A family whose child wass molested by a hotel employee sues and finds itself a target of federal probes.
It might have been bearable if the horror had stopped when Paul Gayter and his wife Flora Nicholas learned that their 9-year-old daughter had been molested by a hotel employee during a family vacation.
Or if it had stopped when the hotel’s insurer, American International Group, decided on exceptionally tough tactics — endless depositions, private investigators and psychological tests — to prevent a payout to the family. Or when federal prosecutors, perhaps acting on a tip from lawyers for the insurer and hotel, started questioning the family’s immigration status (they’re from Britain) and launching criminal probes into their business dealings. Or when a settlement deal with the hotel fell apart and the battle headed back to court.
But it hasn’t ended. Eight years after their daughter was attacked, the Gayters’ fight grinds on.
Lawsuits have snaked through two federal trial courts and two federal appellate courts. At least 20 lawyers have worked on the matter, including litigators from some of the top firms in the country. Lawyers for the hotel have been admonished repeatedly for overreaching discovery tactics. Yet they’ve been able to bat down a jury trial.
Now, however, the FAmily is hoping to inflict some pain. On May 2, they filed suit in the U.S. District Court for the District of Columbia against the hotel, the insurer and several of the lawyers who worked against them, accusing the group of malicious prosecution for allegedly instigating the criminal investigation and immigration proceedings.n The family is seeking $5 million in compensatory damages and $10 million in punitive damages.
The case is no sure thing, but the family may be helped by a record showing the government eventually abandoned both the criminal and immigration investigations. Plus, after eight years of fighting, an uphill battle isn’t likely to cause much concern for the family.
In April 2000, the family traveled to St. Thomas in the U.S. Virgin Islands for a getaway. Just after they returned from the trip, their daughter read a section from the children’s book, "Chicken Soup for the Kid’s Soul," which counseled that if children are touched inappropriately, they should tell an adult.
The daughter told her parents that Bryan Hornby, director of Wyndham’s day care program, Kids Klub, had sexually molested her several times throughout their seven-day stay at the resort. They immediately called the police in the Virgin Islands — who arrested Hornby.
It turns out that the girl wasn’t the only victim. Two other cases were brought by families who said their children were molested by Hornby. The other two families agreed to settle for undisclosed amounts in April 2008, according to court documents filed in the Virgin Islands.
By March 2001, Hornby was convicted of unlawful sexual contact and sentenced to five years in prison. (He was released in 2006 and then deported to his native Zimbabwe.)
AIG, the hotel’s primary insurer, took the lead in assembling, and paying for, a defense team. It included Los Angeles solo litigator Bill Schroeder; the Virgin Islands firm Dudley Clark & Chan; and another Virgin Islands firm, Hymes & Zebedee. Three Am Law 200 players were also on the defense list: Reed Smith; Wilson, Elser, Moskowitz, Edelman & Dicker; and Baker & Hostetler. The insurance company also hired counsel for Hornby, even though it was no longer required to do so under Wyndham’s policy, according to a Dec. 12, 2001, letter from AIG to Hornby.
From the start, AIG and Wyndham played hardball: They wanted repeated psychological evaluations of the family and hired private investigators. They asked to speak with friends of the family and the daughter’s classmates, and took a two-hour deposition of the daughter’s school principal. The family recently filed lawsuit says that investigators also stole the family’s garbage to obtain evidence.
The goal, according to court papers filed by the defense, was to show that the family were overstating their injuries and had a history of lying on government documents, including their
IMMIGRATION QUESTIONS
In May 2002, Douglas Beach, of counsel at Dudley Clark, subpoenaed the familys’ immigration records. Along with Schroeder, the Los Angeles solo, he deposed the father in Washington, D.C., at the offices of Baker & Hostetler.
The lawyers zeroed in on the familys’ visa status. The father and his wife had come to the United States in 1996 to work for a Northern Virginia advertising company. In 1999, they lost their jobs, but quickly started working with a Boston-based sports marketing company. Under an agreement with his employer, the father started an advertising company of his own.
