JURISDICTION from: Judicial Conduct Board DOCKET NO. 16.004
above-entitled cause, the Clerk will enter:
1. Pursuant to Rule 10(3) of the Rules of Supreme Court for
Disciplinary Control of Judges, we hereby order that
respondent be immediately and permanently suspended from
judicial office and prohibited from holding judicial office
in Vermont in the future. Upon review of the Judicial Conduct
Board's decision, the Court orders review on its own
motion, adopts the Judicial Conduct Board's decision in
its entirety as a final order of this Court, waives briefing
and oral argument, and orders that the decision be published
in the Vermont Reports.
to Rule 10 of the Rules of Supreme Court for Disciplinary
Control of Judges, the Judicial Conduct Board (the Board or
JCB) issues the following disposition report.
primary purpose of judicial discipline is to 'protect the
public, ensure the evenhanded administration of justice, and
preserve and enhance public confidence in the integrity and
fairness of the justice system.'" In re
Balivet, 2014 VT 41, ¶ 39, 196 Vt. 425 (quoting
In re O'Dea, 159 Vt. 590 (1993)). Pursuant to
that purpose, the Board must remove from the Bench those
individuals found to be unfit for judicial service. Fitness
for service requires not only a knowledge of the law, but
also the utmost in integrity. To maintain public confidence
in the Judiciary, a judge must demonstrate honesty, candor,
and the commitment to ethical principles both on and off the
matter was initiated based on media reports of allegations
that former assistant judge Paul Kane may have engaged in improper
conduct regarding the assets of his uncle's wife,
Katherine "Kay" Tolaro. On February 22, 2016, the
Board initiated an investigation into these allegations. On
February 25, 2016, Mr. Kane agreed to step down from his
position during the pendency of the investigation. After the
Board's initial inquiry pursuant to the Rules of Supreme
Court for Disciplinary Control of Judges (hereinafter
R.S.C.D.C.J.) 7(1), Attorney Ian P. Carleton was appointed to
serve as Special Counsel to investigate the matter further.
Attorney Carleton filed a formal complaint on June 27, 2016,
alleging that Mr. Kane violated several Canons of the Vermont
Code of Judicial Conduct. Mr. Kane retained Attorney Melvin
Fink as his counsel and filed his answer on July 26, 2016.
The Board held an evidentiary hearing on March 20-22, 2017.
Alleged to have been Violated
complaint asserts that Mr. Kane violated Canons 1, 2A, 4A(2),
and 5B(2) based on the following allegations:
not uphold the integrity of the Judiciary and participate in
maintaining high standards of conduct as evidenced by:
1. His collecting and depositing into his personal bank
account certain payments on loans that were made with Ms.
Tolaro's money, as well as his continued management of
the loans, including negotiating the forgiveness of the
remainder of the loans, even though he did not have legal
authority to do so;
2. His failure to provide entirely truthful testimony at a
court hearing when he indicated that at least one of the
loans was made with his money, even though it was actually
Ms. Tolaro's money he used for the loans;
3. His filing of a facially implausible claim against Ms.
4. His continued use of Ms. Tolaro's funds after her
death to pay for the expenses of her Pleasant Street
property, which he stood to inherit, until the estate
administrator was compelled to seek an order by the Probate
Division to turn over the funds and management because Mr.
Kane did not do so after prior request.
not avoid impropriety in all of his activities and did not
act at all times in a manner that promotes public confidence
in the integrity of the Judiciary based upon the same factual
allegations as the Canon 1 charge. (Canon 2).
not conduct his extra-judicial activities in such a way to
avoid demeaning his judicial office based upon the same
factual allegations as the Canon 1 charge. (Canon 4A(2)).
not maintain the dignity appropriate to a holder of judicial
office and act in a manner consistent with the integrity of
the Judiciary based upon the same factual allegations as the
Canon 1 charge. (Canon 5B(2)).
Special Counsel's burden to proof that Mr. Kane violated
the alleged Canons by clear and convincing evidence.
R.S.C.D.C.J. 10(1); Balivet, 2014 VT 41, ¶ 20.
