By Frank Parlato
Part I: The Sanctuary and the Suit
D.E.L.T.A. Rescue sits in the high desert above Los Angeles. Fifteen hundred dogs, cats, and horses live there. For forty-five years, Leo Grillo, now seventy-five, has kept his promise: no animal rescued will ever be killed.
It began with one dog.
In 1979, Grillo was a young actor driving through the mountains. He saw a doberman mix, thin and starving. He stopped.
The dog was afraid and backed away. Grillo spoke to him as if she were his own. He told him he would be safe. He would never run again.
He named him Delta.
On that roadside, the sanctuary was born. A man and a dog. The start of the no-kill movement. The start of DELTA.
The sanctuary bought insurance from the Nonprofits Insurance Alliance of California. The policy gave one million dollars in liability coverage.
When a former worker sued, NIAC should have contained the case within that limit. But NIAC made the decisions. It picked the lawyers. It set the strategy. It held the power to settle.
The jury’s verdict was millions beyond the policy. DELTA, not NIAC, carries the burden—and it forced the sanctuary into bankruptcy to continue feeding the animals.
Part II: The Plaintiff’s Story
The Duarte Lawsuit:
The case centered on a former worker, Adriana Duarte Valentines. She said she was the victim of pregnancy, national origin, and gender discrimination.
Duarte’s Story
Duarte came to the United States from Mexico in 2002 with her husband. She had no legal papers.
In 2017, she asked for a job at DELTA. She told them she had been working in the fields, picking lettuce in Oxnard, tough toil. Later, she testified that this was not true.
She provided the rescue with a W-9 form containing a false Social Security number. Of course. Here is the amplified reasoning, woven into the narrative in your established style.
She provided the rescue with a W-9 form containing a false Social Security number. She had to. It was the only way in.
For fifteen years in the United States, she had no legal status. No Social Security number. Her husband, Raúl Lopez, worked off the books. So had she, when she was not home raising children. DELTA Rescue did things by the book. They would not pay her under the table.
DELTA paid her $15 an hour. She worked in the catteries. She fed cats and cleaned litter boxes. In time, DELTA trusted her to work alone and manage her cattery supplies.
While at DELTA, she became pregnant. Hospital records showed her husband was not the father. Testimony tied her to affairs with men she worked with. The catteries carried a risk for pregnant women. Cat waste might carry toxoplasmosis, which can cause miscarriage or deformity. Her first pregnancy ended in miscarriage.
Her second was with Jorge Avalos, the horse caretaker.
DELTA had a rule. Pregnant workers did not work in the catteries. Duarte hid her pregnancy. Duarte hid her pregnancy for two reasons.
The catteries were her domain. She worked alone. A reassignment would mean constant supervision. It would end the privacy she relied on.
It would end her access to Jorge Avalos in his trailer. And it would cut her off from the supplies she was stealing.
The theft did not start big. It started with a bottle of bleach and a roll of paper towels slipped into a purse. Then a bag of kibble dropped into a box in the truck.
Within months, it was routine. Duarte loaded cases of Fancy Feast cat food and Pedigree dog food into her truck. No one was watching. DELTA trusted her. This was a mission. The people who worked there felt it. Who would steal from rescued animals?
On Saturdays, the truck sat at the Lancaster swap meet. She spread the pet food out on a folding table. Half-price. Cash only. No questions.
The money filled the gaps—her husband’s thin wages, tuition, bills, the promise of a car for her son.
The sanctuary’s donations were turned, bag by bag, into her comfort.
She hid the pregnancy to keep that life.
For two and a half years, she had taken food, medicine, and supplies. The audit placed the value at over $300,000.
Domestic Fallout
But she could not hide it from her husband.
Witnesses said her husband, Raúl Lopez, stalked Avalos, the father, and found him right at the Acton general store. They saw him chase him in his truck and almost run him off the road.
Avalos escaped by hiding in the bushes, and the next day he returned to Mexico. He said he feared for his life.
Duarte sent him a photo on Facebook of their daughter, a child he could not see for fear of his life.
In January 2020, Duarte quit DELTA. She gave no notice. Her work had to be covered at once. When supervisors stepped in, they reported missing supplies. That’s when they first suspected Duartes was stealing.
