Provides detailed information about the case  during Blog Interview

vector scales of justice and gavel

The attorney for the plaintiff, Mr. Rich Harris, who is suing Yavapai Community College and NorthAire on behalf of former Yavapai Community College Aviation Director Dan Hamilton, was interviewed by the Blog regarding his theory of the case. The case has dragged on for almost 6 years and neither the Community College nor NorthAire or Guidance Aviation have been able persuade the federal district court to grant or dismiss all of the claims. If successful, the Defendants might have to pay over  $100,000,000. The matter has been scheduled for a settlement conference in July.

The Plaintiff seeks personal damages in the amount of at least $1 million for contract (salary) damages, plus recovery on various tort damage theories. 

Based on the remaining claims, the plaintiff’s attorney sets out the following that suggests that damages in theory could exceed a hundred million dollars. 

In this case, the Plaintiff is titled “Relator.” The following is a partial copy of a settlement document obtained by the Blog and then edited by the Blog to help readers better understand the theories. Remember, these claims are not evidence; they are only the views of the plaintiff’s attorney and are based on his best estimates.

1.              Prospects of Defendants Winning Are Low

a. Defendants’ past history of lost dispositive motions indicates a strong likelihood of Relator succeeding trial.

• Guidance Defendants moved to dismiss certain claims against them with prejudice (Guidance Doc. 23)
  • The Court refused to dismiss with prejudice, but rather granted Relator leave to amend his Complaint (Guidance Doc. 74)

• Guidance Defendants moved to dismiss Relator’s Third Amended (Guidance Doc. 94)
  • The Court (Judge Rosenblatt) again substantially denied dismissal ordering the lion’s share of the case to  proceed. (Doc. 127 in Guidance). 

• Defendants moved to dismiss the Complaint in the NA (NorthAire Doc. 49)
  • • The Court (Judge Snow) denied that motion (NorthAire Doc. 90)

• Guidance Defendants moved for summary judgment in the Guidance (Guidance Doc. 189)
  • • The Court (Judge Snow) denied Guidance Defendants summary judgment. (Guidance Doc. 414)
• Morgan Defendants moved for summary judgment in the Guidance (Guidance Doc. 244)
  • The Court (Judge Snow) substantially denied Morgan Defendants summary judgment (Guidance Doc. 414)
• Yavapai and Morgan Defendants moved for summary judgment in the Guidance (Guidance Doc. 476)

• •  The Court (Judge Snow) substantially denied Yavapai and Morgans summary judgment (Guidance Doc. 620)
• Guidance Defendants moved (again) for summary judgment in the Guidance (Guidance Doc. 477)
  • The Court (Judge Snow) again denied Guidance Defendants summary judgment(Guidance Doc. 620)
  •  
  • The likelihood of the Court going against the law and its past rulings from the Guidance case in the pending motions for summary judgment in the NorthAire Case is remote.
  •  
  • The Guidance case will be going to It is highly likely that the Court will try Guidance case concurrently with the NorthAire case.

2.              Damages at Trial Could Exceed $ 98,855,857.00+ a.  FCA Damages 201303 – 201501 = $97,855,857.00 ($89,770,857.00 + $8,085,000.00)

Payable to United States (not Relator)

Singles = $ 29,932,619.00

• All proceeds from the AVT(HE) and AVT(AI) programs from Fall 2013 through Spring 2015 are the basis for damages. FN1  (See YC 031411) ( Relative to the singles, the total of over $ 8 million is relatively low and completely in-line with constitutional guidelines for penalties.) (In an abundance of caution, Relator limits this valuation to the period of the AVT program through the VA’s suspension of the same. These dollar amounts are subject to increase at least with respect to the claims submitted for NorthAire students because the Court has not limited the scope of those claims to any time period. Moreover, the parties still dispute whether the temporal scope of claims in the Guidance case has been limited to those occurring in or after Fall 2013.)

Treble damages = 3 X $ 29,932,619.00 = $ 89,770,857.00 (Trebling of damages is not discretionary, but mandatory under the FCA.)

Penalties – $ 8,085,000.00  (VA paid on at least 735 claims between 201303 and 201501 (per YC030089-30108). (Penalties are mandatory, not discretionary, under the FCA. As with the dollar damages stated herein, the actual number of claims (and therefore the dollar amount of penalties) may be much higher because the Court has not limited Relator to claims after Fall 2013 in the NorthAire case and the parties dispute whether the scope of claims in the Guidance case predates Fall 2013. Moreover, these penalties could double if the Court were to apply one penalty for each false claim and a separate penalty for each false certification attending each claim.) 

$5,500 to $11,000 per false claim (a) @ $ 5,500 = $ 4,042,500.00. @ $11,000 = $ 8,085,000.00. (This number is conservative because it counts each student as only one claim even though YC actually submitted multiple claims on behalf of many, if not most, students each term.)

• Damages for Relator’s personal claims– $ 1,000,000.00+
  • Payable to Relator (not United States)
    • Backpay – $ 500,000.00
    • FCA Double backpay – $ 1,000,000.00 
    • Other tort, make-whole and punitive damages easily should eclipse the backpay

3.              Attorneys Fees and Costs

Under the FCA, an award of a successful relator’s attorneys’ fees and costs are mandatory.

