Escrow companies linked to Gearhart win civil lawsuit
October 8, 2013
A lengthy and complex civil fraud trial featuring Kelly Gearhart and his associated property predators ended Tuesday with complete exoneration of three escrow companies alleged to have conspired with the disgraced North County developer.
Hurst Financial investors, many of whom lost their nest eggs in Ponzi-type scheme, looked stricken as the verdict was read. Many broke out in tears.
The jury deliberated for three days prior to the verdict.
The two-month trial, before San Luis Obispo County Superior Court Judge Charles Crandall, ended in a 9-3 verdict favoring the defendants, Cuesta Title, Stewart Title of California and Stewart Title Guarantee. That was the barest majority required for a favorable verdict.
Eight plaintiffs claimed the title companies committed civil conspiracy, aiding and abetted Gearhart and Hurst Financial, and elder abuse.
The eight plaintiffs were suing for approximately $3 million. However, this was a bellwether case and if the title companies had been found liable, it would have set the stage for hundreds of investors receiving damages.
Neither Gearhart nor former hard-money lender Jay Hurst Miller of Hurst Financial were directly involved in the trial; both await criminal proceedings.
Plaintiff’s attorney David J. Noonan, with the San Diego law firm Kirby Noonan Lance & Hoge, said he was uncertain if an appeal would be made.
“It was devastating for our clients and extremely disappointing,” Noonan said. “I have great respect for the jury system and the court. We will talk to our clients and determine our next step, if any.”