By Alex George
Trinitas golf course will remain open until at least Jan. 27, after a U.S. Bankruptcy Court judge turned down a bank's request to immediately seize the property and put it up for auction.
Community Bank of San Joaquin requested Judge Ronald Sargis lift a stay that prohibits foreclosure on the property. In bankruptcy law, an automatic stay is an automatic injunction that prevents creditors from collecting debts from a debtor who has declared bankruptcy. Trinitas owners Michael and Michelle Nemee filed for bankruptcy in 2009, after the Calaveras County Board of Supervisors voted against granting their golf course legal status.
The golf course was built on 280 acres of agricultural land without proper permits. Despite the Nemees' claim that golf should qualify as agritourism, Judge Sargis ruled in November that golf is not a legal form of agritourism in Calaveras County.
Sargis said Wednesday he would approve a judgment that would require the Nemees to discontinue golf operations by Jan. 27.
Dennis Hauser, an attorney representing Community Bank of San Joaquin, said that once golf at Trinitas is halted, the Nemees will have no documented source of income to pay back bank loans. Hauser urged Sargis to lift the stay as quickly as possible, so the bank may move forward with a foreclosure auction that would help regain some losses.
"It is a misstatement to say the bank is protected. That's untrue," Hauser said. "This is a very small one-branch bank, and this is its largest loan."
According to Hauser, the bank has loaned more than $2.4 million to the Nemees. Hauser said the bank is financially crippled by not being able to collect more than partial payments on money owed. In his statement to the court, Hauser noted the bank has taken the position that the Nemees will be unable to pay back the entire loan.
While Sargis said he was sympathetic to the bank's request, the bank played a role in helping finance an illegal golf course.
"It became clear that everyone in the world knew what was being built there was not in compliance with zoning," Sargis said.
According to the Nemees' attorney, Ken Foley of San Andreas, his clients plan on filing an appeal to Sargis' ruling on the grounds that golf constitutes agritourism. If the appeal is heard by the U.S. 9th Circuit Court of Appeals, it could permit the Nemees to continue operating Trinitas beyond Jan. 27.
In the proceedings Wednesday, Sargis said an unfavorable ruling is not grounds for an appeal.
"Show me where I did something wrong," Sargis said. "If you are intending to argue the same things, you are better off going over my head."
The Nemees deadline for appeal is 14 days after the judge has issued his final opinion. While Sargis has ruled in favor of the county, he has not yet published his final opinion.
The bankruptcy hearings and agritourism suit are not the only legal issues swirling around Trinitas. On Wednesday, the bankruptcy court held a status conference on a $12 million lawsuit the Nemees filed in which they claim the county violated their constitutional rights by prohibiting the golf course's construction.
Sargis scheduled the next status conference on the civil rights suit for Feb. 22 in Modesto, after Foley, who initially filed the suit, did not appear in court Wednesday.
Contact Alex George at email@example.com