Bay Area Developer hit with huge damages in dispute over sale of Kings County farmland

By Lloyd G. Carter

    A prominent western San Joaquin Valley grower and a Bay Area developer have been ordered to pay $128.6 million in damages following a nearly three-month trial in Kings County Superior Court.  McCarthy Family Farms, headed by John McCarthy, and Sandridge Partners, a family-own real estate business headed by John Vidovich of Los Altos Hills were ordered Friday (March 28) to pay $73.4 million in compensatory damages and $55.2 million in punitive damages.  McCarthy was found guilty of breach of contract and Sandridge Partners was found guilty of interference with contractual relations. 

   Punitve damages of $32.75 million were imposed on the Sandridge partnership.  John Vidovich personally was ordered to pay $18 million in punitive damages.  His brother, Michael Vidovich, was hit with punitive damages of $2.46 million, and his sister, Kathryn Tomaino was ordered to pay $1.75 million in punitive damages.  A Sandridge partner, Larry Ritchie, a member of a prominent Tulare County farming family (C.J. Ritchie Farms), was ordered to pay $250,000 in punitive damages.  Ritchie's niece, Ashley Ritchie Schwarm, is an anchorwoman at the Fox television station in Fresno and Visalia, KMPH Channel 26.  She received just under $500,000 in farm subsidies between 1995 and 2010.  Attorneys in the case said the family-held Sandridge Partners was worth more than $420 million.  C.J. Ritchie Farms was listed as the 9th largest farm subsidy recipient in California for the years 1995-2010, raking in $8.8 million in federal subsidies, according to the Environmental Working Group website.  Sandridge Partners received just under $1 million in cotton subsidies in the year 2009.

   The lawsuit, filed in 2009, followed a 2007 proposed land sale between McCarthy and Kings County Ventures, headed by Southern California developer William Quay Hays, involving 22,254 acres in two separate parcels known as Liberty Ranch.  Hays had options to buy both parcels but before the options expired McCarthy sold the two parcels to Vidovich.  Hays said he wanted to build a futuristic city of 150,000 on the land, with state of the art solar energy systems, energy use and high speed computers.  The idea collapsed along with the U.S. economy in 2008 when venture capital to finance the new city dried up. 

    John Vidovich was in the news in 2009, when he sold a portion of his share of the Dudley Ridge Water District water contract with the California Department of Water Resources.  Vidovich sold a portion of his Dudley Ridge contract rights to the Mojave Water District in San Bernardino County for $73.5 million, triggering an outcry from some segments of the San Joaquin Valley farming community who feared their irrigation supplies might disappear if farmers and ranchers sold their water to urban developers.  Hanford attorney Michael Nordstrom brokered the deal between Vidovich and the Mojave water district.  Nordstrom was a named defendant in the initial complaint in the current case but his name was later dropped from the complaint.

   Sandridge Partners was in the news again on another matter when Tulare County Judge Harry N. Papadakis recently issued a preliminary injunction against the partnership, which allegedly pumped thousands of acre-feet of groundwater from the aquifer under Tulare County and funneled it 25 miles through pipes and canals to his almond growing operations in Kings County.   (An acre-foot is enough water to cover an acre of land a foot deep, or 325,851 gallons).  The Lower Tulare River Irrigation District sued Vidovich last year to halt the groundwater export out of the county. The irrigation district's lawsuit says Sandridge Partners bought 920 acres of land in the Tulre River district in 2012 and soon started pumping grounwater into lines and pipes leading to his Kings County almond orchards. The preliminary injunction will prevent further groundwater pumping pending a trial on the issue.       

     The Vidovich family reportedly owns 60,000 acres of farmland in the San Joaquin Valley. The family wealth started with John Vidovich's grandparents who built a farming empire in Santa Clara County, and later saw the land become extremely valuable for urbanization. 

     Attorneys for Sandridge Partners are expected to appeal the jury verdict and the amount of damages awarded.