Former Newport Beach automobile dealer Jim Slemons has lost a $1.2-million judgment to an advertising executive who sold Slemons his stock in a now-defunct Orange County commuter airline.
Roger C. Riddell, founder and former chairman of the parent company of Resort Commuter Airlines, sued Slemons in Superior Court for a $1.2-million debt in Riddell's name that Slemons had promised to pay as a part of a 1987 stock transaction.
Riddell's attorney, Gary A. Dapelo, argued during the three-week trial that, after Slemons took control of the airline in 1988, he did not honor an oral agreement to pay a $700,000 debt to a La Jolla investment group. The debt payment ultimately fell on Riddell, who had personally guaranteed the loan eight months before Slemons' involvement.
The debt "grew to over $1 million with interest, and I ended up having to sell my house and a lot of other assets to pay it off," said Riddell of Newport Beach. "This basically means that I have just gotten my money back."
The 12-person jury awarded Riddell the money after four hours of deliberation late Thursday in Superior Court in Newport Beach.
"The jury believed that Slemons was lying," Dapelo said. "They used absolute common sense. Slemons' tale didn't fly."
Slemons' attorney, Randall L. Hite, argued before the jury that Slemons had never entered into an oral agreement to pay off the debt and was unaware of it until after he had purchased Riddell's interest in the airline in late 1987.
"Mr. Riddell had not disclosed the existence of the debt until two months after Mr. Slemons agreed to put in money," Hite said. "Mr. Slemons was thoroughly devastated financially by this airline."
Slemons had lost his $14.7-million investment in Resort Commuter Airlines by 1990.
The airline, which was founded in 1985 and flew to Santa Catalina Island, Big Bear Lake, Santa Barbara and one international route to Cabo San Lucas, went bankrupt in 1990. Much of Slemons' auto holdings, which included Jim Slemons Imports in Newport Beach and a Honda-Jeep-Eagle business in San Clemente, were sold or liquidated.
Slemons now lives in Hawaii and operates a Volvo dealership in Honolulu. He could not be reached for comment Friday.