Buzz-worthy lawsuit alleges Las Vegas lawyers engaged in insurance fraud

A federal lawsuit accuses Las Vegas attorneys Dennis Prince, George Ranalli and Sylvia Esparza of racketeering and civil conspiracy for trying to defraud an insurance company out of more than $18 million.

Such lawsuits against lawyers are rare, so naturally Southern Nevada’s legal community is buzzing.

Prince is a prominent local attorney. He’s a partner in the Eglet Prince law firm and was honored as Trial Lawyer of the Year in 2016 by the Nevada Justice Association.

The roots of the complex fraud lawsuit are in a state negligence case involving a bicyclist who was hit by a pickup and suffered catastrophic brain damage.

Ryan Pretner was riding his bike Jan. 12, 2009, about 5:30 p.m. when he was hit by a Ford F-150 driven by Michael Vasquez, owner of Blue Streak Auto Detailing. Vasquez told police he was not on the job and that the truck was his personal vehicle, which was insured by Progressive Casualty Insurance Co. The policy had a $100,000 liability cap.

But his detailing company had commercial liability garage coverage through Century Surety Company — with a $1 million cap.

On Jan. 7, 2011, Prince, representing Pretner and his legal guardians, his sister and father, sued Vasquez and Blue Streak Auto Detailing for negligence in a personal injury lawsuit in state court. Prince alleged Vasquez was on the job in his lawsuit, despite the driver’s claim that he was not.

Because Blue Streak was insured by Century, the insurance company should have gone to court to represent the auto detailing business.

Except Century thought Progressive was handling the case and was a no-show until it was too late. A default judgment of $18 million had been granted by District Judge Douglas Herndon.

Case closed.

Or not.

The fraud lawsuit alleged Prince had orchestrated a deal with Progressive, an insurance company he represents. “He assured Progressive that he planned to set up Century Surety for a subsequent bad faith claim and that he would not pursue Vasquez.”

On June 8, 2012, Prince sued Century in federal court to collect the default judgment.

The case was assigned to U.S. District Judge Andrew Gordon, who nixed Herndon’s move to add $5 million in attorney fees on top of the default judgment. Gordon ordered the 40 percent attorney fees come from the judgment, not an add-on. That case is pending, awaiting a decision by the Nevada Supreme Court to determine whether Century would have to pay an amount over the $1 million policy cap.

Gordon found Century negligent in failing to represent Blue Streak in state court. But he also wrote, “Genuine issues of material fact remain regarding whether the settlement agreement was the product of fraud or collusion.” That’s a question for a jury, he wrote.

On Oct. 21, Century sued, claiming conspiracy and racketeering, alleging Prince, Ranalli and Esparza teamed to defraud Century through a “bad faith insurance set up.” That case was assigned to U.S. District Judge Jim Mahan.

Prince spokesman Tom Letizia called the lawsuit “a Hail Mary” by Century that makes “crazy allegations” in an attempt to reach a smaller settlement.

Letizia added that Century was “negligent in the way they represented their client. They are playing hardball with the wrong people. They screwed up and this is a last-ditch effort.”

Ranalli’s law partner Benjamin Carman called it “a frivolous case” and said it would be “defended fully.”

It’s not disputed that Progressive hired Ranalli to advise Vasquez and negotiated a settlement agreement to pay Pretner the $100,000 maximum under the personal auto policy.

The lawsuit alleged Vasquez was reluctant to sign the settlement because he said repeatedly he was not on the job and didn’t believe the garage policy applied. Ranalli is alleged to have pressured him to sign.

Esparza, an immigration attorney, was Pretner’s girlfriend at the time of the accident and is now his wife. She originally represented him and helped make the decision to hire Prince. Century alleged she failed to disclose their relationship when she began negotiations. She did not respond to a request for comment.

The violation of Nevada’s racketeering laws is based on allegations of insurance fraud, offering false evidence, perjury or subornation of perjury and obtaining a signature by means of false pretenses. The conspiracy count is based on the alleged coordinated effort to defraud Century.

The case was filed by out-of-state attorneys from Wisconsin and California with Las Vegan Marty Kravitz acting as the local counsel. Milwaukee-based Ric Gass, a nationally noted trial attorney, is one of four attorneys on the case.

Prince has resources, too. His partner, Robert Eglet, has a reputation for being one of the best at picking sympathetic jurors.

This civil case of note will take years to resolve. File it under buzz-worthy cases with the potential to ruin reputations. Or not.

Jane Ann Morrison’s column runs Thursdays. Leave messages for her at 702-383-0275 or email jmorrison@reviewjournal.com. Find her on Twitter: @janeannmorrison