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Monday, July 15, 2024 | Back issues
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Long Court Fight Rages on|for 180,000-Carat Emerald

LOS ANGELES (CN) - One of many claimants to the 840-pound Bahia Emerald claims his lawyers double-crossed him and tried to settle his stake in the enormous gem cluster against his wishes.

Mark Downie sued attorney Frank Rasoslovich, Frank Rasoslovich PC, and Radoslovich Krogh PC, in Superior Court. They and Does 1-20 are the only defendants.

Downie claims he hired Radoslovich and firm Radoslovich Krogh to represent him in a legal fight over the 180,000-carat stone.

Miners discovered the emerald in Brazil's Bahia province and allegedly sold it to someone - though to which of at least four claimants remains a mystery - for $60,000 in 2001.

Gemologists have appraised the Bahia Emerald's at $400 million to $900 million. It's one of the largest clusters of emeralds ever discovered.

In 2011, Los Angeles Superior Court Judge John A. Kronstadt tentatively rejected Anthony Thomas's claim that he bought the stone from miners who never shipped it to him from Brazil.

But Kronstadt never made his ruling final before being sworn in as a federal judge, so his replacement - Judge Michael Johnson - resurrected the case this year.

FM Holdings Inc. claims to own the emerald, which has been in an evidence locker at the Los Angeles County Sheriff's Department since 2008.

But Downie said in a 2010 lawsuit that the stone belongs to him: that he agreed to loan Gemworks Mining $81,000 in exchange for "10 times his investment" when the emerald was sold.

Downie said then that Gemworks mining official Eric Kitchen told him the company needed the loan to ship and store the emerald at a Delaware depository. Instead, Downie claimed, Gemworks sent the stone to a plywood and lumber office in San Jose.

From there, Thomas's ex-friend allegedly moved the emerald from San Jose to El Monte, east of Los Angeles. Then FM Holdings owners Kit Morrison and Todd Armstrong "took possession of the emerald from the El Monte vaulting facility and moved the emerald to a facility in Las Vegas, Nevada," according to Downie's 2010 lawsuit.

The L.A. Sheriff's Department recovered the stone, and years of legal wrangling ensued.

FM Holdings has settled with several of the alleged owners of the Emerald, and Downie says in his recent complaint that Radoslovich tried to settle as well - without his permission. He says he has no interest being bought out by FM Holdings.

Downie claims Radoslovich Krogh breach its agreement with him in a variety of ways, including: "(1) Failing and refusing to provide plaintiff with a budget letter or estimate of the cost of representation after agreeing to do so; (2) Failing and refusing to follow plaintiff's directive that (a) plaintiff was not interested in settling by being bought out by another party in the case [FM Holdings] whose lawyer, Andrew Speilberger, had befriended, and (b) not to negotiate at a mediation since plaintiff intended to pursue his claim through trial."

Nonetheless, Downie claims, Radoslovich participated in mediation on his behalf. He accuses Radoslovich Krogh of "going rogue on plaintiff by initiating and presenting a settlement proposal under which the parties would sell plaintiff's Bahia Emerald and split up the proceeds at an agreed-upon percentage of interest and by auditor class."

The new complaint continues: "Defendants later showed plaintiff an easel-sized piece of paper from the mediation on which defendants had written up how plaintiff's Bahia Emerald would be split up between all the other parties in the case. When plaintiff told defendants they had no right to negotiate such a settlement and had acted beyond their authority, the exact opposite of what defendants were authorized to do, defendants told plaintiff that defendants were fully within their rights to settle the case, notwithstanding plaintiff's express instructions to the contrary."

Downie claims that Radoslovich also made settlement proposals on his behalf at a mandatory settlement conference and took "secret and unauthorized meetings and telephone calls" with Spielberger and another FM Holdings owner, Jerry Ferrera. And - adding insult to injury - Radoslovich Krogh billed Downie for services it never performed and inflated the bill by billing extra time, Downie claims.

Downie says in his complaint that he considers himself the sole owner of the Bahia Emerald, despite having loaned Gemworks Mining only $81,000 in exchange for an interest in the stone.

Downie seeks lost profits and punitive damages for breach of contract, intentional misrepresentation, and concealment.

He is represented by Steven H. Haney of Los Angeles.

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