Suits litter Airola’s past

Saturday, Aug. 5, 2006 | 8:10 a.m.

Although Clark County sheriff candidate Jerry Airola touts his business acumen as the wealthy owner of a helicopter company, he has been dogged by numerous lawsuits accusing him of shady dealings, including reneging on contracts.

Airola has been a defendant in at least eight lawsuits filed in Clark County District Court that resulted either in out-of-court settlements or judgments against him. He also is a defendant in a federal bankruptcy case in Utah and a lawsuit in U.S. District Court in San Diego, and was a defendant in another federal case in Las Vegas.

Most of the lawsuits have focused either on Silver State Helicopters, which Airola owns, or on his prior water purification business. In at least some of the lawsuits, he has denied the allegations.

As for the lawsuits filed by former student pilots of Silver State Helicopters, Airola told the Sun via e-mail: "I would like to note that all together they only involve 25 students out of a total of 3,000 enrolled to date, or less than 1 percent. We live in a sue-happy society and lawsuits are a fact of business life."

Airola's campaign and Airola himself provided written responses Friday to the Sun's questions about the lawsuits.

The suits, Airola contends, do not undercut his ability to boast of his business background as one of the attributes he would bring to the sheriff's office. Occasionally being sued, he adds, is simply one of the unfortunate byproducts of running a business.

"My customer satisfaction rate is in the high 90 (percentile) and in the few cases that a dispute has gone to litigation we have always been able to come to resolution without court action," Airola wrote.

"My company has a large training school as part of our main operation. We are under contract with thousands of individuals as well as businesses, and it is as common to list 'breach of contract' in court filings as it is common to list 'irreconcilable differences' in a divorce proceeding."

Airola's campaign Web site states that after moving to Las Vegas from California in 1995, he opened a water purification company as "the exclusive dealer for a manufacturing company that specialized in high-tech commercial and residential purification." He "grew the company to become the largest volume dealership in the nation by 1998," the Web site says.

In August 1997, Hague Quality Water of Las Vegas Inc. was formed, and Airola served as its president, secretary and treasurer, according to Nevada secretary of state records. He also became a managing member of Hague Quality Water of Nevada LLC. His dealership was affiliated with an Ohio-based company that makes the water treatment equipment and sells it worldwide.

But there were out-of-court settlements in 2002 and 2003 with two separate plaintiffs in cases that named Hague Quality Water. One plaintiff, a Clark County business known as the Water Doctors, alleged that Airola and his company reneged on a contract that called for the Water Doctors to do warranty work for Hague customers. The Water Doctors stated that the breach of contract cost the company more than $40,794 in business and that the firm also was owed $1,160 for work performed.

"This case was the result of a dispute between a former employee of Hague and the owner of Hague," Airola said. Although he was named as a defendant in the lawsuit, Airola said the case originated after he sold the company.

The ongoing case in U.S. Bankruptcy Court in Utah involves an allegation that Airola, in connection with Hague Quality Water, failed to repay $3.5 million in loans to an insolvent Idaho company, Equity Trader-1 LLC, which has been accused of operating a Ponzi scheme. Equity Trader, which was purportedly in the business of purchasing consumer debt from third parties at a discount, was run by Lance Henderson, according to court records. Henderson, listed in court documents as a Utah resident, also was Airola's business partner in Hague Quality Water of Nevada LLC.

Kim Wilson, a Salt Lake City attorney who represents the unsecured creditors' committee in the bankruptcy case involving Equity Trader, told the Sun that the case against Airola is pending. But Airola said different .

"The allegations of this lawsuit were unfounded as regards to my involvement," Airola said. "I was one of many creditors and individuals listed in the suit. There was no claim as to an amount that I owed. The court ordered the plaintiff to show cause against me and they were unable to do so."

Airola and Henderson, along with Hague Quality Water, also were named as co-defendants in a 2001 lawsuit filed by ILD Telecommunications Inc. of Florida in U.S. District Court in Las Vegas. ILD alleged that Tanner Inc., doing business as Hague Quality Water, owed $91,139 in rent, late fees, interest, utility charges and repair costs for a sublease of offices at South Tech Business Park, 4325 S. Industrial Road. ILD also charged that checks written by Tanner and Hague Quality Water to ILD were returned because of insufficient funds in their respective accounts.

Airola settled his end of the case in 2002 when he signed a "confession of judgment" in Clark County District Court, under which he agreed to pay ILD $30,000 without admitting any liability or guilt.

"ILD was a company that was leasing a building next to the Hague office that I sold," Airola said. "When the new owners (Henderson) of Hague took over in November of 2000 they wanted to expand the office and sublease additional space from ILD. Because the new owner had no rent history in Las Vegas I was asked to co-sign for the sublease and I agreed. When the owner defaulted on the lease, ILD filed a lawsuit and I settled out of court."

