Leonard Gross, Lois Gross, Intervivos Family Trust v. Inglewood Redevelopment Agency, City of Inglewood
Published: Nov. 2, 2000 | Result Date: Oct. 9, 2000 |Case number: YC034992 Verdict – $0
Judge
Court
L.A. Superior Torrance
Attorneys
Plaintiff
Defendant
June S. Ailin
(Aleshire & Wynder LLP)
Facts
The subject property is located on Century Boulevard in the City of Inglewood, across the street from Hollywood
Park. The plaintiffs purchased the subject property in the early 1980s and developed it with an industrial
building, custom designed for plaintiffsÆ business.
By 1990, the business had outgrown the building, but did not relocate because efforts to sell the building were
unsuccessful. The property was on and off the market several times during the 1990s, but did not sell.
Although the area around the property had previously been planned for industrial uses, the Inglewood
Redevelopment Agency was seeking a developer to redevelop the subject property and the surrounding area,
including apartments in an adjacent residential neighborhood with a high crime rate, for commercial uses. The
agency began negotiating with Home Depot with regard to such a development.
In December 1998, the agency offered to purchase the plaintiffsÆ property, subject to the agencyÆs entering into
a disposition and development agreement with Home Depot. The plaintiff did not accept that offer. Also in
December 1998, a new specific plan for the area was approved and the zoning of the subject property and other
properties was changed from industrial to commercial.
Over time, the rent being paid to the property owners by the business occupying the property had been
decreased because of changes in the real estate market and because the business was struggling financially.
In March 1999, the business located on the property (ownership of which had been transferred to the plaintiffsÆ
children) sold its assets and moved. The buyer of the assets continued to pay rent on the property through
December 1999. Evidence did not establish that either the rent reductions or the businessÆ decision to sell its
assets was related to any of the actions of the agency or the city.
On May 5, 1999, the plaintiffs filed suit, alleging inverse condemnation based on alleged unreasonable delay
in condemning the property or other unreasonable conduct and based on the adoption of the specific plan and
zone change. The plaintiffs sought to hold the city liable for the agencyÆs actions on an alter ego theory.
On May 25, 1999, the agency entered into a disposition and development agreement with Home Depot.
In June 1999, the city council member who was the projectÆs strongest supporter was not re-elected, which was
expected to have affected the agencyÆs ability to follow through on its obligations to Home Depot.
In July 1999, Home Depot informed the agency that it had entered into an agreement with Hollywood Park to
purchase land from Hollywood Park for commercial development, subject to the agency agreeing to terminate
the disposition and development agreement.
In September 1999, the disposition and development agreement was terminated. The plaintiffs contended that
the reason Home Depot wanted out of the disposition and development agreement was that the terms of that
agreement were unreasonable. However, the plaintiffs did not introduce sufficient evidence to support that
contention. The agency had never adopted or considered a resolution of necessity authorizing condemnation of
the subject property.
In January 2000, the plaintiffs found a buyer for their property at a purchase price of $825,000. The escrow
closed on April 21, 2000.
The plaintiffs contended that, due to the activities of the city and the agency, they were unable to sell their
property for a number of years and that, when the property was sold, they were unable to sell it for its fair
market value.
The plaintiffsÆ appraiserÆs opinion was that the fair market value of the property as of the date of trial was $1.1
million.
The defendantsÆ appraiserÆs opinion was that the fair market value of the property as of April 21, 2000 was
$900,000.
Other Information
Pursuant to the defendants' motion to bifurcate, the question whether there had been a taking was tried to the court sitting without a jury, with the understanding that, if the court ruled that there had been a taking, a jury would decide the issue of damages. The court ruled that there had been no announcement by the defendants of an intent to condemn the subject property, no unreasonable conduct and no taking on any other theory. In addition, the court ruled that the city and the agency were separate entities and not alter egos. The defendants had made a motion for summary judgment which was denied on the grounds that there were triable issues of fact as to the reasonableness of certain actions taken by the defendants.
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