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Brown v. Sappi Fine Paper6/30/2004
Reporter of Decisions
Argued: April 14, 2004
Sappi Fine Paper appeals from a decision of a hearing officer of the Workers' Compensation Board (McCurry, HO), granting a motion for attorney fees and expenses brought by the law firm of McTeague, Higbee, Case, Cohen, Whitney & Toker, P.A. The fees were awarded in response to a consolidated motion for fees related to thirteen cases in which Sappi had previously paid attorney fees to James MacAdam pursuant to lump settlement agreements. The hearing officer concluded that the McTeague firm was entitled to additional fees beyond those already paid to MacAdam for work during a period that MacAdam had been employed by the law firm. Sappi contends that McTeague's motions for fees were barred by the lump sum settlement agreements and by a settlement of a related Superior Court action between the McTeague law firm and MacAdam. Sappi also asserts that, because Hearing Officer McCurry's term of office expired prior to his decision on the motion, McCurry lacked de jure or de facto authority to issue the decision. Although we conclude that McCurry had de facto authority to act upon the motion, we conclude that he erred in awarding additional fees against Sappi for the benefit of the McTeague law firm in this case, and vacate the decision.
I. BACKGROUND
This appeal arises from a consolidated decision involving thirteen employees who settled their workers' compensation claims against their employer, Sappi, for lump sums. Each of the thirteen employees retained MacAdam as counsel who, at the commencement of the litigation, was employed by the McTeague law firm. In April 2000, MacAdam withdrew from the law firm, and many of his former clients, including all those in the present appeal, continued to retain him to represent them. Shortly after MacAdam left the McTeague law firm, the thirteen employees settled their claims against Sappi for lump sums. The settlements provided for the payment of attorney fees to MacAdam for his services rendered to the employees resulting in the lump sum settlements.
Meanwhile, the McTeague law firm filed a civil action in the Superior Court against MacAdam raising several claims, including conversion, breach of fiduciary responsibility and diversion of corporate opportunity, unjust enrichment, and misappropriation of trade secrets. As one of its remedies McTeague sought recovery of a portion of any prospective fee awards to MacAdam in connection with any cases on which MacAdam had worked while with McTeague.
In June 2001 McTeague and MacAdam settled the Superior Court action. McTeague, Higbee et al. v. James J. MacAdam et al., CV-00-249 (Me. Super Ct., Cum. Cty., June 1, 2001) (Warren, J.). The order approving the settlement specifies that the agreement and documents would be confidential, and that the Superior Court would "retain jurisdiction for the exclusive purpose of administering and enforcing the terms of this Order, including without limitation, jurisdiction to consider and act upon requests by any person relating to the Stipulation and Confidentiality Order."
In early May 2001 McTeague sought an award of fees and disbursements in the thirteen cases that had been settled by MacAdam. Hearing Officer McCurry was the hearing officer assigned to the case. His term of office expired on December 31, 2002. In January 2003 the parties received a letter from the Executive Director and the Chief Hearing Officer of the Board, notifying the parties of a potential issue concerning McCurry's authority, and giving the parties an opportunity to object within 10 days. The letter explained that in the absence of a response the Board would "assume that there is
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