Suit Tests Owner-Dealer Pact at Mobile Home Park

Father Ignatius Hunkler, a 65-year-old Roman Catholic priest, had been searching for somewhere to put a mobile home he planned to buy. But when he got to the Oakridge Mobile Home Park in Sylmar in 1980, the shopping stopped.

He says a dealer at the park told him he would have to forget the mobile home he had in mind if he wanted to live at Oakridge. The salesman showed him a $65,000 model, which seemed expensive compared with the one he had seen elsewhere.

“I said, ‘Gee, what a difference,”’ Hunkler recalled. “But you couldn’t argue.” Unless Hunkler bought from the dealer at Oakridge, the priest says he was told, he could not have a space there.

Drawn mostly by the park’s lovely, mountainous surroundings, he went along with the terms. But Hunkler, chief chaplain for the Veterans Administration Hospital in Westwood, may soon tell that story in court. He and 157 other Oakridge tenants are plaintiffs in a restraint-of-trade lawsuit against the park’s owners and the mobile home dealer.

$13,000 Overcharge Claimed

The suit charges that competing dealers were shut out of Oakridge and tenants wanting to live in the park were forced to pay Oakridge’s dealer, the Van Nuys-based Fuller-Western Motor Sales Inc., an average overcharge of $13,000 for mobile homes.

The trial of the class-action suit is expected to start within the next two weeks in Los Angeles Superior Court.

Lawyers on both sides say the case will be the first to give a jury a chance to rule on a common and highly controversial practice in the mobile home industry: The awarding of exclusive rights by mobile home park owners to dealers.

Critics say the practice unfairly closes a park to other dealers, leading to price gouging and kickbacks paid by the exclusively contracted dealers to park owners. They say businessmen are particularly likely to use the practice in areas where a shortage of land for new mobile home parks has narrowed home purchasers’ options for a place to live. Los Angeles County, particularly the San Fernando Valley, is such a place, according to Louis Ito, a county deputy district attorney who has brought similar lawsuits.

The tenants are asking more than $2 million in repayments from the defendants for the alleged overcharges, and as much as twice that amount in damages.

‘Symbiotic Relationship’

Oakridge’s owners say they did nothing wrong. They argue that they made the special agreement merely to make sure the homes were sold by a reputable dealer who had a knowledgeable and experienced sales force.

The exclusive owner-dealer deal, said Joseph Coyne, an attorney for the network of companies that own the park, “is a symbiotic relationship designed to promote the interests of the tenants and the marketing of the houses.”

State and county prosecutors throughout California have brought at least 10 suits against partners in such agreements in the past eight years. William Clark, an assistant state attorney general who has specialized in such cases, said he views the disputed practices as a restraint of trade.

Clark said he knew of no such suit anywhere in the country that had gone to trial. All, he said, had ended in settlements.

Community Divided by Suit

Whoever wins or loses, it is unlikely that Oakridge will ever be the harmonious community its tenants were looking for when they settled there after the park opened in October, 1979, amid wide-open expanses of sky and hilly terrain.

The lawsuit has divided a community once thought of by its inhabitants as a village, an intimate neighborhood where everyone knew everyone else.

That tranquility has been ruptured. When the suit was filed in 1983, the occupants of all 331 lots at Oakridge were in the class action. But the owners have convinced 173 tenants to pull out in exchange for a temporary rent freeze and other offers, made in individually negotiated settlements.

Residents says that the division between those who stayed in the suit and those who pulled out has ruptured friendships, provoked bitter arguments within families and made envy and suspicion grow as lushly as the deep-purple ice plant that adorns the park’s manicured landscape.

Said one tenant, “I know of a family where the wife and husband were almost torn apart by this thing. I’ve lost friends because I believe in the suit.”

Talking to residents is like canvassing a town engaged in a giant game of chance. “You think I should have taken the settlement?” asked one tenant.

Exodus by Tenants

Thirty-three of the 158 plaintiffs have moved out of the park since the suit was filed. Many of those who remain speak about leaving no matter what happens.

An attorney for the park’s owners accuses Hunkler of staying in the case just for the money. “It’s greed,” the lawyer said, rubbing the fingers of the right hand against his palm. Hunkler, however, says he generally “loves” the community aspect of mobile home living, and just wants Oakridge to get closer to his ideal.

“The owners are pretending that peace would go on here if we drop this suit,” Hunkler said. “But I maintain that peace is an enterprise of justice. It’s not peace that establishes justice. When we came in here, we were lambs to the slaughter.”

The word “mobile” seems misplaced when applied to the trailers at Oakridge. If one does not look at any building too closely, the park is like a tract housing development, with good-sized, two and three-bedroom homes. Some are as large as 24 feet wide and 60 feet long. One difference, though, is that people do not own the land beneath their homes, paying an average monthly rent of $300 for an average space of 48 by 60 feet. And the building materials give a sense of authenticity that turns false when examined at close range: Shingles appearing to be wood are synthetic, panels that seem to be knotty pine achieve their effect artificially, ceiling beams are hollow, bricks are a half-inch thick and the patterned surfaces of the walls conceal metal.

The cost of the homes ranges from $40,000 to $90,000. Once in place, moving them can cost thousands of dollars.

The defendants’ attorneys charge Steven Ruben, the Los Angeles lawyer representing the tenants, with emotionalizing the case by stressing the tenants’ age and vulnerability. Yet any visitor to the park will notice that many residents are elderly. Ruben said the average age is about 53. The tenants have included a former federal judge, salesmen, a Rapid Transit District security guard, a retired film studio technician. Said Ruben, “It’s a cross section of Los Angeles.”

