Free Enterprise, Fort Bragg Style (Jan. 27, 1999)

In 1992, Patsy Burlesci was operating the Mendocino Popcorn Company in Fort Bragg’s Depot mini-mall. Mrs. Burlesci was also a foster parent and daycare operator. Carl Burlesci had worked much of his life as a commercial fisherman but his failing health had forced him to give up the outdoor rigors of fishing for indoor work. He suffered from heart trouble and, perhaps, died of a broken heart in November of 1995 when his family’s modest property, accumulated over a life time of hard labor, seemed lost to a trio of well-connected Fort Bragg slicksters. 

After borrowing heavily to open a popcorn business in the Skunk Depot, the Burlescis decided to supplement their first enterprise with three other food service establishments in their Depot space. But in July of 1993, after they had ordered restaurant equipment for the new enterprises, the Burlescis’ attempts to refinance their home to pay for the expansion at the Depot fell through. To pay for the new equipment, the Burlescis negotiated a private, $125,000 loan from Jim Cummings, the legendary Fort Bragg entrepreneur who was shot and killed two years ago. (A Brinks armored van was required to carry off Cummings’ portable assets from his modest headquarters in Noyo Harbor, including, it is said, several million dollars in cash.) When the Burlescis borrowed the $125,000 from Cummings, a multi-millionaire well known for his ruthlessness, they stepped square into the mouth of the crocodile.

Back at the Depot with their new Cummings-financed restaurant equipment, the Burlescis had been assured by Dominic Affinito, the Skunk Depot’s major domo, that it would be open by June 1st, 1993. The Depot was not ready for business until late July. The Burlescis missed the profits they might have expected from the summer tourist flow, falling behind in their house payments and their two equipment loans. The struggling family was obstructed in other ways from trying to raise funds to pay off the Cummings loan:

Their operating agreement at the Skunk Depot was cut from 8am-9pm to 10am-5pm.

A large catering job for 200 people was arbitrarily canceled because it was scheduled for after hours in the Skunk Depot’s courtyard but wasn’t separated from other shops. Guests “might shoplift.” The Burlescis had already successfully catered an event on the premises and had an agreement with Affinito to be allowed to cater.

By his own admission Cummings never sought credit information on the Burlescis when he made the $125,000 loan to them. If he had he wouldn't have loaned any money with reasonable expectation to be repaid. And, in turn, he wouldn't have obtained the Burlescis’ five acres, with its large house, its barn, a fenced horse pasture, swimming pool and sauna. The house had been listed with Mendocino Realty for more than $300,000 and was appraised by Century 21 Realty and Jack Azevedo for more than $500,000. Half a mil was high, but so were Azevedo and Cummings at the prospect of obtaining it. 

The loan Cummings made to the Burlescis was secured by a second deed of trust on their home. Jack Azevedo — crocodile number 2 — brokered the loan for Cummings. (Azevedo nearly became 4th District supervisor a decade ago but was defeated when his anti-Semitism and his penchant for enemies lists were publicly revealed.) 

Mrs. Burlesci never dealt with Cummings directly but was convinced Cummings “had an intense dislike of me, and I’m not really sure why.” She knew  his reputation for sharp dealings might have gotten her in over her head. Mrs. Burlesci suspected that Cummings had made an earlier loan to her family when they were under threat of foreclosure on their first deed of trust because he saw an opportunity to pick up a nice piece of property at a bargain price. The Burlescis, smelling the proverbial rat, paid Cummings ahead of schedule on that loan, depriving him of some of the interest payments he would otherwise have received. Mrs. Burlesci then heard that Cummings was unhappy about losing those payments. Jack Azevedo had told Cummings the Burlesci house had been appraised at $575,000. And Cummings, smelling opportunity, knew the Burlescis owed some $110,000 on their first deed of trust.

Cummings soon decided he wanted the family’s restaurant equipment as additional security for his loan to them. According to Azevedo, the Burlescis agreed because “the loan was dead without the additional collateral.” Patsy Burlesci testified that she thought the loan was secured only by the house. Cummings, representing himself in the transaction, had a financing statement prepared that listed the restaurant equipment as collateral. He neglected, however, to include a security agreement. Carl Burlesci signed the financing statement for himself and his wife, whose power of attorney he held.

The Burlescis made their first payment on the note to Cummings in September of 1993. By November their businesses were failing and the Burlescis were planning to move out of the Depot. Dominic Affinito, the master lessee — legalese for landlord — of the Depot brought an offer to his sinking tenants through Azevedo to purchase their restaurant equipment for half what the Burlescis paid for it. The price Affinito offered was the market rate, according to Castino Equipment, which had sold the equipment to the Burlescis. However, Azevedo told Patsy Burlesci that Cummings would have to approve the sale because of his security interest in the equipment. Mrs. Burlesci testified this was when she first understood the equipment was also collateral for the loan Cummings had made to the Burlescis. Azevedo, busily running errands for both Affinito and Cummings, brought Affinito’s offer to buy the restaurant stuff to Cummings, who said 50¢ on the dollar was not enough. No sale took place and the Burlescis closed shop and moved the equipment into rental storage space.

In 1994, the Burlescis, both mom and pop in ill health, fell behind on their payments on the $125,000 they’d borrowed from Cummings. According to Cummings, the last payment was made in May 1994. According to Patsy Burlesci, the payments were current until October 1994. On two occasions she sold pieces of restaurant equipment in order to pay Cummings. Cummings asked Azevedo whether Patsy could sell the equipment without his permission. Azevedo told Cummings he didn't know, saying Cummings knew more about that than Azevedo and most of the lawyers in town. Cummings was aware the Burlescis were struggling and had been trying to refinance their home from May until September of 1994.

