Kaile Warren, a Windham entrepreneur cleared in 2009 of investment-related fraud charges associated with his handyman company, is suing the expert witnesses who worked for him and his defense lawyer, Daniel Lilley.

Kaile Warren

Kaile Warren

The suit comes about five years after state prosecutors dropped their fraud case against Warren. At the time, Warren, owner of Rent-A-Husband, claimed he was given faulty legal advice regarding how to structure investments in his company and that he had not misled investors. Warren said he told investors prior to the disolution of the handyman chain that he was developing a partnership with the national Ace Hardware chain, which, Warren claimed, had agreed to erect Rent-A-Husband kiosks in its stores.

While Warren avoided jail time, a plea deal required him to pay about $2 million to his former investors. Once cleared, Warren filed a successful civil suit against his former legal advisers, including the Portland firms Preti Flaherty and Marcus Clegg & Mistretta, as well as Ace Hardware, although terms of any payout were sealed.

In this latest court action, filed on Dec. 21, 2015, in York County Superior Court, Warren claims Randall Dunham, Laura O’Keefe and their former Kennebunk-based appraisal company failed to provide “a defensible expert opinion and report” for Warren’s 2011 suit against Ace Hardware and his former lawyers.

Warren is suing Dunham and O’Keefe, who assisted Dunham in research and analysis for the report, for professional negligence, breach of fiduciary duty and negligent infliction of emotional distress.

In the complaint, Warren claims that Dunham failed to accurately calculate the value of Rent-A-Husband, to use “generally accepted accounting principles” in preparation of the report, and to “adequately prepare for deposition testimony.”

Dunham’s attorneys, Russell B. Pierce, Jr. and Jonathan W. Brogan, of Norman Hanson & DeTroy in Portland, have since filed a motion for dismissal based partially on the grounds that Warren and Lilley argued, in the previous suit against Ace Hardware, in defense of Dunham’s expert testimony.

In December 2009, the attorney general’s office filed a criminal indictment against Warren, then the owner of Rent-A-Husband,  for securities fraud. The office later dropped the charges, under the terms that Warren transfer $1.9 million to the state, to be transferred to the investors who had complained that Warren had not repaid promissory notes.

During the subsequent suit against Ace Hardware and Warren’s former attorneys, Warren hired Dunham to evaluate the worth of Rent-A-Husband. The defendants also hired their own expert witness, Nancy Fannon, to evaluate the company.

According to Dunham, he gave Rent-A-Husband a value of $14.5 million; Fannon evaluated the company at $0.

Subsequently, Ace and Warren’s former lawyers filed a motion to exclude Dunham’s expert testimony. In response, Warren and Lilley defended Dunham’s expert opinion, filing an opposition to the motion on Oct. 7, 2013.

In the motion, Lilley described Dunham’s opinion as “reasonable and thoughtful” and said his testimony “must not be excluded” from the proceedings.

Lilley wrote that Dunham “analyzed a multitude of data through a recognized and acceptable methodology” and that his projections for the company’s potential worth at the period of evaluation was “based on facts, which are stubborn.”

In evaluating the worth of the company, Lilley wrote, Dunham relied partially on projections of Rent-A-Husband provided by an Ace executive.

“Now Defendant Ace cries foul and attempts to distance themselves from figures arrived at following years of study and testing. This transparent attempt to exclude Dunham … should be denied,” Lilley wrote.

In Dunham’s recent motion to dismiss the suit brought against him and his associate, his lawyers recounted Warren’s defense of Dunham in 2013, and wrote that the case is, “in essence, a plaintiff and his counsel approaching this Court for a second time to argue that their position in the first judicial settlement conference was disingenuous and false.”

In an interview last week, Dunham said he was “a little disturbed by the lawsuit,” and said he would “like to keep his old firm out of it as much as possible (because) Dan Lilley is mostly suing me.”

Since working for Warren and Lilley, Dunham and O’Keefe started their own litigation company for providing expert testimony, based in Marco, Fla.

Dunham, who has been practicing for 30 years, is a certified public accountant who is accredited in business valuation and financial forensics. He resides in Florida, but said he returns to Maine as needed.

“To me this is a frivolous lawsuit,” said Dunham. “The whole thing is preposterous.”

Warren declined to comment on the matter. Lilley did not return several attempts for comment prior to deadline.

Only subscribers are eligible to post comments. Please subscribe or to participate in the conversation. Here’s why.

Use the form below to reset your password. When you've submitted your account email, we will send an email with a reset code.