Soon after, Duartes wrote to Leo Grillo. She admitted she had hidden her pregnancy. She said she was sorry. She asked for her job back.
Two days later, she told Grillo she had given birth. She was ready to return the next day.
Grillo refused. He told her she had lied about her pregnancy. He already suspected theft, but he did not say it then. He waited for proof.
When DELTA refused to rehire her, Adriana Duarte filed suit. She said she was the victim of pregnancy discrimination. She said Leo Grillo, the founder, was biased against Mexicans and women.
Part III: The Trial
The case went to trial in October 2024 before Judge Kristin Escalante in Los Angeles. From the outset, the judge established the rules governing what the jury could hear.
Jury Selection
Jurors spoke of their feelings. One woman said her boss once warned her not to get pregnant if she wanted to keep her job. Another said she cried when she read Duarte’s complaint. A third said, “I’d never rule for a company.”
Others admitted bias. One Hispanic woman said she trained a man who earned more than she did. She said she might not be fair. Another said the case hit too close to home.
Escalante let them serve. At the same time, she excused jurors who doubted large verdicts. The jury consisted of nine women, mostly Hispanic, many of whom had open sympathies for Duarte. In short, the jury looked like Duarte.
Evidence Excluded
The jury never learned that Duarte had entered the country illegally. They never heard she used a false Social Security number.
Yet the false number was the key to the case. It unlocked a $15-an-hour job, a formal paycheck, and the solitude of the catteries.
It also unlocked the supplies. The audit later showed Duarte was stealing them on an industrial scale.
Surveillance cameras had captured footage of her truck bed filled to the brim with stolen supplies. Nobody checked them. DELTA trusted her.
The W-9 that granted her access was a forgery. The life she built on the theft it enabled was a lie.
The judge barred it, and NIAC’s lawyers lacked the skill to fight for its inclusion.
The jury did not hear about her affairs with coworkers or that she did anything wrong to hide her pregnancy.
The deception extended to the witness stand.
Her husband testified as if the child were his. He never said it outright—that would have been perjury—but he allowed the jury to infer it. He knew the defense could not challenge him.
He spoke of how Duarte had changed after losing her job cleaning cat litter. How sad and broken she was.
What he did not say was how he had slashed her face to mark her adultery. He had seen her lose her lover. He had seen her changed by the loss of her stolen goods.
None of it was told.
When Duarte testified for three days, she wept the entire time.
The jury believed the tears. They saw a faithful wife with a loyal husband. They saw Grillo as the brute who hated women and Mexicans and had fired her without cause.
And Duarte herself risked her unborn child’s health so she could keep stealing. Judge Escalante knew it. Outside the jury’s hearing, she told the lawyers, a woman can take that risk to keep the job she wants.
She barred DELTA from saying it was a nonprofit. She barred them from saying it lived on donations.
The jury believed DELTA was a for-profit giant. They thought her husband was the father. They did not hear about the man who fled to Mexico.
By design—by the design of the judge—that was the story they were told.
And through it all, NIAC’s lawyers sat and made feeble objections. They did not fight. They did not stand up to the plain injustice of a rigged trial.
Why? Because they were young. Because they were green. Because NIAC paid them less than what paralegals make at real firms.
DELTA’s fate was left in the hands of cheap help.
When Duarte’s lawyer called it a racist defense, NIAC’s lawyers said nothing. Two days passed. The jury was already deliberating when they raised their objection.
They were green. NIAC sent children to fight a war.
Deposition Clips
The judge also gave the plaintiff’s attorney, Jacob Nalbandyan, the leeway to show edited video clips of Grillo’s pre-trial deposition. At the deposition, now displayed on a 47-inch TV screen, the jury was treated to short clips where an angry Grill called Duarte a “bimbo,” a “lettuce picker,” an “immigrant,” a “criminal.”
The clips were shown more than fifty times. Even on the day Grillo testified, they showed the clips more than 20 times to blunt anything he might say in defense of his life’s work.
Jurors never heard that Duarte herself had claimed lettuce-picking as past work.
By design, they were led to believe it was a racist slur.
Grillo never got to explain.
“Bimbo” was a word he learned from his Italian father. It meant foolish philandering. A woman having affairs at work and getting pregnant, with a jealous husband waiting—she was acting foolish—a bimbo.
