FARMINGTON — A Franklin County Superior Court justice has awarded nearly $7 million in compensatory and punitive damages to a former Phillips doctor’s estate.

Friday’s decision in a 2007 lawsuit found against a German couple accused of defrauding Dr. Margarete “Gretl” J. Hoch and her estate of millions of dollars after she moved into their spa in that country.

Hoch, 84, died June 24, 2008, in Germany. She had practiced medicine in Franklin County for more than 40 years and moved back to Germany, her native land, in late 2004.

“The record is clear . . . that the defendants engaged in a malicious course of conduct. The court finds that they indeed cloistered Dr. Hoch at the Naturhotel when she was in an extremely fragile and vulnerable state of her life and prevented her from having contact with her closest friends and family. The facts show that they bullied, manipulated and intimidated her in order to gain control of her money and generated false and fraudulent documents to achieve their ends,” Justice Michaela Murphy wrote.

Richard Chandler of Strong, Hoch’s personal representative, is the executor of Hoch’s will and stands to gain no benefits. Named in the will as beneficiaries are Shriners Hospitals for Children, SOS Children’s Villages USA and Franklin County Animal Shelter in Farmington.

Chandler and his wife, Lorraine, Hoch’s friends and attorneys of record, filed a lawsuit on her behalf in October 2007 against John and Gudrun Stifel of Meinhard, Germany, owners and operators of Naturhotel hessische Schweiz, a spa in Germany, where Hoch spent her last years. The Stifels claimed through their attorney and court documents that Hoch issued them power of attorney in 2007 and named them as beneficiaries of her will.

Justice Murphy upheld the Chandlers as attorneys of record in 2008.

The 2007 suit cited, among other claims, fraud, undue influence/constructive trust and civil conspiracy. The action was brought after the Chandlers paid an unexpected visit to Hoch at the spa after the Stifels prevented contact between them. Court documents state the Chandlers found Hoch, who was diagnosed in 2005 with progressive Alzheimer’s disease and dementia, in poor health and in dire need of medical care and living in filthy conditions. John Stifel also tried to buy out the Chandler’s power of attorney authority for $130,000 or more if they were willing, court records state.

Murphy stated in her final judgment order issued Friday, that the Chandlers, represented by Portland attorney Thimi Mina, had proved that damages in the amount of $3.9 million were caused by the Stifels’ misconduct. This amount, which essentially restores Hoch’s estate funds wrongfully taken from her, includes unauthorized transfers of account balances from a number of Hoch’s accounts as well as unauthorized debits against other accounts belonging to her, according to the order.

All of these assets were either used by the defendants before or after Hoch’s death or were transferred before or after her death to the Stifels, the order states. In the case of the real estate, the property belonging to Dr. Hoch was transferred into the names after her death.

The order also requires that a constructive trust be imposed against the Stifels, and in favor of Hoch’s estate, in the amount of $3.9 million. A constructive trust is an equitable remedy resembling a trust imposed by a court to benefit a party that has been wrongfully deprived of its rights. Any assets the Stifels have or will have in the future must be held in the benefit of Hoch’s estate, Mina said Monday.

Murphy awarded nominal damages in the amount of $1, requested by Mina, for intentional infliction of emotional distress.
In respect to the issue of punitive damages, the court awarded the estate $3 million.

“This judgment is proper and right,” Mina said Monday. The Chandlers took great care to try to protect Hoch’s well-being and her estate while she was alive and her estate after her death, he said. This is one of the most complex cases he has ever dealt with, Mina said.

“The defendants’ objective from the beginning was to run out the clock to obtain Dr. Hoch’s money,” he said. “This woman had a long documented history of wanting to be generous to charities. . . . Her intent was to leave money to charities and nonprofit organizations. . . . I’m pleased with the outcome. It’s really a sad case.”

German court proceedings are ongoing, but it is known that just under $2 million in euros belonging to Hoch’s estate was frozen, Mina said.

Court documents claimed that Hoch had about $7 million in assets in 2004, with $1.8 million of those in the U.S. It is unknown what her estate’s assets are at this time, Mina said.

The Stifels’ Portland attorney, John Whitman, was not available for comment on the case Monday.

[email protected]