closing arguments of all of the parties. The hearing was concluded and the panel adjourned to deliberate.
Respondents Phillip P. Mancini, Paul E. Peck, and Alexander W.P. Saksen, were at all times relevant hereto attorneys duly admitted to and engaging in the practice of law in the State of Maine and subject to the Maine Bar Rules and the Maine Rules of Professional Conduct. At the time of the alleged misconduct all three attorneys were employed at the law firm of Drummond & Drummond in Portland, Maine. Mr. Mancini was a partner who was designated as the firm’s ethics officer, Mr. Peck was a senior associate and the nominal head of the firm’s foreclosure practice group, and Mr. Saksen was an associate who was the most experienced of the three attorneys who were involved in the litigation of real estate foreclosure cases.
In 2009 and 2010, the firm was heavily engaged in foreclosure actions as counsel for plaintiff banks and finance companies. In mid-2010, the firm had over 130 cases in the foreclosure process where GMAC Mortgage, LLC (GMAC) was the plaintiff client of the firm, either as the holder of a mortgage or the servicer of a mortgage on behalf of another institution.
In the case of Federal National Mortgage Association v. Bradbury, Attorney Peck was the counsel of record when a Motion for Summary Judgment on behalf of the plaintiff was filed in August 2009. That motion was filed with a Statement of Material Facts which was supported by an affidavit of GMAC employee Jeffrey Stephan, whose position with GMAC was “Limited Signing Officer.” That affidavit, which in identical or similar form was used in most of the GMAC foreclosure cases being litigated by Drummond & Drummond, asserted that Stephan had reviewed all of the critical documents, that he had personal knowledge of the facts asserted, and that he had signed and sworn to the affidavit in the presence of a Notary Public.
On June 7, 2010, Attorney Cox, representing the defendant Nicole Bradbury conducted a deposition of Jeffrey Stephan. Julia Pitney, Esq. an associate at Drummond & Drummond participated in the deposition via telephone link on behalf of GMAC. During the deposition Mr. Stephan testified that some of the statements he made in his affidavit were not actually true. He testified that he did not actually review all of the documentation in each foreclosure case filing, but only checked the figures with respect to payments made and amounts due on the mortgages. He also testified that he never actually signed and swore to his affidavits in the presence of a notary. This testimony raised the issue of whether all of the cases that had utilized Mr. Stephan’s affidavits in summary judgment motions contained false information not properly sworn to, thus resulting in false information being presented to the various courts where the cases were pending or had been processed.
Some brief information regarding the deposition was given to Paul Peck by Julia Pitney in a passing conversation either on the day of the deposition or shortly thereafter. On June 9, 2010, Attorney Cox had a phone conversation followed up by an e-mail exchange with Ben Campo, Esq., another junior associate at Drummond & Drummond about the problems revealed by the Stephan deposition. These exchanges were in regard to another case where the Stephan affidavit had been utilized in a motion for summary judgment, GMAC v. Ciraldo. On or about June 15, 2010, Attorney Cox filed an opposition to the plaintiff’s motion for summary judgment in the Ciraldo case and copied Attorney Campo with the motion and a copy of the transcript of the Stephan deposition. Thus an actual copy of the transcript of the Stephan deposition was in the possession of Drummond & Drummond by June 17, 2010.
In addition, persons unknown placed a copy of the Stephan deposition transcript on the internet on or about that same date, and it was seen by Julia Pitney and was brought to the attention of Paul Peck on that date. According to Mr. Peck’s testimony, it was the on-line version of the deposition transcript that he first saw, on June 17, 2010.
Mr. Peck’s initial response to the testimony in the Stephan deposition was that he couldn’t believe the testimony that Stephan gave regarding the fact that he didn’t actually review all the documentation and that he didn’t actually swear to and sign the affidavits in the presence of a notary, and that Peck thought that these statements would be corrected or changed in an “errata” sheet, before the deposition became final. The panel finds it is not logical that an experienced attorney would consider that such material statements of a deposition witness would actually be substantially changed in an “errata” sheet, which is designed to correct minor errors and clerical mistakes. Shock and disbelief that a GMAC official would operate in such a manner is understandable, but believing that this damaging testimony under oath would somehow be erased by an errata sheet is not.