According to a court filing, defense lawyers believed the arrangement was a cover for a money laundering operation. In court documents, they outlined a scheme where the father was allegedly sending $18,000 a month in payments to his former employer, which in turn was kicking back a portion of that money n the form of salary payments.
The father and his wife would be deposed six more times.
In 2003, the family had enough and refused to comply with a subpoena for access to their business computers. Lawyers for the plaintiffs turned to judges in the U.S. District Court for the Eastern District of Virginia to force the family to comply. And when they were rebuffed, the attorneys took the matter to the 4th U.S. Circuit Court of Appeals.
In a July 2004 ruling, the 4th Circuit affirmed the lower court’s ruling, calling the request "unduly burdensome" and "harassing."
With their discovery shut down, Wyndham’s lawyers sought help elsewhere: the federal government.
For a while, it looked as if the family had the government on its side. Back in May 2004, Attorney General John Ashcroft honored them for their work with the Center for Missing and Exploited Children. In response to their child’s ordeal, they had marshaled an ad campaign to raise awareness about child molestation.
Within six months, prosecutors were investigating the family for money laundering and immigration fraud. The family, in their suit, say that attorneys and the insurer supplied information from the civil battle to help the government launch a criminal investigation.
It’s a fairly common occurrence, say former prosecutors not involved in the litigation for private lawyers ri regularly refer potential criminal cases to federal prosecutors, but is incumbent on any prosecutor to keep their antennae up and beware of ulterior motives.
The family learned they were targets of a probe in December 2004. A business associate told them that he had been served with a grand jury subpoena to testify, says the family’s current lawyer. He says when they into the matter, they discovered their clients were indeed under investigation for visa fraud and money laundering.
In their May 2 complaint, the family say thatan Assistant U.S. Attorney in the Eastern District of Virginia handled the probe, along with a Special Agent with the Office of Labor Racketeering and Fraud Investigations in the Labor Department’s Office of Inspector General, as well as a Special Agent with U.S. Immigration and Customs Enforcement.
According to the complaint, information in the government’s possession included DVD recordings of the father’s deposition.
In September 2006, the family learned that the government wasn’t going to pursue criminal charges. Their immigration status, however, was a different matter. The father and his counsel learned that month that the wheels had been set in motion for deportation. The father was ordered to appear at the U.S. Citizen and Immigration Services office in Fairfax, Va. Once there, he was arrested for immigration violations, was fingerprinted, and had his mug shot taken. The father says he was also detained in a holding cell several hours before he was allowed to leave after posting a $5,000 bond.
In May 2007, U.S. Immigration Judge John Bryant granted a motion by the Department of Homeland Security, which houses Immigration and Customs Enforcement, to terminate the case. The motion gave no reason for the change of heart.
By the end of the government investigations into their business and immigration status, the family say they had spent some $400,000 in legal fees.
A proposed settlement would have more than covered the spending. In July 2005, the parties agreed to settle the case on the eve of a trial. The payout: $2.1 million.
But disputes raged over fine points, such as which family member would receive the money. And the funds were never released.
After two years of haggling, the family moved to restore the case. Chief Judge Curtis Gomez, in the Virgin Islands, granted the motion, ruling last November that the case was still active. He ordered pre-judgment and post-judgment interest on the money, according to court documents. Counsel has appealed the decision to the 3rd U.S. Circuit Court of Appeals, where the issue is currently being briefed.
The family hired new counsel on April 23 and their former counsel withdrew his representation on April 28. It is unclear why the change took place.
In addition to the malicious prosecution allegation in their May 2 complaint, the family are claiming abuse of process, intentional infliction of emotional distress, and false light. Named in the suit are AIG, the Wyndham resort (now known as Wind International Inc.), and its lawyers, Schroeder, Dudley Clark & Chan, and Beach.