Angela Moritz and Ken Shoner missed buying JJJ Feed & Pet Supply by $100,000. They were in the process of buying JJJ Feed from Gene and Betty DeBoer when their escrow fell through. While getting an appraisal of the property, the potential buyers found out the property represented by Bob Angilella, then of Prudential Properties, was appraised at $100,000 less than what it was on the market for.
When Moritz and Shoner's real estate agent, Ina Niday, who then worked for Realty Executives, tried to negotiate, the DeBoers would not budge on the price. The escrow was cancelled and another buyer's offer was accepted the same day, according to Angilella. The new buyer was Dennis McCormack, who Angilella's team also represented. McCormack paid cash and did not get a property appraisal.
McCormack said Angilella did tell him about the discrepancy with the appraisal. The price of the property was decreased and the cost of the business increased, which kept the asking price the same. McCormack said he felt the increased price of the business was still worth it based on income reports disclosed, which specified income from hay sales.
Now, McCormack is facing hard times. An anonymous caller made a complaint to code enforcement in August, one month after McCormack purchased JJJ Feed, reporting that McCormack was storing hay, violating fire and county codes. “The business itself would have been worth less if I had known about the problems with storing the hay,” McCormack said.
The biggest blow for McCormack may come from east on the boulevard. Moritz and Shoner are opening their own store in the former location of La Rosa Hardware in Big Bear City, called Four Paws 'n Tail. Big Bear City Fire Chief Dana Van Leuven met with Moritz about Four Paws hay storage limitations. “The codes are applied the same as with Dennis (McCormack),” Van Leuven said, adding the Four Paws owners said they plan to carry a very small amount of hay on site.
“We tried to purchase the JJJ Feed store when it came up for sale last spring and things did not work out,” Moritz wrote in an e-mail to The Grizzly. “We were not concerned about the hay issue because we have plenty of space on our ranch to store hay, and it makes it easier to deliver from here because we live here.”
Moritz said Gene DeBoer told her to watch out for the fire department coming by and citing code violations having to do with hay piles. Gene DeBoer did not return a call by The Grizzly, instead having Angilella call to answer questions. Angilella said he did not know of any code violations that should have been disclosed.
The Grizzly obtained copies of two prior JJJ Feed fire inspection reports from during the time the DeBoers owned JJJ Feed. On June 16, 2005, Betty DeBoer signed a fire inspection report citing special problems with the size of the haystacks on the premises, which were higher than 20 feet and within 20 feet of property lines. On July 19, 2005, the re-inspection was complete with no violations.
When McCormack took possession of the property, the stacks were just as high, according to McCormack. In a letter sent to McCormack on Oct. 27, Angilella stated he wasn't aware of prior violations. Angilella also told The Grizzly the same day that the DeBoers did not notify him of any code violations, but that if the DeBoers did know, they were legally obligated to disclose the information.
William Moran agreed. The manager of enforcement for the Department of Real Estate, a state agency that oversees real estate licensees, said if a property owner had multiple noncompliance fire inspection reports and were still not in compliance at the time of the sale, they were legally required to disclose that information.
The Grizzly also received copies of the commercial property purchase agreement dated June 2, 2006, that includes seller disclosure requirements. Under seller disclosures, section B.8 states seller shall provide to the buyer in writing documentation and information of any notices of violations of any law filed or issued against the property and actually known to seller.
While the documents also include a dispute resolution clause, stating the buyer and seller agree that any dispute or claim in law will be settled through arbitration, Moran said it is up to lawyers and judges to decide that since the breach can lead to civil litigation. “Nothing is cut and dry,” Moran said.
Roman Whittaker, an attorney at Best, Best & Krieger, is not McCormack's attorney of record as of yet. McCormack is in possession of a retainer letter. “We're going to try to negotiate with the former owner to try to resolve it informally,” Whittaker said. “We may be forced to file a complaint against him (Gene DeBoer) for failure to disclose the lack of compliance with county code.” Compensation sought will be for part of the revenue that would have resulted from the sale of hay, Whittaker said.
Meanwhile, Moritz plans to have hay available through Four Paws by the end of November. In the meantime, local horse owners are circulating petitions to appeal to Third District Supervisor Dennis Hansberger's office for help.
Mary Patterson, a field representative for Hansberger, met with county code enforcement Nov. 6. “We have no intent to run him out of business,” Patterson said regarding McCormack, adding her office is doing what it can to help him find solutions. However, the county cannot override fire codes, she said. “At this point, as far as the county goes, we are at a standstill,” Patterson said.
Contact reporter Arrissia Owen Turner at 909-866-3456, ext. 142 or by e-mail at email@example.com .