2 Developers Name Thrift in $100-Million Suit : Real estate: The action against First Nationwide Financial comes as its owner, Ford Motor Co., attempts to sell the savings and loan.

By GREG JOHNSON and DAVID W. MYERS

April 12, 1994 12 AM PT

TIMES STAFF WRITERS

Two Los Angeles-area home builders have sued First Nationwide Financial Corp., alleging that the San Francisco-based savings and loan is attempting to sabotage their operations by seizing control of thousands of single-family home lots in Southern California.

The suit, filed in Los Angeles County Superior Court last week and made public Monday by Santa Monica-based Paragon Homes and American Beauty Homes of Los Angeles, seeks more than $100 million in damages from First Nationwide, a Ford Motor Co. subsidiary that is up for sale.

First Nationwide declined to comment on the suit.

Ford is expected to announce shortly the winning bidder for First Nationwide, which has fallen on hard times in recent years. The deadline for final bids was Monday night.

Although the lawsuit could complicate or delay the bidding process, it stands little chance of scuttling a sale, analysts said Monday.

“Even if a lawsuit turns out to be pretty serious, a buyer can always factor its potential liability into the price that it offers, or it can insist that the seller assumes any future liability for damages,” said Jonathan Gray, an S&L; analyst for Sanford Bernstein & Co. in New York.

Dallas-based Madison Financial, Oakland-based Golden West Financial Corp. and a partnership of Chatsworth-based Great Western Financial Corp. and investment giant Lehman Bros. are among those that are believed to have submitted bids for First Nationwide. All declined to comment on the suit.

Paragon and American Beauty allege that First Nationwide failed to provide promised funding for several housing developments in Los Angeles, Orange, Riverside, San Bernardino and Ventura counties.

Keith Bardellini, an attorney for the developers, said Monday that First Nationwide has used “similar heavy-handed tactics” to take control of projects involving as many as 30 other joint-venture partners around the country.

“We see a pattern of (First Nationwide) forcing developers out of business,” Bardellini said. “First Nationwide is taking the prime properties and building them out themselves” to make more money.

The suit alleges that First Nationwide wrongfully terminated joint ventures with the builders and transferred control of the projects to FN Development Co., its home building subsidiary in Irvine.

The developers maintain that First Nationwide’s failure to provide funding for their projects will have a “detrimental if not disastrous” effect on their operations.

According to the suit, joint ventures involving First Nationwide and the two developers generated more than $700 million in sales during the past 20 years. American Beauty reported $21 million in sales during 1993 and Paragon reported $25 million.

Funding Dispute

Santa Monica-based Paragon Homes Inc. and Encino-based American Beauty Homes allege that First Nationwide, a troubled thrift owned by Ford Motor Co., broke its contractual obligation to fund housing developments in Orange, Los Angeles, Riverside, San Bernardino and Ventura counties. Paragon’s current real estate development projects with First Nationwide include:

SECO II

* Project: 1,636 single-family detached (SFD) homes on 491 acres; includes 8-acre park and 7.4-acre school site

* Location: Santa Clarita Valley, Los Angeles County

* Status: Near close-out

TRIPLE CROWN

* Project: 708 SFD homes; includes 10-acre commercial site, park site

* Location: Perris, Riverside County

* Status: Nearly sold

MOUNTAINVIEW EAST

* Project: 633 SFD homes on 424 acres

* Location: Canyon Country, Los Angeles County

* Status: Actively selling

BRENTWOOD

* Project: 2,154-unit, master-planned community on 568 acres; includes 7.5-acre park; 6.5-acre school site; 15 acres zoned for multifamily and 45 acres of commercial sites

* Location: Victorville, San Bernardino County

* Status: Under development

MOUNTAINVIEW

* Project: 949 SFD homes on 516 acres; includes a 7.5-acre school site and an 8.5-acre park site

* Location: Santa Clarita Valley

* Status: Construction anticipated to begin this year

ROYAL OAKS

* Project: 24 SFD homes on 87 acres

* Location: Simi Valley, Ventura County

* Status: Construction anticipated to begin this year

HB RANCH

* Project: 1,113-unit, master-planned community on 980 acres; includes 15 acres of commercial zoning and a 10-acre school site