Ruben repeatedly refers to the tenants as people on “fixed incomes.” Replies owners’ attorney Coyne, “The average income is $35,000 annually. Sixteen percent have post-graduate degrees and 32% went to college. Have you seen all the Mercedes out there? There are people who are significantly wealthier than I am.”

Roots of Turmoil

The turmoil at Oakridge has its roots in two contracts.

On Dec. 4, 1978, representatives of Fuller-Western Sales Inc., a mobile home dealer with offices in Stanton and Van Nuys, signed agreements with businessmen representing a complex cluster of companies and partnerships that owned and developed Oakridge. The agreement gave Fuller-Western an exclusive right to sell from an office at Oakridge and specified that the dealer would pay the park a percentage of its sales.

For one popular type of home, for example, there was a 7% payment per sale to the mobile home park. The tenants’ lawyers call this a kickback. The defendants say it was a “fee” that covered costs the park incurred to help run the sales operation. The two La Habra businessmen who oversee Oakridge, through a company called Continental Mobile Housing Inc., are Myron Reichert and Howard Brigham.

Reichert said the lawsuit gives a wrong impression of what happened. He does not deny that the agreements were signed, but he says they did not violate antitrust laws.

“It makes a nice juicy story to read about this land-raping landlord down there and how he’s taken all these people, but that’s not how it is,” Reichert said. “We have some very disgruntled people down there and they’re making it tough for everyone else.” The most disgruntled of them all, said Reichert, the man he angrily says started it all when he led a “militant core” of “avaricious mercenaries” to begin the lawsuit, is a big man named Loyd McFee, 71.

As Hunkler puts it, “It was McFee who smelled a rat.”

Controversial Figure

Before 1979, McFee, a sales representative for several aircraft and aerospace parts manufacturers, says he and his 66-year-old wife had been thinking of retirement and wanted to make money by selling the “regular” home the couple owned in Lake View Terrace.

McFee is stocky and talkative. He is 6 feet tall, with a square, florid face. Often, his wife, Jo, cuts him off as he speaks, as though she were an experienced policeman of his verbal excess. Other park tenants describe him as “shrewd,” “smart,” “tough” or “a digger.” The McFees say they had shopped around for mobile homes and a park to put one in for months. Like many others at the park, they say they had browsed several years in a row at show of mobile homes at Dodger Stadium. They had seen a number of models they wanted at prices they liked, they say, but finding a park was a problem. They looked at several, finding them too isolated, too run-down, or already filled.

During the spring of 1979, they went several times to Fuller-Western’s office in Van Nuys, before it had an operation at Oakridge. They say they complained about the frustrations of their search and that a salesman told them, “We happen to have a park where you can go, but you have to buy our coach.”

“We said we’d like to bring in a dual-wide (a 24-foot-wide model), a type he didn’t have, and he told us what type to get,” said Jo McFee.

“‘Why just Western?’ I asked,” she continued. “They said they had an exclusive on this, but we didn’t know then that it was against the law to keep us from shopping.”

Home Used as Model

Eventually, the McFees paid about $65,000 in cash for the home. Because they were one of the first couples at Oakridge, their home was used as a model to show other prospective buyers.

“We kept hearing the same story,” Loyd said. “People would look at us and say they’d been told, ‘You have to do this and you have to do that.’ We were all told we had to go to Western Motor Sales.”

McFee became so suspicious that, one evening about a year after moving in, he and five other tenants piled into his 1977 Chevy Capri and drove to the Woodland Hills office of a lawyer recommended by a friend. That lawyer led them to Ruben, who filed two suits that were consolidated into one class action in the fall of 1983.

The suit’s plaintiffs were the tenants of 331 spaces at Oakridge who had bought homes from Western, but the court sent a notice to all the tenants, advising them that they had 90 days to drop out of the suit.

Battle for Loyalties

Quickly, a battle for their loyalties began.

The defendants offered a series of individual settlements to each tenant who was willing to drop out of the suit, an arrangement that infuriated the plaintiffs’ lawyer but was sustained by the court. The park owners offered various combinations of temporary rent freezes and limited rent increases in the future. Tenants were besieged by letters from both sides and invitations to a variety of meetings. Eventually, 178 of them settled.

“It has divided us into two camps,” said Hunkler, who refers to members of the class-action suit as “the movement.”

Owners’ attorney Coyne said the sentiment in favor of the park owners was as strong as the support for the lawsuit, and told the following story to illustrate his point:

“I went out to the park one night to take a deposition. When I came out of the house, I walked past the park clubhouse, where a woman was baking cookies. I asked for a cookie. She looked at me and said, ‘Didn’t you just come out of that house with one of those depositions?’ I said, ‘Yes,’ and she said, ‘Which side are you on?’

“I said, ‘The owners’,’ and she threw her arms around me and said, ‘Then you can have a cookie.’ ”

As the fight intensified, Ruben said, the park’s owners used “coercion.” He said they threatened members of the class-action lawsuit that, when they attempted to sell their homes to purchasers who would inherit their Oakridge space, the monthly rent would be increased. The park’s owners acknowledged using the technique, saying it was legitimate. In some cases, the park owners also offered to buy back the mobile homes of plaintiffs. Nine people agreed to that.

The owners, Ruben said in a letter sent to tenants in July, 1983, “have attempted to intimidate you with implied threats of retaliation if you fail to opt out of the class action. . . .”

Reichert answered in a similar letter sent to tenants the following month, “After the trials and appeals are through, I predict there will be two groups of residents at Oakridge--those who settled and have a low rent and another group who received nothing because they lost the lawsuit.”