JAMS and retired appellate justice Sheila Sonenshine began presenting their defense last week to Kevin Kinsella’s claim that they padded Sonenshine’s online resume. JAMS presented business associates who vouched for Sonenshine’s accomplishments and family law experts who said her handling of Kinsella’s marital dissolution was by the book. JAMS even presented testimony from two of Kinsella’s former divorce lawyers and his ex-wife’s current divorce attorney, Sharon Blanchet.
Thursday’s proceedings ended on a surreal note after Judge John Meyer called an abrupt halt to Blanchet’s testimony and excused the jury. Blanchet remained seated on the witness stand for another 15 minutes, at one point exchanging pleasantries with the judge, while attorneys for JAMS and Kinsella argued with each other and with Meyer over the relevance of her testimony.
But whatever jurors are ultimately allowed to hear might prove academic, as Meyer has raised the possibility of deciding the case himself. JAMS claims the only damages available to Kinsella is restitution of $40,000 in neutral fees. And restitution under the Consumer Legal Remedies Act is an issue to be decided by the judge, not the jury, JAMS argues.
Meyer raised the issue several times during last week’s proceedings. “My dilemma is whether to bite the bullet now or let it go to the jury,” he said Wednesday. He said the damages issue is as glaring as “the bleeding elephant in the snow,” but added that he has “a visceral negative reaction to taking the case away from the jury at this point.”
Kinsella’s attorney, Bryan Vess, argues Kinsella is also entitled to damages for the $1.5 million he paid his attorneys to litigate before Sonenshine recused herself, and $14,000 he paid investigators to help uncover her alleged fraud. But Meyer has balked at admitting that evidence, which JAMS and Sonenshine say was hidden from them during discovery. JAMS argued in a motion filed Wednesday that it should not have to pay for Kinsella’s “abusive, scorched earth approach to litigating against his ex-wife.”
Kinsella, who is the founder of Avalon Ventures, alleges that Sonenshine and JAMS padded her resume to fill a gap between her retirement from the California Court of Appeal in 1999 and her joining JAMS in 2008. Sonenshine’s resume states that she co-founded an investment bank in 1999 and led its European expansion, then after selling that business founded the Escher Fund, a private equity fund that invested in women-owned businesses.
Kinsella charges that Sonenshine concealed that the investment bank, called EquiCo, had no genuine European presence and settled a fraud class action for $41.5 million. The Escher Fund was not a private equity fund that raised money from outside investors, but simply a vehicle for Sonenshine and her husband to invest $1 million of their personal funds, he says.
JAMS and Sonenshine, who are represented by Long & Levit, say the resume is truthful. They counter the definition of a private equity fund is not so limited, and EquiCo wasn’t sued until long after Sonenshine sold the business. They charge Kinsella’s real beef is being ordered to pay more spousal support.
JAMS kicked off its defense case Wednesday by calling two of the people who helped Kinsella dig into Sonenshine’s background. Administrative assistant Christy Brandon testified that Kinsella had directed her to transcribe an hour’s worth of divorce law podcasts in which Sonenshine appeared as a guest, and assembling a thick dossier of printed materials divided it into sections with titles such as “general dirt on Sonenshines.”
On redirect Vess moved to enter the binder into evidence. Meyer refused. Vess then tried to get just the materials under the “general dirt” tab admitted. Meyer again refused. Finally, Vess held the binder up in front of the jury and asked Brandon if it contains “true materials, false materials or something else?” Meyer again sustained JAMS’s objection as members of the Sonenshine group could be heard tsking in the audience.
Three people who had business dealings with Sonenshine testified about her bona fides. Banker Paul Weisbrich, who worked alongside Sonenshine at RSM EquiCo in the early 2000s, said Sonenshine handled the company’s European operations “like a pro.”
“Did RSM EquiCo have a European office?” Long & Levit partner Jessica MacGregor asked him.
“Yes,” Weisbrich replied.
“Were any of these offices just a broom closet?” MacGregor asked.
No, Weisbrich said, they were real offices with real people.
Weisbrich wavered only when MacGregor asked if RSM EquiCo was licensed in Europe. Weisbrich said he didn’t know, but that based on the records he saw over the years, “I convinced myself that we were operating legally.”
Under questioning from Vess, Weisbrich said he knew RSM EquiCo had been the subject of a fraud class action, but never learned any details.
