When I started to write this column I thought I’d be able to report a settlement of a lawsuit at Paradise Cove Mobile Home Park. Unfortunately, the case was in court on Tuesday and the settlement stalled. Perhaps by the time the paper hits the stands on Wednesday or Thursday, last minute kinks will have been ironed out and it will all be over–or the case will be in trial.
After many years of fighting and litigation, the anger and economic uncertainty the litigation inflamed may finally be subsiding.
About 60-plus tenants, coach owners (roughly one quarter of the park) and the park owners (the Kissel Company) last week arrived at a tentative out-of-court settlement of the suit, which is set for trial this year.
The coach owners, the plaintiffs, had sued the Kissel Company, charging a failure to maintain the park because of alleged septic overflows, untrimmed trees whose branches were falling on coaches, dilapidated roads and serious electrical problems. The Kissel Company countered that as a result of the rent control ordinance and the unwillingness of the city to allow rent increases or a fair return on their investment, the park could not be properly maintained.
But recently, after several years of litigation, discovery, attempted mediation and settlement conferences, as well as the departure from the park in recent years of some of the older, more confrontational tenants, a momentum has built for settlement and final closure. Apparently, most everyone has grown weary of the battle.
The park and its insurance carriers have reached a tentative settlement with the coach owners for almost $2 million, which the coach owners overwhelmingly approved at a meeting last week. Observers said, after the deduction of attorneys’ fees and costs, it will leave about $1 million or so to be split among the coach owners for an average of about $15,000 per plaintiff. However, all coach owners would not receive the same amount. A formula has been created based on the amount of harm to individual coaches, which will determine how much the individual plaintiff will get.
Barring any last minute hitches, and it was rumored that an insurance carrier might want to pull out of the settlement, the matter, if approved, may finally put to rest many years of litigation in the park in many jurisdictions.
Earlier this year in April, in another Paradise Cove lawsuit, a settlement was reached in which the Kissels received their long, sought-after rent increases and they, in turn, as we previously reported, “agreed to use some portion of the increased rents to upgrade the common area amenities and facilities of the park. These will include a replacement and upgrade of the wastewater collection” that allegedly resulted in sewage overflowing into the park.
The rent increases were substantial. Estimates at 50 percent or more for most, with the spaces now renting from a low of $321 per month to a high of $1,331 plus a 15 percent rent raise whenever a space changes hands.
The Kissel Company owns the mobile park land and any improvements on it. The coach owners pay a rental to put their coaches on the land. The coach owners own the mobile homes, many of them with ocean views. Recent coach prices are reportedly in the high $400,000 plus range.
According to Joe Buchwald, a longtime park resident and board member, “The overwhelming acceptance of the earlier settlement led the way to this most recent proposed settlement … The bad news is that the rents are now higher, going up an average of in excess of 50 percent. However, the good news is the adversarial relationship is now gone and the park is friendlier and the relationships with the Kissel Company and the Dahlbergs have improved dramatically.”
The Paradise Cove legal and political battles in the past have been deeply enmeshed in the politics of Malibu. Shortly after Malibu became a city in 1991, the then City Council passed a rent control ordinance, which rolled back the rents to a 1984 base line, which quickly resulted in a lawsuit in federal court. After several years of litigation, a judge ruled against the city, in part, and the city ended up paying $2,500,000 plus in damages, attorneys’ fees and costs. The residents of the park were strong supporters of the Walt Keller/Carolyn Van Horn political machine, often voting 3 to 1 or 4 to 1 for them, and giving them large pluralities in their precinct that was often an important element of their margins of victory. The City Council and the rent control commission often strongly supported the interests of the coach owners over the mobile home parks. Resulting years of litigation created a high degree of tension in the parks and had substantial impact on resale, according to some observers.
This settlement, if successful, would signal the end of a long fight and a change from a city that supported confrontation and divisiveness, frequently to benefit some members of the council and their friends, to one that encourages rational settlement of disputes.