Farmer Gets $60 Million Damage Award
SALINAS, Calif. (AP) _ Wells Fargo Bank officials say they’ll appeal a $60 million damage award a Superior Court jury ordered it to pay a Castroville farmer who declared bankruptcy.
Garth Conlan accused Wells Fargo of driving him into bankruptcy by canceling the financing on his 1,500-acre farming operation in 1984.
The bank’s attorney, William Trautman of San Francisco, said Wednesday’s unanimous verdict will be appealed. ″Obviously we’re disappointed and surprised by the verdict, especially the size of it,″ he said.
The jury of eight women and four men deliberated 13 1/2 hours over a four- day period.
Of the sum awarded, $10 million was compensatory damages for actual losses and $50 million was punitive damages to punish the bank for what the jury perceived to be misbehavior.
Jury foreman Cheryl Zertuche said that during the deliberations on damages some jurors wanted to go as high as $75 million.
″We felt the bank kind of jumped the gun to cover its loss,″ she said.
Several attorneys, one of whom has been in practice in Monterey County for 45 years, said $60 million is the largest damages award ever made here.
The jury awarded the bank $3.84 million plus $1.5 million interest on the bank’s countersuit to recover the value of crops in accord with a loan agreement.
Conlan had asked for $100 million in damages on grounds of fraud, breach of contract, breach of covenant of good faith, and intentional infliction of emotional distress.
He said the bank approved an $8 million line of credit for him in 1982 to launch a farming venture to be known as Lightning Farms on 1,505 acres of ″mixed vegetable and strawberry″ land he owned.
In 1983, the bank agreed to increase his credit line to $9.5 million but executed a credit agreement providing that default would occur if annual losses exceeded $2 million, according to the suit.
The agreement also provided that Conlan had 120 days from the end of the farm’s fiscal year (Dec. 31) to provide an accrual basis financial statement and a 20-day grace period to ″cure technical defaults,″ the suit stated.
But in November 1983, the bank ″unexpectedly announced that Lightning Farms had violated the credit agreement, even though neither the fiscal year end nor the 120-day submission period had passed,″ Conlan charged.
At that time, Wells Fargo said that no further funds would be advanced, Lightning Farms would be shut down and its assets would be liquidated, according to Conlan.
According to Roger Cruzen, a Wells Fargo spokesman, the bank is the second- largest farm lender among commercial banks in California with an agricultural loan portfolio of $861 million.