A San Diego plaintiff attorney wound up his 2½ week resume padding trial against JAMS Inc. and neutral Sheila Sonenshine by comparing them to one of modern history’s most famous liars.
By presenting a failed investment fund as a grand business accomplishment, JAMS and Sonenshine follow “the exact same fact pattern” as Rosie Ruiz, the woman who ran the last mile of the 1980 Boston Marathon and then claimed to have won it, plaintiff attorney Bryan Vess told a jury in closing argument Wednesday.
Ruiz might be able to say that, technically, she “ran” the Boston Marathon, just as Sonenshine claims to have founded and run a private equity fund. But with JAMS and Sonenshine, “we’re dealing with people dispensing justice,” Vess said. “We deserve better from our judges than technical accuracy. Their whole case is based on, ‘We’re not technically lying.’”
Defense attorney Joseph McMonigle told the jury that venture capitalist Kevin Kinsella’s case has nothing to do with Sonenshine’s resume but everything to do with her rulings in Kinsella’s marital dissolution. “We are here because Mr. Kinsella did not get his way in the divorce proceedings,” said McMonigle, a Long & Levit partner. “That’s what set him off. It’s not because of half a page on an eight-page resume.”
Kinsella and Vess allege that Sonenshine, a former justice on the Fourth District Court of Appeal, falsely claims in her online bio that she founded and ran the Escher Fund, a private equity fund investing in women-owned companies, when in fact the justice invested only $1 million of her family’s own money in three companies, none of which returned a profit. Kinsella says it was the private equity experience that sold him on Sonenshine because dividing his VC interests posed complex challenges.
They also accuse JAMS and Sonenshine of touting her founding of an investment bank, EquiCo, but concealing that the company paid $41.5 million to settle a fraud class action. “Justice Sonenshine shouldn’t be bragging about it. She should be apologizing for it,” Vess said Wednesday. Sonenshine should surely have known of the settlement since JAMS mediated it, he added.
McMonigle said Sonenshine sold the investment bank and exited from it years before the lawsuit, which didn’t allege any misconduct on her part. “She didn’t pay any money. She wasn’t asked to pay any money,” he said. He went over each EquiCo detail in her biography and recounted all of the evidence from trial that validates them.
The parties have been slugging it out before Superior Court Judge John Meyer since May 2. Kinsella is asking for $1.6 million in damages under California’s Consumer Legal Remedies Act, though Meyer has expressed skepticism about that figure.
Vess described Sonenshine as having spent a few months trying to put together the Escher Fund in 2005, but never attracting the outside investment that he said is the hallmark of a private equity fund. “Wouldn’t a private equity investment fund have some stationery, business cards, a telephone, an office, something?” he said.
It would be more accurate to say Sonenshine tried to start a private equity fund. “That would be true and that wouldn’t violate California law, but it wouldn’t be very impressive,” Vess said.
He accused JAMS of making over Sonenshine’s resume after what an executive called in an internal email “a very slow start.” Several JAMS executives — or “the JAMS bots” as Vess called them Wednesday — testified that Sonenshine’s start was typical of all neutrals. So “the email that said ‘very slow’ meant ‘average,’” Vess said.
He also mocked JAMS’ claim that making money is a secondary consideration behind serving the public. JAMS CEO Chris Poole had testified that most neutrals donate 1 percent of their fees to the JAMS Foundation. “For the $550 an hour Kevin paid to JAMS, they gave $5.50 to charity. Oh great,” Vess said.
McMonigle said the case isn’t about Sonenshine’s eight-page resume. “This is a case about an abuse of power and money. It’s not about a quarter of a page on page two,” he said, practically spitting out the last two words.
Once Sonenshine ordered Kinsella to up temporary spousal support from $23,000 a month to $123,000 month — per standard guidelines — Kinsella began manufacturing excuses to remove her from the divorce case, McMonigle said. He argued that Sonenshine was too expensive – “too expensive for Mr. Kinsella? That sounds like a pretext to me” — and that she was biased against men.
He finally chose her resume, even though Kinsella couldn’t testify with certainty about which JAMS bio he read or how he’d accessed it, McMonigle said. “He can’t prove to you what he read. And he can’t prove to you what he relied on,” he said.
Sonenshine, he said, can take pride in a 50-year career as a pioneering trial judge and one of the youngest ever appointees to the California Court of Appeal. After her retirement she founded Escher, investing in three women-owned companies, serving on the board of directors of one and providing legal services to another. She drew up a business plan and hired a private equity lawyer to put it in action. That qualifies as founding the fund, he said. Vess is playing “a game of semantics, like we had a grammar class,” McMonigle said.
As for EquiCo, it doesn’t follow that Sonenshine would have heard of the settlement through JAMS, he said. “Mediations are confidential. They are kept confidential within JAMS,” McMonigle said. “There’s no communication from one neutral at JAMS to another” about cases.
Whereas Vess leaned heavily on analogy and anecdote, McMonigle’s style was more methodical. But he worked in a few of his own sarcastic jabs. He recalled testimony that Kinsella had engaged in a three-way hug with his wife and her attorney, Sharon Blanchet, when they thought they’d reached the framework of a settlement. After things went sour, Kinsella filed a 59-count complaint against Blanchet with the State Bar. “Mr. Kinsella hugged — can you imagine? — Ms. Blanchet,” McMonigle told the jury. “Times have changed.”