3 Cases That Help Explain Local Schools Attorney’s Current Troubles - Voice of San Diego

Education UNVEILING THE UNSEEN

3 Cases That Help Explain Local Schools Attorney’s Current Troubles

• The San Ysidro School District sued attorney Dan Shinoff and his firm for malpractice. The suit settled without any admission of wrongdoing. The district also filed a complaint against Shinoff with the State Bar of California.

• Fallout from a palm tree scandal at MiraCosta College led to the departure of several administrators and lawsuits.

• A lawsuit in Solana Beach over special education was dragged all the way to the 9th Circuit — causing a federal judge to question what was going on.

Attorney Dan Shinoff has for decades been the go-to lawyer for public schools across San Diego County.

Many county schools share resources in a partnership to defend against cases that inevitably come at them. Shinoff has gotten the vast majority of that business. In other cases, districts hire Shinoff directly.

But his grip on the local education market is slipping after costly court losses. Now, 10 lawyers are leaving Shinoff’s firm to start their own endeavor.

One of the districts dealt an expensive loss, the San Ysidro School District, is fighting back. Its challenge represents the most aggressive and public attack on Shinoff’s practice – and his past decisions there continue to loom large and pose new threats this year.

In San Ysidro and elsewhere, Shinoff has left behind not only legal bills, but questions about his ethics and the quality of his legal work. Clients say Shinoff negotiated settlements that came back to haunt them, and some have accused him of providing advice that went against their best interests.

Shinoff declined repeated requests for an interview about his work history.

Here is some background on a few of his most contentious cases.

San Ysidro Fights Back

Just one month after cutting the Artiano Shinoff & Holtz law firm a final check for $61,000, the San Ysidro school board voted 5-0 in March 2015 to sue the firm – and Shinoff specifically – for malpractice. The district also filed a complaint against Shinoff with the State Bar of California, which investigates claims of attorney misconduct.

The small K-8 district near the border – only now emerging from years of financial woes and corruption – had a new slate of board members and new legal advice.

They came out swinging, alleging Shinoff gave advice aimed at increasing his own billings, not helping the district.

“Defendants’ actions were performed with the objective of enriching themselves, in violation of their known obligations to their client,” wrote San Ysidro’s attorney, Bryan Vess, in the lawsuit. The district also claimed the firm submitted unnecessary and inappropriate invoices for work “performed in the interest of generating fees for Defendants.”

Many of San Ysidro’s claims centered on a breach-of-contract dispute that resulted in a $12 million judgment against the district in February 2014.

The district had hired a company called EcoBusiness Alliance to install solar panels, but when construction fell behind schedule, the district terminated the contract for failure to perform. The contractor claimed the delays were caused by project changes from the district, as well as design and placement challenges. EcoBusiness alleged the contract was actually terminated because the company refused to buy a school board member a home, and sued.

According to the district, Shinoff failed to communicate the solar company’s settlement offers, didn’t apprise the school board of the litigation risks and didn’t get permission to file a cross-complaint against the company.

San Ysidro and Shinoff’s firm settled the malpractice lawsuit before Shinoff was deposed – a process where he would testify under oath about what happened in the case.

Artiano Shinoff & Holtz admitted no wrongdoing in the September settlement, which recouped nearly $2 million in legal fees for the San Ysidro district. The firm’s insurance carrier, Lawyers’ Mutual, which paid the district, is now asking for the firm to foot the bill.

A decision is still forthcoming on the State Bar complaint. The solar company now plans to sue Shinoff, its CEO told me.

Other San Ysidro matters also still pose a risk to Shinoff, particularly a meeting he attended with former Superintendent Manuel Paul and a contractor, Loreto Romero, who was wearing a wire for the FBI. At the meeting, a plan was created to explain a $2,500 cash gift given to Paul by Romero, the San Diego Union-Tribune has reported.

Three board members amended their campaign finance forms to report the money as donations for campaign signs purchased in Tijuana.

Shinoff negotiated an exit deal for Paul in June 2013 that granted $211,000 in severance pay, plus $80,000 in leave pay and $44,000 in so-called unpaid overtime.

Paul eventually pleaded guilty to two misdemeanor charges and served two months in prison for the $2,500 gift from Romero. Weeks before Paul was released from custody in March 2015, San Ysidro filed a lawsuit demanding he return the payout money. The district is still trying to unravel the deal in court, and Shinoff could get deposed by Paul’s team.

Bill Trejo, San Ysidro’s new general counsel, urged other districts to “monitor and assess their legal billings so that occurrences like this don’t happen again in San Diego County.”

As it turns out, San Ysidro’s grievances aren’t all that unique.

San Ysidro isn’t the first public agency to cut ties with Shinoff, isn’t the first to complain to the State Bar, isn’t the first to accuse him of failing to act in the best interests of the agency nor the first to reverse a severance deal he brokered.

All this has happened before.

PalmGate

Before there were solar panels in South County, there were palm trees in North County.