It was not hate. Not a word against women. It was a word for stupid.
In Italian, bimbo meant fool. It could mean a child. It was not tied to women. In fact, bimbo was masculine. Bimba was the feminine. The meaning was the same: naive, stupid.
But the court never heard that. They took an old Italian word and turned it into misogyny.
NIAC’s lawyers heard it. They stayed silent. They let it poison the jury. They let one careless word sink the man who fed 1,500 animals.
Played dozens of times on a 47-inch screen, the colloquialism was stripped of its context and weaponized into a symbol of pure misogyny.
As for a bias against Duarte because she is Mexican.
DELTA’s staff was 90 percent Hispanic, including Grillo’s son-in-law and grandchildren.
The words stood alone: Bimbo—lettuce picker.
To the jury, they became proof of sexism and racism.
Damages and Expert Testimony
Duarte asked for millions in lost wages. She had no tax returns. No W-2s. No legal work history in the United States. The defense tried to show this. Judge Escalante blocked it.
Duarte’s case leaned on experts. A psychologist said she had serious psychological harm from losing the job she loved. He had spoken to her once, for three hours, on Zoom. He had never met her. An economist said she had lost more than a million dollars in future wages. He based his numbers on earnings she could never prove.
Courtroom Atmosphere
Duarte’s lawyer, Jacob Nalbandyan, carried her child before the jury. He wept openly. The judge warned him, but he did it again. The child was eventually kept outside the courtroom, in view during recesses.
The Net Effect
The jury saw one story. They heard Duarte’s claims. Grillo’s lawyers never allowed him to defend – a gamble they took with his life’s work.
They saw Grillo’s words without context. They never heard of her false papers, her hidden pregnancy, her missing supplies.
Her side was vivid. His side was gagged.
The jury ultimately awarded Adriana Duarte $6.7 million in damages: $16,000 in past wages, $181,000 in future wages, $5.5 million for emotional distress, and $1 million in punitive damages. Observers noted the award exceeded many verdicts in cases involving catastrophic physical injuries, even though Duarte’s claims rested primarily on emotional harm.
Judge Escalante later reduced the total to $3 million but denied DELTA’s request for a new trial. Post-trial motions and appeals remain pending.
Part IV: The Betrayal
NIAC’s Failure: DELTA as the Sacrificial Lamb
DELTA carried a $1 million liability policy. When Adriana Duarte’s lawsuit went to trial, the risk was many times higher. Bankruptcy hung over the sanctuary.
NIAC was the insurer. It had two duties. Defend the case. Settle within limits when the risk is clear. DELTA says it failed both.
Gamble With DELTA’s Money
NIAC alone held the power to settle. For most of the pretrial phases of the case, it offered $726,000. On the eve of trial, it raised the offer to just over $1 million. Any verdict above that fell on DELTA.
The gamble was simple. If NIAC won, it saved money. If it lost, DELTA paid the price. Heads NIAC won. Tails DELTA lost.
Defense Failures
NIAC’s lawyers, selected by NIAC and woefully inexperienced, sent Leo Grillo into a deposition unprepared.
DELTA asked for independent counsel. California law allows it when insurer and insured clash. NIAC said no.
The defense was weak. Few experts. No actual fight over the judge’s rulings. No real challenge when the plaintiff’s lawyer carried a child before the jury or when he called Grillo a racist more than 50 times.
A Doctrine of Sacrifice
Critics argue that this was not an accident, but rather NIAC’s plan. In March 2025, after the DELTA trial, NIAC’s chief, Pamela Davis, said it in an article for their Blue Avocado newsletter. She wrote of “nuclear verdicts.” Her words were a match for DELTA’s case, which had concluded a few months earlier.
“It would be better if one or two nonprofits fail,” she wrote, “than the whole sector lose insurance.” DELTA was expendable.
On paper, NIAC could argue that it was prudent. An insurer must guard its pool. It cannot yield to every demand. To them, the trial was a risk. Premiums had to be kept low. The DELTA verdict, they might argue, was an aberration.
But Davis’s article told the truth. It was not a defense. It was a sacrifice.
NIAC kept its treasury safe and shifted all the risk to DELTA.
