SAN MATEO, Calif., Jan. 25 /PRNewswire/ -- The California Court of Appeals for the 6th District has upheld the 2001 finding of liability against San Jose developer Barry Swenson and Green Valley Corporation in a ruling issued on January 21, 2005. The court affirmed the lower court's decision in Pietro G. Denevi v. Green Valley Corporation et al, in a case involving a failed project to build the Los Gatos Golf Course and Country Club on 210 acres of land near Lexington Reservoir in Santa Clara County. In November 2001, Judge Frank Cliff of Santa Clara County Superior Court ruled that Pietro Denevi did, in fact, lose his chance to buy the property in order to build a country club, because Barry Swenson and Green Valley had failed to make a critical payment of $750,000 to Arlie Land and Cattle Company, owner of the property, as they had promised. At the time, the judge awarded a judgment of $10 million to Pete Denevi, former Los Gatos high school football coach. The Court of Appeals has upheld the finding that Swenson and Green Valley breached their fiduciary obligations, but sent the case back to the lower court for a retrial on the issue of the amount of damages only. "This opinion is justice for my client," says Mike Danko of the San Mateo law firm of O'Reilly, Collins & Danko, who represented Denevi. "Pete Denevi's heart was broken and his dream lost because of Swenson's failure to follow through on his commitments. Swenson thought he was big enough to get away with cheating my client. He is learning differently." In its 37-page opinion, the Court of Appeals ruled that Swenson's conduct amounted to a breach of his fiduciary obligations. It ruled however, that the method the trial court used to determine the award of damages was unclear and therefore ordered a retrial as to damages. At the new trial, Swenson will not be able to dispute the established fact that he breached his fiduciary duties and that he caused the property to be lost to another buyer. Denevi was "saddened" at the turn of events leading to the judgment. "I hoped the completion of the project would have benefited the community," said Denevi. But for Swenson's breach of contract, he said, "we would be playing golf out there right now." The Arlie property was eventually sold to Midpeninsula Regional Open Space District and the Peninsula Open Space Trust and will remain undeveloped land. San Jose developer Barry Swenson was the managing partner of the Los Gatos Country Club, LLC, a limited liability corporation formed to help Denevi buy the uniquely beautiful piece of land for the golf course and country club. Denevi held the original purchase option on the valuable property. The deadline for payment to Arlie had been extended several times during negotiations and finally a cash payment of $750,000 was due to the seller on September 30, 1998. Swenson promised Denevi that he would make the payment, then decided not to. The seller terminated the deal and sold the property to the Open Space District.
SOURCE O'Reilly, Collins & Danko