Longtime Carson City builder Garth Richards has filed a lawsuit accusing former Silver Oak partner and lawyer Steve Hartman of violating legal and ethical rules to cheat him out of several million dollars.
The complaint was filed Monday in Carson District Court charging that Hartman and the Allison/MacKenzie law firm convinced Richards to let them join the Silver Oak development as partners who would handle the legal as well as some management aspects of the project rather than just hiring them as the company's lawyers.
In the process, according to the lawsuit filed by Las Vegas lawyer Dominic Gentile, they violated numerous Supreme Court rules governing how lawyers are supposed to operate, used deceptive trade practices and misrepresented or failed to disclose material facts to Richards. The lawsuit says they also acted with malice to damage Silver Oak after the partnership ended.
The lawsuit charges that Richards relied on Hartman to handle the legal side of the business, not realizing Hartman was using that position to set up the partnership for his own benefit. It charges that, in the process, Hartman violated Supreme Court rules including the prohibition on entering into a business transaction with a client.
It charges he never informed them he was also in a partnership with Tom Duncan of Silver Oak Golf Club and had represented Duncan several years before arranging for Duncan to operate the golf course at Silver Oak.
When Hartman left the Silver Oak partnership, the lawsuit says he drafted all the separation documents -- including one immunizing him from any damages - but never advised Richards to have those agreements reviewed by an independent lawyer. The lawsuit describes that as a conflict of interest by Hartman.
The lawsuit claims Hartman received $3,305,000 when the partnership dissolved and Allison/MacKenzie received $903,000.
Then, according to the lawsuit, Hartman helped Duncan sue Richards and Silver Oak using knowledge he gained as their lawyer and which should have been protected under attorney-client privilege.
The lawsuit also blames Hartman for the fact the company is now in receivership and seeks damages in excess of $10,000 including punitive damages. It accuses both the Allison/MacKenzie firm and Hartman of legal malpractice, breach of fiduciary obligations, breach of contract and of unjustly enriching themselves at Richards' expense.
Hartman could not be reached for comment. He is no longer with the Allison/MacKenzie firm.
Gentile said he doesn't plan to file a complaint with the Nevada State Bar. "That's not my style. This is a civil damages lawsuit."
He said, however, Richards or the judge handling the case could file a bar association complaint if they wanted to.
"This is a money damages lawsuit," he said. "It bothers me this involves brother lawyers.
"I don't bring it lightly," he said pointing out that it took Richards most of a year to convince him to take the lawsuit.
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