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Legal News verdicts & Decisions Progressive Environmental Industries, Inc., vs. El Cap Ranch, LLC et al. Santa Barbara Superior Court, Anacapa Division CASE NUMBER: 1266837 TYPE OF CASE: Breach of contract and fraud TYPE OF PROCEEDING: Jury trial JUDGE: Hon. Thomas P. Anderle LENGTH OF TRIAL: 4 ½ weeks (October 2, 2009 – November 4, 2009) LENGTH OF DELIBERATIONS: Initial damages phase: 3 hours; Punitive damages phase: 2 hours DATE OF VERDICT OR DECISION: November 4, 2009 PLAINTIFF: Progressive Environmental Industries, Inc. PLAINTIFF’S TRIAL COUNSEL: William Clinkenbeard of Clinkenbeard, Ramsey & Spackman, LLP and Bruce W. Hogan of Kingston, Martinez & Hogan, LLP DEFENDANTS: El Cap Ranch, LLC and Lester Knispel, Trustee of The BP 10 Trust dated November 14, 2005 DEFENDANTS’ TRIAL COUNSEL: Joseph A. Yanny and Kim Ashley of Yanny & Smith ExPERTS: For Plaintiff: Sheila Lowe (handwriting and document examination), Robert Muraoka and Arturo Gonzalez (landscaping arborists), and James Hammock (real estate appraisal); For Defendants: James Dean and Greg Santamaria (landscaping arborists), and Leonard Liston (engineering and land use) FACTS: Plaintiff Progressive Environmental Industries, Inc. (PEI) is a local business owned by Arturo Gonzalez that provides large-scale estate landscaping services in the Santa Barbara area. From August 2006 through January 2008 plaintiff provided and billed approximately $3,000,000 worth of landscaping services to defendants El Cap Ranch, LLC and The BP 10 Trust, two entities owned and controlled by Jon Peters. All services were provided at Peters’ request on a 200-acre horse ranch known as El Capitan Ranch. In December 2007, Arturo Gonzalez and Jon Peters had a meeting at El Capitan Ranch to discuss payment of plaintiff’s outstanding bill, which at that time was over $500,000. Peters demanded a reduction of the bill. Gonzalez refused. CONTENTIONS: Plaintiff contended it was entitled to payment in full for services rendered. Cross-complainants contended that on January 20, 2008 the parties entered into a written settlement agreement reducing the charges by $400,000. Mr. Gonzalez testified he never agreed to the terms of the alleged agreement, did not sign the agreement, and in fact had never seen it until the “signed” agreement was faxed to PEI’s and its counsel’s office by the Ranch manager, Kim Goto, on February 29, 2008. A xerox copy later was mailed to plaintiff’s counsel. Plaintiff contended that it received three copies of the alleged settlement agreement and that the signatures on the three copies, though very similar, were different from each other. Peters and Goto testified in their depositions and during interviews with the Santa Barbara Sheriff (who investigated plaintiff’s forgery complaint) that only one document was signed. During Peters’ second deposition session he contended two documents were signed. At trial he testified three documents were signed. Each version of the agreement contains a signature purported to be that of Mr. Gonzalez that closely matches, both in size and character, his genuine signature on a proposed maintenance agreement that was faxed to the Ranch by PEI on or about January 18, 2008, just two days before the date on the alleged settlement agreement. Other exemplars of Mr. 32 Santa Barbara Lawyer
Gonzalez’s signature vary significantly from the closely matched signatures on the proposed maintenance agreement and the differing versions of the settlement agreement. Both of plaintiff’s expert document examiners (only Ms. Lowe testified at trial) opined with a high degree of certainty that Mr. Gonzalez did not sign the purported settlement agreement. Defendants did not have a handwriting expert. Cross-complainants also contended they were entitled to extensive damages attributable to plaintiff’s work. Plaintiff contended its work was of the highest quality, that Peters often complimented Gonzalez on his work, and that crosscomplainants never made a single written complaint to PEI until after January 2008, when PEI stopped providing landscaping services because of non-payment and threatened litigation. Among other claims, cross-complainants alleged at trial that the vast majority of the ~200 large olive trees planted by plaintiff were dead or dying and would need to be replaced. Plaintiff countered that, at the time of plaintiff’s last inspection during trial, only 12-15 of the large olive trees showed some effects from transplanting and needed either special care or replacement, and one of eight large transplanted palm trees had died and needed to be replaced. (The total cost to replace all of these trees would be less than $60,000.) SUMMARY OF CLAIMED DAMAGES: At trial plaintiff claimed damages of $502,949, which was the total of unpaid invoices after October 29, 2007, plus punitive damages of $1,500,000 - $2,000,000 based on defendant’s alleged false promise without intent to perform. Cross-complainants claimed damages of over $9,000,000 for replacement of olive trees and bedding plants, damages related to landscaping and grading around a pond, and concerns regarding rock retaining walls constructed by plaintiff throughout the Ranch, among other things. RESULT: In the initial damage phase the jury, with a 12-0 vote, awarded $502,949 to plaintiff and $60,000 to cross-complainants. The jury also found in plaintiff’s favor on the false promise cause of action, which triggered the punitive damages phase. In the punitive damage phase the jury, with a 9-3 vote, awarded $1,000,000 to plaintiff. After trial plaintiff was awarded pre-judgment interest of $86,048.08 and attorney fees of $225,000 as the cost of proving matters that defendants denied without good cause in response to requests for admission. On December 22, 2009 the Court denied defendants/cross-complainants’ motions for a new trial and for a judgment notwithstanding the verdict. This will be your last issue of Santa Barbara Lawyer if your membership is not renewed by the end of this month The 2010 Membership Application for the santa Barbara County Bar Association can be found on page 27. February 2010 33 Legal News
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