SLO attorney and developer sued by business partners over alleged ‘double escrow’ scheme
Update, 1:30 p.m. Sunday: John Belsher sent an emailed statement on Saturday in which he called Judkins’ lawsuit against him a “desperate preemptive strike” to a legal challenge Belsher said he plans to file this week against Judkins related to the SLO Public Market at Bonetti Ranch project off Higuera Street in San Luis Obispo, of which both Judkins and Belsher are partners.
That project, which is managed by Judkins, is more than a year behind schedule, and “more than several million over budget,” Belsher wrote.
Belsher wrote that the Marsh-Higuera lawsuit is a “copycat” of Judkins’ 2018 lawsuit against Belsher, which Belsher wrote was settled with a waiver of claims for past actions.
According to Belsher, that same 2018 settlement included terms that the Judkins owed Belsher and his partners “millions of dollars,” a portion of which remains unpaid. Belsher wrote that more lawsuits are on their way to collect that debt.
The email also included a statement from Belsher’s attorney, Roy Ogden, who wrote that “the present suit is a business tactic straight out of the playbook used by this Bakersfield family in all its Central Coast business dealings,” Ogden wrote.
“They have filed a lawsuit on just about every project they have in town,” the statement reads.
Original story: A San Luis Obispo attorney-developer is facing a pair of lawsuits from business partners — including one that accuses him of an illegal “double-escrow” scheme related to a downtown property.
The lawsuits filed within a day of each other in late April accuse John Belsher of fraud and misrepresentation related to office space that formerly housed Coast National Bank and settlements from past lawsuits that have allegedly gone unpaid.
The recent litigation also names as a defendant Ryan Wright, a real estate developer convicted of domestic abuse. He was formerly known in San Luis Obispo County as Ryan Petetit before changing his name in April 2019.
The lawsuits are just the latest in a series of mounting legal troubles for Belsher and Wright related to their now-defunct P.B. Companies, which at one point had a hand in several high-profile commercial and residential developments in San Luis Obispo.
Neither Belsher nor Wright have returned requests for comment from The Tribune regarding their various legal issues over several years.
Belsher late Friday generally denied the allegations and said that he would be providing a statement in response to the lawsuit. Neither he nor Wright have yet filed responses in court.
But the facts are unclear; lawsuits only represent one side of the story.
The plaintiffs in both cases — Bakersfield developer Taylor Judkins and his family, and Russell Sheppel, a former dentist who says he had partnered with Belsher in business matters since the 1980s — had both previously filed lawsuits against Belsher for business dealings both related and unrelated to the most recent allegations.
Those cases were both separately dismissed in 2019 after settling out of court, records show.
Furthermore, Shappel had previously sued Judkins as part of one of those lawsuits when the latter was still doing business with Belsher.
The incestuous legal battles also come after Judkins filed a separate lawsuit against another prominent San Luis Obispo developer, Hamish Marshall, over similar allegations related to a recently completed division of town homes near San Luis Obispo’s railroad district.
Marshall’s attorney told The Tribune in response to that case in March that filing lawsuits to “gain business leverage” is “a technique the Judkins have employed in most of their other projects in this county.”
Lawsuit: Developers came up with ‘double escrow’ scheme
In his complaint filed against Belsher and Wright April 24, Taylor Judkins’ attorney writes that the pair bilked the Judkins family out of roughly $700,000 through a double escrow scheme.
The lawsuit accuses Belsher and Wright of fraud, misrepresentation and omission of facts, breach of fiduciary duty, and breach of a promissory note, and seeks more than $280,000 plus legal fees and punitive damages.
The Judkins’ allege that in March 2015, PB Companies solicited the Judkins to invest $1 million and enter into an LLC to purchase a $4 million property containing office space from Coast National Bank at 486 Marsh Street and 545 Higuera Street near the downtown core.
Belsher allegedly represented to the Judkins that PB Companies was “in escrow” to purchase the property when PB Companies was already under contract to purchase the property from the bank for $3.3 million, the lawsuit states.
“This concurrent ‘double escrow’ allowed (Belsher and Wright) to use (Judkins’) funds to purchase the property and, at the same time, allowed (Belsher and Wright) to bank the $700,000 difference between the property’s actual purchase price and the price paid by (Judkins),” the complaint reads.
After forming March Higuera LLC with the Judkins’ in March 2015, Belsher in May 2015 filed information with the state naming PB Companies as the only manager of the entity without Judkins’ knowledge, the complaint alleges.
Between April 2015 and June 2015, the Judkins allegedly contributed $750,000 to Marsh Higuera LLC while Belsher and Wright continued to falsely represent that Marsh Higuera LLC was purchasing the property directly from Coast National Bank.
In October 201 5, PB Companies entered into a lease for the property with a local business, with Wright signing the lease as a managing member even though he was not involved in the Marsh Higuera LLC, the lawsuit states.
Through that deal, PB Companies took in a total of $269,500 in rent and deposits from the business, which they didn’t share with Marsh Higuera LLC, the filing says.
The transactions were the subject of Judkins’ dismissed 2018 lawsuit against Belsher, and the parties agreed “to address the misappropriation ... and to avoid the then outstanding litigation,” the filing says.
Belsher and Wright issued the Judkins a promissory note, in which they promised to pay roughly $282,000 on or before December l2, 201 9, according to the filing
The Judkins allege that neither Belsher nor Wright have made any payments, and the alleged fraud was only discovered on April 17, 2020, when they were reviewing California Secretary of State records.
It appears the result of Sheppel’s 2018 lawsuit against Belsher was also settled with a $175,000 promissory note which also has not been paid, leading to Sheppel’s April 2020 lawsuit against Belsher and Wright.
Judkins is behind such local projects as San Luis Obispo Public Market at Bonetti Ranch and San Luis Square, as well as a mixed-use project at the former home of The Tribune on South Higuera Street.
San Luis Obispo Public Market was expected to open its first business spaces in November or December 2019, according to past company projections, but the project has been delayed.
According to his website, Belsher is past president of the San Luis Obispo Property Owners Association and served on several local boards — including as past president of Sunny Acres, Inc., which operates a sober living facility on the outskirts of San Luis Obispo.
Belsher’s company was behind a complex of manufactured homes known as Downtown Terrace that replaced the old Mission Trailer Park at 550 Higuera St.
Wright was convicted in July 2019 of five domestic violence-related felonies for a drunken attack on a girlfriend in which he slammed her head through a glass window.
Wright ended up serving less than five months in San Luis Obispo County Jail for the conviction, and now lives in Los Angeles County, according to public records.
Following his felony convictions for domestic violence, Wright successfully petitioned San Luis Obispo Superior Court to change his name.
He ended up serving less than five months in San Luis Obispo County Jail for the convictions, and now lives in Los Angeles County, according to public records.
Another personal injury lawsuit filed against Wright by a woman who also claimed to have been a victim of domestic violence was dismissed in December, court records show.
Belsher, Wright, Judkins, and Sheppel are all due in court for the two lawsuits in August 2020.
Editor’s Note: This article was updated late Friday to include a comment by Belsher.
This story was originally published May 15, 2020 at 3:09 PM.
