This just in from the City of Lancaster: ‘Local businesses free from Palmdale lawsuit’

Updated: 2/3/12 at 5:30 p.m. Read the Final Court Order here.

LANCASTER – The City of Lancaster, Antelope Valley Chevrolet, and Sierra Toyota are free from a lawsuit filed against them in 2010 by the City of Palmdale, regarding the opening of the new Antelope Valley Chevrolet dealership in Lancaster. This according to a news release issued Friday by the City of Lancaster. The following is the full text from the news release:

Antelope Valley Chevrolet Owner Lou Gonzales opened his dealership in the Lancaster Auto Mall in November of 2010.  This followed a preliminary ruling by Los Angeles Superior Court Judge David P. Yaffe, who ruled that Mr. Gonzales was free to open his new dealership in Lancaster, albeit without incentive.  Judge Yaffe also ruled that Lancaster could legally complete its purchase of property from Sierra Toyota, and that Lancaster had followed proper procedures in approving agreements with both Chevrolet and Toyota.

“Despite a clear indication from the Superior Court that the actions of Lancaster, Antelope Valley Chevrolet, and Sierra Toyota were legal and irreversible, Mayor Ledford and the Palmdale City Council went forward with a lawsuit that had no point and no possibility of benefitting anyone, least of all Palmdale citizens,” said Lancaster Councilwoman Sandra Johnson.  “Mayor Ledford and the Palmdale City Council were so intent on impeding fair business practices, the entrepreneurial spirit and just plain old common sense, that they pressed on with a foolish lawsuit.  Conservatively, their ill-considered decision cost their residents over $400,000, cost Lancaster taxpayers over $300,000, and cost two local businesses a combined $500,000 in totally unnecessary legal fees.”

Honorable California Superior Court Judge Rita Miller ruled that “…Palmdale caused its own damages by refusing to sell or lease available real property in the Palmdale Auto Mall to the Gonzales parties, by leading Mr. Gonzales on so long that Mr. Gonzales had to go elsewhere on an expedited basis to meet his deadline, by proposing patently unworkable terms for any possible transaction, and by conditioning any deal with Mr. Gonzales on him waiting beyond the General Motors deadline to see if Mr. Maile could wrest the General Motors franchise away from Mr. Gonzales.”

“Undoubtedly, Mayor Ledford will claim his typical ‘victory’ in this case by focusing on some non-substantive fact or portion of the Court’s decision,” said Lancaster Councilman Marvin Crist.  “This will be just like his claims of ‘victory’ when Palmdale spent an enormous amount of taxpayer money to sue the region’s college, Antelope Valley College (AVC), and got nothing; and when they sued their citizen’s own Palmdale Water District, and ended up with a second revised rate schedule and continued high water rates.  An examination of the impacts of the Court’s decision in this case clearly shows that Lancaster and our business partners prevailed.”

The Final Court Order of Judge Miller found that the City of Lancaster did not violate the Brown Act in any way, as claimed by the City of Palmdale.  The Court also found that the City of Lancaster did not illegally purchase land from Jim Hawse, as also claimed by Palmdale.  The Court found that no damages are available to Palmdale under any cause of action, either in law or in equity.  Although the Court did rule that Lancaster cannot provide an incentive to Antelope Valley Chevrolet under the original agreement, the Court determined that “…Lancaster did not act with conscious disregard of the rights of Palmdale” and that Lancaster would not be enjoined from providing financial assistance after November 9, 2012.  It is worth noting that the original agreement contemplated an incentive payment schedule that would have extended to March of 2013.

Jim Hawse, owner of Sierra Toyota, commented on the Court’s decision and his legal expenses, “It’s great to be vindicated but this doesn’t feel like victory.  It feels like Palmdale’s Mayor and City Council stole $350,000 from our family and our employees; there was never any point to Palmdale’s frivolous lawsuit and it was an unnecessary waste of taxpayer dollars.”

The owner of the new Antelope Valley Chevrolet, Lou Gonzales, reflected on the ordeal his family and his employees have had to endure during the past 18 months, “From day one, all we ever wanted to do was open our new business and offer the entire Antelope Valley a great product, great service, great deals, and new jobs.  We gave that opportunity to Palmdale first and they basically kicked us to the curb, as the Court documents clearly show.  I am glad this is finally over, but it cost my family over $150,000 to defend ourselves against totally baseless charges; we don’t have that kind of money to waste.”

Lancaster Mayor R. Rex Parris put in perspective what Palmdale’s history of frivolously suing local public agencies really means to Antelope Valley taxpayers, “When Mayor Ledford and the Palmdale City Council sued AVC, they were not suing an ‘institution’, they were suing Palmdale and Lancaster residents whose taxes pay for AVC and they were suing AVC students, who have to pay through higher tuition and fewer classes.

When Palmdale’s Mayor led the suit against the Palmdale Water District, he was not suing an ‘anonymous agency’, he was suing his own citizens, who in that case paid for both sides of the lawsuit – meaning Palmdale residents couldn’t win that one no matter what the decision.  When Mayor Ledford and the Palmdale City Council sued Lancaster, it was not two ‘city governments’ involved, it was every resident of Palmdale and Lancaster, along with two private employers; we all had to pay $1.2 million dollars in wasted legal costs.  This reckless behavior by Mayor Ledford and his Council is intolerable.”

Councilwoman Johnson concluded by asking for help from all Antelope Valley residents in putting an end to Palmdale’s practice of wasteful government spending, “It can’t just be the Lancaster City Council railing against Palmdale’s destructive, bullying practices; if it is our pleas only, it will fall on deaf ears.  It is up to the citizens of Palmdale and Lancaster to send a clear message to Mayor Ledford and the Palmdale City Council – ‘Stop wasting our tax dollars!’”

This final judgment in the Antelope Valley Chevrolet lawsuit brings an end to this ordeal.  Antelope Valley Chevrolet will continue to operate in the Lancaster Auto Mall and the City of Lancaster will continue to receive sales tax revenues generate by Antelope Valley Chevrolet.  In a related note, the City of Lancaster is proud to report a 51% increase in new auto sales from Third Quarter 2010 to Third Quarter 2011.

(Information via press release from the City of Lancaster.)

Read the Final Court Order here.