Embattled SLO developer drunkenly trashed house, lawsuit says

Ryan Joseph Petetit, 28, in his booking photo following an alleged November 2015 domestic violence incident in Arroyo Grande.
Ryan Joseph Petetit, 28, in his booking photo following an alleged November 2015 domestic violence incident in Arroyo Grande. Courtesy of the San Luis Obispo County Sheriff’s Office

A San Luis Obispo developer facing four felonies over allegations that he beat his then-girlfriend in November was sued last week by an Arroyo Grande couple who claim he not only drunkenly trashed a house he agreed to remodel, but also hired unlicensed contractors to conduct “shoddy” repairs while failing to finish the project as promised.

Ryan Petetit, 28, was scheduled to be in San Luis Obispo Superior Court on Wednesday for a pretrial hearing in his criminal case that was continued to July 27. He faces felony charges of inflicting corporal injury on a spouse or cohabitant, assault resulting in great bodily injury, false imprisonment with force and dissuading a witness for a Nov. 22 incident, in which he allegedly slammed the woman’s head through a window.

He has pleaded not guilty in that case.

In a lawsuit filed last week, Jonathan and Crystal Westbay allege that the assault occurred at a house Petetit was living in and supposed to be remodeling through the private investment firm he co-owns, PB Companies.

San Luis Obispo-based attorney and PB Companies co-owner John Belsher announced in December that Petetit stepped down as CEO of the company but would remain a managing partner.

Lawsuits represent only one side of the story, and Petetit had yet to file a response to allegations in the Westbay lawsuit as of Wednesday.

On June 15, the Westbays, who own a home at 383 Alder St., filed a complaint against Petetit for breach of contract and property damage.

The Westbays, who bought the home in 2012, were approached by Petetit a year earlier with a proposal for the Westbays to buy the property and for Petetit to remodel it.

Under the agreement, according to the lawsuit, Petetit was to refund the Westbays $15,000 of the $20,000 in closing costs with the remaining $5,000 to be credited toward the Westbays’ investment in the property. Petetit was to pay off all existing encumbrances on the property, pay all taxes and insurance, and cover all costs associated with the remodel, the lawsuit reads. The Westbays would receive a 10 percent return on any pretax profits from the remodeled house.

But Petetit allegedly did not make his first payment until months later. Before he did, the Westbays allege, he convinced them to execute a quitclaim deed — an agreement that transfers ownership and interest between two parties quickly — that would transfer ownership of the home to Petetit. Petetit said he needed the quitclaim to show to his investor but that the transfer would not be legally recorded, according to the lawsuit. The Westbays complied, the suit reads.

The Westbays then spoke to the attorney for Petetit’s investor, Arroyo Grande-based real estate broker Rick Haynes.

The attorney allegedly warned them that what Petetit proposed was an illegal straw transaction and that Haynes was backing out of the project. However, Petetit and the Westbays agreed that Petetit would live at the residence as the project moved forward in exchange for $1,800 per month in rent.

Throughout his stay at the house, Petetit punched and kicked several holes in the walls and damaged other areas during “numerous drunken tirades,” the lawsuit reads. The Westbays claim to be in possession of text messages in which Petetit bragged about the holes he created.

He also allegedly performed unauthorized subpar repair work using contractors who admitted to being unlicensed, resulting in even further damage to the property. The Westbays alleged the entire home now needs to be gutted — at a cost of at least $100,000.

The lawsuit contends that Petetit and his unnamed partners additionally wrote more than $27,000 in bad checks to cover their portion of the mortgage payments, and Westbay paid nearly $17,000 through May 2016 to cover Petetit’s late payments. Petetit allegedly told the couple the project would begin by summer 2013, but instead purchased several million dollars’ worth of other properties across the county.

“The Alder project, on the other hand, started five years ago and defendants have shown no sign the property will be developed any time soon,” the lawsuit reads.

In December, the Westbays drove by the home to serve Petetit a 3-day pay-or-quit order and found Petetit had left the home and reportedly hired an unlicensed contractor to patch up the damage he allegedly caused.

In March, Westbay was asked by an unnamed person to file an insurance claim for roughly $25,000 in water damage caused by a previous Petetit contractor’s plumbing work.

“PB Companies has since tried maliciously to use the leverage of a lawsuit against plaintiff to file a fraudulent insurance claim and as grounds to not close on the property as per (the) agreement,” the lawsuit states.

The Westbays are seeking an unspecified amount of damages.

On Wednesday, Petetit did not have a listed attorney in the civil case, and Roy Ogden, who has represented him in other civil filings, could not immediately be reached for comment. The Westbays’ attorney, Michael McMahon, did not respond to a request for comment.

According to a police report of the Nov. 22 incident, following an argument at the Alder house, Petetit grabbed his girlfriend by the throat, punched holes in the wall next to her face and slammed her head through a bathroom window. She was treated at a local hospital, and Petetit was arrested days later.

The Westbay lawsuit is one of several adjudicated and ongoing civil cases filed against Petetit dating back to 2014.

PB Companies has had several projects in the works in San Luis Obispo, including a mixed-use development at the former Foster’s Freeze building at Marsh and Nipomo streets; the San Luis Obispo Public Market at the historical Long-Bonetti Ranch at South Higuera Street and Tank Farm Road; and four two-story homes on Grand Avenue. Other developments include two residential projects in Templeton.

A case management conference has been scheduled for Oct. 20 in Petetit’s latest civil case.