EState Hoch v. Stifel

• Citation: 2011 ME 24,16 A.3d 137
• Decision Date: 01 March 2011
• Docket Number: Docket No. Fra–09–537.
• Parties: ESTATE OF Margarete HOCHv.John STIFEL et al.
• Court: Supreme Judicial Court of Maine (US)

16 A.3d 137

2011 ME 24

ESTATE OF Margarete HOCH

v.John STIFEL et al.

Docket No. Fra–09–537.

Supreme Judicial Court of Maine.

Argued: Jan. 11, 2011.Decided: March 1, 2011.

John S. Whitman, Esq., Heidi J. Hart, Esq. (orally), Richardson, Whitman, Large & Badger, Portland, ME, for John and Gudrun Stifel.Thimi R. Mina, Esq. (orally), Shaun M. Garry, Esq., McCloskey, Mina & Cunniff, LLC, Portland, ME, for the Estate of Margarete Hoch.Panel: SAUFLEY, C.J., and ALEXANDER, LEVY, SILVER, MEAD, and GORMAN, JJ.ALEXANDER, J.

[¶ 1] John and Gudrun Stifel, residents of Germany, appeal from a denial of their motion to dismiss, a default judgment, and a judgment determining damages entered by the Superior Court (Franklin County, Murphy, J.) in favor of the Estate of Margarete Hoch. On appeal, the Stifels argue that: (1) the court lacked personal jurisdiction over them pursuant to the long-arm statute, 14 M.R.S. § 704–A (2010), and due process; (2) the court erred in concluding that venue in Franklin County was proper; (3) the court abused its discretion when it entered a default judgment against them for failing to comply with a discovery order; (4) the court erred by admitting evidence at the damages hearing relating to financial transactions occurring after Hoch's death; and (5) the compensatory and punitive damages awards are not supported by sufficient evidence. We modify and affirm the court's judgment.

I. CASE HISTORY

[¶ 2] Margarete Hoch, a medical doctor, was born in Germany in 1924. She lived and practiced medicine in Franklin County in Maine from 1965 to 2005. ¹ Richard and Lorraine Chandler were her friends and unpaid caregivers in Maine for many years. On December 7, 2001, Hoch executed a durable power of attorney naming the Chandlers as her agents (the Chandler POA). This power of attorney was recorded on July 25, 2005. The Chandler POA authorized the Chandlers to manage, control, and handle all of Hoch's business, financial, property, and personal affairs as completely as Hoch would do, including the authority to bring suit on Hoch's behalf. Hoch also named Richard Chandler as her personal representative in a will dated February 20, 2002. The Chandlers were not named as devisees in the will.

[¶ 3] In December 2004, Hoch, then eighty years old, returned to Germany where she took up residency, but she asked the Chandlers to continue to manage her property and substantial assets, much of which remained in the United States. It was estimated that, in addition to her home and real property, Hoch had money assets and securities in accounts in the United States valued at over $1.8 million and several million euros in money assets in Germany. At Hoch's request, the Chandlers sold land that Hoch owned in Maine in 2005 and her home in 2007. The proceeds of the sales were deposited into Hoch's accounts in the United States.

[¶ 4] Hoch communicated with the Chandlers by telephone regularly from December 2004 to August 2006. Hoch was hospitalized for an injury in or around August 2006. After she was released from the hospital, because her home was being renovated to accommodate her needs, Hoch took up temporary residency at the Naturhotel, a German hotel and “spa” owned and operated by John and Gudrun Stifel. Hoch continued to communicate regularly with the Chandlers, but she indicated that she regretted returning to Germany. At one point, Hoch complained to a family member visiting from Spain that she was not receiving good treatment at the Naturhotel and that she was afraid of John Stifel. In October 2006, Hoch fled the Naturhotel and was admitted to the hospital for nine days in serious physical condition. Hoch's distant family attempted to move Hoch to a nursing facility in November 2006, but days before the planned move, Hoch revoked a power of attorney that she had given to her family member only four months earlier.

[¶ 5] On or around January 25, 2007, just months after arriving at the Naturhotel, Hoch apparently executed a power of attorney, naming Gudrun Stifel as her agent (the Stifel POA). The Stifel POA, by its terms, would not expire upon Hoch's death. In April 2007, the Stifels began preventing the Chandlers from reaching Hoch by telephone, and John Stifel called the Chandlers at their home in Maine multiple times to tell them not to attempt to communicate with Hoch. He also instructed them to send documentation concerning Hoch's United States assets to him.

