FARMINGTON — The state’s high court on Tuesday upheld a 2009 Franklin County court’s decision to award nearly $7 million in damages to the estate of a former Phillips doctor, calling the case an “extreme example of elder abuse.”
The late Dr. Margarete “Gretl” J. Hoch had practiced medicine in Franklin County for more than 40 years before she moved back to Germany, her native land, in late 2004. Hoch, 84, died June 24, 2008, in Germany. Court documents state that Hoch was diagnosed in 2005 with progressive Alzheimer’s disease and dementia.
Richard and Lorraine Chandler of Strong, friends of Hoch’s and her attorneys of record, filed a lawsuit on her behalf against John and Gudrun Stifel of Germany in October 2007.
The Chandlers’ lawsuit accused the Stifels of defrauding Hoch and her estate of millions of dollars after she moved into their spa in Germany. After the Stifels prevented the Chandlers from having contact with Hoch in 2007, the Chandlers paid a surprise visit and found Hoch in poor health, in dire need of medical care and living in filthy conditions, according to court documents.
Richard Chandler, Hoch’s personal representative, is the executor of Hoch’s will, and stands to gain no benefit from the estate. The beneficiaries named in the will are Shriners Hospitals for Children, SOS Children’s Villages USA and Franklin County Animal Shelter in Farmington.
Though the Maine Supreme Judicial Court upheld the lower court’s decision Tuesday, it did lower the compensatory damages awarded in 2009 by nearly $140,000, making it $3.7 million. The change was made to better reflect the valuation of Hoch’s estate, according to the decision.
The Supreme Court’s decision affirmed the amount of the $3 million in punitive damages that Franklin County Superior Court Justice Michaela Murphy ordered the Stifels to pay in September 2009. The Stifels are the owners and operators of Naturhotel hessische Schweiz, a spa in Germany, where Hoch spent her last years. The Stifels, who claimed that Hoch had given them power of attorney in 2007, appealed the Franklin County court decision citing the court erred in several ways, including abusing its discretion by admitting evidence at the damages hearing relating to financial transactions occurring after Hoch’s death.
Justice Murphy had upheld the Chandlers as attorneys of record in 2008.
The high court’s decision also noted that whether a German court would enforce the punitive damages is a separate matter. According to past case law, punitive damages are unavailable in Germany and German courts may decline to enforce foreign punitive judgments as contrary to public policy, the decision states.
The total award is $6.746 million.
In 2009, German court proceedings were ongoing and at that time it was known that just under $2 million in euros belonging to Hoch’s estate was frozen, attorney Thima Mina, who represented Hoch and the Chandlers, said then.
Court documents claimed that Hoch had about $7 million in assets in 2004, with $1.8 million of those in the United States. It was unknown Tuesday what her estate’s U.S. assets are currently valued at.
Mina said Tuesday that they were relieved the U.S. court’s case was included. He is hoping the German courts uphold Maine’s ruling.
He also said Hoch picked the right couple, the Chandlers, to oversee her assets and financial matters.
“The Chandlers were not looking for a fight here, they were doing their job,” Mina said.
The Stifels’ Maine attorney, John Whitman, said that Justice Murphy held the Stifels in contempt of court, and defaulted them on all counts.
“These drastic sanctions resulted from the Stifels’ refusal to turn over certain documents pertaining to Dr. Hoch, because they had been advised by their attorneys in Germany (where the parties are also involved in litigation) that it would be a violation of German law to do so,” Whitman said Tuesday.
In December 2008 the Stifels retained Whitman’s law firm to represent them.
“At that point, little remained to be done except for the determination by Justice Murphy of the dollar amount of the award,” he said. “On appeal from that award, we argued that the Maine courts had lacked jurisdiction over the Stifels from the outset, and we challenged her decision on numerous other grounds, but it was largely affirmed by the Law Court. It appears that the litigation in the U.S. is probably at an end.”
In the American courts, the Stifels were portrayed as villains, a characterization that the courts accepted in their absence, Whitman said.
“The ongoing German litigation, in which my firm is not involved, may reach a different conclusion altogether,” he said.
The Law Court’s decision Tuesday also did not change the lower court’s order to impose a constructive trust on Hoch’s assets that were transferred to the Stifles. A constructive trust may be imposed to do equity and to prevent unjust enrichment when title to property is acquired by fraud, duress and other similar ways, according to the decision.
dperry@sunjournal.com
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