Judge: Firm lied about subpoena delivery
Awards ex-Bermuda bank president $3.3 million in damages
It's right up there with "the dog ate my homework" and "the check is in the mail" in the pantheon of the world's most improbable statements: "No one notified me to show up for court."
But when Donald P. Lines, the former president of the Bank of Bermuda, told authorities that he never received a hand-delivered legal notice from the US Securities and Exchange Commission to appear as a witness in a federal inquiry in Washington, D.C., he wasn't fibbing, a Massachusetts state judge has ruled.
In one of the more bizarre recent lawsuits in the state courts, Suffolk Superior Court Judge Robert C. Cosgrove determined that Stokes & Levin, a Stoughton-based "process serving" company, lied about delivering a subpoena to Lines at a Boston hotel in November 2005 and falsified a document to make it appear it had.
The judge ordered the company to pay Lines $3.3 million, including interest and attorneys' fees, for the damage to his reputation. SEC officials had criticized Lines's alleged failure to obey the subpoena in a Bermuda newspaper. And Lines, who is a member of the Order of the British Empire because of his serv ice to Bermuda, said the controversy cost him positions on two boards of directors.
Cosgrove also held Stokes & Levin's principal owner and its business manager in contempt for failing to show up for court hearings, including the one where he made the award. He also hinted that he might refer the case to law enforcement authorities or other state officials, possibly by the end of next week. "The fact that defendant Stokes & Levin Inc. is in the business of serving process for this court and other courts of the Commonwealth of Massachusetts exponentially compounds the offense it committed against Mr. Lines," Cosgrove said in a ruling earlier this month.
Darren Stokes, the principal owner of Stokes & Levin, and Maria Barrios, the office manager, could not be reached for comment yesterday despite phone messages left at the business.
According to Lines's suit, Lines was recovering from a heart procedure he underwent at Brigham and Women's Hospital in November 2005 when the SEC sought to serve him with an administrative subpoena. He was to testify at a deposition in Washington concerning an inquiry about possible market manipulation involving shares issued by
Stokes & Levin later filed with the US District Court in the District of Columbia a "return of service" document indicating that an employee, Gerson Maciel, personally delivered the subpoena to Lines at the Fairmont Copley Plaza on Nov. 10, 2005, said Lines's lawyer, Henry Sullivan of Boston. The return of service gave a physical description of Lines and bore a signature purporting to be Maciel's.
Most of that was untrue, though, Sullivan said. He interviewed Maciel, who told him that he had stopped working for Stokes & Levin by then. His signature was made with a rubber stamp, Sullivan said. Lines wasn't even staying at the Fairmont Copley; he was at the Copley Square Hotel.
Thomas P. Collins, who defended the company and Stokes in the suit, said it is obvious that "there was an error" by someone at Stokes & Levin, but he was unsure who did it or why. He said Sullivan offered to resolve the matter if Stokes & Levin admitted to the SEC that it never delivered the subpoena. But, "I didn't get the cooperation I felt was required from my client," he said.
Lines, 76, who lives in Bermuda and is chairman of Lines Overseas Management Limited, an offshore investment firm, was traveling with his wife yesterday and could not be reached for comment, Sullivan said.
The case puts a spotlight on individuals who play a crucial role in the court system but are all but invisible to the public. Process servers help ensure due process of law by alerting people to court proceedings, delivering thousands of lawsuits and subpoenas every year in civil and criminal cases.
"The courts fundamentally depend on process servers to be truthful," said Sullivan, who estimated that a company like Stokes & Levin receives up to $100 for each delivery. "Most of the process servers are very honorable. This guy is not."
Jonathan Saltzman can be reached at jsaltzman@globe.com
