COSTA MESA, Calif--(BUSINESS WIRE)--Pinnacle Surety Services today announced it has filed two expert reports in its four year-old breach of fiduciary duty case in federal court against attorneys Rex H. Elliott of Cooper & Elliott LLC and G. Bruce Stigger of Manion Stigger LLP.
At stake are the defendant attorneys’ emails and texts between themselves and Pinnacle’s employees which defendants Elliott and Stigger claim attorney-client privilege. Pinnacle’s 14-page filing of Expert Reports and Supplement to Briefing, filed earlier this month (US District Court, Western District Kentucky, Civil Action No. 3:15-CV-364-DJH-CHL Document 161, filed 02/05/20, https://ecf.kywd.uscourts.gov/cgi-bin/login.pl), supports and requests the Court to confirm the attorneys’ actions establish “crime-fraud and breach of fiduciary exceptions to the attorney-client privilege” as set forth in prior filings. A ruling is expected in the near future.
The recent filing notes that, “all these communications, personal emails, texts and documents should be ordered to be produced based on the exhibits and evidence establishing the above list of Defendants’ aforementioned actions… because they constitute communications in furtherance of a crime-fraud against Pinnacle and/or establish a showing of breach of fiduciary duty owed to Pinnacle and are, therefore, not protected by privilege.”
According to Court documents filed previously,1 “Defendants are Pinnacle’s former legal counsel, but while still representing Pinnacle’s interests and owing it the highest fiduciary duties, Defendants, among other improper acts, acted directly and materially adverse to Pinnacle by sending a demand letter on behalf of Pinnacle’s employees (Todd Loehnert and Brian Ayres) threatening suit, suing Pinnacle, and even encouraging and assisting those same employees to breach an employment agreement with Pinnacle, leave Pinnacle, and prepare, form, organize and start a competing business [L.A. Surety] directly against Pinnacle.”
The “assisting” referenced in the Court filing includes actively helping those two Pinnacle employees, “prepare, form, organize, start and even act on behalf of – all to the great detriment of Pinnacle.” In addition, Stigger signed and filed with the Kentucky Secretary of State L.A. Surety’s Articles of Organization and is even listed as a registered agent for L.A. Surety.”2
The expert reports were prepared by Gary M. Weiss, a Kentucky attorney who has represented “both plaintiffs and defendants in over 100 legal malpractice cases including many cases in the course of my representation of Lawyers Mutual Insurance Company of Kentucky.”
At about the time this case was first initiated, the Louisville Courier Journal published a feature article about Weiss in which Stigger’s defense counsel, Ed Stopher states, “‘I think he [Weiss] was one of the best plaintiff’s lawyers I’ve ever seen, and one of the best defense lawyers I’ve ever seen. So, the only conclusion I can draw is that makes him a very good lawyer.’” 4
Weiss’ report concludes that a jury or court is clearly justified in determining that Defendants, “grossly and purposefully breached their fiduciary, professional and ethical duties to Pinnacle as described multiple ways in detail above, and intentionally interfered with Pinnacle’s employment agreement, engaged in civil conspiracy, aided and abetted Loehnert and Ayres to breach their fiduciary duties to Pinnacle, and caused great damage to Pinnacle.”
Separately, Pinnacle in previous court documents3 has shown that many of the emails in question were transmitted between Stigger and Elliott and Loehnert and Ayres across Pinnacle servers while they were employed by Pinnacle. This renders them Pinnacle property per the Company’s written policy which both employees were aware.
For Eric Lowey, President of Pinnacle Surety, the four-year legal battle has become a cause to prevent this from happening to other Elliott and Stigger clients. “It would have been far easier on us to walk away but we couldn’t ignore our conscience. Attorneys representing both sides is fundamentally wrong, what if they do this to someone else?”
Pinnacle Surety is represented by P. Blaine Grant of Hayden Grant PLLC.
1. Pinnacle Response in Opposition to Motion to Dismiss, US District Court, Western District of Kentucky, Civil Action No. 3:15-CV-364-DJH-CHL Document 64, filed 09/30/16, page 1 page ID#: 625
2. First Amended Complaint, US District Court, Western District of Kentucky, Civil Action No. 3:15-CV-364-DJH-CHL Document 53, filed 07/20/16, pages 5 and 6 of 24 page ID#: 354-355
3. Pinnacle Motion to Compel, US District Court, Western District of Kentucky, Civil Action No. 3:15-CV-364-DJH-CHL Document 80-1, filed 06/11/18, page 2 of 30 page ID #: 777