District Attorney Sherry Caloia fights back against Marble lawsuit
November 15, 2013
GLENWOOD SPRINGS — District Attorney Sherry Caloia has fired back against her former employer, the town of Marble, maintaining that the town's trustees and mayor were the ones really responsible for allowing former town clerk Karen Mulhall to steal hundreds of thousands of dollars over the course of several years.
Caloia, who was elected in 2012 to the post of 9th Judicial District Attorney representing Garfield, Pitkin and Rio Blanco counties, is being sued for legal malpractice by the town, which discovered in 2012 that Mulhall allegedly had embezzled more than $329,000 from the town's coffers over the previous six years, according to the lawsuit.
Mulhall reportedly worked for the town for 18 years before being dismissed in the summer of 2012. Her body was found in a Denver area motel room in late October 2012, where she is said to have committed suicide.
Caloia was town attorney for Marble from 2002 to 2012, and employed Mulhall at Caloia's law office, starting in 2007, as a legal assistant and bookkeeper. Mulhall's term of employment with Caloia covered much of the same period when Mulhall allegedly was writing fraudulent checks on town accounts, payable either to herself or to Caloia's business accounts.
According to the town, Caloia had a duty as the town's attorney to pay closer attention to Mulhall's work, and to Caloia's own business accounts, and should have uncovered the embezzlement at some point.
When the impending lawsuit was made public by the Post Independent in June, Caloia said at the time, "Karen did, in fact, launder Marble money through my firm. I wasn't paying attention, as I should have been."
But the town had contacted her and demanded payment of $30,000 as a settlement, and that "the number they gave me was how much I paid."
The lawsuit was filed on July 12, and according to Caloia's reading of an email from current town attorney Marcus Lock of Gunnison, "They're asking for $329,000."
According to the lawsuit, Caloia "should have known that Mulhall's propensity for theft and embezzlement" was a risk to the town's finances.
But Caloia said that Mulhall stole money from Caloia's business, too, although she has not said how much was taken.
Early in the case, 9th District Judge Daniel Petre disqualified himself, and the suit is now being heard by retired senior Judge David R. Lass, formerly of the 5th Judicial District in Eagle.
In filings by her attorneys, Stacy Carpenter of Denver and Joseph Bennett of Colorado Springs, Caloia has maintained that the lawsuit is invalid due to the expirations of certain statutes of limitations, and that any crimes committed by Mulhall against the town were not Caloia's responsibility but were "acts and omissions of others over which [Caloia] had no control."
Caloia has maintained that her legal work for the town was on a "matter-by-matter basis" and that she was never hired to be the town's "general counsel" with responsibilities that might extend to oversight of town personnel.
Caloia also disputed the town's claim that she worked for Marble into August 2012, maintaining she left the town's employ in April of that year, before Mulhall's alleged thefts were formally acknowledged or even understood by the town trustees and Mayor Robert Pettijohn.
Caloia argued in court documents that the current town attorney and elected officials bear as much responsibility as she ever might have when it comes to ferreting out thefts from the town's financial accounts.
"Damages [to the town], if any, were caused by its own negligence, and the negligence of its employees, representatives and agents," Caloia countered, including Mulhall, the trustees, the mayor and attorney Lock in that list.
She is preparing documents "to designate non-parties at fault," meaning placing blame for the thefts on others as much as herself, according to court filings.
"It's unfortunate," Caloia said in June. "She stole money from me, she stole money from Marble."
But, she stressed at that time, "I got no money from Marble. I had nothing to do with the finances. It's just heartbreaking for me. But, it is what it is. I can't change it, and I don't want to hide it. I want to be as transparent as possible here."