Kings County jury awards $128.6 million damages to Hanford developers

The Fresno BeeMarch 31, 2014 

A Kings County Superior Court jury has awarded a $128.6 million verdict against McCarthy Family Farms for breach of contract and against Bay Area developer John Vidovich and Sandridge Partners for intentional interference of two contracts involving water for a planned community outside Hanford.

The dispute was over water rights for Quay Valley, a proposed 150,000-resident, solar-powered city that would use clean and renewable energy generated from a proposed on-site 600-megawatt power plant.

The project's developers, Kings County Ventures and GROW (Green Renewable Organic and Water) Holdings, sued McCarthy Family Farms, Vidovich and Sandridge Partners after a water deal fell through, causing the suspension of the Quay Valley project.

The plaintiffs were represented by Fresno attorneys C. Russell Georgeson and Chris Noyes and attorney Phil Baker of Los Angeles.

They told jurors in the three-month civil trial that in 2007 McCarthy Family Farms had agreed in writing to sell to Grow Land and Water Company, a division of Los Angeles-based GROW Holdings, two parcels of property called Liberty Ranch.

Liberty Ranch in Kings County consists of more than 34 square miles of fallow agricultural land, but with allocable water in excess of 25,000 acre feet a year in perpetuity, Baker said.

Baker said McCarthy Family Farms breached the contract in 2009 by selling off the Liberty Ranch parcels and water rights to Vidovich and Sandridge Partners, which included Vidovich's brothers and sister, Michael Vidovich and Kathryn Tomaino, as well as investor Larry Ritchie.

The civil trial, which began Jan. 7, included more than 30 days of testimony and hundreds of exhibits. The jury on Friday awarded $73.4 million in compensatory damages and $55.2 million in punitive damages against the defendants, Baker said.

Fresno attorney Marshall Whitney, who represents Sandridge Partners, declined to speak about the verdict, but said he plans to file several motions, including one for a new trial.

Water is a precious commodity statewide, Baker said.

Just last week in another Valley courtroom, Judge Harry N. Papadakis stopped Sandridge Partners from allegedly pumping thousands of acre-feet of water from the underground aquifer in Tulare County and exporting it 25 miles through pipes and canals to an almond farm in Kings County.

Papadakis put a temporary halt to the pumping by issuing a preliminary injunction in Tulare County Superior Court against Sandridge, which is controlled by Vidovich of Los Altos Hills and others. The preliminary injunction will stay in effect until a trial determines whether the pumping and movement of water violates state water law, the judge said.

When groundwater is pumped out faster than it can be replenished -- a condition called overdrafting -- by law it can't be pumped out and used elsewhere, said Alex Peltzer, the Visalia water lawyer representing Lower Tule River Irrigation District, which sued Sandridge Partners last year to stop the pumping.

In late 2012, Sandridge Partners bought 920 acres inside and outside of Lower Tule River Irrigation District on the east side of the Valley, improved wells, laid pipes and started pumping the groundwater, according to court documents. In the documents, Sandridge Partners says the water was not moved across the Valley floor but rather was used by an adjoining landowner. The pumping also did not exceed historical use for the property and Lower Tule lacks data showing that the area is in overdraft, the court papers say.

In 2009, Sandridge Partners profited from the $73 million sale of thousands of acre-feet of State Water Project water from the Dudley Ridge Water District, south of Kettleman City in Kings County, to the Mojave Water Agency, which serves several cities in San Bernardino County.

The reporter can be reached at (559) 441-6434, plopez@fresnobee.com or @beecourts on Twitter.

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