WHEELING – A circuit judge has ruled in favor of a former adviser to President Donald Trump who had asked the court to enforce a settlement agreement in a civil lawsuit about the division of assets related to her divorce.
Healy Baumgardner also wanted Ohio Circuit Judge Jason A. Cuomo to remove her ex-husband Emil Nardone II’s attorney Paul Harris as a trustee of the Nardone Family Trust. Cuomo did so in an October 27 order.
"The court will not recite any further details of the tortured factual and procedural background of this case," Cuomo wrote. "The court will simply state here that the underlying case had been pending for over four and one-third years ... and the court entered no less than 13 orders."
Cuomo
In granting Baumgardner's motion, Cuomo gave the trust until November 3 to produce requested financial documentation regarding the settlement that was reached by all parties July 27. Those documents had not been submitted despite requests to do so.
According to the motion, the case – Nardone Family Trust v. Baumgardner and her ex-husband Emil Nardone II – was set for a bench trial August 2. But the parties reached the settlement with mediator Frank Fragale. That agreement included that about 84 acres of realty in Belmont County, Ohio, be sold and the proceeds – including oil, gas and other mineral rights – be divided equally between the parties. From his half, Emil Nardone “shall pay all amounts due to Healy Baumgardner pursuant to the Final Divorce Order, with interest.” The fair market value of the property would be determined by an appraiser selected by Baumgardner
After Baumgardner selected an appraiser and her counsel had requested financial information from Nardone and the Trust, neither party has responded to those requests at all.
“Unless the settlement agreement is enforced by the court and the Nardone Family Trust to comply with the terms of the agreement, it is obvious that the Trust will continue to unnecessarily delay and obstruct the agreement and prevent the resolution of the case,” the motion states. “The Trust’s utter refusal to carry out the Settlement Agreement in good faith and its dereliction of duty to cooperate with the appraiser is a continuation of Trustee Paul Harris’ unremitting hostility toward Ms. Baumgardner Nardone and evinces his persistent failure to administer the Trust fairly and effectively.”
In the motion, Baumgardner says proof of Harris’ determination to deprive her of her rightful share of the trust is evident by him using the original trust document to open a bank account in the names of Healy Nardone and The Nardone Family Irrevocable Trust without her knowledge or consent.
“To open the account, he used Ms. Baumgardner Nardone’s expired driver’s license and completed and submitted IRS Form W-9 in her name,” the motion states. “Mr. Harris then deposited into that account a check made payable to The Nardone Family Trust in the amount of $93,480.00. A few days later, he withdrew and kept $92,000 from that same account, again all without respondent’s knowledge or consent. …
“Unless Mr. Harris is removed as Trustee and replaced by a neutral party with the express charge of carrying the Settlement Agreement to a fair and final conclusion, this case is likely to go on for years more.”
Using someone’s expired driver’s license and filing IRS forms without their consent could be a violation of the U.S. Patriot Act as well as other laws, including identify theft.
"Although a further evidentiary hearing may be required to flush out the details of any alleged current breaches by Paul Harris as trustee, this court believes that, given the many conflicts in which attorney Harris has found himself in and which forced the court to remove him in various capacities, any doubts about any further breaches of trust or conflicts therein will be resolve in favor of the respondent (Baumgardner)," Cuomo wrote in his order.
A footnote in the order goes into more detail.
"First, attorney Harris was the trustee of Trust 1 and/or Trust 2," the footnote states. "Second, attorney Harris chosen to advocate in dual roles -- as both trustee and attorney for the trustee -- and in both roles he advocated for the validity of Trust 2 over Trust 1. Third, attorney Harris represented and/or continued to represent one of the parties in this case for various matters, including legal advice surrounding Trust 1.
"Fourth, by the filing of this Declaratory Judgment Action in support of the validity of Trust 2 over Trust 1, attorney Harris was essentially representing himself (as Trustee of Trust 2) and beneficiary Nardone (a former and/or current client) against himself (as Trustee of Trust 1) and the interests of beneficiary Baumgarner (a former and/or current client)."
Earlier this year, the state Supreme Court affirmed an Ohio County family court divorce ruling in favor of Baumgardner. And days later, an Ohio County circuit court judge dismissed a complaint filed by Nardone that had accused Baumgardner of illegally intercepting text messages from her ex-husband and sharing them with her attorney.
On May 20, the Supreme Court issued a memorandum order affirming a May 2020 Ohio Circuit Court denying an appeal by Nardone, who claimed Ohio Family Court Judge Heather A. Wood’s January 2020 order didn’t distribute equity properly. He also accused Baumgardner of contempt, and he accused her and Charleston attorney Mike Kelly of abuse of the discovery process.
Nardone disputed the distribution of a 2016 civil lawsuit settlement in which he was awarded $2 million from The Health Plan of the Upper Ohio Valley Inc., according to the memorandum order. He had accused the company of improperly withholding reimbursements for services Nardone had rendered as a chiropractor. Of the $2 million, $80,000 was to “constitute full and final payment for (Nardone’s) alleged losses for billings.” The rest was personal injury damages.
For the divorce proceedings, Nardone was ordered to deposit $40,000 – half of the alleged losses – into his attorney’s IOLTA account, according to the Supreme Court order. Later, the family court ordered him to deposit half of the settlement proceeds until it could determine the proper division. Nardone didn’t comply, and Baumgardner filed a contempt petition. She was awarded fees and costs for that.
