Jury Selection Starts in Case Against Pioneer : Justice: First of more than 800 civil actions resulting from bankruptcy filing comes to trial in San Diego.

Jury selection will begin this morning in the first of more than 800 civil lawsuits that were lodged in the wake of La Mesa-based Pioneer Mortgage’s January, 1991, bankruptcy filing.

The trial that will begin Jan. 4 in Superior Court in San Diego comes almost two years to the day after word of Pioneer’s financial collapse first spread among Pioneer investors during an emotional meeting in a Mission Valley hotel ballroom.

Before entering bankruptcy, Pioneer arranged nearly $200 million in real estate loans for 2,500 investors. Most of those loans soured when California’s real estate market softened, and investors will recoup very little of their initial investments.

In April, Pioneer’s new management team said that investors probably would recoup about 35 cents on the dollar after the firm’s remaining assets are sold off through bankruptcy proceedings.

After Pioneer failed, hundreds of individual investors alleged that Pioneer’s collapse was the result of fraudulent activity on the part of Pioneer officials, banks and companies that did business with Pioneer. Suits filed by investors seek unspecified damages.

The Superior Court trial, which deals with fraud allegations lodged by seven investors, will set in motion a complex legal proceeding that eventually will lead to the resolution of the hundreds of remaining investor lawsuits.

Next month’s trial in Superior Court in San Diego will help to determine the financial responsibility of former Pioneer President Gary Naiman, as well as several banks, law firms and other companies that did business with now-bankrupt Pioneer.

The trial is but one strand of a tangled web of legal proceedings that stretches through several state and federal courtrooms.

Pioneer and its business associates also face fraud charges in a separate case brought by investors in U.S. District Court in San Diego. That case, which mirrors allegations brought in Superior Court, is scheduled to begin in June, according to plaintiff’s attorney Tim Cohelan.

Pioneer is selling off its remaining assets through U.S. Bankruptcy Court, and several state and federal agencies are believed to be investigating Pioneer’s collapse for criminal wrongdoing.

During a lengthy hearing on Thursday, State Superior Court Judge Anthony Joseph tackled several tough issues that must be resolved before the trial begins.

One of the toughest issues is the role that Naiman will play during the upcoming trial.

Trial observers believe that, if Naiman takes the stand, he would repeatedly decline to answer questions on the grounds that his answers might be incriminating. During depositions conducted earlier by plaintiffs’ attorneys, Naiman answered hundreds and hundreds of questions by asserting his constitutional right to remain silent.

Lawyers familiar with the case said that the credibility of Naiman’s co-defendants would be severely damaged if Naiman responded to questions about his dealings with those companies by stating that his answers might be incriminating.

Joseph on Thursday said that Naiman “is not going to be in front of (a) jury for days, hours or minutes claiming the Fifth Amendment. . . . It’s not going to happen.”

Joseph, who also is dealing with a host of other pretrial motions, noted that, although all legal actions build to “a crescendo just before the trial begins, the crescendo in this one is a little bit bigger.”