California Court of Appeal, Second District, Eight Division
APPEAL from a judgment of the Superior Court of Los Angeles County. Rita Miller, Judge. Affirmed. (Los Angeles County Super. Ct. No. BC443280)
Kane, Ballmer & Berkman, Murray O. Kane, Los Angeles, and Guillermo A. Frias, for Plaintiff and Appellant.
Stradling Yocca Carlson & Rauth, David R. McEwen, Allison E. Burns and David C. Palmer, Newport Beach, for Defendants and Respondents.
Callahan, Thompson, Sherman & Caudill, Robert W. Thompson and Bryan S. Owens, Irvine, for Real Parties in Interest Antelope Valley Chevrolet, Inc., 7 Jays LLC, and Juan Lou Gonzales.
The City of Palmdale appeals from the trial court's judgment that prohibited the City of Lancaster from offering financial assistance to auto dealer Juan Lou Gonzales and his dealership for only two years and denying disgorgement by the City of Lancaster of related sales taxes. We affirm.
FACTS AND PROCEEDINGS
Juan Lou Gonzales owned Saturn of Antelope Valley, a General Motors (GM) auto dealership in the Palmdale auto mall. As part of GM's reorganization in bankruptcy during the Great Recession, it stopped making Saturn cars. Consequently, Gonzales sought a Chevrolet franchise from GM. GM agreed to award a Chevrolet franchise to Gonzales under certain conditions, which included that he find an automobile sales lot satisfying GM's criteria for Chevrolet dealerships and that he be ready to open his new dealership on a " short deadline."
As the trial court later found, Gonzales tried in good faith to lease or buy from appellant City of Palmdale a lot in the Palmdale auto mall suitable for his hoped-for Chevrolet dealership. But the trial court found, " Palmdale flatly refused to lease or sell [a lot] to him and otherwise made it impractical for Mr. Gonzales to locate his Chevrolet dealership in the Palmdale auto mall. Palmdale's apparent reason was that Palmdale preferred to have another dealer, Mr. Maile (who had a history of having a dealership in the Palmdale auto mall,) run any Chevrolet dealership that was to be operated in the Palmdale auto mall."
While Gonzales was unsuccessfully trying to strike a deal with Palmdale, he entered into negotiations with respondent City of Lancaster to obtain a lot in the Lancaster auto mall, which was the only other location in the area that satisfied GM's requirements. As negotiations with Lancaster were underway, the Lancaster City Council in August 2010 authorized $604,000 in financial assistance to Gonzalez to help him move his car dealership business to Lancaster.
Government Code section 53084, subdivision (a) mandates that a city such as Lancaster " shall not provide any form of ...