[¶ 6] In late July 2007, Mary (M.M.) Wagner–Burkhardt, a Kentucky resident, telephoned and then met with the Chandlers in Maine, stating that she was Hoch's “dear friend” and had come to Maine to inspect Hoch's property and obtain information about her Maine assets. According to a sworn affidavit, Wagner–Burkhardt stated at that meeting in Portland that, in coming to Maine, she was “acting at the behest of John Stifel.” Wagner–Burkhardt's request for information was refused because she offered no authority to receive it and made no reference to having or expecting a power of attorney. Two days later, John Stifel faxed a power of attorney executed by Hoch in favor of Wagner–Burkhardt to Hoch's bank in Maine, as well as a document purportedly revoking the Chandler POA. Wagner–Burkhardt apparently later contacted Hoch's bank in Maine to request information on how to liquidate Hoch's account there.

[¶ 7] In August 2007, John Stifel sent letters, one of which Hoch apparently countersigned, to the Chandlers and to the Chandlers' attorney, offering them the proceeds from the sale of Hoch's Maine home, estimated at $130,000, to “resolve this situation now and without using the Courts,” indicating that the Chandlers should relinquish their power of attorney. The letters stated that, if the compensation offered is “too low,” the Chandlers should inform Hoch of this “via Fax,” but that “a Court battle” was to be avoided.

[¶ 8] In September 2007, the Chandlers made an unannounced visit to Germany to check on their friend. Despite Gudrun Stifel's attempt to prevent their seeing Hoch, the Chandlers located her room and found Hoch bedridden with bruises and severe bedsores, moaning and in pain, extremely thin, dehydrated, and filthy, with the telephone beyond her reach. The Chandlers accompanied Hoch to the hospital at her request, where she remained for several days because she required surgery for her bedsores and treatment for severe dehydration.

[¶ 9] Hoch indicated to the Chandlers at that time that, although the signatures on the Wagner–Burkhardt POA and the revocation of the Chandler POA were hers, she wanted everything to “stay the same” in the United States. Hoch also stated that she had never met Wagner–Burkhardt and did not know who she was. Before the Chandlers left Germany, Hoch indicated that she wanted to return to the United States for medical treatment. The Chandlers began to make arrangements for Hoch's return, but the Chandlers were unable to contact Hoch after they returned to Maine, except for one call monitored by the Stifels. In October 2007, Hoch placed two phone calls to her bank in Maine. In these calls, Hoch was apparently on a speakerphone with others in the room who were instructing Hoch on what to say.

[¶ 10] The Chandlers, acting on behalf of Hoch pursuant to the power of attorney, filed a complaint for injunctive relief (Count VII) and a declaratory judgment (Count I) against the Stifels on October 10, 2007.² The complaint also alleged various torts—fraud (Count II), undue influence/constructive trust (Count III), tortious interference with economic advantage (Count IV), intentional infliction of emotional distress (Count V), and civil conspiracy (Count VI). These counts asserted, among other things, that the Stifels conspired to use fraud and undue influence to secure the Stifel POA; to revoke the Chandler POA; to extract or secure from Hoch valuable legal instruments, money assets, and property; and to interfere with Hoch's longstanding contractual or fiduciary relationships with Hoch's banking institution in Maine and with the Chandlers.

[¶ 11] The Chandlers sought an ex parte temporary restraining order (TRO) the same day, seeking to prevent dissipation of Hoch's money and assets and end the intimidation and abuse of Hoch by the Stifels. The court ( Jabar, J.) granted the TRO request the following day, finding, among other things, that: (1) the Chandler POA was valid and in force and no purported revocation thereof was valid; and (2) any power of attorney from Hoch to the Stifels or Wagner–Burkhardt was invalid and had no legal effect in Maine.

[¶ 12] On December 10, 2007, the Stifels moved to dismiss the action for lack of personal and subject matter jurisdiction, improper venue/forum non conveniens, failure to join Hoch as an indispensable party, and lack of the Chandlers' standing to bring suit.³ After a hearing, the court ( Murphy, J.) denied the Stifels' motion to dismiss in a thorough written order dated February 14, 2008. Hoch's subsequent motion to intervene was granted, but her motions to dissolve the TRO and dismiss the action were denied. The Stifels then filed numerous pleadings in court, including a late answer to the Chandlers' complaint ⁴ and an unsuccessful motion for summary judgment. The Stifels' answer did not assert lack of personal jurisdiction as an affirmative defense.

[¶ 13] On February 29 and April 14, 2008, the court entered an order and an amended order, respectively, modifying the TRO. These orders required all parties, including Hoch, to disclose under oath to the court and each other all information and documents in their possession relating to Hoch's money, assets, property, estate planning, and debts/obligations in the United States and Germany for all dates beginning January 1, 2006. The Stifels conceded through their American counsel that the court had the authority to order disclosure of this information and that they would consent to it. Subsequently, the Stifels sought an...