VTN to Appeal $3.5-Million Lawsuit Verdict
VTN Corp., an Irvine engineering and land-planning firm, vowed Monday to appeal a $3.5-million negligence verdict handed down late last week by a San Diego Superior Court jury.
Jurors in the complex case held the company’s land-planning subsidiary responsible for an investment group’s losses after a newly incorporated city cut back the number of units that could be built on a property engineered by VTN.
A “shocked and angry” Al Rattan, VTN’s president, also promised to seek legal advice on his $3.4-million purchase of controlling interest in VTN. Rattan, who said the company is not insured for losses in this case, claimed he was advised the San Diego litigation, as well as several other pending suits, posed no threat to the company when he bought control of VTN last August. He said he also wants the other suits examined by his new attorney.
The San Diego verdict came in a suit charging a VTN subsidiary, VTN Consolidated, with negligence for its handling of a proposed 687-acre residential subdivision in the central San Diego County community of Poway.
VTN was hired by Executive Investment Group Inc. of San Diego in 1980 to draw a map proposing how a 95-acre parcel, the first phase of the giant project, could be divided into home sites.
Attorneys for both sides of the case agree that VTN’s engineers proposed that the land be divided into 78 lots. However, when the landowner submitted the plans to the Poway City Council, it received approval for just 62 home sites.
“They didn’t use the right formula for determining the number of lots that we could get,” explained Steve Lopardo, a Fallbrook attorney who represented the plaintiff.
As a result of the council’s decision, Executive Investment decided the project would be unprofitable and abandoned it. Ultimately, the entire 687 acres were lost in a foreclosure sale.
Asked $7.4 Million
Lopardo said Executive originally asked the jury for $7.4 million as compensation for its losses.
VTN’s Rattan contended that the engineering work was completed prior to Poway’s incorporation as a city and its adoption of new land-use laws. “We’re totally perplexed by the judgment, and we believe it’s unfounded and unwarranted,” he said.
Rattan also said that because the legal counsel for VTN’s previous owners claimed the suit posed no liability when pending legal matters were reviewed before last summer’s sale of the firm, he is examining his “legal remedies.” Rattan paid $3.4 million for 52% of the company.
“We question the competence of the former attorneys, and we’re reassessing the nature of the remaining cases against us,” he said. “We don’t trust what we were told.”
VTN’s current attorney, Carmen Morinello of Newport Beach, said about a dozen “minor” cases are pending against the company.
The $3.5-million verdict against VTN comes at a time when Rattan thought he would be on the verge of bringing the once-profitable company out of four consecutive years of red ink. Instead, the company is still reporting losses. In the first six months of the 1985 fiscal year, ended Nov. 30, the company lost about $1 million.