Nardone insisted he had complied properly, adding that the order regarding half of the settlement proceeds “was entered upon the mistaken representation that (Baumgardner) had no funds,” the memorandum order stated.
During the final divorce hearing in 2019, evidence also showed Nardone had invested $600,000 of the settlement proceeds into an entity of which he owned 99 percent, according to the memorandum order. That entity then loaned the money to another corporation. Nardone received interest-only payments of $8,500 per month, and the principal $600,000 was to be paid in a balloon payment in July 2019. The family court found Nardone in indirect civil contempt and ordered the $600,000 be frozen until further order.
The family court also found Nardone in contempt for failing to put the $8,500 interest payments in escrow. It also noted that he traveled to Europe twice, rented a $3,000 per month apartment in Charleston, S.C., as he attended law school and leased a luxury automobile for $1,500 per month. But he deposited the $40,000 to avoid this contempt charge as well as 10 days in jail, according to the memorandum order.
The family court order detailed many other instances of Nardone apparently not acting in good faith during the proceedings, such as different accounts of where money ended up, different financial figures related to his closed chiropractor business and the civil lawsuit related to it, failure to disclose some documents and trying to introduce evidence that hadn’t previously been disclosed, according to the memorandum order.
“Any reasonable litigant or their attorney would have preserved such copies of such important documents so obviously relevant to this pending litigation,” the family court wrote in awarding Baumgardner $50,000 in attorney fees.
Nardone appealed, saying the family court erred in awarding equitable distribution and attorney fees plus interest in a marriage that lasted less than six years and both parties were able to earn income, according to the memorandum order.
Baumgardner filed a response and cross-petition challenging the family court’s allocation of $1.39 million to the loss of future value of Nardone’s clinic as well as other issues.
In May 2020, the circuit court denied Nardone’s appeal and Baumgardner’s cross-petition for appeal. Nardone then appealed to the state Supreme Court, and Baumgardner did as well.
Nardone argues that anything above the $80,000 wasn’t marital property, that the family court erred in finding he abused the discovery process, that Baumgardner also took part in wrongdoing by intercepting his text messages and that the family court erred regarding attorney fees.
Baumgardner also takes issue with the family court’s equitable distribution, saying attorney fees and investigative costs were not fully reimbursed. She also notes Nardone’s contempt and the “alleged windfall” he obtained as a result.
“(Baumgardner) argues that (Nardone) flouted the family court’s order directing him to escrow 50 percent of the settlement proceeds, which allowed him to lend the proceeds and receive monthly interest payments on that loan totaling $306,000,” the Supreme Court memorandum decision states, adding Baumgardner claimed Nardone should have been held accountable for his “dissipation of marital assets.”
Throughout the 11-page memorandum order, the Supreme Court notes that Nardone had “consistent non-compliance and misrepresentations” or similar language, such as that he “fails to support this ‘presumption’ with citation to any authority” or “he does not offer a meaningful challenge” or “he presented no testimony that he suffered” or he “makes no argument” in support of a position or claim.
Thus, the Supreme Court says it found no abuse of the family court’s discretion or the circuit court’s affirmation of the family court order.
Following that ruling, Ohio Circuit Judge Michael Olejasz issued an order June 9 granting motions filed by Baumgardner in a civil lawsuit filed by Nardone against her and Kelly accusing them of illegally intercepting his private text messages between he and his attorney and using them during the divorce proceedings.
Citing a 2005 ruling in Clark v. Druckman, Olejasz says the litigation privilege is generally applicable to bar a civil litigant for civil damages against an opposing party’s attorney if the alleged act of the attorney occurs in the court of the attorney’s representation of an opposing party and is conduct related to the civil action.
“The allegations against Mr. Kelly involve actions taken during his representation of Ms. Baumgardner and were directly related to the litigation,” Olejasz wrote. “Therefore, under Clark, Mr. Kelly is entitled to immunity from the civil claims brought forth in the underlying complaint.”
Olejasz also says Nardone filed the claim past the one-year statute of limitations that apply to the allegations and that the complaint wasn’t served under the 120-day time frame following filing.
Baumgardner, a native of the northern Panhandle, and Nardone were married for approximately six years until she filed for divorce in 2016. According to the original complaint, Nardone and Baumgardner’s divorce has been “tumultuous.”
Court records support that description, showing four separate lawsuits having been filed since the actual divorce proceeding was filed in Ohio County in 2016. One of those filings says Baumgardner actually filed for divorce first in Arizona in early 2016 before dismissing it and refiling in Marshall County, which then was transferred to Ohio County.
Nardone is a chiropractor who also graduated from the Charleston School of Law in South Carolina and is licensed to practice law in Alabama. He also started Chirodefense, which was created to support chiropractors who are falsely accused of healthcare and insurance fraud.
Baumgardner advised Trump during his 2016 presidential campaign, and she previously worked on Rudy Guiliani’s 2008 presidential campaign. She has served as a senior communications adviser and spokeswoman for the White House, the Department of Energy, heads of state and other public figures. She is a frequent television guest contributor providing analysis on politics, international issues and energy issues.
In the Nardone Family Trust case, Baumgardner is being represented by Kelly of the Charleston law firm of Ray, Winton & Kelley. Baumgardner declined further comment on the case, saying "the motion speaks for itself." Harris did not return a message seeking comment.
Ohio Circuit Court case number 17-C-95