Davis’s article revealed this was not about principled defense. The failure to prepare Grillo, the denial of independent counsel, and the refusal to settle for the policy limit on the eve of trial—actions that protected NIAC’s treasury while exposing DELTA to ruin—were not accidents.
She admitted the settlements track policy limits. A $1 million policy settles for one million. A $10 million policy settles for ten. NIAC capped its offer low and held it there.
NIAC had lost its reinsurer of 25 years. It needed $100 million to survive. Every dollar cut from a settlement was a dollar saved.
The record suggests NIAC made a stark corporate calculation: better to risk a single client like DELTA than to bleed the reserves necessary for NIAC’s own survival.
Davis blamed the system. Juries, she said, hand down runaway verdicts. With that excuse, NIAC went to court expecting to lose and spent little to fight.
If they had to pay a million either way, let it go to court and take a chance on winning. If the insured lost, they still paid a million.
Collapse Inside NIAC
At the same time, NIAC was faltering. Its reinsurer was gone. Its computer system failed. Brokers were unable to process policies or issue ID cards. For almost a year, NIAC took no new business. AM Best cut its outlook.
DELTA Rescue wasn’t a client; it was ballast thrown overboard to keep the insurer afloat.
Hard times do not excuse leaving a client unprotected. But they show why NIAC chose to sacrifice DELTA.
Bad Faith
California law requires good faith. An insurer must defend. It must be settled within limits when the risk is clear. It must not put itself ahead of its insured.
NIAC refused to settle.
NIAC denied Cumis counsel. It gave DELTA a poor defense. Lawyers say this is the very definition of bad faith. Some say NIAC’s “sacrifice” plan could also violate California’s Unfair Competition Law or even RICO.
Part V: The Aftermath
Consequences
Pamela Davis said she built NIAC to protect nonprofits. DELTA says it was left to die for the sake of the pool.
California law is simple. An insurer must defend its client. It must settle within policy limits when the risk of a larger verdict is clear. Critics say NIAC did neither.
DELTA says NIAC botched the defense. Its lawyers sent Leo Grillo, the founder, into a deposition with no preparation and with an inexperienced lawyer who had few objections in a 6-hour deposition. His three minutes of sound bites were replayed more than 50 times at trial. They sat silent when the plaintiff’s lawyer carried a child before the jury. They made feeble objections when evidence was excluded.
DELTA asked for independent counsel. California law permits it when the insurer’s interest conflicts with the insured’s. NIAC said no. It wanted to protect its money. DELTA faced ruin if the verdict went over the limit.
Pamela Davis put it in writing: “It would be better if one or two nonprofits fail because of a large jury award, than the entire nonprofit sector lose its ability to be insured.”
DELTA’s lawyers say that sentence alone could prove bad faith. It shows NIAC was willing to let its own clients fall to save itself.
Discovery could expose board minutes, reinsurance papers, and claims notes that prove sacrifice was the plan.
If a court finds bad faith, NIAC could be forced to pay the full $3 million judgment, not just the $1 million policy. Punitive damages could follow. California’s unfair business law could apply. Some lawyers say a pattern could even bring RICO into play.
For DELTA, the stakes are life and death. The sanctuary has 1,500 animals to feed. For NIAC, the question is whether its survival plan crossed into betrayal.
Adriana Duarte has not seen a dime. Her lawyer has not been paid. Appeals and bankruptcy may drag on for years. She could end with nothing.
NIAC’s strategy of deflect and defer came back to bite them. What they could have done at the outset, they could have done at the onset.
He promised no animal would be left behind.
NIAC promised to protect him.
Only one of them kept the promise.
In our next in the series, we will examine how NIAC was struggling financially and scrambling, while never warning its insureds that their problems would result in some of them taking the fall.
Tell that to the cats and dogs left at the border, or lost in the Mojave Desert, or in the San Bernardino forest—the ones Grillo would bring in to DELTA. He cannot, with the shadow of NIAC, Duarte, and Escalante looming.
In the next in our series on how NIAC sacrificed a 45-year old not for profit to create a pattern of doing business to rescue itself from its own miscalculations, Frank Report will take you behind the scenes at NIAC – with an indepth report from employees, former managers, brokers and those who suffered from being insured during this dark period of NIAC- a period which some say is far from over.
Frank Parlato is an investigative journalist, media strategist, publisher, and legal consultant.
