A San Luis Obispo County Superior Court judge recently issued a tentative ruling requiring real estate and land use attorney John Belsher and his co-partner of the controversial development company PB Companies, disgraced former executive Ryan Wright, to pay millions of dollars to two clients for allegedly breaching fiduciary duty and fraud.

Those two clients are Jeffrey Chase and Debora Chase.

• File Photo By Steve E. Miller
• SIDESTEP SLO real estate and land use attorney John Belsher plans to appeal a judge’s tentative ruling ordering him to pay more than $3.6 million in damages to two of his clients whom he allegedly swindled out of millions of dollars in property investments.

"Unfortunately, as the facts demonstrate, Belsher was not looking out for Chase as a fiduciary would be required to, but in multiple instances was pursuing his own agenda to develop the real estate projects in which Chase had been induced to invest," Judge Michael Kelley's May 23 order read. "The court finds that, in numerous respects, Belsher was acting to maximize Belsher's interests rather than the Chases'."

Still subject to objections and further court consideration, the judge's ruling capped off a six-year saga between Belsher and the Jeffrey Chase and Debora Chase Revocable Living Trust. In 2018, the Chases sued Belsher; Wright (formerly known as Ryan Petetit); development companies PB Opportunities LLC, Las Tablas Villas LLC, and JB Devco; and Belsher's wife, Jody Belsher, for reportedly defrauding the couple of millions of dollars invested in several of the developers' properties.

Belsher told New Times on May 28 that he intends to appeal the proposed ruling.

"Some monies in excess of $1 million have already been offered to the Chases, even before and throughout the trial," he said via email. "They chose to litigate rather than settle at every opportunity over five years."

Belsher isn't a stranger to legal battles. In 2016, Jonathan Westbay filed a lawsuit against him, Wright, and former business associate Russell Sheppel for breach of contract and property damage related to a development deal in Arroyo Grande. Westbay alleged that Wright and his partners wrote bad checks to pay their share of the mortgage.

In the thick of the Chase trial, the U.S. Department of Justice (DOJ) filed a three-count indictment against Wright, who was arrested on Oct. 30 last year. The indictment reported that Wright allegedly colluded with a former SLO County supervisor to pay him bribes and gifts worth more than $95,000 in exchange for political favoritism. A source who wished to be anonymous confirmed to New Times in previous reporting that the unnamed supervisor was late 3rd District Supervisor Adam Hill. The indictment mentioned an unnamed "co-conspirator" of Wright's too, describing them as a private law firm attorney who specializes in real estate and land use. Wright's jury trial is set for Oct. 29 in Los Angeles.

The ruling in the Chase litigation detailed that between August 2013 and April 2016, the couple invested roughly $2.9 million in Mission Oaks Camarillo, Las Tablas Villas LLC, the Tribune, and the Junction Gang development projects. Belsher and Wright played principal roles in all of them, according to the ruling.

Jeffrey Chase invested $500,000 in the Mission Oaks Camarillo plan to purchase 8.6 acres of vacant land. It was supposed to be rezoned to "create the potential for development" of a 259-unit residential project. The ruling said that he was provided with documents that offered 100 percent return on his investment. Chase was paid $600,000 after the close of escrow.

"Chase contends that he was supposed to receive a total of $1 million (i.e., an additional $400,000) based upon the terms of the operating agreement he signed and based on promises made in emails from Belsher at the time of the closing," the ruling read. "Chase ultimately was persuaded to treat the unpaid $400,000 as a capital contribution to another Belsher/Wright project (Junction Gang)."

Similar patterns emerged with the other three properties, with Chase allegedly being promised returns on his investments by Belsher but not seeing any.

"As the foregoing summary makes clear, while much of the amount plaintiff's claim to be due is conceded to be owed, defendants have vigorously contested claims of intentional wrongdoing," the ruling said.

Beyond owing $3.6 million in damages for breach of fiduciary duty—failing to act in the best interests of the beneficiary through acts of omission or self-dealing—the judge awarded the Chases a slew of other damages relating to three properties. For the Las Tablas project, they're owed $1.3 million in damages. For the Tribune project, the Chases stand to receive $1.1 million. The judge awarded them $2.6 million in damages for the Junction Gang project. He cited causes of action as "fraud and deceit," "breach of promissory note," "breach of guaranty," and "breach of contract."

"John Belsher, with the help of Ryan Wright and motivated by greed, leveraged his position as the Chase's lawyer and longtime friend to use lies and half-truths to convince the Chases to invest their savings with him," Chase attorney Kurt Wilson told New Times. "It is gratifying to me and the Chases that, in the crucible of trial, Belsher's lies have been revealed and confirmed." Δ