Fresno County loses $2.5 million judgment in contract breach case

A Fresno County Superior Court jury awarded CMG Construction Management Group Inc. $2.5 million after a two-week trial over a failed property deal. The county backed out of a 2019 contract to sell the University Medical Center campus to CMG for $4 million.

Judge Kristi Culver Kapetan presided. The judgment was entered following the trial. County spokesperson Sonja Dosti said the county disagrees with the ruling and intends to file a motion to challenge the verdict. The Board of Supervisors will discuss options in closed session on August 25.

The county did not immediately provide figures for attorneys fees spent defending the case.

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CMG’s attorney, Butch Wagner, said the county withdrew from the deal in 2021 after former Supervisor Sal Quintero’s staffer Steve Rapada was accused of a conflict of interest. Rapada was later sentenced for a conflict of interest violation. Wagner said the judge excluded the Rapada matter from evidence, calling it “nonsense.”

“That Rapada thing was an excuse, a baseless excuse for the county and the city to back out of the deal, and it cost them a lot of money,” Wagner said.

Wagner said the county relisted the property weeks later at $6 million — $2 million above the CMG contract price. “They found that they undervalued the property, and then wanted more money, so that’s why they breached the contract,” Wagner said. “It was devious.”

The Board of Supervisors approved a January 2025 sale to developer Sevak Khatchadourian for $5.3 million — a $700,000 credit off the $6 million asking price due to flood and electrical damage from copper thieves in December 2023.

CMG had planned a mixed-use development with affordable housing, a pharmacy, a grocery store, and other retail on the 33-acre site at Kings Canyon Road and Cedar Avenue.

The Breakdown

• A jury awarded CMG $2.5 million after a two-week trial over a failed 2019 contract to sell the University Medical Center campus for $4 million.
• The county withdrew from the deal in 2021 after a staffer was accused of a conflict of interest. The judge excluded that matter from evidence.
• The county relisted the property weeks later at $6 million, then sold it in January 2025 to a different developer for $5.3 million.
• The county plans to challenge the verdict in a motion and will discuss options in closed session on August 25.

What This Means for You

This judgment means $2.5 million will go to a developer the county contracted with and then backed out of. Attorneys fees for defending the case are additional but have not been disclosed. The Board of Supervisors will discuss whether to continue fighting the judgment or pay it in closed session on August 25.

What to Watch

The $2.5 million awarded is confirmed. What remains unconfirmed is how much the county spent on attorneys fees to defend the case — Dosti said the county “could not immediately say.” That figure, when disclosed, will show the full cost of this decision.

The county’s justification for backing out — a staffer’s conflict of interest — was excluded from the trial as evidence. The jury heard the case without it.

The property sold to a different developer in January 2025 for $5.3 million — $1.3 million more than the CMG contract, but $700,000 less than the $6 million asking price due to theft-related damage. Whether the county netted more from the second sale after subtracting the judgment, legal fees, and property-damage losses is a calculation the public has not yet seen.