ROCKLAND, Maine — Mediation has failed to resolve a legal battle over the state’s sale of a waterfront home for less than half its value while the owner was in a mental hospital.

Two lawsuits remain in progress in the state’s Business and Consumer Court in Portland over the Owls Head property sale, damage to the man’s Rockland home, the sale and disposal of many of his personal belongings and the euthanizing of his cat.





Two and a half years after the Maine Department of Health and Human Services sold the Owls Head home of William Dean, one lawsuit still seeks to overturn that sale and the other seeks damages from the state for its actions while it had legal authority to handle the Rockland man’s finances.

The parties have gone through mediation but no agreement was reached in the case, according to paperwork filed in court last month.

“The parties have participated in ADR (alternate dispute resolution). Although no agreement of settlement was reached, the ADR neutral (mediator) indicated that a further discussion aimed at settlement might be productive,” according to an April 16 filing by presiding Justice Andrew Horton.

The next conference to discuss the schedule of the case, and when a jury trial could be held, will take place in October.

According to a transcript of a hearing held in the business court, attorney David Jenny said Dean was impoverished by the state’s action. Dean had $654,000 worth of real estate, free of any mortgages, when the state became his conservator in September 2012, but in less than a year, Dean was down to $20,000, according to Jenny in the transcript.

In addition, the state’s sale of his Owls Head waterfront home has left Dean with a capital gains tax bill of more than $31,000 that was unnecessary, according to Jenny.

The saga began after Dean was hospitalized in 2012 at the state-run Dorothea Dix Psychiatric Center in Bangor. DHHS was appointed conservator in November 2012 by a probate judge to oversee Dean’s finances. At the time, DHHS argued that it needed to sell some of Dean’s assets to pay upcoming property tax bills.

Dean’s relatives, however, said they offered to pay the bill but that the state went forward with the Owls Head sale.

Dean’s property on Castlewood Lane in Owls Head was sold by DHHS to James Peter Taylor in January 2013 for $205,000, even though the town had the property assessed for $476,840. The property consisted of 1 acre with 100 feet of shore frontage and a two-story, 1,000-square-foot cottage.

Court papers show that the state hired appraiser Sarah Robertson, who concluded the property was worth $340,000.

Court filings also revealed a Jan. 10, 2013, DHHS memo that showed attorneys for the department approved moving up the closing of the Owls Head property before Dean’s relatives could go to court to try to block the transaction. The DHHS official drove to Rockland to the Knox County Registry of Deeds that day and met with Taylor’s attorney and completed the sale and filed the deed transfer at the registry.

Dean’s sister Claire Dean Perry filed a lawsuit in May 2013 against the state, Key Bank and her brother. In her lawsuit, she claimed that her brother drained a trust account their parents had established for both of them. Key Bank was named in the suit because it oversaw the trust account and the state was named because it was the conservator. The state was named as a defendant because of its actions.

A second lawsuit was filed in February by Pamela Vose, Dean’s cousin, who became conservator over his finances in August 2013 after the state withdrew. Vose’s lawsuit seeks to void the sale of the Owls Head waterfront property.

Perry, Dean and Key Bank reached an agreement, approved by the Penobscot County Probate Court in September 2014 to settle the first lawsuit. The settlement calls for the sister to be paid $71,542 and $48,475 to Vose as the conservator of Dean.

Dean was released from Dorothea Dix in 2013 and lives in the midcoast.

Vose’s lawsuit also contends that DHHS hired an auction company to sell off belongings in the Rockland house without having a contract and without taking an inventory. Other court documents stated that the estate included many valuable items such as musical instruments and a Cadillac that Dean cherished.

His cat Caterpillar was euthanized.

The July affidavit also revealed that Dean’s house in Rockland was left unheated during the 2012-2013 winter while the state was Dean’s conservator. The water was not turned off nor the pipes drained, so pipes froze, burst and flooded the residence with an estimated 27,000 gallons of water. Since the house on Broadway was closed up, a serious mold problem resulted.

DHHS is arguing that the Rockland house already had a mold problem before the broken water pipes. Jenny is contesting that claim and is asking for an expert witness to testify that he had inspected the home before the flooding.

The state put the property — a two-story, 2,000-square-foot colonial house — up for sale for $69,900. A sale was not completed, however, before DHHS was replaced as conservator by Vose.