Public Agency Lawsuit to Seize $21,000 Home from Rightful Purchaser near Sacramento, California...

In the rustic, antique wood-built town of Locke, California, founded from 1912 to 1920s, the Locke Management Association (LMA), a thirteen (13) member board put in place in 2003 to maintain, preserve and manage the town is prioritizing its limited $60,000 operating budget to attempt to undo a recent property purchase that occurred. The buyer, Martha Esch, struck a deal to purchase one of the town’s dilapidated properties with seller, Dona LaBlanc for a $21,000 purchase price. The LMA claims both women circumvented the agency’s rules in order to complete the sale. The property was previously owned by LaBlanc’s cousin, Laura Ulewicz, who died in 2007.

A brief summary of the Town of Locke
The tiny town currently has approximately the same number of residents as it has buildings (about fifty (50)), mostly renters and a few owners. Several of the buildings are vacant.  Locke is a well-kept secret and a favorite destination on weekends for in-the-know tourists, photo clubs, artists, bikers, and car clubs. It’s loaded with colorful history of its immigrant ancestors. In 1930, the U.S Census recorded 410 residents in Locke whose origins were from China and nineteen (19) other countries. There is an iconic Main Street bar called “Al the Wops” which is still in business under the same name given it in 1934, by its Italian founder, Al Adami. Al began selling his famous steaks there in 1934 and the steak tradition (among others) continues. The one-block-long town looks like an old-west movie set. In fact, Clint Eastwood and a few other silver screen actors and directors have used the town for their movie sets - most recently, “On the Road,” a soon-to-be-released big screen adaptation of Beat Generation novelist, Jack Kerouac.

Despite the occasional fame Locke enjoys, the parks and side streets go largely unmaintained, the sidewalks are in terrible disrepair, and basic fire response safeguards, such as fire extinguishers and accessible alarms are virtually non-existent. A connective sprinkler system was put on the exterior of most of the Main Street buildings in 2002, but residents have been told by fire officials that the system cannot be tested without turning the entire chain of pipes on and a building would have to be engulfed in flames before they’ll kick on automatically.

The Dispute
Regarding LMA’s quest for Esch’s property, in a March 26, 2011 letter signed by LMA’s Chairman, Clarence Chu, a statement was made: “… to enable the LMA to carry out its legal obligations to its Historic Preservation purposes. (This includes our responsibility to notify the 400 Chinese Ascendants and Descendants of Locke of their own priority to purchase the Locke property).” The “400” statement has been the only reason given by the LMA for its option to exercise its ROFR (Right of First Refusal) on the property.

LMA’s pursuit to give preference to a single ethnic group to buy the property is in probable violation of State and Federal laws. Locke Federal HUD investigators immediately began an investigation on the LMA and its parent organization, the SHRA (Sacramento Housing & Redevelopment Agency) for the discriminatory statement made in the March 26 letter and the LMA’s policy regarding ROFR (Right of First Refusal) – a rule in LMA’s CC&R’s (Codes, Covenants & Restrictions) which allows the agency to match a bona fide offer on any property in the town or to assign the right to purchase - provided they act within 25 days of receiving notification by the seller of the offer.

LMA’s lawyer, Stephen J. Beede has an additional hurdle to convince a Superior Court Judge - that the 25 calendar days had not expired by the time they finally got around to acting - yet, it had expired by four days. Esch, an Ohio-born artist and art teacher says she, LaBlanc and Placer Title Company waited out the time period, completed the property transfer legally and has she believes she has every constitutional right to retain its ownership.

While the LMA board members voted unanimously 6-0 to exercise its ROFR (which raises the question whether the six directors in attendance who voted unanimously in favor of exercising ROFR actually constituted a majority of the 13-member board); there was no discussion of funds allocation for the purchase, hence no vote for allocation of funds from LMA’s sparse budget; additionally, there had been no closed door meeting previous to their March 8, 2011 meeting to fall back on.

