A Friend In Need

The Maine Supreme Judicial Court affirmed the conviction of a former attorney for theft by misapplication of property

Dale Thistle was an attorney in Newport. As part of his practice, he drafted a will for Gilman Friend in 2008. The will nominated Donna Friend, Gilman’s ex-wife, as the estate’s personal representative and devised a substantial portion of Gilman’s estate to her. The will devised the remainder of the estate to Gilman’s four adult children.

In December 2010, Gilman fell at his home. Emergency responders treated Gilman for cuts and abrasions and then left Gilman at home with Donna. Donna found Gilman dead the next morning. As personal representative of Gilman’s estate, Donna hired Thistle to explore the possibility of a wrongful death suit against the emergency responders’ employer. Thistle ultimately negotiated a settlement on Donna’s behalf, and on July 2, 2012, he received a check for $390,000 payable to “Donna Friend Personal Representative of the [Estate of] Gilman Friend and Dale F. Thistle Esq.” Thistle deposited the check into his IOLTA (client trust) account on July 13, 2012.

On August 2, 2012, Thistle consulted an attorney about whether the proceeds of the wrongful death settlement should go to Donna or to Gilman’s children. The attorney advised that, under both the will and 18-A M.R.S. § 2-804 (2009), the funds were statutorily required to go to Gilman’s children, but Donna was entitled to recover her expenses in pursuing the action on behalf of the estate. From the IOLTA account, Thistle then reimbursed Donna her expenses and paid the consulting attorney. Accounting for these expenses, and the approximately $96,300 Thistle was entitled to receive as an attorney fee for the wrongful death claim, approximately $290,000 remained of the settlement funds for Gilman’s children.

A question of balance

As of March 2014, the account balance was only $21,958.62.

Thistle made frequent withdrawals from the IOLTA account for personal expenses, such as tax delinquency payments, payments to his son and ex-wife, utility payments, home repair payments, and payments to himself. Between July 2013 and March 2014, Thistle withdrew over $300,000 from the IOLTA account, far more than the sum of Donna’s expenses, expenses of the consulting attorney, and Thistle’s attorney fees in the settlement action.

In May 2014, a receiver appointed to close Thistle’s practice liquidated and closed the IOLTA account. When the receiver was appointed, the account contained $15,445.92—not enough to pay Gilman’s children their roughly $290,000 share of the settlement funds. Between Thistle’s receipt of the settlement funds in July 2012 and the closure of his IOLTA account, Thistle never paid Donna or Gilman’s children or notified the children that the settlement award existed. Gilman’s children learned of the settlement award only after Donna’s death in 2014. When they finally learned of the award, they contacted the Board of Overseers of the Bar.

Claim of prosecutorial misconduct in closing argument

Thistle challenges three statements made by the State:

(1) That defense counsel made “evidence-free assertions”;
(2) That “[Thistle] apparently thinks that Donna Friend is an accomplice to Dale Thistle’s theft? That Donna Friend enabled that theft”; and
(3) That “there’s no evidence that . . . [Donna] told Dale Thistle not to pay the heirs the money. There is no evidence of that. None. Seriously.”

None of these statements constitutes improper argument.

As to following the late ex-wife’s instructions

Contrary to Thistle’s position, Donna’s obligation as personal representative of the estate to distribute Gilman’s assets to his children does not alter Thistle’s legal obligations under the Maine Rules of Professional Conduct as the estate’s attorney. See M.R. Prof. Conduct 1.15. The evidence establishes that Thistle owed a fiduciary obligation to safeguard and distribute the settlement funds, obtained on behalf of the estate, whether to Donna as personal representative or to Gilman’s children directly. See In re Ingeneri, 321 B.R. 601, 604-05 (Bankr. D. Me. 2005); cf. State v. Schmidt, 2008 ME 151, ¶ 27, 957 A.2d 80 (holding that a “reasonable view of the evidence” supported finding that defendant who had “sole . . . control over” funds obtained as an agent of another owed a fiduciary obligation under section 358(1)(A) to make the payments for which the funds were intended). Under no view of his obligations could he distribute the funds to himself or his family.

He received a disability suspension in 2014. (Mike Frisch)