“Did you factor in any of the allegations of that lawsuit in convincing yourself” that the company was operating legally, Vess asked, leading to another sustained objection.
Cynthia Graff testified that she held discussions with Sonenshine in 2005 and 2006 about a possible Escher Fund investment in Graff’s chain of weight-loss clinics. Vess seemed to walk into an ambush when he asked Graff if she still had any documents containing the words “Escher Fund.” Vess has argued throughout the trial that no such documents exist following the initial failed attempt to establish the fund, but Graff said she had such documents, and even had brought them with her to court.
“Physically with you?” Vess asked.
Yes, Graff said.
“Well, I don’t think we’re ready to admit undiscovered evidence,” Vess said. Graff was excused moments later.
JAMS called four family law attorneys to make the case that resume fraud isn’t the true motivation behind Kinsella’s suit. James Clark, who represented Kinsella for a time during his divorce proceedings, testified that his opponent Blanchet enjoyed a level of familiarity with Sonenshine that made him uncomfortable. But, he added, “that’s different than collusion,” a charge leveled by Kinsella.
Notwithstanding that concession, defense attorney Joseph McMonigle of Long & Levit played deposition testimony in which Clark said he’d been troubled by Sonenshine and Blanchet talking about fashion and shoes. McMonigle then forced Clark to concede that he sometimes talks about sports with neutrals. “And making small talk about sports is different than making small talk about fashion?” McMonigle asked.
Clark, who is of counsel at Moore, Schulman & Moore, said the question seemed argumentative, but Vess didn’t object to that or any other part of Clark’s testimony, part of an apparent strategy to draw a contrast with Blanchet, who was expected to assert Tamara Kinsella’s attorney-client privilege.
The same dynamic came into play when former Kinsella counsel Richard Renkin testified. “I will issue my own objection” for vagueness, Renkin said, when McMonigle asked if the Kinsellas had been “not very far off” from settling in 2013.
Renkin, of the Law Offices of Renkin & Associates, testified that he and Blanchet had jointly recommended to their clients that Sonenshine be retained. Renkin said his first choice was N. Denise Asher of Judicate West, who had a conflict of interest with Blanchet. But Sonenshine is “a wonderful jurist” and was “the best fit that we had under the circumstances,” Renkin testified.
Renkin said he did not consult Sonenshine’s JAMS bio, relying instead on the positive reviews he heard from other family law professionals. On cross-examination, Kinsella’s co-counsel Jerry Hemme of Goode Hemme Peterson tried repeatedly to elicit testimony that Renkin had told Kinsella to check out Sonenshine’s JAMS bio, but JAMS successfully objected that Kinsella had asserted attorney-client privilege to block Renkin from answering at deposition.
“Why do you get client approval” for the hiring of a neutral, Hemme finally asked.
“It’s ultimately the client who has to live with the decision of the jurist,” Renkin explained.
On redirect, McMonigle asked Renkin if he’d run into Sonenshine after she’d recused herself from Kinsella’s case. Hemme objected bitterly that the question went beyond the scope of his cross-examination, which was limited to Renkin’s work on the divorce case.
Meyer overruled the objection and Renkin told the jury, “I apologized to her for putting her into this position, for having gotten her into this difficult situation.”
Finally, Blanchet, of Ashworth Blanchet Christenson, took the stand near the end of the day Thursday. Meyer polled the jury on whether they wanted 15 minutes of testimony or to head out. The jury voted to proceed, but a few minutes later, as Hemme lodged objections, Meyer said, “Ugh. We’re not off to a good start,” and sent the jury home.
Meyer questioned why the jury needed to hear from Blanchet at all. MacGregor said it was to counter Kinsella’s testimony that Sonenshine’s courtroom was like “a cafeteria food fight” and that he had filed a State Bar complaint against Blanchet. Meyer indicated that he would allow MacGregor to continue questioning her Monday but on a short leash. “Just be careful,” he told her.
Hemme and Vess renewed their complaint that Meyer is letting JAMS plumb the details of Kinsella’s divorce while restricting their inquiries into Sonenshine’s business relationships. They got only one small consolation prize Thursday afternoon: Meyer agreed to instruct the jury to ignore Renkin’s testimony about the apology. “If that’s what you want me to do,” he told Hemme, “I’ll do it.”