The court has appointed an Augusta attorney to try to mediate a lawsuit filed by the state against a former Washington couple and their defunct contracting business that is accused of bilking more than 100 people out of more than $1 million.

The court Oct. 1 appointed attorney Walter McKee to serve as a neutral third party in the civil lawsuit brought against Malcolm and Elizabeth Stewart and their former company, Castle Builders.

On Oct. 29, McKee said he was not able to comment on the matter and referred questions to the parties in the case.

Assistant Attorney General Carolyn Silsby requested the appointment of a neutral third party, saying in court filings that the AG's Office and Stewarts were unable to reach an agreement on a mediator or on the process to conduct alternative dispute resolution. Alternate dispute resolution is required in civil cases.

In July, the Stewarts filed paperwork with the court, claiming they were unable to pay their share of a mediator.

"We are without funds to pay half a mediator that costs $200 to $300 per hour." they stated in their court filing.

The Maine Attorney General's Office filed a lawsuit against the Stewarts and Castle Builders in Knox County Superior Court Dec. 18.

The Attorney General is suing the couple under the state's Unfair Trade Practices Law, claiming the Stewarts violated that law on multiple counts. The state is seeking an injunction to prevent them from soliciting further business but also restitution for customers, legal and court costs and civil fines of up to $10,000 per violation.

The AG began the investigation after numerous complaints were filed by customers, some before the couple closed their contracting business in September 2019. Complaints have since come in from homeowners in Knox, Lincoln, Waldo, Kennebec and Somerset counties.

No criminal charges have been filed.

In addition to the state civil lawsuit, the case in U.S. Bankruptcy Court continues.

Attorney Anthony Manhart, who is the trustee in the bankruptcy case, said Oct. 28 there will be a distribution to creditors, but he did not yet know what it will be.

The Stewarts filed bankruptcy in federal court in Bangor for themselves and the defunct business.

The Stewarts operated Castle Builders for nearly three years before abruptly closing it and their Agway store in Union Sept. 8.

The couple then moved to South Carolina to live with relatives.

The civil lawsuit alleges the Stewarts hired people to cold call homeowners in an effort to solicit business for Castle Builders. The Stewarts would then request down payments for work before beginning and often times would seek a second advance payment before any work was done.

Much of their work was faulty, according to the state, resulting in damages to homes. A lot of that damage came from not ensuring that the properties were protected from rain and snow during repair work. In addition, electrical work was done by unlicensed workers and did not meet minimum standards.

The AG claims the Stewarts violated the unfair practice law by soliciting and accepting more than one-third down payments at the start. They also failed to give an expected start and completion time for the work as is required by the law.

Requesting and accepting second advances when work was not done was another violation of the state law, according to the AG.

The failure for the Stewarts to respond to the numerous complaints by customers about work not done also constitutes a violation, according to the lawsuit.

The Stewarts also failed to pay subcontractors, which left workers without money but also exposed homeowners to liability for the debt, the AG argues.

The Courier-Gazette contacted Malcolm Stewart by telephone Nov. 15, 2019.

He said a lot of "false things" were being said about him and that his attorney was "working on the resolving the matter." He would not comment further and did not detail what false things were being said.

Filings in U.S. Bankruptcy Court in Maine by the Stewarts indicate they have claims against them totaling $1,215,877. This includes $165,234 in taxes owed to the government.

There are 177 creditors listed in their bankruptcy filing with most of them former customers of Castle Builders. Former workers, suppliers and the government are also listed as creditors.

Castle Builders was formed as a corporation by the Stewarts in December 2016.

The response filed by the Stewarts in the civil case includes denials to all the claims filed by the state.

"Plaintiff's alleged injuries and/or damages were caused by the negligence of third parties who Defendants had no control," the Stewarts stated.

In addition, the Stewarts claim the plaintiffs have "failed in their duty to mitigate damages and, therefore, are barred from recovery against the Defendants," the Stewarts stated in their written response to the court.