Fourth Judicial District Court Judge Wilson Rambo recused himself from a civil lawsuit after being accused of being biased in favor of the defendant.

Attorneys for plaintiff Stanley R. Palowsky III filed a motion on Oct. 23 for Rambo’s recusal. On Oct. 29, Rambo filed the recusal order stating he was recusing himself from the case, but denied any bias toward the plaintiff or the plaintiff attorneys, Joseph Ward Jr. of Covington and Sedric E Banks of Monroe.

Palowsky's lawsuit claims that the defendants, a former business partner and others, have conspired to commit fraud, breach of contract and also violated the Louisiana Racketeering Act.

The motion for Rambo's recusal by Ward and Banks contain 59 points of contention including ruling without reading the pleadings, missing court documents and allowing plaintiff attorney Tom Hayes to question Ouachita Citizen reporter Johnny Gunter about why he attended a hearing on the lawsuit. Following Hayes' questioning of Gunter, attorneys were called into Rambo's chambers.

The recusal motion states: “After Hayes was apparently satisfied regarding Mr. Gunter’s presence, Judge Rambo re-convened court, and the attorneys made their arguments as to why the sealed evidence was or was not protected from disclosure to law enforcement under the protective order. Although Judge Rambo stated in open court on that day he had read the sealed documents, the fact is the seal on the documents has still not been broken.”

In Rambo's order recusing himself, he stated: “Without unduly belaboring all of the particulars set forth in the motion to recuse, suffice it to say that many of the allegations, which are emphatically denied by this Court, have little or nothing to do with the stated basis of the motion, bias or prejudice on the part of this Judge. Moreover, some of the allegations, which are also denied, even if true, could not give rise to a recusal therein. Some others of the allegations are little more than unfounded personal attacks on this Court. The motion also contains factual omissions and errors, some of which had been explained to Counsel for the movers prior to the filing of the motion to recuse.”

Palowsky is seeking damages in the lawsuit because of losses and future losses that he alleges his partner, W. Brandon Cork, caused. Palowsky and Cork were 50-50 partners in Alternative Environmental Solutions Inc. (AESI), an environmental remediation company.

In a ruling issued Sept. 17, Rambo said Palowsky could only disclose confidential information to federal, state or local law enforcement upon specific written request to the court and all attorneys involved. No disclosure of alleged criminal activity could be given to law enforcement until “all Counsel of Record in this proceeding (is given) at least five business days in advance of the actual response or production of information,” according to Rambo’s ruling.

Rambo said each party would be given the right “to seek appropriate (legal) relief regarding the potential disclosure of confidential information pursuant to the specific written request from a law enforcement agency…”

Rambo’s order was “hereby stayed for a period of 30 calendar days” from the time filed with the Clerk of Court’s office and that the order will expire without further action of the court “if no application for supervisory review is sought by any party…”

If a timely application for supervisory review is made, a contradictory hearing would be held to determine whether any further stay of the proceedings “may be granted by this court pending supervisory review of this Court’s orders,” according to Rambo’s ruling.

Palowsky filed the lawsuit against Cork and others on Aug. 20, 2013.

Last month, Palowsky filed a separate lawsuit against Cork’s defense attorneys Thomas M. Hayes III, Brandon Creekbaum and the law firm Hayes, Harkey, Smith & Cascio LLP. Palowsky’s petition against Hayes, Harkey, Smith & Cascio accuses Hayes and Creekbaum of advising Cork to intentionally breach his fiduciary duty to secretly and successfully compete with AESI. That breach, according to Palowsky’s lawsuit, was part of Cork’s acts to harm Palowsky and financially ruin and dissolve AESI. That petition was filed Aug. 15 by plaintiff’s attorneys Joseph R. Ward Jr. of Covington and Sedric E. Banks of Monroe

When contacted Tuesday, Hayes told The Ouachita Citizen he could not comment on either lawsuit as is customary.

Also named as defendants in Palowsky’s original lawsuit against Cork are Anthony White, owner of OHC Services LLC of Webster Parish, and Michael L. Holder, a resident of Oklahoma and owner of TP Environmental & Pipeline Services.

The lawsuit states that in 2011, AESI (the company owned by Palowsky and Cork) began working on a project with estimated gross revenues of more than $4.7 million for the calendar year 2012.

In 2008, Cork, on behalf of AESI, signed a master services agreement with White and OHC Services to provide equipment and other services as a subcontractor.

Pursuant to the master service agreement being signed with the project client, AESI, OHC Services and TP Environmental were engaged in environmental remediation services on the project performing soil shredding services, according to the lawsuit.

In July 2012, Palowsky found an invoice showing that OHC Services “had excessively marked up its invoice for services rendered. This invoice, which was included in OHC Services comprehensive invoice, had been passed on to AESI, which in turn passed the invoice on to AESI’s Client,” according to the lawsuit.

After finding the invoice, Palowsky contacted Holder with TP Environmental, a subcontractor, and asked for that company’s rates.

According to his lawsuit, Palowsky claims he found that OHC Services “was adding an additional markup of over $500,000 to OHC Services’ disclosed markup, with Cork’s knowledge.”

The lawsuit accuses Holder, Cork and White of developing a plan to overcharge AESI through OHC invoices. It involved TP Environmental overcharging for services performed on the “Carpenter job.” The overcharges were then incorporated into the invoices submitted by OHC to AESI. Those funds were used to fund the purchase of equipment for a new unincorporated enterprise owned and controlled by Holder, White and Cork.

“The enterprise continued to work together to conceal the fraudulently obtained and converted money while intentionally evading payroll and income taxes and other state requirements,” the lawsuit says.

Palowsky’s lawsuit claims Holder, White and Cork included non-existent employees on invoices forwarded to AESI on 41 different occasions.

The lawsuit states that TP Environmental in September 2012 sent OHC two invoices totaling $904,199.75 and AESI paid both. Later, OHC only remitted $637,368.25 on Dec. 14, 2012.

“The difference was skimmed by the defendants and used to enrich themselves in this ‘ off-the-books’ and illegal enterprise,” the lawsuit says.

Cork said in deposition that he formed his own company and was secretly competing against Palowsky and AESI. He also continued drawing a paycheck from AESI.

In the lawsuit against Hayes and Creekbaum, it states that the attorneys and Cork “had full knowledge Palowsky would also suffer direct harm, and did indeed intend to cause plaintiff to suffer direct harm, including loss of income, loss of reputation and standing in the business community, as a result of Hayes’ and Creekbaum’s directing Cork’s steadfast failure and refusal to honor his fiduciary duty to AESI, as well as concealment of same.”

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