LAGUNA BEACH : Couple File Appeal in House-Color Case

A couple whose $1-million lawsuit against the city over the color of their house was dismissed by a federal judge last month have filed an appeal, according to their attorney.

The lawsuit by Nick and Denise Karagozian revolved around their decision in 1990 to paint their house a different color than that approved by the city’s Design Review Board and the city’s subsequent refusal to allow their utilities to be connected until they repainted it.

In response to the city’s position, the Karagozians and their supporters held a protest party and painted part of the house red, white and blue.

Later, the couple reached an agreement with the city allowing them to repaint the house a shade between the “eggshell” they had chosen and the “sandstone” approved by the Design Review Board. Then, the Karagozians filed a lawsuit against the city in federal court.

Last month, U.S. District Judge Lawrence T. Lydick rejected the case, finding that the Karagozians should have sued first in state court. By the time that decision was issued, it was too late for the Karagozians to file in state court, Laguna Beach City Atty. Philip Kohn said.

A statement released Monday by Eugene C. Gratz, the couple’s attorney, said they have now appealed to the Ninth Circuit Court of Appeals because they believe the city and its Design Review Board are violating citizens’ constitutional rights.

“The issues in controversy go to the very essence of the rights of property ownership,” Gratz said in a prepared statement.

Kohn said Tuesday he is “optimistic about the likelihood of the dismissal being upheld.”