VENTURA : Appeals Court Upholds Judgment Against Port

The state Court of Appeal has upheld a multimillion-dollar judgment against the Ventura Port District in favor of a former development firm that went bankrupt after lengthy delays in its attempts to build the Ventura Harbor Village.

Although it reduced the monetary award slightly--to $15.6 million--the appellate panel in Ventura ruled unanimously that the port district, which runs the Ventura Harbor, did not act in good faith in its dealings with Ocean Services Corp.

Ocean Services signed an agreement with the port district in 1979 to develop part of the harbor by building, among other things, an aquarium, a restaurant and retail facilities. At the time, the port district did not disclose that it had an agreement with another developer prohibiting the construction of retail facilities at the harbor, according to court documents.

Because of repeated assurances by a former harbor general manager that the problem could be resolved, Ocean Services officials went forward with the Harbor Village development. By the time Ocean Services went bankrupt in 1988, the company had incurred $13 million in net operating losses.

A jury awarded more than $31 million to Ocean Services in September, 1990, but the judgment was reduced to just under $17 million by the trial judge.

In its appeal, the port district contended that Ocean Services failed to adhere to time limits for suing a public entity. Justice Arthur Gilbert, writing for the appeals court, said the delay was the fault of the port district.

Attorney John R. Johnson said Wednesday that the lawsuit is being pursued by Ventura Group Ventures, a company made up largely of former Ocean Services shareholders. The new company must pay a percentage of any award to the bankruptcy court to help pay Ocean Services’ creditors, Johnson said.

Richard Parsons, current harbor district manager, said he expects the matter to be appealed to the state Supreme Court.