Former general manager of the Ross Valley Sanitary District Brett Richards is attempting to get the district to pay for his legal defense in a related civil suit.
In May, the Ross Valley district sued Richards for fraud and breach of contract. He was located and arrested in the Philippines in July, and s being held in the Martin County Jail to await his trial.
His nine felonies include misappropriation of public funds, embezzlement, and multiple counts of money laundering. He is accused of taking a $350,000 housing loan from the district that was never used for its intended purpose. If found guilty, Richards faces a maximum of ten years in prison and over $1.5 million in fines.
Jai Gohel, the San Francisco lawyer representing Richards in his case, is pressing the district to pay for his client’s defense. This claim is based on an indemnification clause in Richards’ employment agreement with the district. It reads, “”District shall defend, save harmless, and indemnify Richards against any tort, professional liability claim or demand or other legal action or other proceeding, whether groundless or otherwise, arising out of an alleged act or omission occurring in the performance of Richards’ duties as district manager for the period of his employment with the district.”
Christian Picone of Berliner Cohen, the San Jose law firm representing the sanitary district, said in response to the claim, “The indemnification clause is pretty general in employment agreements. It arises out of a situation where a district gets sued, and they also name the general manager. So the district indemnifies the general manager for any liability related to his official duties.”
Picone states that the clause only protects Richards within the normal course and scope of his employment, and does not extend to willful wrongdoing. Jack Govi, counsel to the Central Marin Sanitation agency believes that the district isn’t obligated to pay for Richards’ defense, as they are filing a suit against him for fraud, which is not protected by the indemnification clause.
The district’s civil suit asserts that Richards avoided supplying a deed of trust as security for the loan by artfully deceiving the district’s board of directors and interim legal counsel when the agreement was negotiated. According tot he suit, Richards allegedly intercepted an email from Sanford Skaggs, the sanitary district’s interim legal counsel at the time, which was sent to board members alerting them that the agreement lacked a deed of trust requirement.
Richards has made some payments on the loan, but the civil suit states that his debt to the district exceeds $338,00. The district seeks to recover interest, investigation costs, legal fees, and punitive damage. According to an affidavit filed by Marin Country District Attorney Ed Berberian to secure Richards’ arrest warrant, the prime of the $350,000 loan had been spent on living expenses, a new truck, and several trips to Barcelona, Paris, and Venice.