No Sabotage of Defense Case, Judge Says : Plaintiffs Win Round in Old World Case

An Orange County judge has dismissed defense attorneys’ allegations that two Old World shopping center store owners--involved in a four-year legal battle against center developer Josef Bischof--destroyed government documents to sabotage Bischof’s defense during his civil fraud trial last year.

Superior Court Judge James L. Smith, who presided over the monthlong trial in Santa Ana, in which a jury ordered Bischof to pay $2 million in real and punitive damages to the store owners, said in a ruling late last month that Bischof’s attorneys had failed to prove “impropriety or misconduct” by the store owners.

Attorneys for Bischof had asked the court to dismiss the judgment, alleging that shop owners Julietta Lewis and Virgil Batesole--two of the 12 plaintiffs in the case--destroyed Department of Real Estate documents and Huntington Beach Planning Department records that could have been beneficial to Bischof’s case.

The allegations were based on a conversation that Bischof’s lawyers said they had with a third plaintiff, Alfred Skistimas, another store owner in the Huntington Beach complex. Lewis and Batesole have denied the allegations since they were made last November.

In a related action, the judge appointed Santa Ana attorney Michael D. Pursell as receiver for the Old World Owners Assn., the shopping center’s governing board. The action was not taken because the association is insolvent but rather, Smith said, to preserve the assets of an association that has been split for years by the battle between Bischof and the Lewis group.

Smith said in his ruling that appointing a receiver to manage the association’s assets was “the easiest decision I have had to make in 15 years” because evidence in the trial showed that the association “ceased to exist as an independent, unbiased, objective, fair and reasonable board of directors . . . years ago.”

Lewis and her followers had been seeking a receiver to manage the board’s affairs since 1982, but the court repeatedly denied the request. In 1983, the court appointed a retired judge to referee the board’s disputes, but the judge later quit the post, saying there was too much animosity to make the job worthwhile.

The store owners originally filed their fraud suit against Bischof late in 1982, claiming that the developer mishandled the association’s advertising funds and purposely misrepresented certain amenities that were to be provided to the shop owners, who are required to live above their stores.

Most of the $2 million awarded by the jury in May was in punitive damages, and Smith later reduced the total award to $1.1 million.