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CASE TYPE: Breach of development agreement CASE: Border Business Park Inc. v. City of San Diego, No. 692794 (San Diego Co., Calif., Super. Ct.) PLAINTIFF’S ATTORNEYS: Vincent J. Bartolotta Jr. of San Diego’s Thorsnes, Bartolotta & McGuire; and David B. Casselman of Tarzana, Calif.’s Wasserman, Comden, Casselman & Pearson DEFENSE ATTORNEYS: Anthony J. Shanley and Richard Alan Ostrow, San Diego City Attorney’s Office JURY VERDICT: $94.5 million; reduced Although this was the second-largest verdict in California in 2001 and it was among the top 20 nationally, what happened after the verdict was handed down may be more interesting than the jury’s award itself. The defendant, the city of San Diego, accused the judge, who used to be a city attorney, of bias toward plaintiffs’ attorney Vincent J. Bartolotta. The judge recused himself after admitting that he had dated Bartolotta’s secretary. The new judge threw out $29 million of the verdict. And the defense filed post-trial motions seeking JNOV contending that “every pivotal point [the plaintiff] made to the jury was false” and that the trial record was “riddled with perjured testimony” from the plaintiff’s witnesses. The plaintiff was Border Business Park Inc., a company owned by the Roque de la Fuente family. In 1986, Border entered into an agreement with the city of San Diego to develop 312 acres of property for a light industrial business park in the Otay Mesa area of the city, said Bartolotta. As part of the agreement, he added, Border would provide an infrastructure for the property. The city would freeze or alter zoning laws for the project and would be a conduit for financing. But, Bartolotta alleged, the city thwarted construction efforts for years, “by changing specifications on roads, delaying the permitting process, applying new fees” and ticketing construction vehicles. As a result, the project fell apart, and Border lost the property through foreclosures and bankruptcy, he said. In 1995, Border sued the city, charging breach of the development agreement and inverse condemnation. The city counterclaimed, charging breach of contract and unfair business practices. The city contended that it had not blocked the construction process and that Border had failed to develop the property or repay debt. The city also charged that Border had not lost the property through foreclosures, but that various entities owned by the de la Fuentes had purchased back much of the land. On Jan. 2, 2001, a San Diego jury ordered the city to pay Border $94.5 million. The city immediately hired outside counsel, including the San Diego office of Los Angeles’ Latham & Watkins and the Los Angeles appellate boutique Horvitz & Levy, to handle post-trial motions and an appeal. The new attorneys moved quickly. On Jan. 11, the San Diego Tribune published a profile of Bartolotta, noting that the case had “solidified his reputation as one of San Diego’s pre-eminent plaintiff’s lawyers.” But, said Kristine L. Wilkes of Latham & Watkins, within the story was reference to a confidential reprimand given by the state Commission on Judicial Performance to the judge in the de la Fuente trial. In 1992, Judge Vincent Di Figlia had been cited for creating the possible appearance of impropriety because Bartolotta had once paid for a charity golf foursome in which Di Figlia participated. “The city moved to disqualify Judge Di Figlia for cause,” said Wilkes. In a subsequent hearing, she said, “the judge confirmed the information.” Then under questioning, she said, he revealed that “he had taken Bartolotta’s paralegal on a date in the midst of the case.” All this was irrelevant, said Bartolotta. “My present secretary was his secretary 25 years ago.” As for the impropriety charge, “I paid for a charitable round of golf and he and another judge were in the foursome.” The city’s claims of bias were cynical, he added. “The judge had worked for the city attorney’s office. He was their lead counsel, half of their witnesses worked for him.” Before the trial went badly, he said, “the city was desperate for this judge to try this case.” Judge Di Figlia denied any impropriety but recused himself. Orange County Superior Court Judge Raymond Ikola took over. The city continued filing a flurry of post-trial motions as the new attorneys began to learn more about the plaintiff, said Wilkes. Among the motions was a request for relief from the jury’s verdict on the ground of fraud. The brief supporting this motion charged that the plaintiff had withheld information requested before trial and disputed the claims made by the plaintiff during trial. The city, in its brief, charged that the plaintiff falsely claimed that the de la Fuente family lost everything as a result of the Border Business Park bankruptcy. “De La Fuente moved well over $200 million dollars through his various alter ego entities in the years immediately following the Border bankruptcy,” the city charged. The plaintiff’s attorneys responded that there was no new evidence. “The fraud motions merely demonstrate a disagreement between new counsel and trial counsel over trial tactics,” said plaintiff’s attorney David B. Casselman. On Oct. 10, Ikola rejected the city’s attempts to have the verdict to set aside, finding no bias by Di Figlia and finding that the city had access to the evidence that it now claimed had been withheld. The court upheld the verdict on inverse condemnation but ordered a new trial on the breach of contract claim, thus erasing $29.2 million of the jury’s award. The judge then added $26.4 million in interest. Ikola determined that the statute of limitations barred recovery of all damages for breach of contract that accrued before June 23, 1994, but because the verdict was a general verdict, a new jury would have to determine how much or if any damages were owed due to post-June 23, 1994, events. A motion is still pending on the plaintiff’s request for $33 million in attorney fees. Both sides will be appealing.

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