MALIBU : Mobile Home Operator Settles Lawsuit With City

After losing costly legal challenges to defend its mobile home rent control law in state and federal courts, the city of Malibu has agreed to a settlement with the owners of one of the community’s two mobile home parks.

The agreement with the Adamson Cos., the owner of Point Dume Club mobile home park, was reached six days before a scheduled federal court hearing in which the park owner was seeking $1.5 million in damages against the city. The City Council approved a $400,000 settlement in a 4-1 vote at a council meeting two weeks ago.

City Atty. Christi Hogin has been in negotiations with the Adamson Cos. and the Kissel Company, the owner of Paradise Cove mobile home park, since June in hopes of averting a damages trial. “We’re satisfied that the settlement is good for Malibu and we have worked very hard with the Adamson Cos.,” Hogin said.

No settlement has been reached with the Kissel Company. Attorneys representing the company filed suit last week against Malibu seeking $2.5 million to $5.5 million in damages for loss of back rent, attorney’s fees and other losses incurred by the rent control law. The trial ended Thursday, and a decision from U.S. District Court Judge Mariana R. Pfaelzeris pending.

Pfaelzer in June struck down as unconstitutional several key provisions of the city’s mobile home rent control ordinance, including a rent rollback to 1984 base levels and a two-year rent freeze. Pfaelzer upheld the city’s right to regulate future rents and told the city to reimburse the park owners for attorney’s fees.

With a damages suit looming and having already spent more than $500,000 in attorney’s fees, the city began settlement negotiations with the Kissel Company.

The city’s agreement with the Adamson Cos. calls for Malibu to pay $400,000 to the company over two fiscal years. Under the agreement, the city amended the rent control ordinance to allow rents to be raised at the full rate of Consumer Price Index, but no less than 2% and no more than 5% annually. Under the previous version of the law, space rents could be raised 75% of the Consumer Price Index, but no more than 5% a year.