After filing his motion in opposition to summary judgment in the Ciraldo case that included as an exhibit a copy of the Stephan deposition transcript, Attorney Cox contacted Attorney Horace Horton, a senior partner at Drummond & Drummond around June 25, 2010, by telephone and by letter, but was unable to actually talk to him. Cox then wrote a letter to Attorney Mancini on June 29, 2010 expressing his concerns about the problems with the Stephan affidavits as revealed in the deposition of June 7, 2010.
Upon receipt of the letter from Cox, Attorney Mancini, in his role as firm ethics officer, took several steps. He responded to Cox’s letter, although in a somewhat non-committal fashion; he contacted Attorney Paul Chaiken seeking advice, and convened a management committee meeting within a few days. That meeting determined that the firm should seek the formal advice of an outside attorney, which resulted in Attorney Daniel Rappaport being retained. A meeting with Rappaport was held on or about July 8, 2010, and a letter with formal advice on how to handle the problem was received from Attorney Rappaport on July 15, 2010. In addition, Attorney Mancini contacted Bar Counsel seeking advice on how to handle the situation.
The advice from Attorney Rappaport was largely adopted by Drummond & Drummond and Mancini and the management committee decided that the correct response would be to write letters to the clerks of court in each pending case, file an affidavit from an attorney at Drummond & Drummond outlining the problems with the Stephan affidavits, and file a new, properly executed supplemental affidavit in support of the motions for summary judgment that were pending in each case. In addition, in any cases where summary judgment had been granted to the plaintiffs but a foreclosure sale had not yet occurred, all sales were put on hold.
As the problem of the Stephan deposition and the affidavits he had produced was playing out in June and July 2010, Attorney Saksen had his own personal issues that caused him to be detached from business at the firm. Saksen had taken an extended leave of absence because of the expected birth of a child whom it was known before the birth would have significant health issues. He was absent for most of May and June, and was not back to a full work schedule even in July. As a result, he played a very small role in the firm’s response to the Stephan deposition problem. He was not part of the group of lawyers in the firm who decided what response would be made to try to correct the problem revealed by the Stephan deposition.
Attorney Saksen was the attorney of record in the case of U.S. Bank National Association v. James, however, and in that case he did file a reply brief to the defendant’s brief in opposition to the motion for summary judgment. This reply brief by Saksen was filed on June 16, 2010 without any indication to the court of a problem regarding Stephan’s affidavit, even though Saksen was aware of the problem regarding the affidavit prior to filing the reply brief, though he had not yet actually read the Stephan deposition.
Attorney Saksen was also the attorney who essentially implemented Drummond & Drummond’s plan to inform the various tribunals of the problem of the Stephan affidavits, although he did not participate in the decision as to how the firm would respond. Saksen drafted and sent the letters to the court clerks along with his own affidavit detailing the problem with the original Stephan affidavits, and included a new supplemental affidavit from Davida Hariott, another officer of GMAC. An example of the letters and affidavits sent to try to correct the problem and inform the tribunals is found in Board’s Exhibits 25-27. These documents were filed in the case of U.S. Bank National Association v. Ciraldo, a case pending in the Waldo County Superior Court, and were sent to the court on August 3, 2010.
Letters and affidavits such as those represented by Board’s Exhibits 25-27 were sent out in approximately 130 cases that Drummond & Drummond had pending in various courts. All were sent out around the first week of August 2010. However, there were a number of cases pending as of the time the problem of the Stephan affidavits became known to Drummond & Drummond where summary judgment proceeded against the defendants before any action was taken to inform the various courts of the defects in the Stephen affidavits that had been presented in support of the plaintiffs’ motions for summary judgment. Respondents’ Exhibit # 58 was a list prepared by Drummond & Drummond of all of the GMAC cases being handled by the firm at the time of the Stephan deposition of June 7, 2010. That list indicates that between the time of the Stephan deposition and the time that Drummond & Drummond began to send letters and new affidavits to the courts regarding the problems with Mr. Stephan’s affidavits, six cases where summary judgment motions were pending relying on Stephan affidavits proceeded to judgment for the plaintiffs, without the courts being notified of the faulty affidavits. In addition, seven new motions for summary judgment were filed between June 7, 2010 and June 22, 2010, apparently relying on the faulty Stephan affidavits, even though the firm was aware of the problem after the completion of the Stephan deposition on June 7, 2010.