"Clear and convincing evidence is a 'very
demanding' standard, requiring somewhat less than
evidence beyond a reasonable doubt, but more than a
preponderance of the evidence. [It] does not require that
evidence in support of a fact be uncontradicted, but does
require that the fact's existence be 'highly
probable.'" In re E.T., 2004 VT 111, ¶
12, 177 Vt. 405 (citation omitted).
following facts were established by clear and convincing
1. Katherine "Kay" Tolaro is the
wife of Paul Kane's uncle. Mr. Kane knew Ms. Tolaro for
approximately forty years before she died. Mr. Kane and his
late-wife Marie would visit Ms. Tolaro frequently at her home
on Pleasant Street in Bellows Falls.
2. In late 2009, Ms. Tolaro moved into Mr.
Kane's home in Westminster. She was 82 years old at the
time. There is conflicting evidence as to whether she was
showing early signs of dementia at the time Ms. Tolaro moved
in with the Kanes, or whether she was simply losing her
3. Initially, Ms. Tolaro did not move into
the Kane residence full-time. She would sleep at their house
and Mrs. Kane would return with Ms. Tolaro to the Pleasant
Street home where Ms. Tolaro would attend to her personal
needs such as cooking and bathing. It was unclear at that
time how long Ms. Tolaro would be staying with the Kanes.
According to Mr. Kane, Ms. Tolaro requested to sleep at his
residence because she was afraid of being alone at night due
to recent break-in attempts.
4. On October 11, 2009, Ms. Tolaro executed
a "Limited Power of Attorney For Finances, " which
granted Mr. Kane and his wife the ability to obtain financial
information on her behalf. The document was signed at the
office of Ms. Tolaro's longtime attorney, Mike Harty.
5. On December 3, 2009, Mr. Kane sent
Attorney Harty an email requesting that Mrs. Kane be
compensated for her time caring for Ms. Tolaro. He did not
mention that he was also caring for Ms. Tolaro. He stated
that Mrs. Kane had been providing services to Ms. Tolaro
seven days a week for at least four hours a day.
6. On December 6, 2009, Mr. Kane sent
Attorney Harty another email, saying "[Ms. Tolaro] has
been with [the Kanes] for the past 3 days." Mr. Kane
testified that this reference to the "past 3 days"
indicated when Ms. Tolaro had moved in permanently with the
Kanes. This testimony is in conflict with other emails,
discussed herein, as well as Mr. Kane's Statement Of
Claim filed with the Probate Court, discussed below, in which
he asserted that he had personally been providing Ms. Tolaro
with 24/7 care since October 2009.
7. On January 7, 2010, Mr. Kane emailed
Attorney Harty requesting that he arrange to have Mrs. Kane
be Ms. Tolaro's POA because she was "having issues
in helping [Ms. Tolaro] with finances." Mr. Kane was
vague as to what he was specifically requesting. The 2009
limited POA had given Mrs. Kane and himself the authority to
obtain financial information. The email acknowledged that
they knew her financial information, but added "[Ms.
Tolaro] needs to have some things done that are beyond her at
this point." However, in the December 3, 2009 email, Mr.
Kane stated he wanted Attorney Harty "to set up a
withdrawal and dep from [Ms. Tolaro] to [Mrs. Kane] for
payment of work." It is clear from the circumstantial
evidence that this was his reason for requesting a more
8. Both Special Counsel and Mr. Kane agree
that as of January 2010, Ms. Tolaro's net worth was
approximately $767, 500.
9. On February 5, 2010, Mr. Kane wrote a
check for $60, 000 made payable to himself from Ms.
Tolaro's bank account. Ms. Tolaro signed the check. Mr.
Kane described the check as a "gift." Mr. Kane
testified at the evidentiary hearing that Ms. Tolaro
initially wrote him a check for $100, 000, but he refused to
accept it because it was too much money. Mr. Kane testified
that Ms. Tolaro tore up the check and wrote him a second
check for $75, 000, which he again refused and she again tore
up. He testified that it was only after tearing up the second
check that she gave him permission to write a third check,
which he made out for $60, 000. He claimed Mrs. Kane was the
only other person present and that he did not report the $60,
000 on his taxes because he had understood that gifts were
not taxable. Special Counsel presented copies of Ms.
Tolaro's check receipts proving that there were no
missing checks preceding the $60, 000 check. Moreover, there
was only $45, 000 in the one other bank account in which Ms.
Tolaro had the ability to write checks. The Board finds that
Mr. Kane did not provide truthful testimony as to the
circumstances surrounding this $60, 000 check.
