State’s pursuit of case proves costly to taxpayers

Friday, Feb. 20, 1998 | 10:41 a.m.

CARSON CITY -- The state is going to pay $499,113 to the owner of a private investigation business in Reno in a case that could have been settled for less than $100,000.

It's the second time Attorney General Frankie Sue Del Papa's office pursued a case and it ended up costing the taxpayers hundreds of thousands of extra dollars.

The state Board of Examiners Wednesday agreed to pay Martin Stivers, who won a judgment in federal court after being denied a license by the state Private Investigator's Board in September 1989. The state lost its appeal to the U.S. 9th Circuit Court of Appeals and will now pay Stivers.

"This is a waste of taxpayer money," said Terri Keyser-Cooper, attorney for Stivers. She said Stivers would have taken less than $100,000 initially before the suit was processed but the attorney general's office refused the offer.

The attorney general's office won a pre-trial summary judgment dismissing the case. But Stivers appealed to the 9th Circuit Court which reinstated the case. A federal court jury in Reno in May 1996 awarded $150,000 to Stivers and Keyser-Cooper was given $216,000 in lawyer fees.

Keyser-Cooper said she personally contacted Del Papa and offered to reduce the award if there was no appeal. But the attorney general's office decided to go to the 9th Circuit again where it lost again.

In the interim, more than $100,000 in interest was added to the initial award.

Solicitor General Mark Ghan of the attorney general's office said Keyser-Cooper agreed to reduce the jury's $366,000 award by 10-15 percent if no appeal was taken.

"We though we had a great argument," he said. "We've got to think of taxpayers' money. But we've got to do what we think is right."

The attorney general's office, if it settles a case, is always open to criticism, Ghan said. "We were right but we lost," he said.

Last year, the state paid $525,000 to Julie Jimenez, whose 14-year-old mentally retarded son was repeatedly sexually assaulted at a state treatment center in Reno. Jimenez had offered to settle the case for $49,900 before trial.

The state refused. After Jimenez won in a district court trial, she offered to settled for $250,000. Del Papa refused and the case was appealed to the Nevada Supreme Court which ruled in favor of Jimenez.

Del Papa said the Supreme Court's decision set a wrong precedent in holding the state liable. She struck a deal with lawyers for Jimenez to have the court withdraw its decision and the state to pay the money so there would not be a precedent on the books that would hurt the state.

In the Stivers case settled Wednesday, he won't get one penny, Ghan said. Stivers owes the Internal Revenue Service more than $160,000 in back taxes and about $340,000 is going to Keyser-Cooper.

Keyser-Cooper said she has received only $1,000 in fees since taking over the case in 1991 which has gone through the federal district court and the appeals court twice.

Keyser-Cooper, now living in Santa Cruz, Calif., said this was a case where Stivers, an experienced private investigator, came to Nevada. He had never been arrested or even had a parking ticket. The business was purchased in Reno and continued operation under the old license while Stivers sought state approval. He was turned down on grounds he lacked integrity.

She said Stivers was accused of wrongdoing and lying -- charges that were never proven. Even applicants who had shady pasts were being licensed, according to Keyser-Cooper.

The jury found that six of the eight state officials involved in the case were biased against Stivers who eventually received a license.

But Ghan defended the board, saying there were allegations of unethical past business practices, lack of truthfulness and other problems. The jury verdict, he said, "was a real travesty as far as we're concerned."