HONOLULU — A Kauai man who attempted to sue a group of investors he accused of running a Ponzi scheme stormed out of a federal courtroom “while screaming obscenities and making threatening gestures,” according to a federal judge’s order dismissing the case.
Millicent Andrade and Craig Stanley, of Lihue, filed a lawsuit in 2016 against three California residents they say sold them nearly $500,000 in worthless shares through the pretense of investing in a penny-auction site run out of Hong Kong.
But after roughly three years of trial delays and unsuccessful attempts to settle the matter out of court, U.S. District Judge Jill Otake dismissed the case with prejudice, barring future lawsuits based on the allegations.
Otake’s ruling apparently had little or nothing to do with the validity of the claims of securities and real estate fraud described in the suit, but was based instead on the conduct of the plaintiffs.
“It is clear that Plaintiff Stanley is unwilling to prosecute this case and will continue to disregard deadlines, orders, and rules,” Otake wrote in a July 15 order dismissing the lawsuit.
In the 12-page memorandum, Otake explained that Stanley’s behavior during a July 8 hearing was essentially the straw that broke the camel’s back.
The lawsuit was filed in June 2016, naming Abner, Aurora and Abigail Guarino, along with a Honolulu business called Investors Funding Corporation. Andrade and Stanley “have had eleven attorneys of record since then, all of whom have withdrawn,” Otake wrote, adding that the “revolving door” of attorneys “has substantially delayed this litigation.”
When one of their lawyers withdrew from the case in December, a month before the case was set to go to trial, the judge held a status conference to discuss Andrade and Stanley’s “delay tactics” and set a “firm trial date,” informing them the court “would not tolerate any more games.”
“Despite the court’s warnings, plaintiffs were unable to get along with their next attorney,” Otake wrote, saying Andrade and Stanley’s replacement lawyer “filed a motion to withdraw after only twelve days on the case due to ‘irreconcilable and unresolvable disputes’ and ‘a breakdown of trust.’”
Otake allowed Andrade and Stanley to hire a new attorney, but cautioned them against delaying the case any further.
In a Feb. 1 order, the judge said the problems between the couple and their string of lawyers “have not been limited to one attorney or one firm, causing the court to surmise that plaintiffs are engaging in delay tactics and gamesmanship.”
Finally, on July 8, the “firm trial date,” a final conference was held prior to trial. Potential jurors had already been summoned and were waiting jury selection in the courthouse. During the meeting, Andrade accused her newest attorney of colluding with lawyers representing the people she was suing.
“Defendants’ attorneys were visibly shocked when they heard this,” Otake noted in the order of dismissal, adding that she had no reason to believe the allegations.
Following Andrade’s statement, Otake wrote that “Stanley stood up and remarked on, among other things, his past eye surgeries and Hurricane Iwa.” His attorney promptly informed the judge of his intent to withdraw from the case.
Then, during an ensuing discussion over the lawyer’s decision to quit, Stanley “stood up and began yelling” in a profanity-laced tirade, telling everyone in the courtroom to “shut up,” and saying, “you guys are crazy.”
Stanley then attempted to exit the courtroom, while yelling curse words at his lawyer, only to find the doors had been locked because the hearing was sealed due to the confidential nature of the discussions.
The court staff unlocked the doors to let Stanley our of the courtroom “for everyone’s safety,” at which time his former lawyer informed the judge of two other instances that morning when Stanley “had walked toward the exit in an angry rage.”
After the sealed hearing, the defendants and their lawyers, who had been waiting in the hallway outside, said Stanley had threatened them on his way out of the courtroom.
“He approached defendants and defense counsel with his hands raised, yelled obscenities with his middle fingers up, called them liars and crooks, and said his father and brother were war veterans,” Otake wrote. “They said they were frightened and had to ask the U.S. Marshals Service to intervene.”
Stanley did not return to court following the outburst. After a two-hour recess and multiple failed attempts to contact him by phone, Otake granted a request by the defense to dismiss the case.
“Stanley’s behavior throughout this litigation demonstrates that any attempt to compel his appearance or compliance with court orders would be futile,” Otake concluded. “Repeated threats of dismissal could not compel Plaintiff Stanley to obey court orders, appear in court, or prosecute his case.”
Neither Andrade or Stanley could be reached for comment.
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Caleb Loehrer, staff writer, can be reached at 245-0441 or cloehrer@thegardenisland.com.
