Judge imposes $350,000 in fines in eTreppid civil case

RENO -- A federal judge has imposed $350,000 in sanctions and fees on lawyers for former eTreppid software designer Dennis Montgomery, saying they manipulated his civil case in an effort to undermine court orders.

In a 53-page ruling, U.S. Magistrate Judge Valerie Cooke found that Deborah Klar and Teri Pham engaged in "forum shopping" by trying to get other courts and officials to prod Montgomery's previous lawyer, Michael Flynn, to release documents and to get out of paying the fees Montgomery owed Flynn.

Flynn had represented Montgomery in a legal battle with Warren Trepp, owner of eTreppid Technologies, over ownership of special software, purportedly used in the war on terror. But Flynn quit the case in July 2007, saying he wasn't getting paid.

Despite a ruling by Cooke that the federal court in Nevada had jurisdiction over Flynn's fees and his possession of documents on the case, Klar and Pham turned to a California court, the San Diego County Bar Association and the Massachusetts Bar for a ruling in their favor, Cooke wrote.

"The conduct of Ms. Klar and Ms. Pham epitomizes the scorched earth litigation tactics that undermine citizens' confidence in our courts and our system of justice," Cooke said in her order, released Tuesday.

In her ruling, Cooke said they must pay Flynn $204,411 in attorney's fees and costs. She also ordered Klar to pay $102,205 in sanctions, and Pham and her law firm to pay $20,411 each in sanctions.

In addition, the judge ordered Montgomery to pay $61,323 in sanctions, saying he committed perjury when he made claims about where he thought Flynn was licensed to practice, the Reno Gazette-Journal reported.

Montgomery and Trepp became embroiled in the civil lawsuit after Montgomery left the company in 2006. The two sides sued each other over the secretive software, said to be worth millions.

In the case, Montgomery claimed that Gov. Jim Gibbons had helped Trepp secure defense contracts in exchange for money, a Caribbean cruise and other bribes, claims that Gibbons and Trepp denied.

Gibbons became the target of a federal investigation, but was cleared of wrongdoing in November.