Arts dispute cites millions of dollars in damages

Two local arts education organizations – one now reportedly defunct and one preparing to produce the Oct. 12 Kihncert in Morgan Hill – are involved in a bitter legal dispute over breaches of contracts, unpaid wages, theft of property and theft of trade secrets.
Involved in the lawsuit filed in Santa Clara County Superior Court in July are the former Sobrato Arts Foundation for Education and five Morgan Hill residents who used to work for SAFE – whether as paid employees or volunteers is unclear due to conflicting statements made by the two parties.
The five former SAFE associates – Gary Harmon, Mark Masoni, Mike and Rebecca DiRubio and Matt Altamirano – now work for Arts Related Technical Training for Entertainment Careers (ARTTEC), which had a relationship with SAFE as an “affiliate” from 2010 until earlier this year, according to court documents.
The total amount of damages cited by the five plaintiffs exceeds $1.5 million – mostly in unpaid wages and the loss of personal property – though any award would be determined by any future court proceedings or settlements, according to court documents.
Furthermore, just this week Harmon became the subject of a separate complaint filed by longtime actor and stuntman Kerry Wallum, who claims Harmon perpetrated a complicated scheme to defraud Wallum and others who invested money by setting up a company known as Luck Films, LLC, which is not the same Luck Films production company that was co-founded by Wallum and country music star Willie Nelson. Harmon never repaid the investors, and never intended to do so, Wallum’s lawsuit says.
Harmon also convinced Wallum to invest in the guitar company Morgan Hill Music Group, which later became Boulder Creek Guitars, according to Wallum’s complaint. Harmon told Wallum that Wallum was listed as an owner on the company’s incorporation documents, but Wallum found out later that was not the case.
“As a result of Harmon’s fraud…Wallum is liable for hundreds of thousands of dollars,” Wallum’s complaint says in part.
The website for Luck Films (the company co-founded by Wallum and Nelson) says in red letters, “Luck Films is in NO way associated with Gary Harmon, ISE Entertainment or ARTTEC in any way, shape or form nor are we associated with any of their employees or affiliates.”
Wallum did not respond to requests for comment on the disclaimer.
Harmon could not be reached after Wallum’s complaint was filed, but said last week he didn’t know why Luck Films would post such a statement on its website.
In August, SAFE fired back against the July lawsuit. In a cross-complaint, SAFE alleged the contracts cited by the five ARTTEC employees were never approved by the SAFE directors, and they agreed to work as volunteers. Furthermore, SAFE accuses them of fraud and theft of trade secrets by gaining access to e-mail, donor and volunteer lists in order to “unjustly” enrich themselves.
The employment contracts cited by both parties are attached as exhibits to the complaints. The contracts do not specify salary or wage amounts, but rather say, “Salary will be determined by researching comparable job positions in Santa Clara County and determining the average salary.”
SAFE is claiming “severe damage to its reputation” which is “irreparable.”
ARTTEC’s mission is to offer video, music and concert production experience to high school students who are interested in careers in the entertainment industry. The group is producing the 2013 Kihncert, which is scheduled for Oct. 12 at the Morgan Hill Outdoor Sports Complex and will feature Bret Michaels, Greg Kihn, dada, The Tubes and others.
“There’s no basis to any of these claims (made by SAFE). All we expect is to get back what’s rightfully ours, that we brought into the organization to help service the students,” Harmon said last week, declining to discuss the specific facts of the case.
ARTTEC is primarily focused on producing the Kihncert and helping students gain technical production experience, the plaintiffs said.
A former employee of SAFE, Edward Prichard, said Sobrato Arts is “done” as an organization, but he only recently started working with SAFE and he is unaware of the lawsuit or the reason why SAFE has closed up shop. Two other sources, who wished to remain anonymous, said SAFE shut down due to the expense of fighting the lawsuit.
However, Prichard said he and other former SAFE associates will continue to promote the arts among the youth in Morgan Hill and beyond.