10. On April 6, 2010, Ms. Tolaro executed a
new Power of Attorney, naming Mr. and Mrs. Kane as her
agents. However, this POA did not contain a provision that
would allow the Kanes to authorize gifts to themselves.
11. That same day, April 6, 2010, Ms. Tolaro
executed a new will. The will bequeathed the Pleasant Street
property to the Kanes. It also indicated that certain money
was to be given to four charities, with the remainder of the
estate to be distributed to Mr. Kane, Ms. Tolaro's
nephew, and two of Ms. Tolaro's friends. Mr. Kane
testified that he brought Ms. Tolaro to Attorney Harty's
office, but that he was not physically present for the
execution of the will.
12. On August 18, 2010, Mr. Kane used his
POA to purchase an annuity through People's United Bank
from Jackson Annuity Co. (Jackson annuity) worth
approximately $123, 000. Mr. Kane named himself and Mrs. Kane
as sole beneficiaries. Mr. Kane purchased the annuity after
having two 60-90 minute meetings with Lynda Walker, a
People's United employee. Mr. Kane said he believed that by
listing himself as beneficiary, it would enable him to
withdraw funds from the annuity to pay for Ms. Tolaro's
care while she was alive. He also claimed to be unaware, at
the time, that it was his POA that would allow him to make
the withdrawals, not his designation as the beneficiary. He
testified that he always understood that although he and his
wife were listed as the beneficiaries, that the money was Ms.
Tolaro's and would go to her estate after she died. Yet,
despite this testimony Mr. Kane did not turn over the assets
from the annuity when requested by the estate administrator
until ordered to do so by the Probate Court.
13. On October 19, 2010, Mr. Kane wrote a
letter to Attorney Harty. In the letter, Mr. Kane said that
Mrs. Kane had been taking care of Ms. Tolaro "for the
past 6 months." He stated that Mrs. Kane chose to take
care of Ms. Tolaro, seven days a week, "out of family
commitment and love." He wrote that Mrs. Kane was caring
for Ms. Tolaro and did not mention that he was also providing
care. In recognition of the amount of work this entailed, Mr.
Kane asked that his wife be compensated going forward at a
rate of $15 per hour. He also specified that he was not
requesting that Mrs. Kane be compensated for "time spent
with us and/or family time. We are talking about the feeding
daily, cleaning, managing the house needs, concerns of the
[apartment] dwellers, finances, etc." There was no
evidence presented regarding Attorney Harty's response or
any formal arrangement reached by Mrs. Kane and Attorney
Harty, and Mr. Kane made no mention of himself as providing
14. In 2011, Mr. Kane entered into a verbal
agreement to loan Mark Olbrych money to renovate a building
which contained a bar. In 2005, Mr. Kane had sold the
building to Mr. Olbrych, although he retained a mortgage on
the building, which Mr. Olbrych continued to make monthly
payments on at the time of the second loan. As to the 2011
loan, Mr. Kane represented to Mr. Olbrych that he would loan
Mr. Olbrych his own money. However, on May 3, 2011, Mr. Kane
used his POA to withdraw $30, 000 from Ms. Tolaro's
account, which he then signed over to Mr. Olbrych. Mr.
Olbrych made out all his loan repayment checks to "Paul
Kane Real Estate" or "Paul Kane." No paperwork
accompanied the loan.
15. On May 11, 2011, Mr. Kane entered into a
written agreement with David Carrier to loan Mr. Carrier
money to purchase a mobile home. The two men knew each other
through working for a mutual employer. The agreement stated
that Mr. Kane was personally financing the loan, that Mr.
Carrier would pay Mr. Kane a monthly repayment amount, and
that Mr. Kane would hold the deed until the loan was repaid.
However, that same day, Mr. Kane used his POA to withdraw
$24, 000 from Ms. Tolaro's account, which he transferred
to Mr. Carrier.
16. On July 1, 2011, Mr. Kane withdrew
another approximately $19, 000 from one of Ms. Tolaro's
bank accounts and transferred the money to Mr. Olbrych.
17. Mr. Kane testified that he had informed
Ms. Tolaro of these loans and obtained her permission to loan
Mr. Olbrych and Mr. Carrier this money as he believed it
would give her a better rate of return than investing the
money in other ways. The Board does not find this claim to be
credible because he consistently ...