Three other lawsuits filed in Clark County that named either Hague Quality Water of Nevada or Hague Quality Water of Las Vegas - but not Airola - as a defendant resulted in judgments of $30,000, $20,201 and $7,741 on behalf of the plaintiffs. The latter judgment was granted in April 2002 on behalf of Nevada's Employment Security Division, which pursued litigation against Hague Quality Water of Nevada to collect money that the company owed to the Nevada Unemployment Compensation Fund.

"I am not aware of the details of this action," Airola said. "I hired accountants to handle that portion of the business, and I do not remember any such action."

The corporate designations of Hague Water Quality of Nevada and Hague Water Quality of Las Vegas were revoked in December 2002 and May 2005, respectively, according to secretary of state records. At the time of the revocations, Airola was listed as president, secretary and treasurer of Hague Quality Water of Las Vegas and as a managing member, along with Henderson, of Hague Quality Water of Nevada.

Airola's helicopter business, which has grown to more than 500 employees, was christened in April 2000 when he formed Silver State Helicopters LLC. He later formed two affiliated companies with similar names. His business specializes in pilot training, search and rescue operations, scenic tours, agricultural spraying, firefighting and work for motion pictures.

Twenty-one plaintiffs sued Airola and Silver State Helicopters in June for breach of contract, misrepresentation and fraud in a lawsuit filed in federal court in San Diego. The plaintiffs, most of whom live in California, alleged that after they each agreed to pay $56,000 to $75,000 for helicopter pilot training, Airola and his company refused demands for refunds when the students decided to drop out of the program.

Among the reasons they cited for dropping out was that the training was to take far longer than the 12 to 18 months they were initially told "due to a shortage of helicopters and instructors."

"Defendant Airola apparently said whatever was necessary to entice a prospective student to enroll," the lawsuit said. "Defendant Airola also encouraged overweight students to enroll and, after enrollment, these students were told that they would have to use a larger helicopter (at a significantly higher cost) in order to get certified."

According to the Airola campaign, 19 of the 21 plaintiffs have received full refunds. The other two have not because "they never officially withdrew and are still enrolled."

"They did not follow proper procedure regarding the withdrawal process despite being advised of that process," the campaign said. Airola is in the process of responding to the specific allegations in the federal lawsuit.

In a separate written response, Airola said the California lawsuit was initiated by one of his unnamed opponents for sheriff.

"The students were encouraged to file a suit against me while I was involved in a political race with a promise from the candidate that they would see a settlement from me to avoid bad publicity," Airola stated.

Airola and Silver State Helicopters had been named as defendants in four lawsuits in 2002 and 2003, each of which was settled out of court. The cases involved:

The Airola campaign said Bizzarro and Folle began dating when they met in training class. Bizzarro allegedly violated company safety policies and procedures by flying low and fast in the Red Rock National Conservation Area. Because of his actions, the company said it was required to ground an aircraft for inspection, during which it found damage. The campaign added that Bizzarro was reprimanded and temporarily removed from flight status and withdrew from the program, as did Folle, who was upset with the reprimand.

"A refund in the amount of unused flight time was given once arbitration was completed," the campaign said. "This had to go through arbitration, as Bizzarro claimed he did not cause any damage to SSH's aircraft. It was found that he 'contributed to his own damages.' "

The Airola campaign said a 10 percent insurance cancellation fee that Falcon sought "was never disclosed or printed on any insurance binders SSH (Silver State Helicopters) signed. This had never been agreed upon.

"This had to go through arbitration to get the amount due reduced and the cancellation fee Falcon 'added' dropped."

The Airola campaign said that when Silver State Helicopters took delivery of the aircraft, repairs could not be performed because the necessary logbooks and permits were not delivered with the helicopter, a violation of Federal Aviation Administration regulations.

It also was discovered by Airola's company that the aircraft was not worthy for flight, based on numerous parts that were either damaged or installed improperly, the campaign said.

Silver State Helicopters - but not Airola - also was a defendant in a case in which plaintiff Ryan White of Payson, Utah, alleged that he was owed a $24,405 refund after deciding to cancel his participation in a pilot training program. Ultimately, he won a court judgment in his favor for the full refund, plus interest and court costs.

Airola and his wife, Holly, also were sued in February by JTS Trust of Las Vegas for failing to meet the deadline for depositing into escrow the full purchase price for a one-half acre parcel of vacant land in Las Vegas. The plaintiff sought $10,000 in "earnest money" from the defendants for the breach of contract claim. The case was settled out of court in April with the stipulation that the Airolas would pay the money, and the property was sold to another party.

"My wife and I put a deposit on a piece of property in Las Vegas," Airola said. "After investigating the property we decided not to complete the purchase. The owner of the property filed a suit against myself and the escrow company to have the deposit money released. I released the deposit to the seller and settled the claim."

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