SLO jury awards Chuck Liddell nearly $2 million

June 24, 2015

A San Luis Obispo jury awarded mixed martial arts champion Chuck Liddell approximately $2 million in his lawsuit against Cuesta Title, the company that worked closely with convicted North County developer Kelly Gearhart.

Liddell alleged that Cuesta Title helped Gearhart defraud him of $2 million. During the trial, Liddell testified that he purchased four lots at Gearhart’s Vista del Hombre development for $500,000 apiece, but Cuesta Tittle released his money before escrow closed and without transferring title to the properties.

The lawsuit centered around a document authorizing the release of the money, which Liddell said was forged. An attorney for Cuesta Title — now Stewart Title — argued Liddell did sign the document and was not taking responsibility for putting too much faith in Gearhart.

Stewart Title relied on expert testimony of a former Secret Services agent who claimed Liddell had signed the documents. During cross examination, information that Larry Stewart was accused of perjury in the Martha Stewart case and is banned from testifying in Canada because of allegedly overstating evidence was disclosed.

The jury awarded Liddell $1,982,727. Jurors have yet to decide on two other plaintiffs in the case who also claim Cuesta Title helped Gearhart defraud them.

Gearhart and James Miller, the former president of Hurst Financial Inc., defrauded more than 1,200 investors of more than $100 million in an alleged Ponzi scheme. Gearhart bilked investors who put money into Central Coast real estate projects, like the Vista Del Hombre development, and then siphoned off the monies for other purposes, including his extravagant lifestyle.

After Gearhart contacted Liddell with a business proposal, the then-MMA fighter decided to invest $2 million for his retirement. Gerhart then told Liddell to go to Cuesta Title and work with escrow officer Melanie Schneider.

Gerhart’s attorney argued that Schneider, who handled many of Gearhart’s deals, had a conflict of interest. Schneider had $50,000 invested in the Vista del Hombre development, testimony indicated.

Additionally, sources told CalCoastNews Schneider moved to Colorado with Gearhart’s brother, Doug Gearhart, shortly after the fall of Hurst Financial. Schneider also reportedly flew on Gearhart’s private jet and briefly lived in his guest house while she was friends with Gearhart’s wife.

When called to the stand, Schneider testified that she did not know Gearhart was committing fraud. She then claimed she did not know who is paying for her attorney.

Multiple lawsuits claim employees of Cuesta Title aided and abetted and/or conspired with Miller and Gearhart. Cuesta Title created false escrows, falsely closed active escrows and illegally filed clean title reports before placing additional loans on already encumbered properties, according to lawsuits.

Prior to Liddell’s award, some investors lost their claims in court, while others received a portion of their losses from the title companies.

In May 2014, Gearhart pleaded guilty to two counts of wire fraud and one count of money laundering in Los Angeles federal court. He is due to be sentenced on Monday.

Gerhart is asking for a 57-month sentence, while prosecutors are seeking a 135-month sentence. The statutory maximum is 50 years in federal prison.

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