Damage Phase to Be Reopened in Baldwin Trial

Ruling that Baldwin Co. defendants misled jurors about their finances, a judge has reopened the damage phase of a breach-of-contract trial involving the home builder.

In a ruling mailed last week, Los Angeles Superior Court Judge James A. Bascue granted the motion for a new damage phase by Robert B. Burns, former head of the Los Angeles-Ventura division of the company.

Jurors in June agreed with Burns that James and Alfred Baldwin had reneged on a 1988 promise to give him a 10% stake in his division. Burns, an Idaho lawyer, joined Baldwin that year and left the company in 1994.

The jury awarded damages of $2.5 million, but Burns, who had been seeking $35 million from the Newport Beach-based builder, maintained that was inadequate.

In his ruling, Bascue said the award could have been higher had the Baldwins not testified misleadingly and withheld pertinent documents until after the end of testimony.

Baldwin, battered by a long real estate recession in the early 1990s, sought bankruptcy protection from creditors in 1995. A two-year reorganization stripped the Baldwin brothers of control and gave majority ownership to former bondholders. The company is going forward under the name New Millennium Homes.

In granting Burns’ motion for a new damage phase, Bascue cited testimony from James Baldwin. Trying to show that the company no longer had the resources to fund projects in Burns’ division, James Baldwin had testified that a San Diego County project called the Otay Ranch Property was about to be sold.

In fact, Baldwin retained an interest in the Otay Ranch Property and the possibility of future profits from it, Bascue ruled.

The Baldwins’ lawyer, Joanne Frasca, predicted a lengthy appeal, saying no misleading testimony was given and that the property had been sold.