There were at least four contested cases being litigated where counsel for defendants had filed opposition to summary judgment motions filed by the plaintiffs at the time of the Stephan deposition of June 7, 2010. The first case was that of Federal National Mortgage Association v. Bradbury, pending in the Bridgton District Court, the case in which the Stephan deposition was conducted by Attorney Cox. In that case, Drummond & Drummond was replaced as counsel for the plaintiff by the Pierce, Atwood law firm. Attorney Cox filed a motion to re-open the partial summary judgment that had already been granted in that case based upon the faulty Stephan affidavit. In September 2010 Judge Powers issued an order reversing the original summary judgment order, denied a subsequent summary judgment motion that had been filed by new plaintiff’s counsel, and issued sanctions against the plaintiff for the filing of the original false affidavit.
In U.S. Bank National Association v. Ciraldo, a case pending in the Waldo Superior Court, a motion for summary judgment had been filed by the plaintiff on April 25, 2010, utilizing a faulty Stephan affidavit in support of the statement of material facts. Paul Peck was listed as the lead attorney for the plaintiff, although the pleadings were signed by Julia Pitney. Attorney Cox filed an opposition to the plaintiff’s motion for summary judgment on June 16, 2010 in which he outlined the problems of the Stephan affidavit and attached a copy of the Stephan deposition. Settlement discussions ensued in this case after that date, but had not been concluded by August 3, 2010, so on that date Alexander Saksen filed his letter and new affidavits to the court clerk outlining the problems with the Stephan deposition. On October 10, 2010, Justice Hjelm, sitting in the Waldo Superior Court considered and denied the plaintiff’s motion for summary judgment, stating that under Rule 56 (h) he could not consider the new affidavit since the statement of material fact did not reference the new affidavits. This case was ultimately settled without further motions to the court.
In the case of U.S. Bank National Association v. James, pending in the United States District Court, Attorney Saksen filed a motion for summary judgment on behalf of the plaintiff on April 26, 2010 utilizing the faulty Stephan affidavit. On June 16, 2010 Saksen filed a reply to defendant’s opposition to the plaintiff’s motion for summary judgment in which no mention of the faulty Stephan affidavit was made, despite the fact Drummond & Drummond had been aware of the problems revealed during the Stephan deposition of June 7, 2010 in the Bradbury case. Defense counsel for James subsequently filed a motion for relief and sanctions based upon the false Stephan affidavit. Attorney Saksen withdrew from the case and was replaced by counsel from the Pierce, Atwood law firm on August 6, 2010, and apparently no notification to the court regarding the false statements in the Stephan affidavit was ever made to the Court by any attorney from Drummond & Drummond. Magistrate Judge Rich ultimately ruled that sanctions should be imposed against GMAC and ordered attorney’s fees be awarded to James for the costs of bringing the motion for sanctions and in opposing the original motion for summary judgment by the plaintiff. Judge Rich, however, refused to make a finding of contempt.
Finally, in the case of U.S. Bank National Association v. Holmes, the plaintiff’s motion for summary judgment was granted by the Belfast District Court on May 4, 2009, again based in part upon an affidavit made by Jeffrey Stephan from GMAC. Notice of a public auction based upon the judgment of foreclosure was mailed to the defendant Michael Holmes by the law firm of Drummond & Drummond on June 10, 2010, scheduling a foreclosure sale for July 1, 2010. This sale was apparently postponed as part of the firm’s response to the false Stephan affidavit, and a letter and new affidavits were sent to the clerk at the Belfast District Court on August 3, 2010.
