A former vineyard manager and vintner may be tried for allegedly stealing $50,000 worth of premium grapes from a Mount Howell client in October 2013, according to court records.
Jeffry Hill, 36, on Tuesday pleaded not guilty in Napa County Superior Court to two counts of grand theft for allegedly stealing eight bins of grapes for high-end wines from David Paul Del Dotto, according to court records.
Napa County Superior Court Judge Mark Boessenecker set the trial date for April 13. Hill, a Clovis resident, remains out of custody on $25,000 bail, according to court records.
His winery near St. Helena, Hill Wine Co., closed after the business filed for bankruptcy in May, leaving behind a trail of allegations against Hill’s business practices, court records show.
Hill Wine Co. left liabilities totaling $8.6 million, according to court records. Creditors included Umpqua Bank, several grapegrowers and agricultural suppliers.
Liquidation proceedings began in August 2014 in U.S. Bankruptcy Court in Santa Rosa after efforts to sell wine inventory were unsuccessful, according to court records. By then, Hill Wine Co., which leased the property at 1001 Silverado Trail near St. Helena, had no money left. The property, the site of a former slaughterhouse, is now for sale for $12.5 million.
The initial bankruptcy proceedings began after Hill surrendered his day-to-day control of the winery, according to court records. Hill also could no longer sell wine, having agreed to surrender his permits to federal officials after a host of allegations were brought up, including mislabeling wine made from grapes from Lake County and Sonoma County, passing them as being made from Napa Valley fruit, according to court records.
On April 23, 2014, a few weeks before Hill Wine Co. filed for bankruptcy, two federal Alcohol and Tobacco Tax and Trade Bureau (TTB) agents had a five-hour meeting at the winery with Hill and the winery's counsel, Vincent Martin Spohn of Napa, according to a letter from Spohn to Hill Wine’s then-new chief executive officer, Gordon Munroe. The letter was filed as part of the bankruptcy proceedings.
The two TTB agents "declared that if the permits were not surrendered, the TTB would immediately commence legal proceedings to revoke or annul the permits,” Spohn wrote in his May 16, 2014 letter to Munroe.
The two TTB officials presented 15 manila folders filled with “evidence” of alleged violations, according to Spohn’s six-page letter.
The agents alleged Hill sold Lake County wine as Napa Valley cabernet sauvignon and Sonoma Coast wine as Napa Valley chardonnay; he also allegedly sold grapes from Lodi as Napa Valley fruit, altered grapes’ harvest weigh tags, failed to pay taxes on wine, and other allegations, according to Spohn’s six-page letter. Hill also allegedly failed to disclose a 2008 felony conviction for insurance fraud in Sonoma County Superior Court, according to Spohn’s letter.
"He left a trail of a lot of calamity” Spohn said Friday.
“Throughout the session, as general counsel for (Hill Wine Co.), I refrained from either defending Jeff Hill, or from asking him about the allegations. He initially blamed other people for the first few allegations, but then after being reprimanded by (TTB agent Erin Hogarty) for doing so, he largely remained silent,” wrote Spohn, who no longer represents Hill Wine Co.
Craig Welch of Petaluma, who represents Hill, called the allegations against his client ridiculous.
“We deny the allegations as they apply to Mr. Hill,” Welch said Friday.
Hill had been sued repeatedly for allegedly not paying his bills, breach of contract and other allegations, according to court records in Napa County Superior Court.
Lois Brady, who was appointed trustee during the Hill Wine Co. bankruptcy proceedings, in the fall filed suit in bankruptcy court in Santa Rosa against Jeffry and Rebecca Hill, as well as Terry Otton and his wife, Nancy, an aunt of Rebecca Hill’s, court records show.
Brady alleged the Ottons and the Hills cost the winery millions of dollars even after it became apparent the fine wine business would not be profitable long-term, according to the complaint, which remains in litigation.
The sales of the wine did not generate enough income to pay its debts, according to the complaint. The complaint alleges the Ottons’ involvement in the company contributed to the destruction of Hill Wine Co., according to court records.
Brady alleges the defendants beginning in June 2012 agreed to spend $33,000 in monthly rent, pay a non-refundable $200,000 security deposit and make $1 million worth of improvements to the winery, according to court records.
“At the time, this lease was executed, Defendants knew or should have known that its terms were significantly above-market and that the Debtor had no reasonable possibility to comply with its terms,” according to Brady’s attorney, John MacConaghy, of MacConaghy & Barnier PLC in Sonoma.
Jeff Hill, among other allegations, sold mislabeled wines, according to the complaint. The company was prohibited from operating a wine tasting room, though it allegedly did so, according to the complaint.
The Ottons deny the allegations in court records. The Ottons, who have filed a cross-complaint against the Hills, also denied knowing about the alleged improprieties of Jeffry Hill and Rebecca Hill, according to their response to the allegations in court records.
The Hills in December filed a cross-complaint against the Ottons and Hill Wine Co.’s director of wine making, Phillippe Langner, and the winemaker, Greg Fitzgerald.
Langner declined to comment on Friday. “I’m not willing to go public on this. Not my cup of tea,” he said.
Last summer, Terry Otton of Napa sued Jeff and Rebecca Hill in Napa County Superior Court in connection with $1.75 million in loans they made to the winery, according to court records.
Otton said in court records he lent Hill $1.25 million in October 2012 after Hill Wine Co. began to experience financial difficulties, according to the complaint filed in June. In April 2013, Otton made two other loans, one for $300,000 and another $200,000.
Questions were raised whether the suit could proceed in light of the bankruptcy, according to court records. That lawsuit was dismissed in January.