Water World Resorts, Inc., et al. v. Larry Gold, et al.
Published: Sep. 7, 1996 | Result Date: Jun. 7, 1996 | Filing Date: Jan. 1, 1900 |Case number: 68856 – $4,200,000
Judge
Court
San Luis Obispo Superior
Attorneys
Plaintiff
Defendant
Experts
Plaintiff
Paul Crawford
(technical)
Dennis McCarthy
(technical)
Rita McCoy
(technical)
William C. Sarsfield
(technical)
Defendant
Suzanne Mellen
(technical)
Sherwood Kelley
(technical)
Ronald C. Gable
(technical)
S. Guy S. Puccio
(technical)
Facts
Since 1972, plaintiff Water World Resorts, Inc. has operated the resort, marina, rental cabins, campgrounds and other recreational facilities around Lake Naciemento in San Luis Obispo County. In September 1988, defendant Larry Gold, the president of Bear State Mortgage, made a $3 million loan to Water World and formed a partnership with Water World's owner, plaintiff Dan Heath, to operate the resort and to assist with future development, including a hotel and an 18-hole golf course. The development project was projected to ultimately cost $85 million and include a convention center, six restaurants, a shopping complex, 250 cottages and 50 villas. Gold made an oral joint venture agreement to provide working capital to help the resort through a drought as well as help develop the golf course and 200-room hotel. Heath documented Gold's oral agreements and telephone conversations by sending follow-up memos and letters to Gold. Heath claimed that Gold failed to fullfil the promises made regarding future financing and that Gold tried to foreclose on the resort in 1990. Heath asserted that Gold intentionally withheld financing in an attempt to maneuver himself into a position where he could take over the resort. The plaintiffs, Heath and Water World, brought this action against the defendants, Gold and Bear State Mortgage, based on breach of partnership agreement, fraud, breach of an oral contract and breach of fiduciary obligations and misrepresentation theories of recovery.
Settlement Discussions
The plaintiffs offered to restructure the $3 million note and pay a total of $1.5 million. Defendant Gold demanded $2.7 million.
Damages
The plaintiffs claimed $12.4 million in damages.
Other Information
The verdict was reached approximately five years and eight months after the case was filed. A mediation was held on Feb. 21, 1996, before Alexander Polsky of JAMS/Endispute. It failed to resolve the matter. The case was originally tried in 1992 with Water World prevailing in what was the largest lender liability verdict in the country for that year. An appellate court reversed the jury verdict on a damages issue requiring a second trial. The jury verdict reached in the first trial was $6,652,000.
Deliberation
6+ days
Poll
9-3, 10-2
Length
20 days
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