New lawsuit filed in continued Bay Club battle

Mathis Winkler

NEWPORT BEACH -- A prominent Orange County businessman has filed a

lawsuit against the owner of the Balboa Bay Club, alleging that she made

libelous statements that tarnished his reputation.

William J. Popejoy, who worked as Orange County’s chief executive

after the 1994 bankruptcy, filed the complaint at Orange County Superior

Court in Santa Ana on Tuesday. He is seeking an unspecified amount for

compensatory, special and punitive damages.

It is Popejoy’s third legal action in a dispute with Beverly Ray, the

club’s chairman, and other club officials over an investment deal.

On Friday, Ray said she didn’t know about the latest suit, adding that

she could not comment on the ongoing dispute.

The lawsuits “are just going through the process -- just like all

lawsuits do,” she said.

Ray’s lawyers could not be reached for comment Friday. Popejoy and his

lawyer declined to comment.

Popejoy’s first lawsuit, filed May 31, 2000, alleges that Ray backed

out of an agreement to let him buy the $73.5-million property for her own

financial gain. He seeks $50 million in damages.

A counter suit, filed by Ray and David C. Wooten, a managing executive

for the club, seeks a ruling that Ray performed her contractual

obligations and owes Popejoy nothing.

Club executives and Popejoy first talked about a sale of the club in

October 1999. Five months later, the business relationship disintegrated

and Popejoy demanded a $4-million payment for his services to find

financial backers for the club’s renovation.

Popejoy’s latest suit focuses on two letters about the original

litigation Ray sent to members at the Balboa Bay Club and Newport Beach

Country Club, which are both owned by International Bay Clubs, Ray’s

umbrella organization.

Among others, one paragraph in the letters -- in which Ray comments on

the events leading up to the lawsuits -- is described as defamatory,

because it allegedly includes false statements that “imply that Popejoy

did not have the ability to raise the money necessary” to close the deal.

In the letters, Ray also commented on her business dealings with

Popejoy, saying that the relationship had started out amicably.

“It is tragic that from that innocent beginning have come these

dueling lawsuits, which will waste money and energy and call into

question the good names both Mr. Popejoy and I have built in this

community,” Ray wrote.

Another suit alleging slander against Wooten was filed by Popejoy on

June 9. That action came after Wooten was quoted in a Daily Pilot article

about the initial lawsuits, saying Popejoy was trying to extort the

company.

Popejoy claims that remark also damaged his reputation in the

Newport-Mesa area, the Pilot’s circulation area, where he lives and

conducts business.

A Superior Court judge ruled in March that Popejoy may proceed with

the slander suit, saying that it was unclear whether Wooten was referring

to the original counter suit, which included a reference to extortion.

Wooten’s lawyer had tried to get the slander suit thrown out, arguing

that Wooten’s comments did refer to his client’s suit, which forms part

of the public record.

A section of the state’s civil code protects statements made by

parties to a lawsuit as they directly relate to the case.

In early May, Superior Court Judge Thomas N. Thrasher Sr. then ruled

that several sections from Wooten and Ray’s suit would be struck from the

record.

The sections included references to Popejoy’s “strong-arm tactics” in

trying to receive the $4 million from club officials, as well as Ray and

Wooten’s refusal “to be extorted.”

No trial dates have been set for any of the lawsuits.

TIMELINE

* Oct. 1999 -- Ray, looking for investors in her company, seeks

Popejoy’s help as a consultant. He in turn suggests himself as an

investor.

* Early 2000 -- The business relationship between Ray and Popejoy

falls apart, and Popejoy demands a $4-million payment for his services.

* May 31, 2000 -- Club officials and Popejoy almost simultaneously

file lawsuits, with Popejoy seeking $50 million and club officials asking

for a ruling that they have no further financial obligations to Popejoy.

* June 9, 2000 -- Popejoy files another lawsuit, alleging that

Wooten’s comments about Popejoy trying to extort the company were

slanderous and not protected by state civil code.

* March 2, 2001 -- Orange County Superior Court Judge Ronald C. Kline

rules that Popejoy may proceed with the slander lawsuit after Wooten’s

lawyers had tried to get it dismissed.

* May 3, 2001 -- Orange County Superior Court Judge Thomas N. Thrasher

rules that sections in the club’s lawsuit referring to Popejoy’s alleged

“strong-arm tactics” and “extortion,” among others, are struck from the

record.

* May 29, 2001 -- Popejoy files a lawsuit against Ray, alleging that

letters she sent to club members were defamatory and tarnished his

reputation as a businessman.