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Exclusive: Harkey Drops Legislator vs. Legislator Lawsuit

By on November 25, 2013
Asm. Diane Harkey

A Republican state lawmaker that filed a $10 million defamation lawsuit against another Republican lawmaker has asked the court to dismiss the case. Assemblywoman Diane Harkey, R-Dana Point, requested on November 12 that the Orange County Superior Court dismiss her lawsuit against State Senator Mark Wyland, R- San Diego, without prejudice, according to court records obtained by CalNewsroom.com.

In August, SDRostra.com first reported that the Orange County Assemblywoman had filed a $10 million lawsuit against Wyland for defamation, presenting her in a false light and intentional infliction of emotional distress. Harkey claimed that Wyland’s statements at a summer Tea Party event exposed her to “hatred, contempt, ridicule” and even caused her to seek “medical treatment on a number of occasions.” When asked for information about her medical treatment to substantiate this claim, Harkey declined.

As a member of the legislature, Harkey has repeatedly decried “lawsuit abuse” and “feeding trial lawyers.”

Diane Harkey Lawsuit Dismissed

CalNewsroom Exclusive: Asm. Diane Harkey’s Lawsuit Dismissed

Case Centered on Point Center Financial Lawsuit

At the summer Tea Party event, Wyland alluded to the ongoing financial and legal troubles surrounding the bankruptcy of Point Center Financial Inc., a company that was controlled by her husband, Dan. As a member of the legislature, Diane is required to report financial interests on annual financial disclosure forms filed with the state’s Fair Political Practices Commission. Point Center Financial Inc. is listed on Diane’s forms.

Disgruntled investors say that Dan Harkey made ill-advised loans and pocketed additional fees from the company. In July, a jury “found Dan Harkey and his company liable for $9 million to investors,” according to the Los Angeles Times.

The week of the jury verdict, Wyland allegedly made these statements– that were apparently so hateful that they forced Harkey to seek medical treatment:

“Unfortunately, there has been a lawsuit brought by a lot of investors of modest means against her and her husband for defrauding them. There was decision that those investors were defrauded and there is a judgment.”

Those words, Harkey believed, were worth $10 million in compensation. According to the original lawsuit:

As a direct and proximate result of the Defendant’s acts alleged herein, HARKEY was caused to incur severe and grievous mental and emotional suffering, fright, anguish, shock, nervousness, and anxiety. HARKEY continues to be fearful, anxious, and nervous. For this harm, HARKEY requests compensatory damages in the sum of Five Million Dollars ($5,000,000.00). 

As a direct and proximate result of the Defendant’s acts alleged herein, HARKEY was caused to obtain medical treatment on a number of occasions as of the filing of this Complaint, which medical treatment will continue for an indeterminable length of time. HARKEY requests compensatory damages in the sum of Five Million Dollars ($5,000,000.00).

Earlier this year, when news of the lawsuit first broke, Harkey’s campaign consultant said that the lawsuit was intended to protect her reputation.

“Diane Harkey has chosen to protect and defend her reputation against malicious attacks levied by the Wyland campaign,” said Tim Clark, a spokesman for Harkey’s Board of Equalization campaign. “That’s why she has filed, independent of her Board of Equalization campaign, this legal action.”

Harkey Critical of Lawsuit Abuse

As a member of the legislature, Harkey has repeatedly criticized lawsuit abuse. Earlier this year, Harkey opposed SB 131, a measure to allow victims of sexual abuse to bring civil lawsuits against private organizations that harbored abusers.

“It ought not to be just about reopening wounds and feeding trial attorneys,” Harkey said in a floor speech against the bill.

Harkey, according to her legislative website, has also introduced legislation that “prevents lawsuit abuse and protect our state and local municipalities.” She has also criticized the state’s payment of interest on legal settlements because “often times merely serve to fund the next lawsuit against small businesses and California employers.”

However, some legal experts believe that Harkey’s filing was “facially frivolous.”

“Diane Harkey’s recent propulsion from so-called ‘tort reform advocate’ to major litigant, filing a lawsuit some would term facially frivolous, highlights the hypocrisy in her position,”  said Brian S. Kabateck, president of the Consumer Attorneys of California. “Using her office to routinely slam lawyers who represent truly injured and powerless victims, all the while planning to file her own lawsuit, makes a mockery of the entire tort reform movement.”

In dropping the lawsuit, Harkey follows the advice of the state’s leading tort reform advocates.

“We are disappointed that she felt this dispute needed to be settled through litigation,” Tom Scott, executive director of California Citizens Against Lawsuit Abuse, said earlier this year. “We hope for a speedy resolution that avoids using scarce resources from our state’s already overburdened courts.”

For more on the story, check out these links.

CalWatchdog: Harkey files $10 Million lawsuit against fellow state lawmaker

SF Chronicle Politics Blog: Republican state lawmaker sues fellow GOPer/future rival for defamation

JohnHrabe.com: Diane Harkey Files Lawsuit Against Fellow State Lawmaker

[Update at 11:48AM:]

OC Weekly’s Matt Coker has some of the best coverage of Dan Harkey’s financial problems.

The Sacramento Bee’s Capitol Alert picked up the story.

 

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About John Hrabe

John Hrabe spends his time traveling the world as a freelance journalist. When he isn’t on an international flight, John writes about state and national politics for CalWatchdog.com, FlashReport.org, Huffington Post and the editorial pages of the Orange County Register. John’s most recent high-profile investigation uncovered the questionable labor practices of Goodwill Industries, the nonprofit organization famous for its secondhand clothing stores.