Judge Rules on Bergamot Station Feud

In a legal ruling that stifles a long festering feud over the governance of Santa Monica’s popular Bergamot Station art gallery complex--but raises questions about the ultimate resolution of the dispute--a Los Angeles County Superior Court judge on Monday dissolved the partnership between art dealers Wayne Blank, who developed the facilities, and Tom Patchett, who provided most of the funds. At the same time, Judge Frances Rothschild gave the adversaries a week to work out a new operating arrangement.

The decision appears to be a resounding victory for Patchett, a television comedy writer and producer who last summer filed suit to dissolve the two-part limited partnership, alleging that Blank, the general partner, had misappropriated and commingled joint funds, and disregarded Patchett’s rights as a limited partner.

The judge not only dissolved the partnership, on grounds that it is impractical, but also ruled against Blank’s counterclaim for a total of $965,000 in contractual payments and damages.

Business is expected to go on as usual in the galleries. “I see no reason that we can’t both remain at Bergamot, and make it better,” Patchett said immediately following the ruling. “This shouldn’t even cause a ripple in the water.”

“I’m really, really glad it turned out the way it did,” he said. “Hopefully the dissolution will allow us to develop a structure that will keep Bergamot alive in a way that’s evenhanded and fair, where power is not an issue.”

Declining to comment, Blank issued a press release stating, “Until the court’s decision process is complete, the parties cannot determine what impact the court’s intended decision will have on the Bergamot Station project.”

The statement said Blank was “saddened that Patchett’s accusations and animosity have jeopardized the Bergamot partnership’s very existence.” But it affirmed Blank’s commitment to preserving the arts complex and said he will “press for a resolution of this lawsuit which will allow Bergamot to continue to flourish.”

Dealers in the complex will be watching to see how the issue is settled, but they remain hopeful. “If a partnership doesn’t work, I think it should end,” Rosamund Felsen said. “But I’m optimistic that it can all work out for the best.”

Blank, who owns the Shoshana Wayne Gallery with his wife, Shoshana Blank, conceived the project and was granted a master lease early in the spring of 1994 from the city of Santa Monica to develop a gallery complex on 5 1/2 acres of city-owned land at the intersection of 26th Street and Olympic Boulevard. He entered into a limited partnership with Patchett in April 1994. They lease Bergamot Station from the city for $35,000 a month.

In November 1994, two months after the complex opened--amid a celebration that drew thousands of visitors and caused a major traffic jam--Blank and Patchett extended their partnership in a new agreement that governs their joint purchase of an adjacent strip of property from American Appliance Co.

During the first phase of Bergamot Station, Patchett contributed $504,000, while Blank paid $168,000. The second part of the agreement requires Patchett to contribute an additional sum not to exceed $500,000 for construction on the privately owned property.

Initially the match seemed to work. Bergamot Station was hailed as a long-awaited hub of cultural activity in a region known for its amorphous spread, and it quickly became a destination for contemporary art aficionados.

But trouble began to develop between Patchett, who shows his vast holding of American collectibles along with edgy fine art in Bergamot’s Track 16 Gallery, and Blank, a more conventional art dealer with a flair for real estate development and a freewheeling management style. Finding his personality and approach at odds with Blank, Patchett also began to resent paying the bills for a project in which Blank was calling the shots.

The flash point occurred around the first of 1996, when Blank fired Bergamot accountants, Tanner, Mainstain & Hoffer, charging that their fees were exorbitant, without consulting Patchett. Bergamot account executive William Tanner is an old friend of Patchett and was frequently characterized in the trial as Patchett’s “spiritual advisor.”

Patchett filed his complaint June 13, 1996. In a litany of alleged wrongdoing, the suit accuses Blank of borrowing money from the partnership without the knowledge or consent of the plaintiff, failing to honor his financial obligations, seizing partnership business opportunities for his own purposes and failing to provide the plaintiff with proper accounting.

Blank’s attorney, Hillel Chodos, argued that the two dealers were both guilty of borrowing partnership funds to build their own galleries--although Patchett repaid the money more promptly--and of falling behind in rent payments. Chodos further argued that had Patchett honored his contractual commitment to pay $500,000 for construction on the jointly owned property, the two men would be sharing profits from the new section of Bergamot instead of arguing in court. After months of delay while the case was pending, the Santa Monica Museum and 10 galleries are slated to move into the property later this year and are expected to pay a total of $31,000 monthly in rent.

“This is a textbook case of cutting off your nose to spite your face,” Chodos said last week during the court proceedings. No matter how much the two men have come to dislike each other, dissolving the partnership or ousting Blank would not make sense because of his special working relationship with the city, Chodos said.

Conversely, Patchett’s attorney, Arthur J. Cohen, argued that Blank had taken advantage of the situation and promoted his own interests while Patchett was paying the bills.

Although both agreements between Blank and Patchett provide that the partnership could only be dissolved if the assets were sold, both partners voted for dissolution or one partner died, Patchett eventually decided it was an unworkable situation and the judge agreed.

The partners and their attorneys will meet the judge in court Monday morning to try to resolve their differences.