Dec. 10, 2008 — The V.I. Supreme Court has granted a temporary stay on a contempt-of-court order handed down last month for former Schneider Regional Medical Center head Rodney E. Miller Sr., who had until Wednesday to pay back $515,000 or risk going to jail.
The stay is meant to give the government more time to respond to emergency motions filed in Supreme Court earlier this month by Miller and his attorneys.
In a Nov. 25 ruling, V.I. Superior Court Judge James S. Carroll III found that Miller violated a temporary restraining order (TRO) he granted in early August that froze certain assets belonging to Miller, Amos Carty Jr. and Peter Najawicz. All are former hospital executives recently arrested on charges ranging from grand larceny to embezzlement. Among the assets was a Pentagon Federal Credit Union (PFCU) account belonging to Miller, from which more than $1.1 million was transferred between Aug. 18 and Sept. 2 to accounts belonging to Miller's wife and the law firms of his attorneys, Charles Grant and William Glore.
Grant and Glore had until Tuesday to pay $260,000 back into the court's registry or face contempt-of-court charges. Miller had until Wednesday to hand over his share of the cash, or he would be held in jail until the payment was made, Carroll said. (See "Ex-Schneider CEO Must Pay Half a Million or Go to Jail.")
At the beginning of this month, Miller and his attorneys hit the Superior Court with motions to stay and appeal the contempt order. But before Carroll had a chance to respond, they also filed petitions Dec. 4 for an emergency stay pending appeal with the Supreme Court.
The Supreme Court's rules automatically gave government attorneys 10 days to file a brief in opposition to the motion for an emergency stay. As of Monday afternoon, Carroll had not yet issued a ruling on the motions filed in Superior Court. Since the money was due back from Miller and his attorneys this week, the Supreme Court ruled that a "partial, temporary stay" was warranted and would go into effect for 10 days, until government attorneys had a chance to file their briefs.
Government attorneys made their position clear Wednesday, saying Miller, Grant and Glore should have allowed Carroll to rule on the Superior Court motions before taking their case to the Supreme Court.
In any event, the ruling issued Monday by the Supreme Court made all motions filed in Superior Court moot, Carroll wrote in a subsequent ruling handed down Tuesday, in which he shot down the attempts made by Miller and his attorneys to stay the contempt order.
Miller's motion to appeal the contempt order was filed in Superior Court Dec. 1, while a joint motion to appeal was filed the next day by Grant and Glore. A motion to stay the order pending appeal was filed Dec. 3 by St. Croix attorney Warren B. Cole on behalf of Grant and Glore.
According to court documents, Glore received a payment of $150,000 from Miller Aug. 18, while the same day Grant received a $160,000 payment — both transferred from the frozen PFCU account. Another transfer of $75,000 made Aug. 21 to Glore was later used to post bail for Miller.
Glore has contended that he was "never the recipient of any funds from Miller," but rather that the money was deposited into a client trust account overseen by his law firm. Meanwhile, Grant — whose firm is based in Philadelphia — has argued that since the money he received from Miller is being held in a client trust account in Pennsylvania, the rules of state's Supreme Court would prohibit him from transferring any funds back to the territory, according to Cole's motion.
Grant doesn't have to pay the money out of pocket because he hasn't yet been found in contempt of court, Cole added.
Both attorneys have also cited a conflict with a recent decision made by Superior Court Judge Michael C. Dunston to extend the restraining order until the case against Miller, Carty and Najawicz comes to an end. The ruling, they contend, conflicts with Carroll's order to have Miller and his attorneys pay back the $1.1 million transferred from the frozen PFCU account.
The extension means the money is currently frozen in the attorneys' client trust accounts and can't be taken out until the trial is over — otherwise, Dunston could find Glore and Grant in contempt, Cole said.
As of Sept. 8, Miller's client trust account at the Philadelphia-based firm of Grant and Lebowitz showed a balance of $100,000, while his trust account at Dudley, Clarke and Chan contained close to $124,000, according to court documents.
Carroll dismissed Cole's arguments in his ruling Tuesday.
"This judge's (contempt) order is simply directing the attorneys to place the identified funds in the court's registry and to disburse the funds to other third parties," Carroll wrote in his ruling denying the motions. "It is difficult to see how placing the funds in the court's registry to protect said funds from being further diminished would violate Judge Dunston's order or harm the attorneys in any way."
The government also needs to know where the money is and have some kind of assurance that it's not going to continue to change hands, Carroll said.
"Transfer of funds to the court registry puts the people in a stronger position regarding the security of the funds, and eliminates the guesswork as to how much money is actually being restrained," the judge wrote. "For example, the court cannot ignore the fact that the attorneys made a representation in open court on Oct. 24, 2008, as to the amount of money in their accounts, which subsequently proved to be untrue. Having the funds transferred to the court registry will eliminate such confusion and the balance of the equities in transferring the funds therefore weighs in favor of the people with respect to the attorneys and with respect to Miller."
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