Through a definitive 11-1 decision, a jury recently cleared former La Verne mayor Don Kendrick of the remaining legal claim, also referred to as a “cause of action,” associated with the Chase’s Restaurant loan agreement (LINDA WILKINSON VS DON KENDRICK, ET AL. Los Angeles Superior Court Case No. 18STCV08090).
The City of La Verne has been disputing claims since they were first filed in December 2018 by Chase’s former landlord. The overall argument for the claim was that the City had interfered with the landlord’s tenant arrangement by providing the restaurant economic assistance.
“We are very pleased with the outcome of this case,” said Mayor Pro Tem, Muir Davis “The jury’s decision confirmed what we all knew to be true and correct, that the City and the former mayor acted appropriately and in the best interest of the La Verne community.”
Before the State dissolved redevelopment agencies, California cities were able to use redevelopment money to retain, relocate or attract new businesses as an economic development tool. Therefore, similar to what the City had done for many other businesses during this time, the La Verne City Council had approved Chase’s request for economic assistance in 2017 to move to a larger location that would allow the restaurant to expand their operations and business potential. The total loan amount provided was $54,300.
“The concept behind programs like this is that, while businesses like Chase’s would receive funds upfront to assist with expenses, the City would, in turn, benefit by the additional sales tax revenue generated,” said Eric Scherer, Community Development Director. “It is a ‘win’ for everyone, especially because this allowed the City to help expand the Old Town dining opportunities and retain a successful business in the community.”
Through their attorney, the landlord originally filed a total of four claims, of which three were specifically directed at the City and, ultimately, all dismissed due to a lack of merit. The first of these dismissed claims was a call for declaratory relief under Government Code Section 1090 which prohibits an officer or employee from entering into or participating in making contracts in which they have a financial interest. The second was an injunctive relief under Government Code Section 1092 to prevent the City from acting on its agreement with Chase’s and disbursing funds to the restaurant. The third cause of action claimed that there was an intentional interference with prospective economic advantage – in other words, that the landlord had suffered economic harm through unlawful interference. Again, none of these claims were substantiated and were dismissed.
The fourth and final claim that remained was whether the former mayor had a conflict of interest in voting on the matter due to the location of his business, which sat across the street from Chase’s new location. Last week after a three-day trial, the jury deliberated for just over an hour and reported that evidence supported the City and Mr. Kendrick’s arguments, clearing both of the final legal claim against them.
Since moving to its new location Chase’s Restaurant’s operation has more than doubled contributing to an increase in the City’s General Fund through an increase in sales tax collected. Additionally, the City has developed a policy that will facilitate the detailed review of similar agreements with other businesses in the future.