District to Sue Law Firm Over Belmont
The Los Angeles Board of Education voted Thursday to file a malpractice lawsuit against the law firm of O’Melveny & Myers, alleging professional negligence in the representation of the school district on the environmentally plagued Belmont Learning Complex.
The unanimous decision to sue was the board’s first reaction to an investigative report that sharply criticized the firm and recommended disciplinary action against nine district employees and legal action against five district contractors.
As the board began to consider whether to discipline those employees, it also announced that Supt. Ruben Zacarias would have no role in that decision.
Zacarias, who was criticized in the report for failure to adequately supervise the Belmont project but for whom discipline was not recommended, said he offered to step aside in that process.
“We take this step together, on the advice of counsel, to avoid any challenge to the fairness of the process and the integrity of the process,” Zacarias said. “The board has assured me that this action in no way reflects any loss of confidence in my performance as superintendent of this school district.”
O’Melveny & Myers, one of the city’s largest and most prestigious law firms, ignored conflicts of interest and gave poor advice about district contracts, the board intends to allege. The firm Thursday defended its representation of the district, calling civil litigation “unfortunate and without merit.”
Board President Genethia Hayes said after the closed session that the board will continue deliberations on whether to sue the other firms--the project’s architect and three environmental consultants.
She also said the board is setting up a process to evaluate potential discipline of the nine employees, who include General Counsel Richard K. Mason and Chief Administrative Officer David Koch.
At the conclusion of a six-month investigation, the district’s chief auditor, Don Mullinax, said Tuesday that all should receive discipline, possibly including termination.
District officials said that the review, including formal presentation of charges and hearings, could take up to 60 days and that the board’s decision would be subject to appeal, which could take months.
Hayes said the board had not yet decided whether to leave the nine employees on the job. Despite suggestions that the board meet every day until the crisis is under control, Hayes said it would only resume consideration of questions raised by the report next Tuesday.
“Although this seems to be the crisis of the hour for the public, we still have business that has to be done orderly,” Hayes said.
Among the questions yet to be decided are who would conduct the disciplinary review of the nine employees. Some report to others for whom discipline has been recommended, and some report directly to Zacarias.
The Mullinax report blamed the district’s senior business staff for allowing construction of the high school to begin without adequate environmental protections.
Explosive methane and other toxic substances have been found on the site west of downtown in concentrations that would require costly mitigation for the life of the school. A board-appointed commission has been charged with recommending whether to continue the project.
The report faulted O’Melveny & Myers and partner David Cartwright for their roles in selecting the developer, Temple Beaudry Partners, and negotiating the contract.
The report said Cartwright failed to include “usual and customary” termination language in the contract, which would have allowed the district to dismiss the developer and pay only for work already completed.
“The contractor would not receive its anticipated profit for the remainder of the project and the owner would not pay for costs of work not performed,” the report said.
The lack of such a clause has now become a factor in the district’s deliberations on whether to complete the $200-million project.
“To the extent Mr. Cartwright failed to recommend including these provisions, or to the extent Mr. Cartwright failed to warn the [district] of the risks posed by excluding these provisions, it would appear that Mr. Cartwright and O’Melveny breached its duty and standard of professional legal care,” the report said.
The auditor also concluded that O’Melveny had a conflict of interest because it also represented Kajima International, the parent company of one of the developer’s principal partners.
Although the firm disclosed that relationship and the school board waived it, Cartwright still violated the California Political Reform Act by participating on a committee that selected Temple Beaudry Partners, and O’Melveny & Myers should have instructed him to recuse himself from any decision, the report said.
O’Melveny & Myers dismissed that contention, saying that Cartwright was not subject to an act that covers public officials.
Finally, the report criticized Cartwright for his role in negotiating a purchase contract in which the district assumed all liability for environmental problems on a 24-acre parcel over a former oil field.
In a statement Thursday, the firm reasserted that it had represented the district capably and in compliance with its professional obligations.
“We intend to defend the lawsuit vigorously, and we expect to prevail,” it said.
Founded in 1885, O’Melveny & Myers is the oldest law firm in Los Angeles. It has 10 offices, including four overseas, and 600 staff attorneys. Former Secretary of State Warren Christopher is its senior partner.
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