Whistleblower Blames LAUSD for $60 Million Miramonte Sex 'Fiasco'
LOS ANGELES (CN) - The chief risk manager Los Angeles Unified School District hired to help settle the Miramonte sexual abuse litigation claimed that he was fired after blowing the whistle on "corruption and cronyism" in the district's public law office.
Seeking $10 million in damages in Superior Court, former LAUSD chief risk manager Gregg Breed claims the district's Office of General Counsel hired attorneys with scant experience in sexual molestation cases, ignored his advice on how to structure mediation payments and cut him out of crucial mediation sessions with Miramonte plaintiffs.
Breed claims that "disastrous decision" could cost taxpayers as much as $60 million, as insurers refused to indemnify the district after they too were left out of the loop during mediation.
Mark Berndt, a former Miramonte Elementary school teacher, was charged with 23 counts of lewd acts on 23 children age 7 to 10. He pleaded no-contest to the charges in November 2013.
Miramonte teacher Martin Springer also was charged with lewd acts on a child. He is awaiting trial.
Sean Rossall, a spokesman for the district's Office of General Counsel, disputed Breed's attempt to characterize himself as a whistleblower. He called the former risk manager's attempt to exploit the Miramonte cases "simply reprehensible."
"These are nothing but baseless allegations from a disgruntled former employee," Rossall said in an interview. "He's attempting to manipulate the school district into paying him to go away by latching on to the attention being paid to the Miramonte cases."
"It's simply reprehensible that he would use the students and families involved in this matter," Rossall added. "And we're going to do everything we can to defend ourselves from these types of frivolous lawsuits."
Breed, hired in April 2012 at $14,438 a month plus benefits, claims in the lawsuit that LAUSD General Counsel David Holmquist farmed out the work to attorneys "based on his personal relationships" rather than on their expertise.
Attorneys specializing in sexual assault and molestation cases typically charge about $175 per hour, Breed says in the complaint.
But the attorneys that LAUSD hired, Thomas Delaney of the Sedgwick law firm, and Sean Andrade with Baute, Crochetiere and Maloney, charged $455 and $390 an hour, respectively, according to Breed.
Breed said he recommended that the school district take a piecemeal approach to settling Miramonte cases, based on the "level of exposure and injury" of each claimant.
He claims that the Office of General Counsel decided to offer a flat rate of $470,000 to each claimant instead.
The law office arrived at that rate on Feb. 14, 2013, when the district's Chief Business and Compliance Counsel Gregory McNair, "under direction of LAUSD General Counsel David Holmquist," made the "highly suspect and ultimately disastrous decision" to exclude Breed and third-party insurers from a mediation session with Miramonte plaintiffs' counsel, Breed says in the complaint.
Breed believes he was frozen out of the meeting because he would have mentioned his concerns about the blanket settlements.
Worse, Breed claims, attorney McNair reviewed Miramonte fact sheets for the first time weeks after the district had gone public with the settlement.
"McNair's actions violated the LAUSD's board-approved process to vet each litigant and ensure both that taxpayer dollars were spent properly and victims were adequately compensated, but not over compensated," the complaint states.
Speaking for the district's general, however, Rossall called the notion that that the district did not review fact sheets "patently false." Indeed, there was a "thorough vetting" during a mediation process that included California Supreme Court Judge Cruz Reynoso and Superior Court Judge Peter Lichtman, Russell said, adding that Presiding Judge John Wiley signed off on the mediation.
Breed's complaint meanwhile says that claimant-submitted fact sheets were riddled with errors and missing key information.
The Office of General Counsel's one-size-fits-all approach had unintended consequences, according to the filing. Rossall, the office's spokesman, countered that, over the term of a 14-month contract, Breed never raised "any issues." He made his claims only when he realized his contract would not be renewed, Rossall said.
He claims some students received settlements though they were never in a class with the accused teachers, while one student who was allocated an award was "touched just once on the shoulder."
"Three claimants who received $470,000 each had made allegations against an accused teacher about whom LAUSD had no prior notice of sexual abuse," the complaint states, while two other students who were never abused received awards "on factors such as 'being angry' and 'not wanting to go on amusement park rides.'"
Breed claims that when he complained to LAUSD about the way McNair was dealing with the Miramonte cases, he was told without explanation that his contract would not be renewed.
When news of the $470,000 settlements reached the public, Holmquist, "to save face," said the district's insurers would foot the bill, Breed claims.
He adds: "Holmquist's statement was designed to diminish the shock, should it ever be discovered that students who never even encountered the abuser were handed $470,000, a settlement strategy developed by one of Holmquist's subordinates. Holmquist also stated that LAUSD spent $1 million on defense costs, when the actual amount was over twice this amount."
Because the district's insurers were not involved in the mediation process, as required by the district's insurance agreements, the insurers refused to indemnify the district or pay the settlement, Breed says.
"As a result of rejecting plaintiff's advice to the contrary, it is likely that LAUSD will be solely liable for the $30 million committed in mediation and an additional $30 million allocated for the remaining Miramonte cases," according to the complaint.
And, Breed says, insurers are refusing to cover the district for the 2013-14 school year.
"Despite the outside law firms' dereliction that has caused the LAUSD to lose insurance coverage for both the Miramonte cases and for all claims in the future, McNair, in another example of egregious cronyism, selected the same attorney (Andrade) to represent LAUSD in litigation filed by one of the insurance companies, Everest Insurance, where his own actions and decisions will be the central legal issue adjudicated." (Parentheses in complaint.)
Breed claims that the district sought an injunction against him after the media tried to contact him last year. He says that "gag order" was created to "punish" him for blowing the whistle and prevent him from going public with information about the "Miramonte settlement fiasco."
He claims the district refused several of his records requests under the Public Records Act.
He seeks at least $10 million in damages for violation of free speech, failure to pay wages, retaliation, wrongful firing, conversion, unjust enrichment, breach of contract and other charges.
LASUD is the only defendant.
Breed is represented by Arnold Peter of Beverly Hills.