Although the Buyer is not mentioned anywhere in the policies and procedures of the LMA’s CC&R’s, Attorney Beede’s lawsuit holds Esch party to the action based on the fact that she was in the audience at the March 8, 2011 meeting and sat silent, making no objection when the board members voted unanimously to exercise its ROFR on the property for which she was in escrow. Esch says she knew that they were late to vote, but it was not her responsibility to educate the board members how to count to twenty-five. She adds that if she’d said anything, she would’ve been scolded for interrupting. At many prior LMA meetings she and others have been referred to by the former Chairman disrespectfully as “invitees,” (non-property owning renters) and are told frequently not to speak to issues until their three minutes during public comment at the end of the meeting.

Esch points out the LMA has made other improprieties, such as opening their own escrow with Old Republic Title Company in Lodi, CA on the property the day before her own escrow with Placer Title closed on March 15, 2011. She believes they were trying to block Placer Title from closing her escrow. LMA opened their escrow without LaBlanc’s or her permissions or knowledge and without any public or noticed closed-door meetings for their escrow – all probable violations of the Brown Act.

The LMA, a public 504-C3 non-profit, falls under the Brown Act which is in place to ensure public transparency. The Brown Act requires public agencies to give advance public notification of its closed and open meetings, timely and adequate information on meeting agendas, summaries of meeting minutes and actions taken, and the opportunity for the public to voice their opinions on matters of discussion at meetings.

The absence of public or closed-door noticed discussion of escrow funds allocation and subsequent opening of its own escrow on the property on March 14, 2011 were done in total secrecy and may constitute a contractual tort in addition to alleged violations of the Brown Act. Several other Brown Act violations by the agency have been alleged to have occurred during and since the property was deeded to Esch on March 21, 2011. Lisa Kirk, a friend of Esch and business owner in Locke has been keeping records of the series of Brown Act violations the LMA board has made.

In early April, Esch refused to cave to the LMA lawyer’s written demand for her title and signed a HUD complaint regarding the discriminatory policies of the LMA, giving preference to a single national origin. Esch began actively rehabilitating her property to transform it into an art and music studio with residential quarters, such as the one she rented and operated since 2005 across the street.

A few weeks later, without any written or verbal complaints from the LMA that she’d done anything wrong, she was served with a second lawsuit filing from Attorney Beede - an injunctive restraining order: for trimming her trees; painting her wood siding and her propane tank brown; for removing an abandoned sign post from in front of her building; and for opening her art and music studio, an unauthorized use of the building, according to Beede. However, two weeks prior to receiving the second lawsuit filing, the county had granted Esch a business license for the location. Esch feels the restraining order Beede filed on behalf of LMA is retaliation for refusing to hand over her title and for filing the HUD complaint.

Additionally, the agency has refused to accept and record her monthly $100 assessments, which she now deposits directly to their bank account through the bank teller, despite Beede’s recent objection, and won’t acknowledge receipt of them. LMA has refused her written requests to view its recorded meeting minutes and agendas; and it has stonewalled her requests for its Historic Review subcommittee to review her building plans so she can obtain required Sacramento County building permits and proceed with having the repairs and updates done to her building.

Esch is represented by Sacramento Attorney Mark A. Wasser, who has filed a demurrer to Beede’s first action of demand for title to the property.

On August 17, 2011, Sacramento Superior Court  reviewed Beede's additional filing for the injunctive restraining order to be placed on Esch to prevent her from further trimming of trees, painting, making necessary repairs and using her business license within the property.  The injuctive hearing filing was denied by the court, due to lack of evidence that Esch had done anything wrong, countered by the evidence that Esch's attorney Mark Wasser presented which included the fact that Locke Management Association had violated one of their own CC&R's by not giving Esch any prior written or verbal notice of their complaints before filing for the injunction with the court. 

The property dispute hearing is scheduled to be heard on December 22, 1011 in Sacramento Superior Court.

FURTHER INFO  View online:   Sacramento Bee front page article of June 28, 2011                   

http://www.sacbee.com                                     keywords: Locke dispute

Continue to "Locke property dispute (part 2)"