The Board of Overseers petition regarding Attorney Mancini alleges that he violated his responsibility under Maine Rule of Professional Conduct 5.1 to make sure that lawyers under his supervision complied with Rules 3.3 and 8.4 pursuant to his role as the designated partner in the firm in charge of legal ethics. The allegation is basically that Mancini did not act quickly enough or with sufficient measures to inform the various courts where foreclosure cases were pending that the Stephan affidavits could not be relied upon as being truthful and properly executed.
Rule 5.1 (a) requires that “ A partner in a law firm, and a lawyer who individually or together with other lawyers possesses comparable managerial authority in a law firm, shall take reasonable efforts to ensure that the firm has in effect measures giving reasonable assurance that all lawyers in the firm conform to the Rules of Professional Conduct.” Rule 5.1 (b) states that, “A lawyer having direct supervisory authority over another lawyer shall make reasonable efforts to ensure that the other lawyer conforms to the Rules of Professional Conduct.” The relevant sections of Rule 8.4 are 8.4 (c) & (d) which respectively provide it is professional misconduct for a lawyer to “engage in conduct involving dishonesty, fraud, deceit or misrepresentation,” or to “engage in conduct which is prejudicial to the administration of justice.” Rule 3.3, entitled “Candor Toward the Tribunal,” states in pertinent part that, “A lawyer shall not knowingly, offer evidence that is false. If a lawyer, the lawyer’s client, or a witness called by the lawyer, has offered material evidence and the lawyer comes to know of its falsity, the lawyer shall take reasonable remedial measures, including , if necessary, disclosure to the tribunal.” Rule 3.3 (a)(3). Therefore, the Board’s theory of violation on the part of Mancini is that he had a supervisory duty to make sure that Attorneys Saksen and Peck did not violate the rules by engaging in conduct prejudicial to the administration of justice by not taking reasonable remedial measures to disclose to the various tribunals the problems with the Stephan affidavits that had been tendered to the courts in support of the various motions for summary judgment.
Examining the actions taken by Mancini from the time he became aware of the problems, the panel does not find that he failed to take timely and reasonable remedial measures to rectify the problem posed by the Stephan affidavits. Within a day or two of learning of the deposition in which Stephan admitted he did not have personal knowledge of all of the items asserted in the affidavits and that he did not sign and swear to the affidavits in the presence of a notary, Attorney Mancini contacted Paul Chaiken, a lawyer of long experience for advice, and when Attorney Chaiken was unable to assist, Mancini then contacted Attorney Rappaport for advice. Mancini also contacted bar counsel to seek an advisory opinion and convened a meeting of partners of the firm to discuss the issue. A decision was made to formally retain Attorney Rappaport to obtain a legal opinion as to what action should be taken, and when that opinion was presented, it was implemented in a reasonably prompt manner. Although the remedial measures adopted did not include motions to the various courts asking that motions for summary judgment be withdrawn or for already granted motions to be overturned, the Rule requires only reasonable remedial measures that may include but are not necessarily required to include disclosure to the tribunal. The rule does not require the best possible means of disclosure to the tribunal if disclosure is needed, but only reasonable disclosure. While the panel believes that a better method of making disclosure to the various courts might have been by filing motions that would require action by the courts, it cannot find that the method of writing letters to the courts along with affidavits by Attorney Saksen and new affidavits properly executed by a different employee of GMAC was not a reasonable remedial measure. Because Attorney Mancini acted promptly as soon as he was aware of the problem, and because he did take reasonable, if not the best possible remedial measures, the panel concludes that Attorney Mancini did not violate any of the Rules of Professional Conduct cited by the Board. Therefore, the petition against Attorney Mancini is hereby dismissed.
The petition filed by the Board against Alexander Saksen alleges that he violated Rule 3.3 (a)(1)(3) and Rule 8.4 (a)(c)(d). These allegations essentially are that Saksen offered false material evidence to tribunals and that upon learning of its falsity, he failed to promptly take reasonable remedial action by disclosing the falsity to the tribunal. This would thus also be a violation of Rule 8.4 in that it would be a violation of other rules, it would be conduct that involved misrepresentation, and that all of this would be prejudicial to the administration of justice.
