LEWISTON – Gene Libby, the attorney who left Verrill Dana three years ago over John D. Duncan’s thefts from the firm, might have been a key witness in a disciplinary hearing this week for six of the firm’s attorneys.

Instead, Libby’s testimony took less than 10 minutes.

That’s because a Maine Supreme Judicial Court ruling bars Libby from discussing any information he gathered about the matter before he resigned as Verrill Dana’s general counsel in November 2007.

Although the ruling apparently has not been made public, it was referenced in documents filed in connection with the hearing. Maine’s highest court decided that any communications Libby had with Verrill Dana lawyers, and any documents he obtained while he was still with the firm, are confidential under the attorney-client privilege.

Verrill Dana’s former managing partner, David Warren, and five lawyers who served on the firm’s executive board in 2007 are defending themselves against allegations of ethics violations.

Their hearing opened Monday and testimony concluded Wednesday in Lewiston District Court. Closing arguments will be heard Friday morning in Portland by state Supreme Court Justice Donald Alexander.

On Wednesday, Libby told Alexander that from June 5, 2007, when Duncan’s secretary raised concerns about his billing practices, to Oct. 10, 2007, when Libby learned about a potential lawsuit by the secretary, no one at the firm informed him. As general counsel, he said, he was the point person for concerns about ethics and issues of attorney misconduct.

“I had no idea that there was ever a Duncan matter ongoing,” Libby said.

He investigated the matter from Oct. 10 through Duncan’s expulsion from Verrill Dana on Nov. 6. Then, Libby and two other attorneys resigned and set up their own practice in Kennebunk. Libby has not commented publicly, except to say that they left because of the handling of the Duncan matter.

J. Scott Davis, lead counsel for the state board that governs the conduct of lawyers, asked Libby on Wednesday if the concerns about Duncan should have been brought to his attention. Lawyers for the six respondents quickly objected, and Alexander agreed that Libby could not answer.

Davis, of the Board of Bar Overseers, filed ethics complaints earlier this year against Warren; James Kilbreth III, who chaired the firm’s executive board at the time; and Eric Altholz, Mark Googins, Roger Clement Jr. and Juliet Browne, lawyers who served on the firm’s executive board.

Davis seeks professional sanctions, which could range from a simple reprimand to disbarment, for what he has described as “willful blindness” to the misconduct of Duncan. He alleges that the firm failed to immediately investigate the matter and report it to the ethics board.

The lawyers say they handled the situation appropriately, they broke no ethics rules and they should not be sanctioned.

In June 2007, Duncan’s secretary, Ellie Rommel, informed another partner at Verrill Dana that Duncan had written several checks to himself from the account of an elderly client.

Warren confronted Duncan, who said the money was not stolen from the client but was earned money that should have been shared with all of the partners. Warren and other leaders in the firm accepted Duncan’s explanation, apology and repayment of $77,500.

The issue did not flare up again until October 2007. On Oct. 2, Warren met with the head of Duncan’s department, Kurt Klebe, to inform him of what Duncan had done and to ask Klebe to establish procedures that would ensure it would not happen again.

Within a few days, Klebe began to uncover evidence of other wrongdoing by Duncan.

In the next week or so, Rommel’s lawyer, Daniel Lilley, sent Verrill Dana a letter indicating she intended to file a wrongful-termination lawsuit. Rommel had resigned, but said she had effectively been fired because of the stress of the situation with Duncan.

That month, Verrill Dana brought in auditors to review Duncan’s books. They found he had stolen roughly $300,000 from clients and the firm over the previous decade. Duncan ultimately pleaded guilty to theft and tax evasion. He served two years in federal prison and received a lifetime disbarment.

Members of the firm’s executive board testified Wednesday that they were convinced Duncan had taken only funds that should have been deposited to the firm’s general account. They considered it a breach of the partnership agreement, not something that had to be reported to the Maine Board of Bar Overseers.

Mark Googins said Duncan’s impeccable reputation over 30 years at Verrill Dana was a factor in his decision to accept Duncan’s explanation.

“If you made a list and said, ‘This happened, guess who it was?’ after Roger Putnam, John would be last on that list,” Googins said, referring to another highly respected lawyer at the firm.

“It was inconceivable to me that he would lie to David Warren,” Kilbreth testified. “It was inconceivable to me that he would lie, period.”

Bryan Dench, an expert on the ethical responsibilities of lawyers, testified on behalf of the respondents.

Dench told Justice Alexander that Warren, Kilbreth and the members of the executive board had no duty to investigate further or to report Duncan to the state board when Duncan offered his initial explanation about the suspicious checks.

“The reporting rule calls for an exercise of judgment,” said Dench, a longtime lawyer with Skelton, Taintor & Abbott in Auburn.

Maine bar rules require lawyers to report the conduct of another lawyer when such conduct raises significant questions about that person’s honesty, trustworthiness or fitness to practice law.

Considering what they knew from June to October 2007, Warren and the others believed that Duncan was sincere and that he was worthy of their trust and his position as a partner in the firm, Dench said.

“Was that a reasonable judgment under all the facts they had at the time? In my opinion, it was,” Dench said.

He said that when Klebe’s review and the audit in October revealed the scope of Duncan’s misconduct, Warren and the executive board rightly and promptly expelled him and reported the matter to the Board of Bar Overseers and criminal prosecutors.

Alexander is expected to take several days or weeks to issue a written decision.

Staff Writer Trevor Maxwell can be contacted at 791-6451 or at:

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