Dairy Farm Family’s Attorney Blames Law Firm for Lost Fortune

Let it be loud and let it be clear. Big law is not above the law.
— Robert Barnes - Stueve Attorney

Daily Journal, Meghann Cuniff - August 7, 2018

SANTA ANA — A plaintiff’s lawyer seeking millions in damages from Buchalter LLP told jurors on Monday that the firm didn’t just hire the lawyer that helped dismantle a dairy family’s wealth, but said it also promoted him, protected him, profited from him and dismantled the firm “alarm systems” that could have stopped him.

Robert E. Barnes of Barnes Law LLP, who represents the Stueve family in a fraud, Racketeer Influenced and Corrupt Organizations Act and negligent hiring lawsuit against Buchalter, ended his opening statement with a damages estimate — $150 million in losses and missed interest — and a suggestion for jurors: “Let it be loud and let it be clear. Big law is not above the law.”

He also previewed Buchalter’s defense, telling jurors, “What you won’t hear, unfortunately, is law firm accountability. What you won’t hear, unfortunately, is a law firm apology,” Barnes said.

Barnes’s folksy approach at the start of the expected four-week trial focused on the legacy of a family that valued hard work and family, amassed a huge fortune through their Alta-Dena Dairy, then lost most of it at the hands a family attorney, Raymond Novell, along with Buchalter partner J. Wayne Allen. Stueve et al. v. Novell et al., 10-00411651 (Orange Super. Ct., filed Sept. 24, 2010).

Allen worked at Berger Kahn LLP for about 16 months before he joined Buchalter in July 2007.

Buchalter “forced out” Allen in February 2010 for rule violations related to money he’d loaned himself from the Stueves without disclosing it to the firm or seeking the firm’s permission, said Buchalter’s lawyer, Alan A. Greenberg of Greenberg Gross LLP.

Allen didn’t disclose his $425,000 loan from the Stueves when Buchalter hired him, then in 2008 loaned himself another $270,000.

“He did not ask for permission, he did not get permission. He just did it,” Greenberg said.

Still, Greenberg said the Stueves’ financial situation is of their own doing.

“It was actually the Stueves who made the decisions and took the actions that bring us here today,” Greenberg said. “This case is about personal responsibility for making decisions about one’s own affairs.”

Greenberg’s slide show included a brief history of Buchalter, which opened in Los Angeles in 1940 and now has 240 attorneys in seven offices in three states. As Buchalter Chief Financial Officer Pamela Webster watched from the gallery, Greenberg detailed the firm’s hiring process as well as the rules about loans that led to Allen’s ouster.

“There are rules that govern attorneys, and the firm is very adamant that the attorneys in the firm follow the rules,” Greenberg said.

Greenberg is handling the trial with his law partner, Wayne R. Gross, and firm associates Stephanie S. Elder and Claire-Lise Y. Kutlay.

Barnes is working with Michael S. Cooper, Douglas M. Hanchar and Tony J. Nasser.

Allen, Novell and Berger Kahn, where Allen worked before Buchalter, settled with the Stueves last week, leaving Buchalter the only defendant on trial. Berger Kahn’s lawyer, Allen L. Michel of Gipson Hoffman & Pancione A.P.C., watched opening statements, as did Allen’s lawyer, Michael R. Williams of Bienert, Miller & Katzman PLC. More than a dozen members of the Stueve family also attended.

Barnes talked jurors through what he described as the Stueve family legacy, which began in Frohna, Missouri, and continued in Monrovia, where brothers Harold, Edgar and Elmer started the Alta-Dena Dairy in 1945.

The dairy grew into the largest in the world, but the family maintained modest lifestyles. Stueve children worked the toughest and lowest-paying jobs at the dairy before the family sold it in 1989, then fell into bankruptcy, he said.

Still, the family maintained huge land assets across California, and they trusted Novell, who was a longtime family friend, to develop a wealth management plan that would secure the family’s finances and charitable contributions for generations.

Novell partnered with Allen in 2001 because he was an experienced estate planner. Barnes told jurors that much of Allen’s work at Buchalter attempted to conceal the “self dealing” Novell had engaged in for years with the Stueves’ money.

The Stueves discovered much of their wealth was gone in early 2010 after a family member died, Barnes said.

Orange County Superior Court Judge William D. Claster is presiding over the trial.