Court rules in favor of Denevi in suit against partner Swenson

By Gloria I. Wang

Developer Pete Denevi was recently awarded a judgment of $10 million by a Santa Clara County Superior Court judge on a land deal that soured more than three years ago. Judge Frank Cliff ruled that San Jose developer Barry Swenson had failed to make payments making it impossible for Denevi to follow through on plans to build a golf course.

The property in question is 210 acres near Lexington Reservoir of what is now Midpeninsula Regional Open Space District land. In 1998, Denevi and developer Barry Swenson had an option to purchase the land from Arlie Land and Cattle Company to create the Los Gatos Golf Course and Country Club. Denevi, a former Los Gatos High School football coach, says he had worked on building the club for more than 10 years and invested about $2 million. Of the more than 20 recreational programs that he had worked on, "this was going to be my crowning glory," Denevi said.

As controlling partner of the Los Gatos Country Club's limited liability corporation, Swenson had told Denevi he would pay Arlie $750,000 on Sept. 30, 1998. Swenson, however, failed to pay up and Arlie sold the land to the open space district.

Denevi then filed a series of lawsuits--against Arlie, against the open space district and against Swenson. The Nov. 27 decision, according to Denevi, was a derivative suit, one in which he participated as a stockholder of the corporation. A second case, filed as a personal lawsuit, will be heard early next year. "It'll be nice if we settle it, but who knows?" Denevi said.

"I'm pretty saddened at what happened," Denevi said, "because that's not what I had intended." Swenson and Denevi had been friends and had worked together on a development prior to the golf course.

Denevi says the golf course would have benefited the community tremendously. He had hoped to allow Los Gatos High School golf players to practice on his course, as well as hand the ownership of the course over to San Jose State University after his and Swenson's deaths. The course was to be a "great fundraiser and great recruiting mechanism," Denevi said.

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