NEWPORT BEACH — A Superior Court jury in Los Angeles has awarded $2.5 million to a former executive of bankrupt Newport Beach home builder Baldwin Co. after finding that the owners reneged on a promise to make him a partner in the company.
The jury found that brothers James and Alfred Baldwin breached their contract with Robert B. Burns, who headed their company's Los Angeles-Ventura division. However, the jury awarded damages only against James Baldwin, who directly supervised Burns' division.
The Baldwins could not be reached for comment on the award, which was handed down Friday.
Burns claimed that the Baldwins had promised him a 10% stake in his division, which would make him a partner in the company, when they recruited him from a Boise, Idaho, law firm. He said that similar partnership agreements had already been extended to the other two division presidents, Geoffrey Fearns and Greg Smith.
Burns became head of the division when it was established in 1988. He departed in 1994.
After he was hired, he contended, the Baldwins repeatedly put off executing a formal written partnership agreement and told him that a 10% stake exceeded industry standards.
Instead, his suit claims, Burns was offered a 4% "discretionary" bonus and was told he was an employee, not a partner. Burns was seeking $35 million in damages.
Burns, who has since moved back to Boise, could not be reached for comment.
His attorneys are considering seeking a new trial because they believe the Baldwins did not fully disclose their net worth when they testified during the trial, according to John Olson, a partner in the law firm that represented Burns.
The home-building company has been in Chapter 11 bankruptcy, and the Baldwin brothers, Alfred and James, have since been pushed out of the daily operations by court order. The company has been run for the last year by James Johnson, an executive with home builder Lusk Co.
Two reorganization plans that would remove the Baldwins as owners of the company have been submitted in U.S. Bankruptcy Court. The plans are pending.
Burns is the second Baldwin executive to be awarded damages for back pay and broken promises. Fearns, who headed the company's Orange County division, was awarded $2.2 million last year from both brothers in an arbitration proceeding.
For months, the Baldwins claimed they did not have enough to pay Fearns. However, the award was paid after a judge ordered the seizure of art and collectibles from the brothers' homes and an examination of their assets.
Fearns, who testified in Burns' case, now heads the real estate investment division of Los Angeles-based Lowe Enterprises, a pension fund management company.