Former state senator feels heat in multimillion-dollar lawsuit

Former state Sen. Mark James, engaged in a vicious civil court battle with his friend-turned-enemy Steve Kalish, was sanctioned last week by the trial judge in a strongly worded decision slamming James' deceitful behavior by hiding discovery material, calling it "a pattern of fraud."

It's not the kind of thing a lawyer, which James is, wants to see in a judge's opinion. It's the kind of thing the State Bar of Nevada might notice.

District Judge Mark Denton agreed with much of the damning language Special Master Thomas Biggar used against James, who now operates five cab and two limousine companies as CEO of Frias Holding Co.

The contract dispute is over whether Kalish deserves more than the $3.48 million he already received for helping James run Frias between 2007 and 2009. Kalish contends James owes him another $29 million, or 20 percent of what widow Phyllis Frias gave James when she gave him 48 percent of the company stock.

James paid Kalish $480,000 in consulting fees and paid another $3 million when James received a $17 million bonus from Phyllis Frias. But James balked at sharing the stock.

Kalish claims he was secretly running the company after James was named CEO in 2007 because James was preoccupied with extramarital sex and drug abuse.

But it was James' abuse of the discovery process in this case that caused Biggar to write that he had never seen misconduct and discovery abuses of this magnitude.

A few examples: James ignored pretrial court orders, refusing to produce documents including tax information, financial information, medical information. He refused to allow his computers, cellphones and other electronic media to be inspected. He didn't turn over text messages. And he lied. James had denied being treated for drug addiction, but medical records showed he was treated under an alias.

"James actively concealed evidence and so corrupted the search for the truth," Biggar wrote.

Denton agreed with Biggar that James' "actions during discovery were calculated, manipulative and demonstrate a pattern of fraud that are of such magnitude that even an eleventh hour partial discovery production cannot and will not remedy the harm caused to and the prejudice suffered by (Kalish)."

Denton ruled that Biggar's findings of fraud and deceit by James will be admitted into evidence at trial. The trial was supposed to start in March, but was postponed to an uncertain date. Other sanctions, while technical, will make it more difficult for James to defend himself.

But James won one significant issue. Biggar had recommended to Denton that James' answer to the lawsuit be stricken, which means as far as James' role, the case against him (but not Frias Holding Co., which was also sued) would have been proven and the only issue at trial would have been the amount of damages. Denton didn't go that far in sanctioning James.

Kalish's attorney, Todd Bice, said Denton's decision was "incredible stuff for any litigant, much less a litigant who is a lawyer."

From Kalish's perspective, the most significant finding is that Denton agreed with the factual findings about James destroying evidence, Bice said.

James' latest attorney, Bill Maupin, argued in a Feb. 16 hearing, unsuccessfully it turned out, the discovery issues had nothing to do with the real case.

Maupin, a former Nevada Supreme Court justice, also said James' "personal behavior and the personal behavior of his family has nothing to do with the contract."

James has engaged multiple attorneys since the case was filed in December 2009. He fired Bailey Kennedy in March 2011, and afterward Dennis Kennedy alleged they wouldn't have continued to represent him anyway because they discovered potential ethical violations by James. Biggar didn't disclose details, but described it as "a potential crime/fraud by James."

Mark James no longer seems like the stand-up former senator and former county commissioner once considered GOP gubernatorial fodder.

Jane Ann Morrison's column appears Monday, Thursday and Saturday. Email her at Jane@reviewjournal.com or call her at (702) 383-0275. She also blogs at lvrj.com/blogs/Morrison.