A state court Judge ruled today in favor of the owner of three adjacent pieces of beach front property located just south of the Jonathan Club on Palisades Beach Road in Santa Monica.
This ruling resolves a bitterly contested seven-year battle between Stephen Gaggero, a real estate developer, and Anna Marie Yura, the Trustee of the Frederick Earl Harris II Trust.
Counsel for Yura, David Rosen of Murphy Rosen & Cohen LLP, was extremely pleased with the decision. "This is a complete victory," he said. "The Judge ruled in favor of the Trust on all issues. We could not be more thrilled, particularly for Fred Harris' young daughter, a beneficiary of the Trust."
The three properties in dispute are located at 938, 940 and 944 Palisades Beach Road. Harris, who lived in one of the properties, dreamed of developing the three properties into a beach front community with common gardens where he could raise his young daughter in a quiet, pleasant environment. In August 1998, Harris sold one of the properties to Gaggero, and gave him a right of first refusal on the others. The sale, however, was conditioned on Harris and Gaggero agreeing to certain conditions, covenants and restrictions ("CC&Rs") that would allow Harris to carry out his dream. However, while working to develop the CC&Rs, Harris fell ill. He was diagnosed with brain cancer, and died in May 2000.
After Harris died, Gaggero sued the Trust, claiming that he and Harris had agreed to the CC&Rs before Harris died. Following years of pre-trial litigation, the case was tried to the Court for six weeks. In her lengthy statement of decision, the Judge, the Honorable Mary Ann Murphy, found that Harris and Gaggero had not agreed to CC&Rs before Harris died, and thus the Trustee was not obligated to sell the property to Gaggero. In the decision, Judge Murphy concluded that Gaggero - who has filed several other lawsuits involving beach properties - was not a credible witness, and was "combative, evasive, non-responsive, and was impeached with his deposition testimony many times." The Judge ruled that Yura, the Trustee, was a credible witness and acted in good faith following Harris' death. In addition, as the prevailing party in the lawsuit, the Trustee will be entitled to recover its attorney's fees.
The case is particularly significant in light of the enormous increase in value of beach front property over the last 10 years. The properties, worth an estimated $1.5 to $2 Million when the lawsuit was filed, have at least tripled in value during the pendency of the lawsuit.
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