Members of a Healdsburg wine family squared off in a Santa Rosa courtroom Tuesday as their trial opened to decide who should control a family trust estimated to be worth tens of millions of dollars.
Susan Valera is suing her brother, Louis M. Foppiano, alleging he's neglected his financial responsibility to heirs of the 115-year-old Foppiano Vineyards by taking loans from the trust and using them for business expenses including executive bonuses.
The brother counters that he was trying to revive the struggling brand with a business strategy approved by Valera and others requiring investment in a professional management team and capital upgrades.
Foppiano testified the company he now chairs was suffering after decades of control by his frugal father, Louis J. Foppiano, 101, and he was following through with an agreed upon plan to make it competitive.
"My father is 100 percent Genovese, which means he's very tight-fisted," the brother testified. "If I asked him for $20 to get a haircut, he'd say he didn't have it. That's the way he approaches things."
But Valera's lawyer, Jeff Terry, suggested Foppiano was operating behind his sister's back and may have taken advantage of his elderly father in moving hundreds of thousands of dollars from the trust and leaving the winery $4.1 million in debt.
Among Valera's allegations are that Foppiano forged her father's signature on loan approval papers. Terry suggested the brother circumvented her father's personal lawyer and when he was in his 90s forced caretakers to leave his side when documents were signed.
Terry said the pattern began long before the brother took over the business in 2005. He needled Foppiano about a $300,000 loan he sought in 2009, which he told people he needed to make payroll and keep the business open.
The day after his father approved it, Foppiano left for a 30-day trip to Italy.
"Did anyone suggest to you it wasn't a good time to take a month-long vacation if you couldn't make payroll? Terry asked Foppiano.
"No one suggested that," Foppiano replied calmly.
Valera is asking Judge Mark Tansil to remove Foppiano as co-trustee, leaving her in charge of the funds.
However, lawyers for Foppiano said Tuesday that would be a mistake and asked the judge to consider a third party.
The trust has a 49 percent interest in the Foppiano Corporation, which includes the winery and about 150 acres of grapes in the Russian River appellation.
Foppiano's attorney, Mike Senneff, suggested Valera is motivated by self-interest. He said she began complaining when the man Foppiano hired to run the winery was given a bigger year-end bonus that she was. For years, Valera was in charge of the tasting room.
Valera's position was eliminated by Todd Arterburn, the chief operating officer, in 2010, adding to tensions.
Also, Senneff accused Valera's husband, Tony, of meddling in family decisions. He said the husband has "scuttled the family's ability to move ahead with their business plans."
"Energies are being expended here that should be used to build a better product," Senneff said.
The trial comes as production at the winery has dropped from a high of 100,000 cases a year to less than 20,000, according to legal papers. Gross sales in 2011 are estimated at less than $2 million.