Developer Ordered to Pay $1 Million to 3 Partners in Malibu Title Dispute
Edward Higgins Sr., the first person ever jailed for developing land in defiance of a state Coastal Commission ban, has been ordered to pay more than $1 million to three partners, who claim that Higgins sold them some of the disputed property and then wrongfully foreclosed upon it after they obtained coastal permits to build two houses there.
Included in the judgment against Higgins, his wife, three of their sons and two family trusts, was $100,000 in punitive damages “in light of defendant Edward Higgins’ intentionally malicious actions,” Santa Monica Superior Court Judge Sara K. Radin wrote in a statement explaining her Oct. 3 award to attorney Alan Fenster, engineer Anthony Russomano and marketing consultant Philip Werber.
‘I Disagree’
Higgins could not be reached for comment. His attorney, Gregory Bergman, said no decision has been made on whether to appeal Radin’s judgment. But “I disagree with the legal determination,” Bergman said.
The argument centers on seven lots off Pacific Coast Highway in western Malibu. Fenster, Russomano and Werber, along with the Higgins sons, planned to build five houses there: one atop a bluff overlooking the ocean, a second part way down the hill and three on the beach.
In March, 1974, Higgins served five days in jail for contempt of court because he continued development of modular houses on that property as well as on other land he owns in Malibu, despite a temporary restraining order that barred construction until coastal permits were received.
The South Coast Regional Coastal Commission had denied the permits for modular homes, some of which were eventually occupied.
Four years later, Fenster, Russomano and Werber were introduced to Higgins by their real estate agent, Brad Davis.
Davis “presented Higgins as a reliable man who was misunderstood, who was knowledgeable,” Fenster said.
Higgins indicated that “he had a big problem on developing his land,” Fenster said. “He would run into great resistance with the Coastal Commission and other agencies because of their deep distrust of him.”
Bergman denied that his client ever said such a thing.
A look at the land clinched the sale. “It is such a spectacular spot,” Fenster said.
Davis decided to join in the purchase. (He was originally a plaintiff in the case, but later dropped out of the lawsuit).
While the four partners were negotiating to buy the land, Higgins asked that his sons be allowed to join in the deal. He suggested that Fenster’s group hold a 51% interest in the property and his sons hold a 49% interest.
He offered to throw in 13 more lots, 12 in Latigo Canyon and one in Topanga Canyon, if the four men agreed to his proposal.
“The property was so beautiful and the potential profits were so significant that we were willing to put up with these wrinkles,” Fenster said. “It was a very special deal.” So they bought the 20 lots.
Repeated Arguments
But after repeated arguments with Higgins over the designs for the houses they wanted to build, Fenster said, his faction decided to sell its interest.
When they found a buyer, however, they discovered that ownership of the property was unclear. Liens had been placed against the lots and “title to the Malibu property was held, conveyed and reconveyed between various business entities, individuals and Higgins family trusts in a manner calculated to frustrate creditors and disguise the true ownership,” Radin wrote.
The three plaintiffs said in their lawsuit that they had concerns about the title before the sale. But they also said that Higgins assured them that any problems had been resolved and they believed him.
Bergman said last week, however, that “our position was that the title was not clouded. We were saying (in court) that the title was fine.”
Unable to sell or develop the land because of their disagreements with Higgins, the Fenster group found it impossible to begin making payments. The plaintiffs also claimed in their lawsuit that Higgins tried to force them to start making payments before the agreed-upon time.
Higgins’ position was that the three men were not paying what they should. So he foreclosed on the property in December, 1979.
By this time, according to court files, Fenster’s group had received permits from the Coastal Commission for the two bluff homes.
When Higgins took back the property, the permits came with the land.
The plaintiffs had also applied for permits to build the three beach homes. “All that was required,” Radin wrote, “was the submission of a new percolation test confirming the septic system’s ability to absorb sewage, a matter of standard procedure which did not comprise a material obstacle.”
In January, 1980, Higgins sold an interest in the property to builder Neland Sprik.
Sprik later filed a lawsuit similar to the one filed by Fenster, Russomano and Werber.
“If you put your hands over the names, you would think you were reading our case,” said Jeff Berke, one of the attorneys representing Fenster and his partners.
A settlement was reached in July in the Sprik case. Court records show that Higgins agreed to clear title to several pieces of property, while Sprik agreed to apply for Coastal Commission approval for the remaining planned houses.
If the agreement cannot be fulfilled, a trial will begin in February, 1986, said Sprik’s attorney, Robert Lisnow.
