Vineyards claims court victory

YAKIMA, Wash. -- The Vineyards Resort earned a small victory Tuesday in its effort to get back $3 million in deposits.

A U.S. Bankruptcy Court judge rejected a motion by Fred Gardner to dismiss his firm, Gardner & Associates, from a complaint filed by The Vineyards in December.

"It keeps the case moving, that's the bottom line," said James S. Macdonald, an attorney in Sandpoint, Idaho, who is representing the Vineyards Resort in this case. "Mr. Gardner isn't out of the case."

The complaint states that Gardner & Associates, and another Georgia firm, Dincom Inc., violated an escrow agreement after Gardner distributed a
$3.2 million deposit to Dincom, even though Dincom failed to provide any of the $80 million in financing promised in exchange for
the deposit.

The deposit was made up of money from a group of initial investors who agreed to pay $250,000 for the right to buy one of the 232 single-family lots in the project.

The Vineyards, conceptually valued at $500 million once completed, would include an 18-hole golf course, a hotel, retail area and more than 500 single-family homes and rental units.

Gardner filed a motion in late May that argued his firm should be dismissed from the case because the U.S. Bankruptcy Court did not have legal authority over him because he is an attorney in Georgia.

The order, written by Judge Frank L. Kurtz, does not explain why he rejected that argument, but he explained during a hearing last week that bankruptcy courts have national legal authority, undermining Gardner's argument.

Gardner did not return a call Wednesday.

The judge's order, however, allows both parties 60 days to explore the issue of whether to dismiss Gardner based on a clause in the escrow agreement that states any legal matters should be settled at courts in Douglas County, Georgia.

After that time period, Gardner can then file another motion concerning venue selection.

* Mai Hoang can be reached at 509-577-7685 or mhoang@yakimaherald.com.