The Panel finds that Attorney Saksen did in fact violate these rules in that he did file at least one additional pleading in the case of U.S. Bank v. James after he had knowledge of the Stephan deposition and the problems with the Stephan affidavits that were being utilized in motions for summary judgment. A reply brief to the defendant’s brief in opposition to the plaintiff’s motion for summary judgment was filed under Saksen’s name on or about June 16, 2010 that made no mention of the faulty Stephan affidavit but continued to rely upon it. The Panel finds that Saksen should have made some attempt to inform the tribunal of the problem rather than filing an additional pleading after having knowledge of the Stephan problem. However, the Panel also finds that this violation was not of great consequence or harm since Drummond & Drummond was shortly thereafter replaced as counsel for the plaintiffs, the issue was brought to the attention of the court and punitive action was taken by the court regarding the faulty affidavit. In addition, the serious personal issues appropriately occupying Saksen’s attention during this time period are certainly a mitigating factor regarding this violation of the rules by Saksen. The family tragedy that he endured during this period of time kept him essentially out of the office and on the periphery of the Stephan affidavit problem. Therefore the Panel concludes that the misconduct is minor, there was little or no injury to a client, the public, the legal system or profession, and there is certainly little likelihood of a similar occurrence in the future. Under these circumstances the Panel believes that the appropriate action is a Dismissal with a Warning to Attorney Saksen.
Attorney Peck, though not officially designated as Chief of the foreclosure unit at Drummond & Drummond, essentially performed that function for the firm. As such he was the supervisor of the more junior attorneys such as Alexander Saksen, Julia Pitney and Ben Campo. As he testified, he was also considered to be the “relationship manager” for many big clients such as GMAC. In that role he was the attorney who was primarily responsible to ensure that the firm’s extensive residential foreclosure practice functioned properly and that an appropriate relationship with large corporate clients such as GMAC was maintained. Attorney Peck was informed of the startling revelations of the June 7, 2010 deposition of Jeffrey Stephan either the same day it occurred or shortly thereafter. Though it is clear that he did not immediately recognize the full implications of the testimony contained in that deposition, the Panel finds that Attorney Peck should have much more quickly focused on the significance of the Stephan deposition and should have acted more promptly to ensure that no further use of the Stephan affidavits was made, and that remedial actions were taken. Despite Attorney Peck’s testimony that an immediate hold was put on further summary judgment motions and on foreclosure sales where judgment had already been obtained, the respondents’ own exhibits show the contrary. Respondents’ Exhibit # 58 indicates that between the time of the Stephan deposition and the time that Drummond & Drummond began to send letters and new affidavits to the courts regarding the problems with Mr. Stephan’s affidavits, six cases where summary judgment motions were pending relying on Stephan affidavits proceeded to judgment for the plaintiffs, without the courts being notified of the faulty affidavits. In addition, seven new motions for summary judgment were filed between June 7, 2010 and June 23, 2010, relying on the faulty Stephan affidavits. Attorney Peck had the knowledge of a very serious problem with the affidavits being used by his foreclosure group in motions for summary judgment but did not take immediate and effective action to prevent the continued use of false material evidence in multiple cases in several courts. Although the Panel believes that Attorney Peck honestly failed to appreciate the seriousness and the full impact of the Stephan deposition and the faulty Stephan affidavits until sometime in July, he nonetheless had the knowledge available to him and failed to act to prevent the continued use and reliance on the Stephan affidavits in at least 13 cases mentioned above that were contained within Respondents’ Exhibit # 58. In particular, the panel is concerned regarding the filing of 7 additional motions for summary judgment relying on the Stephan affidavits subsequent to the Stephan deposition of June 7, 2010. As such, at least with respect to those cases during the period from June 7, 2010 through June 23, 2010, the Panel finds that Attorney Peck was in violation of Rule 3.3 (a)(3) and 8.4 (d).
Though the Panel does not believe that there is any likelihood of a repetition of such conduct by Attorney Peck, the Panel does not believe that this misconduct was minor and believes that there was injury to the public and to the legal system. Therefore the Panel finds that the appropriate disposition of this Petition regarding Attorney Peck is a Public Reprimand and such a Public Reprimand is so ordered.
William Baghdoyan, Esq. Chair
William Stokes, Esq.