On October 11, 1994, Patsy Burlesci was hospitalized with a serious illness. She remained in the hospital until November 22, and had a nurse helping her recuperate at home until just before Christmas. After she went into the hospital, and after Cummings had asked Azevedo whether she could sell equipment without his permission, Cummings told Azevedo he had some storage space available, and would offer it to the Burlescis at no cost “to save them the expense of the rental space” where they were storing the equipment — just about the only collateral they had left. Carl Burlesci agreed to the offer of free storage space, and Cummings hired a truck and some helpers to assist Burlesci in moving deeper into the crocodile’s mouth. The restaurant equipment was now on Cummings’ property. 

The unwitting Mr. Burlesci, pleased at the deal he’d just pulled off, went to visit his wife in the hospital, where she had just undergone surgery. The couple’s daughter, Connie, was present. When Patsy Burlesci learned about the new storage arrangement, she said they would never see their equipment again. Connie  told her father he had been too trusting. Carl Burlesci said he had a key to a lock on the space, and Cummings had his own lock and key on it, so neither of them could get in without the other. Mrs. Burlesci, no fool, and well aware of the kind of people her family was now beholden too, laughed. Connie asked what was to stop Cummings from cutting off Carl’s lock. Carl Burlesci threw the key to the storage room across the room, doubled up his fist, and collapsed. He’d suffered a stroke and was never well again.  

Cummings later claimed that he never intended to hold the equipment as collateral; he’d only stored it as a favor to Carl Burlesci. But after he gained possession of the equipment, Cummings refused two offers to the advantage of the Burlescis to purchase it. Affinito visited the storage space and again expressed an interest in buying some of the Burlescis restaurant items.  Cummings told Affinito to make a list of what he wanted, but then refused to give Affinito a price, saying he knew Affinito was looking for a bargain and Cummings was not willing to accept a low price for the things. Azevedo claimed that after Burlesci got out of the hospital he told Cummings that Castino Equipment was willing to pay 50¢ on the dollar for the family’s equipment, but Cummings turned down the offer, saying it wasn’t enough. 

With the Burlescis on the ropes, Cummings and Azevedo moved in for the kill. Cummings seized the restaurant equipment. The Burlescis could not get at it to sell it. Before Cummings helped himself to pieces of restaurant equipment which weren’t his, Mrs. Burlesci had managed to sell some of it which, when added to her husband's social security checks, was enough to make two monthly payments to Cummings to keep their roof over their heads. 

The Burlescis’ were trying. But so were Cummings and Azevedo. 

Cummings initiated foreclosure proceedings against both the restaurant equipment and the Burlesci’s homestead on November 17, 1994. It was then that he learned he had no security agreement with the Burlescis covering the equipment. Cummings did not tell the Burlescis about this discovery. He filed an amended notice of default on November 21, including only the real property. Cummings purchased the $575,000 home at a foreclosure sale for only $131,901.80 on March 28, 1995. Before moving to foreclose, Cummings never demanded payment on his loan from the Burlescis; he claimed that Carl Burlesci, conveniently dead, had asked him to foreclose because the Burlescis could not make their payments to him or anyone else. But Cummings also admitted that Carl Burlesci made a full payment on the loan in November 1994. 

After the foreclosure sale on their home, and now its owner, Cummings also kept the restaurant equipment without speaking to the Burlescis about it. He did not offer to return it until he was forced to when Patsy Burlesci sued him in February 1996.

The Burlescis had been ripped off big time but they fought back. Their case against Cummings was finally heard in Ten Mile Court, Fort Bragg in the spring of 1997. It was a jury trial with Judge Eric Labowitz presiding. Jim Cummings was still among us. He was represented by Bob Peterson of Fort Bragg. The Burlescis were represented by a smart young lawyer from San Rafael named Elizabeth Williams.

Ms. Williams laid out the case to the jury so convincingly they were poised to find for the Burlescis when, inexplicably, Judge Labowtiz tossed it and sent the jury home. Labowitz said the facts presented didn’t support the charges. As a judge in a civil matter the judge has the right, even the obligation, to dismiss a case when there isn’t one. But the Burlescis had a case, and it should have been decided by the jury convened in Fort Bragg to judge it.

The disgusted jurors filed out of the Ten Mile Court past an elated Cummings who shook the hands of the jurors who couldn’t elude him as if he’d just been acquitted of murder. 

Some of the worst people in Fort Bragg — insurance arsonists, mortgage and real estate swindlers, crumb bum lawyers, and miscellaneous thieves of the Chamber of Commerce type, crowded around Cummings to congratulate him on his great victory.

A juror who’d sat through Burlesci versus Cummings summed up her experience in Ten Mile Court. “After serving four days listening to repetitive and tiring testimony on whether Jim Cummings defrauded the Burlescis of their home or not, we were told by Judge Labowitz that he was dismissing the case for lack of evidence and that the jury probably ‘would have too’! The Burlescis had been robbed. I don't want to go into court ever again. I’m still disgusted.”

But the Burlescis fought on. They appealed the cozy Mendocino County verdict and, with Ms. Williams presenting it to appellate judges far removed from the sleazy pressures of Fort Bragg, found Judge Labowitz had pre-empted the jury’s right to decide the case. 

The Burlescis will get their lawyer fees and court costs back — some $300,000 — but the case may be retried again with Jim Cummings reaching up out of his grave for more, ever more.

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