The Heartbreak Kid

Democratic Senate candidate Tim Kaine’s ‘frivolous’ lawsuit cost small VA businessman tens of thousands, blamed for heart attack

• June 11, 2012 5:00 am


A federal judge had harsh criticism for Democratic senatorial candidate Tim Kaine for misconduct during a trial revolving around a "frivolous" lawsuit that ruined the finances—and health—of a small businessman in Virginia.

"It destroyed my career in real estate and was pretty destructive to me, my family, and my children," a defendant in the case told the Washington Free Beacon. "It cost me a whole bunch of money in legal fees and damaged my reputation, and I had a heart attack in the middle of it."

The defendant—a retiree who had a hand in nearly 1,000 real estate transactions over 40 years—needed a quadruple bypass to reverse the damage brought on by the stress of the case. He requested anonymity due to ongoing health concerns.

Kaine was a Richmond, Va. trial lawyer in 1985 when a group of investors who had purchased a stake in the Commonwealth Inn Limited Partnership hired Mezzullo, McCandlish & Framme to sue the small Williamsburg hotel’s property managers.

Just two years removed from Harvard Law School, Kaine zealously pursued the case, punching up simple civil violations revolving around tax disclosure and misallocated funds into racketeering allegations incorporating anti-mafia RICO laws.

Federal Judge Richard L. Williams referred to the evidence introduced by the legal team as "chicanery" and sanctioned Kaine, along with fellow attorney Thomas Wolf and financial analyst W. Duke Grkovic, for bringing a "frivolous" suit to the court.

Grkovic defended Kaine’s handling of the case, taking full responsibility for the judge’s harsh words.

"We were fined for producing evidence out of order, and I was responsible for gathering the data we used from people across the country," he said in an interview with the Free Beacon. "I have no reservations about how [Kaine] conducted himself; he was a man of the highest integrity."

That argument did not hold up upon appeal, and the legal team was sanctioned in the amount of $12,500. Grkovic was ordered to pay an additional $2,400.

"The plaintiffs also argue that sanctions were improperly imposed on plaintiffs' attorney, Timothy Kaine, because he had no notice that he might be liable for such sanctions … in the frivolous claims. But Kaine did receive such notice: notice was given to the law firm," the appeals court ruled. "Kaine's argument on appeal that he was insufficiently involved is not convincing."

The defendants lost at least $50,000 on initial settlements for several minor charges, in addition to tens of thousands of dollars in legal fees over the course of three years.

The Kaine campaign did not return calls for comment.

The Commonwealth Inn case was not the last time Kaine and Judge Williams—a liberal appointed to the bench by Democrat Jimmy Carter who famously struck down Virginia’s partial birth abortion ban—would cross paths. The judge ruled that the Kaine administration disenfranchised more than 2,100 military voters in the 2008 election, the first time the state voted for a Democrat since going for Lyndon Johnson in 1964. Williams died in 2011.

Kaine could have escaped punishment had he pursued the lawsuit in 1993, when Congress made it harder to punish attorneys for filing frivolous lawsuits. Sen. Chuck Grassley (R., Iowa), ranking member on the Senate Judiciary Committee, tried to reinstate harsher penalties through the Lawsuit Abuse Reduction Act of 2011, which has stalled in Congress.

Trial lawyers such as Kaine do little to fight the status quo, Sen. Grassley said.

"While people wait for an economic recovery to take hold, employers are forced to waste money defending frivolous lawsuits that siphon money from job creation," Sen. Grassley said in an email. "Frivolous lawsuits are a burden on the American economy that needs to be lifted. Our front-line defense against frivolous lawsuits and the misuse of our legal system is Rule 11 of the Federal Rules of Civil Procedure."

Virginia political insiders told the Washington Free Beacon in May that Kaine is unlikely to help Grassley in his quest for tort reform. The Democrat has raised nearly $1 million from attorneys thus far in 2012, his largest group of contributors, according to the Center for Responsive Politics.

Kaine took advantage of the relaxed rules against overreaching in lawsuit in the 1990s, resulting in another rebuke—this time from the Virginia Supreme Court.

In 1998, Kaine won a landmark $100.5 million lawsuit against Nationwide Insurance for discriminating against minorities. His clients, Housing Opportunities Made Equal (HOME), arranged for 15 pairs of people to apply to insure their homes and found that black couples in poorer neighborhoods received more expensive coverage.

The Virginia Supreme Court threw out the judgment in 2000 after it found that the group "lacked standing to sue because it was not injured by the company’s alleged bias." Kaine refused to abandon the suit and eventually settled for $17.5 million and promises from the company to market in minority neighborhoods.

Kaine has regularly touted the multi-million dollar judgment to flex his populist credentials as a public figure despite the repudiation of the courts. Soon after becoming governor in 2006, Kaine delivered the keynote address at HOME’s 35th anniversary celebration.