The Montana Supreme Court has ruled in favor of a Whitefish businessman who was defrauded of about a quarter-million dollars in a stolen valor case involving a Virginia man.
According to a previous Daily Inter Lake story, in May 2019 a Flathead County District Court jury awarded $1.7 million in damages to Donald W. Kaltschmidt Jr. after finding Laron D. Shannon liable for fraud and negligent misrepresentation in a case involving an oilfield services company in which Kaltschmidt was a silent investor.
Kaltschmidt, who served in the United States Marine Corps, sued Laron Shannon, Elizabeth Shannon and Oilfield Warriors, LLC, in 2014, alleging Laron Shannon had misrepresented himself as an active U.S. Marine. Shannon dressed in Marine Corps clothing when contacting Kaltschmidt at his Whitefish car dealership and claimed to be active in supporting veterans’ causes, when he “never actively served in the United States Marine Corps or in any other military service branch,” according to the lawsuit complaint.
Shannon, who represented himself in last year’s court proceedings, appealed the award, challenging rulings on evidence by the District Court and procedural rulings that ultimately led to the completion of the trial after Shannon left the courtroom in the middle of the first day of the trial due to what he said was a medical emergency.
“This lawsuit was really about stolen valor.”
The rulings on evidence centered around 300 pages of documents Shannon tried to introduce in court a few days before the trial was to begin. Kaltschmidt had tried, without success, to obtain documents from Shannon for more than four years to prove the defendant’s military service.
But the District Court was presented with proof the documents Shannon attempted to introduce into evidence were either falsified or fabricated.
On April 28 the state Supreme Court issued its ruling, stating the District Court had not erred in its decisions in the case.
After the verdict in 2019, Kaltschmidt said “This lawsuit was really about stolen valor.”
Kaltschmidt, the longtime Whitefish businessman who owns the Don K car dealership, said he was alerted to Shannon’s misrepresentation of military service by fellow Marines. No service record could be found for Shannon, according to court records.
“We asked him for a DD214 form; anyone who has served in the military for any length of time would have this,” Kaltschmidt told the Inter Lake last year. “We’ve been asking him to produce documents for five years. He had nothing.”
While Kaltschmidt told the Inter Lake last year the case was more about stolen valor than “about me making a bad business decision,” the lawsuit also detailed his business dealings with Shannon and made allegations of fraud and related counts. Shannon approached Kaltschmidt more than five years ago about establishing a company to clean oil and gas drilling rigs and related equipment in the oil fields of North Dakota and Eastern Montana. Shannon’s business plan was to preferentially hire veterans for the business venture, according to court records.
'The philanthropic aspect of hiring veterans was the only reason Mr. Kaltschmidt was interested'
Relying on Shannon’s representations, Kaltschmidt invested $250,000 in the enterprise, to be named Oilfield Warriors, LLC in exchange for a 25% share in the company. But within months, Kaltschmidt’s investment was largely dissipated, no revenue had been generated by the company, employees had filed complaints against the company, and, disconcerting to Kaltschmidt, he had received reports that Shannon was not a former Marine. After obtaining confirmation that Shannon had not served in the U.S. Marine Corps, Kaltschmidt initiated court proceedings in 2014.
“The philanthropic aspect of hiring veterans was the only reason that Mr. Kaltschmidt was interested in the venture,” the complaint stated.
At some point during the spring of 2014, Kaltschmidt learned Oilfield Warriors had spent roughly $175,000 in two months but had not cleaned a single rig or piece of equipment, the lawsuit stated. It further alleged that unbeknownst to Kaltschmidt, Shannon established JD Services and Hire America’s Finest at or about the same time as the formation of Oilfield Warriors, both companies that competed actively with Oilfield Warriors.
Kaltschmidt’s lawsuit claimed Shannon committed constructive fraud, actual fraud, negligent misrepresentation, breach of contract and deceit, among other allegations.
Shannon claimed he enlisted as a reserve and had active duty service during training at Quantico from July 13, 1982, through Aug. 21, 1982, and that he was “discharged honorably with a rank of officer candidate,” Shannon’s court declaration states.
Further court documentation showed Shannon filed for Chapter 7 bankruptcy in September 2018.
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