Palo Alto Weekly

News - September 10, 2010

News Digest

Palo Alto contractor awarded $5.75 million

A panel of arbitrators has ordered Woodside homeowner and venture capitalist Jeff Drazan and his wife, Stacy, to pay Palo Alto housing contractor Vance Brown Corp. $5.75 million in a dispute over a construction project on an $18 million home on Bridle Lane in Woodside.

The three arbitrators concluded, after 51 days of hearings, that the couple's excessive number of changes to the home's design and failure to pay costs associated with those changes was a "material breach" of a contract, according to a Sept. 7 statement from contractor Loren Brown.

While the case actually concluded in February, Brown said he was waiting for the dust to settle before making news of the award.

The Drazans' attorney, Dan Alberti of Palo Alto-based McDermott, Will & Emory, said the Drazans "desperately needed to be in front of a jury" but that Vance Brown fought for two years to keep the case out of a courtroom.

An appellate court panel of three judges eventually ordered the case into arbitration, overturning a recommendation for a jury trial on two occasions in San Mateo County Superior Court and once by an earlier and different three-judge appellate panel, Alberti said.

The award included payment of $2.5 million for Vance Brown's attorney fees, about $2.5 million spent by the contractor that the Drazans "refused to pay for," and another $663,300 in attorney fees during the years that the case was in court, said Vance Brown attorney Gregg Dulik of the San Francisco law firm Sedgwick, Detert, Moran and Arnold.

The couple have paid "every penny," Dulik said.

The couple's own outlay for attorneys was about $4.4 million for the arbitration period, and that was on top of what they paid during the court proceedings, Dulik said.

Palo Alto rail committee considers new studies

Engineering help for reviewing high-speed rail reports? $120,000. Determining property values along the Caltrain corridor? $40,000. Studying potential economic impacts of a local high-speed rail station? Another $40,000. Having a lobbyist in Sacramento to push Palo Alto's agenda and keep local officials abreast of rail-related legislation? $30,000 every six months.

Figuring out how state's proposed $45 billion high-speed rail system will affect Palo Alto? Priceless.

That, at least, is the view of the Palo Alto's disillusioned and data-hungry High-Speed Rail Committee, which last week declared a "no confidence" position on the voter-approved high-speed rail.

This week, the committee considered funding the new studies to evaluate possible impacts of the rail line, which under the present plans would stretch from San Francisco to Los Angeles and pass through Palo Alto along the Caltrain tracks.

Mayor Pat Burt said the property-valuation study is particularly important because the California High-Speed Rail Authority hasn't provided any information on the topic. Other members agreed, though Councilman Larry Klein balked at spending money on evaluating a local high-speed rail station, a project that would require the city to provide 3,000 parking spots for rail riders.

"The facts are in and the station is a bad idea," Klein said at the Sept. 7 meeting.

Burt said he shared Klein's skepticism about the new station but argued that the new study would bolster the credibility of the committee's position.

"An individual study that would be done by an expert has more force than merely our opinions," Burt said.

The committee voted unanimously to renew the lobbyist contract with the firm Capitol Advocates and asked staff to return later this month with the scope for the new studies.

The full City Council, meanwhile, is scheduled to discuss the rail project Monday (Sept. 13).

HP sues Hurd, 'John Does' to block Oracle hiring

HP's fired President Mark Hurd knows too much about the inner workings of HP to be allowed to go to work for competitor Oracle Corporation, HP claims in a civil lawsuit filed Tuesday to block Hurd's taking a new job.

The action seeks injunctive relief and a jury trial and lists up to 25 "John Does" as codefendants.

"HP is informed and believes and thereon alleges that Hurd has put HP's most valuable trade secrets and confidential information in peril," the lawsuit states.

Hurd served as chairman of the board, CEO and president of HP prior to his firing in early August following disclosure of a sexual-harassment complaint by a female marketing consultant.

The brief states that Hurd agreed: "If I accept a position with a Competitor at any time within twelve months following termination of my employment with HP, I will promptly give written notice" to the senior human-resources manager with a copy to HP's general counsel.

"Hurd's failure to provide such notice before it was publicly announced by Oracle, gives rise to a reasonable inference that he is violating his trade secret protection agreements with HP," the lawsuit states.

—Jay Thorwaldson

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