Owner of Palisades Bowl Mobile Home
Park Found Liable for $8.9 Million
A jury ruled on November 5 that Edward Biggs is liable for $8.9 million in fraud involving Nancy Belanger and Gaelyn Marvin, owners of three manufactured homes in the Palisades Bowl Mobile Home Park
According to plaintiffs’ attorney Thomas Brown of Brown White & Osborn, Biggs has hired an appeal attorney to handle a motion for a new trial and the appeal.
Circling the News emailed Biggs for a comment, but he had not responded by post time.
This legal battle involving the park, which is located on Pacific Coast Highway, just west of Temescal Canyon Road (and Tahitian Terrace), started in January 2005 when heavy rains activated one of two landslides located in the Asilomar hillside above the park.
Terrace Drive, the street below the hillside, which ran in front of mobile home units 19, 20 and 21, buckled and lifted.
The California Department of Housing and Community Development (HCD) determined that the hillside posed an imminent threat to the safety of the occupants on Terrace Drive (the State has jurisdiction over mobile homes). The HCD red-tagged the units and issued an “Order to Vacate,” until the owner could stabilize the hillside.
Fred Keeler, the owner of the mobile home park, sold the park to Biggs eight months later in August 2005.
Almost immediately, Biggs started a conversion effort. Tenants own the homes in the 19.7-acre park but rent the land on which homes sit. With conversion, they would purchase the land.
Although some residents of the 170-unit park liked the idea of owning their land, others felt the conversion was merely an attempt to circumvent L.A. City rent control.
In a conversion, tenants who purchased the land would be like condo owners, meaning they would help assume the cost of infrastructure repairs, such as stabilizing the hillside.
A 2015 article (“A Fix Underway for Asilomar”) reported on the geology of the area involving Asilomar, which abuts El Medio and Almar Avenues and is built on a hillside that has two landslides. One starts 90 feet below the surface, extends into the Pacific Ocean, and is considered inactive. The other, 35 feet down, is continually moving.
A 2008 geotechnical report prepared by Ninyo and Moore estimated that the cost to remove the landslide and repair the hillside would run about $26 million, a liability many Bowl residents did want to assume.
In a surprise move, L.A. Superior Court Judge James Chalfant ruled in favor of Biggs and required the City to proceed with the conversion in May of 2009.
Residents and the City of L.A. appealed the decision, and in August 2010, the Appellate Court overturned the Superior Court decision, because of the Mello Act, which was enacted in 1981 to preserve continued availability of low-income housing in the coastal zone.
In August 2011, Biggs–who initially operated under Pacific Palisades Bowl Mobile Estates, LLC, then under a Nevada limited liability company (PPBME) and finally a Delaware company (PPBME)–signed an agreement in which Belanger and Marvin agreed to release Biggs from claims arising from the 2005 landslide.
In that agreement, it was stated they did not have to remove their homes and that Biggs did not have a right to remove the homes, unless HCD or another governmental agency ordered it done, or if the removal was necessary for the stabilization of the hillside.
According to the February 2016 court document, Belanger and Marvin said they discovered that their homes had been removed without their knowledge. In November and December 2015, they informed Biggs they planned to file a lawsuit for breach of contract. Biggs discovered his insurance company would not provide a defense or indemnity.
At the beginning of 2016, Biggs, president of Biggs Realty Inc. and manager of NV PPBME, which had acquired the title of the Park from CA PPBME, transferred the park to DE PPBME.
“Biggs conceded during his testimony that he made multiple misrepresentations to his former residents and made misrepresentations in order to get them to remove their homes so that he could build a new, luxurious Pacific Palisades Resort Homes development in Pacific Palisades and reap revenues of $170 million,” attorney Brown wrote in a summary on behalf of the plaintiffs. “His plans for the new resort community included replacing older homes and residents with mostly two-story luxury cottages valued at $1 million each in the 170-home community.”
Biggs, who owns nine manufactured home parks throughout California and Nevada, a vineyard, a wine-tasting room, an apartment complex, large tracts of land, and expensive homes valued at over $20 million, said in the trial that his real estate empire was currently worth more than $145 million and he had a net worth of more than $81 million.
When the jury reached a decision, they found that Biggs was liable for malice, oppression, or fraud; conversion of their homes; breach of contract; breach of the covenant of good faith and fair dealing; and fraudulent transfer of his $18 million in mobile home park assets.
“The jury hit Biggs with an $8 million punitive damages award to punish Biggs for his fraud and to deter him from engaging in such fraudulent conduct in the future,” Brown wrote.
(Editor’s note: Look for a future story about Pacific Palisades Resort Homes at the Bowl, which would essentially wipe out the only affordable housing option in Pacific Palisades.)