In 2006, a MiraCosta College employee complained that colleagues were using college resources to grow privately owned palm trees on the Oceanside campus and planned to sell them for personal gain.

The college ordered up an investigation through Shinoff’s firm.

Shinoff turned to Bob Price, a private investigator who heads the San Diego company ESI International Inc. and whose credentials include 10 years working for the FBI.

All told, Price’s 18-month probe and all the fallout from it cost $6.8 million.

A district attorney’s office investigation resulted in one criminal conviction for a $305 water theft by a college employee.

Some of the concerns about the illicit palm trees turned out to be baseless. The palms were donated to the college years earlier, it turns out, but weren’t properly documented.

But the ordeal turned the college upside down for several years and led to the departure of top administrators via deals negotiated by Shinoff, and lawsuits by employees, fought by Shinoff.

Among those who sued and settled was the school’s vice president of instruction, Julie Hatoff, who was accused by the college of knowing about the theft and doing nothing – something county prosecutors reportedly found no evidence of.

Hatoff tried to get Shinoff removed as counsel for MiraCosta, alleging he and Price failed to make it clear she could be targeted and made false promises of attorney-client privilege. Hatoff also lodged a complaint with the State Bar. The outcome of that complaint is unknown, but Shinoff bears no public record of discipline on the State Bar website.

Hatoff, who declined to comment for this story, eventually settled with the college in 2007 for $542,000.

Three college trustees obtained their own legal counsel separate from Shinoff amid the turmoil. One said in a declaration they “all sought and received independent counsel precisely because we did not believe that Shinoff was acting in the best interests of the College,” but rather in the interests of the college president, Victoria Munoz Richart.

Richart, with Shinoff’s help, negotiated an exit from the college in June 2007, just three years after arriving. And it cut her expected term short years before her contract was supposed to end.

She walked away with a new deal worth $1.6 million. But that wasn’t the end of it.

In 2009, a taxpayer challenged the settlement in court and proved it exceeded the 18-month contract payout limit in state law.

Richart, who did not comment for this story, began repaying the money in small increments, but with her deal overturned, her claims of a hostile work environment were revived. She sued the college in 2011, saying she was wrongfully terminated.

That same year, MiraCosta cut ties with Shinoff’s firm.

Richart’s case was finally settled last April.

College officials today say MiraCosta has come a long way from those dark days.

Charlie Ng, MiraCosta’s vice president of business since 2013, said as for the 18-month payout limit, “We are aware of that now when we enter into settlements, and we expect our attorneys to know that.”

“I think that as districts spend time with an attorney and see more and more results like that, it is certainly in their best interests to make another choice,” Ng said. “There are some that are better than others, but I don’t know that any attorney has even been perfect.”

“I suspect the reason Shinoff is not with us is we wanted to go another direction. The direction we headed in is with the expectation that these kinds of things could be avoided,” Ng said. “Being sensitive to settlements, that’s the lesson. And paying attention to our attorneys.”

‘It Became This Big Litigious Case’

An attorney who won a seven-year special education dispute in Solana Beach had similar advice for public officials.

Attorney Maureen Graves won $580,000 from the Solana Beach School District in 2014 for a federal case that centered on a $6,100 private preschool tuition bill the district didn’t want to pay, despite multiple rulings that found the district’s special education services were lacking for her autistic client.

In addition to Graves’ fees, the district, with some help from the JPA, paid more than $300,000 to their own attorneys, including Shinoff’s firm, which led the case in its final years.

A federal judge questioned why the case was even being heard.

“I am just curious. This whole dispute is about counsel fees I assume. Nobody in their right economic mind would be carrying a case to the Ninth Circuit that seems to me to involve something like $6,000 to $7,000,” said U.S. District Judge Edward R. Korman at a 2012 hearing.

Graves said she was “just outraged at the quality of legal work that the school district was getting,” noting multiple factual errors in their pleadings and reluctance to find a solution. “They didn’t talk to us. They ignored settlement offers. They canceled mediation sessions.”

Generally, a lawyer serving a public agency “tries to eliminate the need for their services,” said Robert Fellmeth, director of the University of San Diego’s Center for Public Interest Law who also served as the State Bar’s discipline monitor from 1987 to 1992. “Theoretically, you try to prevent the dispute and if a dispute does arise, you try to resolve it as quickly as possible.”

Solana Beach school board member Rich Leib didn’t see anything wrong with their legal team, but learned a lot from the case.

“It became this big litigious case more than what we anticipated when we started,” Leib said.

“You want to avoid litigation at any cost and I think to some degree there is a cottage industry out there on both sides that spend a lot of money on litigation and fighting these issues. … What troubles me is in the end we spent a lot of money and it went to attorney’s fees. It didn’t go to the child. I learned a lot from that experience. It wasn’t a positive experience.”

Shinoff has not represented the Solana Beach School District since, but district officials didn’t rule it out.

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