JUDGE LIMITS ZAGARIS DAMAGES

TheBackStory

By Michael Winters, Bee staff writer – Wednesday 6/14/1995

Jurors added some small change Tuesday to the $1.1 million they had already awarded a couple who claimed the Zagaris real estate companies sold them a faulty house.

The $4,309 award represented a third of the assets of Shelter America Builders. Lawyers for the Zagaris companies had convinced a judge to restrict punitive damages to Shelter America alone.

Stanislaus County Superior Court Judge Charles V. Stone’s ruling left the assets of other companies intact and kept a lid on the punitive award, an amount above and beyond actual damages designed to teach a lesson.

Three weeks ago, the jury found <strong>Continental</strong> <strong>Metroplex</strong>, doing business as Shelter America, and Paul M. Zagaris Inc. liable for breach of contract and negligence. Jurors also found company officers Steven P. Zagaris liable for fraud and Jon P. Zagaris liable for breach of fiduciary duty in the sale of the west Modesto house.

They awarded homeowners Monica and Kenneth Marshall $1.1 million for damages and emotional distress.

Zagaris attorney Jack Provine asked the judge Tuesday to stay the award until the court can hear a motion for a new trial. Stone will rule on the stay later.

The Zagarises and their attorneys could not be reached for comment Tuesday after the hearing.

The hearing Tuesday came after Stone denied a separate motion Friday for a new trial. The defendants argued that jurors had overheard conversations in the hall that could have prejudiced their decision, that they had read and chatted during the trial and that the press was biased.

The court also denied the motion by the Marshalls to reopen the question of whose assets jurors could tap to award punitive damages. The Marshalls’ attorney, Edward Nevin, called it chicanery that the Zagarises had managed to shield all but one company from punitive damages.

But a defense attorney argued in court papers that the Zagarises were “scared to death about this case” and the chance that another massive award could cripple their companies.

Stone ruled that only Shelter America could face punitive damages. He ruled Tuesday that the company had validly transferred parcels of land in Riverbank and Los Banos to other companies and so was left with just $12,927.18 in net assets.

Defense attorney Alan Smith then asked the jury to leave even that amount untouched, insisting that the $1.1 million award is deterrent enough.

Nevin argued, on the contrary, that he would ask for another million dollars if he could get access to that much of the Zagaris assets. He urged the jury to show that “this kind of behavior will not be tolerated.”

At least four other cases are pending that involve alleged leaky roofs, weak flooring, crooked walls and other defects in the same Westridge subdivision, with buyers suing builders or vice versa.

The jurors Tuesday deliberated for just 20 minutes. Afterward, several of them congratulated the Marshalls. Juror Richard Rubi called the five-week trial an exhaustive lesson in the pitfalls of house buying.