JURY: MTA TAKEN FOR RIDE PANEL FINDS FIRM'S BILLS FRAUDULENT.

Byline: Troy Anderson Staff Writer

In the largest verdict ever for the Metropolitan Transportation Authority, a jury on Wednesday awarded the county transit agency $29.6 million in damages for fraudulent billing on the subway by one of the nation's largest public works contractors.

The verdict against the Sylmar-based Tutor-Saliba-Perini joint venture came after eight days of deliberation following the judge's decision to throw out the contractor's case for destroying evidence and withholding documents.

Concluding a six-year legal battle and a 12-week roller-coaster trial, the three-man, nine-woman jury agreed with the MTA's accusation that Tutor-Saliba-Perini submitted false claims, engaged in unfair business practices and violated safety rules in the construction of the $4.5 billion Metro Red Line subway that runs from downtown to North Hollywood.

The $29.6 million judgment, about three-fourths of what the MTA sought, came at a huge cost: nearly $20 million in legal fees spent by the transit agency. Some of that could be recovered but Tutor-Saliba-Perini stands to lose more if it is barred from future public works projects.

``I think we are unable to (do business with the contractor again) and almost certainly don't want to,'' said MTA Chief Executive Officer Julian Burke.

The verdict and information from a case that has generated more than 3,000 boxes of documents will now go to the U.S. Department of Transportation, which will investigate and decide whether to bar the construction giant from bidding on federally funded contracts nationwide.

MTA board member and county Supervisor Zev Yaroslavsky said the trial unearthed the ``most reprehensible courtroom tactics I've ever experienced.''

``This is a great victory for the taxpayers of Los Angeles County and the United States of America,'' Yaroslavsky said. ``These are federal funds that were used largely in this project.

``I think the jury has sent a very strong message to this and all other contractors that if you want to engage in fraud and fraudulent claims and these kind of tactics, you are going to pay the price.''

The MTA spent $19.8 million in legal expenses on the case and is hopeful Superior Court Judge Joseph Kalin will order the contractor to pay most of those costs. Tutor-Saliba-Perini spent about $5 million in legal expenses.

``The conventional wisdom was that we never should have prosecuted this case and spent $19 million doing it,'' Yaroslavsky said. ``But were we to walk away from this case, we would be inviting fraud as a daily part of doing business in Los Angeles County. I think we're carrying the torch on this, not only for the MTA, but for all other public agencies.''

MTA board member and county Supervisor Michael D. Antonovich said the MTA's verdict may climb to $40 million after the legal expenses are awarded.

``The MTA board was unanimous in their efforts to see justice done,'' Antonovich said. ``Government fraud will be prosecuted.''

Tutor-Saliba-Perini Chief Executive Officer Ron Tutor said he was disappointed by the verdict but was not surprised in light of one of Kalin's recent rulings that deprived the joint venture of its right to present its case or defend itself.

``We believe that the court's acceptance of MTA's untrue and unsubstantiated claims of discovery abuse deprived Tutor-Saliba-Perini of a fair trial,'' Tutor said. ``Tutor-Saliba-Perini has never been accused of submitting a false claim in over 30 years of joint venture partnership and we are confident that we will win on appeal.''

The fight began when Tutor-Saliba-Perini sued the MTA in 1995, seeking $16 million in damages because the transit agency refused to pay a number of claims involving construction of three subway stations on Wilshire Boulevard. Last month, Kalin threw out the case and left the MTA's countersuit, filed in 1999.

On July 19, Kalin sent the case to the jury after finding the contractor had committed 1,048 acts of business misconduct in relation to the $945 million worth of work it did on the subway project.

The items included skimping on worker safety and quality control, using foreign steel without authorization, only pretending to follow laws on minority subcontractors, inflating bids and deliberately altering bookkeeping records to mislead authorities.

Century City attorney Nomi Castle, who represents the contractor, said the firm was used as a ``scapegoat for the MTA's own incompetence and mismanagement.''

``The MTA's ineptitude has resulted in a tremendous cost to the taxpayers and transit riders of Los Angeles County,'' Castle said.

The jury found damages for the MTA on 23 of 24 items, voting 9-3 on 15 of those. The MTA had sought $41 million in its countersuit, but the jury awarded $29.6 million.

Juror Darlene Cross said she voted in favor of the MTA because ``anybody who breaks the law has to pay.''

``We had people who disagreed on some of the issues,'' she said. ``Most everyone agreed there had to be some penalties paid, except for one person. That's what kept us going so long.''

Holdout juror Eliana Serrano of Silver Lake questioned the outcome.

``I feel we've been used to give legality to the (judge's) decision'' to assign liability to Tutor-Saliba-Perina, Serrano told City News Service. ``I cannot say who is at fault. I saw only one side.''

Tarzana attorney David Casselman, the lead trial attorney for the MTA, said the trial was ``extremely personal'' because the contractor's legal team attacked MTA lawyers with personal accusations.

``When I became involved, they promised they were going to mop the courtroom with me,'' Casselman said.

Fellow Tarzana attorney David Polinsky said that despite repeated efforts to resolve the case ``before it exploded, they basically promulgated a catch-me-if-you-can, stop-me-if-you-dare, scorched-earth policy.''