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Jury Sides with City in $23 million Pier Nightclub Suit

By Jorge Casuso

September 29 -- The first round of a three-and-a-half-year legal battle ended Wednesday when a jury found the City did not breech its contract with a local developer hoping to build a 699-seat nightclub and restaurant on the pier.

The Superior Court decision is a major blow for local businessman and developer Russell Barnard, who had filed the $23 million suit when it became apparent that the project -- which was first approved 16 years ago -- would not become a reality.

The jury found that the City did not materially breach a 1993 lease, which Barnard claimed cost him more than $1 million in damages and $22 million in lost profits, and awarded the City $1 in damages. Barnard vowed to appeal the decision.

"This is an outright victory for the City," said Gary J. Goodstein of the law firm of Goodstein & Berman LLP, who represented the City. "The jury got it right. We never expected a big verdict in our favor.

"Our goal all along was to protect the City from Barnard's claims, which were factually specious and sought millions of dollars in speculative damages," Goodstein said.

The $1 award is significant because it allows the City to collect attorneys fees, which could top $1 million, Goodstein said.

“This was a ridiculously expensive case to litigate,” he said. Goodstein said his fees alone for two years of work “are in excess of $750,000.”

Asked if he would appeal the decision, Barnard said, “Of course.”

“Basically, the jury was saying, ‘They lied and they led you on, but who cares,’” said Barnard, who owns Rusty's Surf Ranch on the pier.

“It was maybe a long trial, and it’s hard to stay focused that long,” he said.

The decision comes nearly ten months after the City -- which argued that the nightclub was never developed because Barnard never fully secured financing for the project -- agreed to pay him $246,000. The fee covered such things as sewage installations that were never built.

The jury’s decision came after Judge Elihu Berle did not allow Barnard’s key witness to testify because the expert lacked foundation, Goodstein said.

The witness, David Nolte, was expected “to build the case for lost future profits” by relying on “a survey of national restaurants,” Goodstein said.

“After the expert was excused, Barnard tried to testify,” he said.

After the ruling, Goodstein said he spoke with the jurors.

“The majority said they didn’t believe his testimony, that he lacked credibility,” Goodstein said. “They also said they thought the City was at fault for dragging it on this long.”

Barnard said Wednesday’s decision is not the end of the road for the nightclub, slated to be called Club Route 66.

“What we want to do is build it,” Barnard said. “We’re prepared to start construction any time they give us the go ahead.”

Related Stories

PART I -- Club Route 66 Reaches End of the Road (Feb. 19, 2002)

PART II -- Lost in a Maze (Feb 20, 2002)

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