San Francisco, Calif. (October 1, 2008) – As part of a binding arbitration, a judge has sided with former Joseph Phelps Vineyards CEO Thomas Shelton and renowned Napa Valley winemaker Craig Williams in their request to be fairly compensated for their 40 percent stake in the famed Napa Valley winery.

Today attorneys filed a motion in San Francisco Superior Court to enforce the judgment against the Phelps family, which has refused to accept or make payments on the binding judgment against them.

In a binding judgment issued Sept. 9, retired Judge William Bettinelli ruled that Mr. Shelton is entitled to a total of $12,264,000 in damages and Mr. Williams is owed $11,856,000, according to the ruling. 

Judge Bettinelli also found that Joseph Phelps Vineyards violated California labor law in the treatment of Mr. Williams and Mr. Shelton.

Both men were longtime employees of the winery and were essential to its success as one of the top quality producers of wine in Napa Valley until their resignations in May 2008. During a 32-year career with Joseph Phelps Vineyards, Mr. Williams helped develop wines that won top honors at tastings around the world. Mr. Shelton helped turn the financially ailing winery around in the 1990s, developing new markets and a long term strategy for the Phelps brand.

Both men received an equity stake in the winery in 1999. But the Phelps family had sought to devalue their shares and tried to block their sale to a third party. The dispute went to arbitration in 2007. Ultimately, the Phelps family filed fraud and breach of contract claims against Mr. Shelton and Mr. William, all of which were rejected by Judge Bettinelli.

“The truth is that Tom Shelton and Craig Williams dedicated their lives to Joseph Phelps Vineyards,” said Forrest Hainline, their attorney who won the judgment for them. “They deserve much of the credit for building the winery into the multi-million dollar enterprise it is today. This is a great victory for Shelton and Williams, but it is also a disappointing story of greed and vindictiveness by the Phelps family, which chose to pursue its baseless legal claims against Mr. Shelton as he was dying from a brain tumor.”

Mr. Shelton died July 26, 2008, leaving behind a wife and five children. He did not live to see the victory that he won against Joe Phelps and his son Bill Phelps.

During his 16-year career with Joseph Phelps Vineyards, Mr. Shelton served as the public representative of the winery. He was also a member of the board of directors of the Napa Valley Vintners, a trade association that helped promote the region’s wineries and their access to direct markets.  He was an internationally renowned advocate for Phelps Vineyards as well as the Napa Valley wine industry. 

Along with interest, Mr. Shelton and Mr. Williams also are owed attorney fees, according to Judge Bettinelli’s ruling. Despite the arbitration’s binding effect, the Phelps family has contested the binding ruling against it.

“Everyone in Napa knows what Tom Shelton and Craig Williams did for the Phelps brand and the Phelps family,” said Hainline. “It is time for the Phelps family to do the right thing, honor their agreements and acknowledge how these two men made monumental contributions to enhance the status and reputation of Joseph Phelps Vineyards and their work was what made the winery successful.”