Long-Running Embezzlement Case Yields 'A Legal Perfect Storm'

by Gwen Moritz  on Monday, Nov. 21, 2011 12:00 am  

Little Rock attorney Pat James is defending Garret and Katherine Sorensen in the civil case filed against them by Stephen L. LaFrance Holdings Inc., the parent company of USA Drug.

A transcript of that July 14 hearing yields what little is known about the defense that the Sorensens and Walters plan to mount. "There was," Clardy said, "a culture at USA Drug of operating side businesses that fed off USA Drug," and the Sorensens and Walters believed they had permission to get in on it.

The hail-Mary effort failed. On the same day, July 18, that Judge Wilson denied the motion for depositions and documents in the criminal case, Pat James began demanding documents in the civil case - even though he and his clients had still not been served.

The next week, he issued deposition notices for Stephen LaFrance Sr. and his two sons.

James told Arkansas Business that the timing was coincidental and he was merely renewing the same efforts for his clients that he had started the first time the LaFrances sued his clients.

But that's not the way it looked to the LaFrances' lawyers:

"The starting point for this discovery dispute was Sorenson's [sic] dissatisfaction with this Court's Order in the criminal case that he could not conduct depositions or obtain discovery in defense of his criminal indictment," the Rose lawyers would write to Judge Wilson months later. "... Mr. Sorensen and Mr. James attempted to get what this Court told them they couldn't get - namely depositions and interrogatories and requests for production [of documents]."

We're From the Government
That's how it looked to the U.S. Attorney's Office as well. Assistant U.S. Attorney Angela Jegley, who is prosecuting the Sorensens and Walters, filed a motion to intervene in the refiled civil case, then in Circuit Judge Wendell Griffen's court, to argue that forcing the LaFrances to answer questions in the civil case would prejudice the criminal case.

After a hearing on Sept. 9, Griffen granted Jegley's request to intervene - but he denied the motion to stop the discovery. Griffen gave the LaFrances 30 days to comply.

Jegley tried another tactic, an interlocutory appeal in the middle of the case, but Judge Griffen never ruled on it.

On Oct. 7, as the deadline for compliance neared, Jegley took a step that boggled even attorneys with decades of experience. She moved the civil case out of Pulaski County Circuit Court and into federal court, where - presumably because Jegley used the criminal docket number on the removal notice - it was initially combined with the criminal case she was prosecuting against the Sorensens and Walters before Judge Wilson.

Although Wilson has since expressed some suspicion that the LaFrances and their attorneys were somehow involved in the prosecution's decision to move the case to federal court, U.S. Attorney Christopher Thyer told Arkansas Business that he made that decision personally "to protect the integrity of the legal system."

Pat James, on behalf of the Sorensens, attempted to get the case moved back to circuit court - and to file a countersuit against the LaFrances for defamation. But in the meantime, Judge Wilson - who had refused to allow depositions in the criminal case - specifically ordered that the depositions of Jason LaFrance, Stephen LaFrance Jr. and Stephen LaFrance Sr. go on as scheduled from Monday, Nov. 7, through Wednesday, Nov. 9.

 

 

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