Relator has not totaled attorneys’ fees and costs, but expects they will be in the millions of dollars. They will likely be greater than the fees and costs for any single law firm for any Defendant but less than the total Defendants have paid for all the firms representing all Defendants.

Assuming we reach a resolution on the other matters, Relator and his counsel are willing to settle the mandatory award of fees and costs for the lesser of his actual fees/costs incurred or the total amount Defendants have paid all their lawyers to defend this case.

4.              Relator’s Willingness to Compromise/Structure

Relator expects to compromise going into settlement However, he is not willing to ignore the very real possibility of judgment in the many tens of millions of dollars.

Attorney Harris wrote that “Relator is grateful Defendants are seriously exploring a path to resolving this case.  We hope it is helpful to do so with a clear understanding of the stakes and what risks Yavapai can avoid by settlement.  For our part, Relator and undersigned counsel are fully aware of the adverse risks Relator faces and we recognize that the benefits of a negotiated settlement are worth accepting compromise.” 

Court denies summary judgment on most (but not all) claims this month; sets matter for trial; Settlement Conference to be held June 11, 2019

The multi-million dollar lawsuit by the former Director of Yavapai Community College aviation, Dan Hamilton,  has been scheduled for a settlement conference with Magistrate Judge Camile D. Bibles in Flagstaff.  Bibles became a full-time magistrate for the District of Arizona, Flagstaff in February 2019.  The conference will apparently occur July 11, 2019. Both cases are now set for trial.

On March 26 the Court dismissed some of the issues in the lawsuit but ordered others to go to trial.  The Court Order denying summary judgment of Yavapai College/NorthAire lawsuit dated March 26 can be read in full by clicking here:  221 ORDER on Motions for Summary Judgment and Partial Summary Judgment.

Magistrate to conduct settlement conference in an attempt to resolve the dispute involving potential millions of dollars in damages to College and other defendants

The six-year multi-million dollar lawsuit between the former director of aviation programs at Yavapai Community College, Dan Hamilton, and the College, is headed for a magistrate settlement conference in Flagstaff.  The lawsuit was sent there by Federal District Court Judge Murray Snow who presides in Phoenix. The action against the College will be consolidated with the lawsuit involving NorthAire Aviation and Mr. Hamilton.

Members of the Community College District Governing Board met  in executive session Wednesday, March 20 where they received legal advice regarding the lawsuit.  They had no comment regarding the executive session. If the matter is not settled, it will go to trial in federal district court.

In the original action there were eleven parties including the plaintiff, nine defendants, and the United States Government. (Note that some named defendants are sued in different capacities, thus the extended list of parties.)

The Complaint was filed in federal court by the former director of aviation programs at Yavapai College, Dan Hamilton, and alleges, among other things, that Yavapai College and its airplane program partner, NorthAire Aviation, violated the Veteran’s Administration funding rule that limits VA beneficiary enrollment to 85% in any program.  (In other words, the program must have at least 15% of its enrollees as civilians.)

The Complaint alleges schemes wherein NorthAire improperly paid for students whom the program certified were not receiving any institutional aid and that the program improperly counted students who were not in the airplane program including part-time, non-flight training, high school students for whom YC waived tuition.  The 85% enrollment limitation is the VA’s safeguard to guarantee that the programs have real world relevance, demand and market driven pricing.

In a ruling made December 6, 2016, Judge Murray Snow denied a motion to dismiss filed by Yavapai College’s partner NorthAire.  NorthAire argued that because it was a mere contractor with the College who did not, itself, submit the claims or certifications to the VA, it could not be held liable for the program’s fraud.

The Court disagreed, holding that “liability extends to any person who knowingly assisted in causing the government to pay claims which were grounded in fraud, without regard to whether that person had direct contractual relations with the government.”  The Court found that Hamilton’s Complaint amply alleged details of how NorthAire knew the YC airplane program was violating VA regulations and thus defrauding the VA.  Indeed, the Court said Hamilton could proceed on his claim that NorthAire and YC conspired to defraud the VA.  The Court dismissed the alternative theory that the airplane program improperly retained overpayments finding that the Complaint alleged more than a mere retention of an overpayment.  “Rather, the Complaint alleges that the Defendants mislead the VA to receive funds that they did not have a right to.”  This ruling follows the Court’s earlier decision denying summary judgment in a case against YC’s Helicopter Program. 

The lawsuit exposes the Community College, its partners and their agents to tens of millions in damages. (Any settlement funds agreed to by the College would apparently come from an insurance trust fund set up for public entities.)

Under the False Claims Act, the statute that allows whistle-blowers to sue on behalf of the federal government, those who defraud the government must repay three times the amount they fraudulently took, plus penalties.  Whistle-blowers, like Dan Hamilton, if successful, can recover up to 30% of any moneys obtained for the government under the False Claims Act.

You may read Judge Snow’s most recent ruling (April 2018) by clicking here. 620 ORDER on MSJs[5372]