Lawsuit claims Sammamish Mayor Don Gerend kept $860,000 from Lacey land deal

A Seattle-based law firm filed a lawsuit against Sammamish Mayor Don Gerend and his wife Susan Tuesday morning, alleging Don Gerend kept $862,000 that wasn't his, the profits of a land sale deal in Lacey in the 1990s in which the plantiff and Gerend were involved.

Acting on behalf of Joseph Mulcahey and Gloria Taylor Brown, Matthew N. Metz of Metz Law Group told The Reporter his client had made numerous attempts to persuade Gerend to return the money as court documents allege was agreed, "but Don never offered a penny." "I think Don thought my client didn't have any money, so wouldn't be able to afford a lawyer. But we worked out an arrangement."

The Reporter's request for comment on Wednesday morning was the first Gerend had heard of the impending lawsuit. He said the lawsuit had nothing to do with his position as the Mayor of Sammamish or municipal business.

It is understood that being the defendant in a civil lawsuit would not in any way hinder Gerend's legal ability to serve as an elected official.

"I have been in conversation with the persons that filed the lawsuit, and we have been discussing our differing views of what transpired some years ago," he said. "I did not know he was going to file a lawsuit."

According to the lawsuit filed in the King County Superior Court, Mulcahey and Brown, residents of San Diego, Calif., formed a partnership with a Clifford R. Mulberg in the 1980s to purchase two tracts of land on Hawks Prairie Road near Olympia. Brown was Mulcahey's silent partner in these partnerships.

In 1990, Mulcahey made an agreement with Don Gerend and Clifford Mulberg, whereby Gerend would assume management of the properties. According to the lawsuit, no management fee for Gerend was agreed upon at that time. It is understood Mulcahey then left the area.

Over the next 18 years, Mulcahey kept in touch with Gerend and Mulberg only sporadically, calling them several times a year. According to the lawsuit's claim, Gerend and Mulberg failed to disclose that they had sold the two properties between 2004 - 2007, for a combined sum in excess of $10 million.

According to Mulcahey, it wasn't until he received an IRS statement in September 18, 2008 that included a tax burden from the transaction that he knew the properties had been sold. Allegedly, Mulberg had filed tax reports with the IRS attributing $1,296,296 in capital gain to Mulcahey.

The lawsuit claims that Gerend later received $862,704 of sales proceeds, and "never remitted any portion of the $862,704 proceeds from the sale... despite their demand that he do so."

Metz told The Reporter he felt Gerend had deliberately avoid repaying what he knew wasn't his.

"The excuses that he offered in my view were not valid," he said. "My client is basically living off social security. Don Gerend is a very wealthy man."

Metz will attempt to recover the $862,000, and said that Gerend had 20 days from the date of the filing to respond. He said he and his client were open to negotiating a settlement.

"Of course, 90 percent of these cases settle," he said. "We will accept a legitimate deal."

Gerend has been a City of Sammamish Councilor since the city was incorporated in 1999. He and his wife have lived on Pine Lake since 1979.

According to the city's web site, he is currently involved in real estate asset and property management with The Pace Corporation, and is a former rocket scientist.

Contact Sammamish Reporter Editor Jake Lynch at editor@sammamish-reporter.com.

Comment on this story.

COMMENTING RULES: We encourage an open exchange of ideas in our online community, but we ask you to follow our guidelines for respecting community standards. In a nutshell, don't say anything you wouldn't want your mother to read.