Dalidio eyes RICO lawsuit against development foes, alleges unfair business practices

March 21, 2008

By KAREN VELIE

Local developers illegally interfered with the development of Ernie Dalidio’s property, costing him millions of dollars in lost revenue, the San Luis Obispo farmer claimed in court declarations filed earlier this month.

At the same time, Dalido’s lawyers hinted at alleged racketeering by the yet-unidentified developers. The recent declarations do, however, focus on Copeland and Madonna family property developers.

These declarations are written statements submitted under penalty of perjury in response to the defendants’ motions.

Dalidio’s own declaration outlines a timeline of alleged conversations and negotiations he conducted with numerous city and county officials, as well as developer Tom Copeland.

“Tom Copeland made it clear that he did not want any further development in the city other than what he was planning for downtown San Luis Obispo,” Dalidio said in his declaration.

Copeland did not respond to requests for comment.

A federal judge in Los Angeles will hear pretrial motions March 24.

The Downtown Association, one of Dalidio’s fiercest critics, was named in the civil lawsuit, along with Responsible County Development LLC, alleging conspiracy and unlawful business practices including illegal interference in Dalidio’s lease negotiations by opponents of the Dalidio project.

The action further alleges defendants violated various federal laws “and are now subject to the enhanced civil penalties contained in the Racketeer Influenced and Corrupt Organization Act (commonly known as the RICO Act).”

The Downtown Association has declined to comment and the members of the LLC are currently undisclosed.

The current court action is the latest chapter in an almost 20-year battle to prevent Dalidio from erecting a 131-acre mixed-use-development on his land off highway 101near Madonna Road in San Luis Obispo.

Attorneys for Dalidio contend that the delays in the development are related to hurdles inflicted by competing developers and that the Downtown Association and the LLC were “straw men” for those developers.

“The heart of our lawsuit is tortuous interference with our clients,” said Mike Pick, an attorney with James McKiernan Lawyers. “Those actions could be perceived as an attempt to create a monopoly; an agreement by a couple of developers to keep Dalidio out. They used straw men to do the heavy lifting. The environmental cause was used as a ruse.”

No on Measure J spokesperson Alan Thomas contends his opposition to Dalido’s project stems from concerns of negative impacts he relates to the project.

“There were also many other legit environmental concerns that were identified by Terry Watt, an independent expert who works for an environmental law firm in San Francisco and who carefully examined Measure J,” Thomas said.

A second declaration, by Sean McCain, a lead tenant negotiator, outlines alleged communications with numerous potential tenants including Old Navy, Circuit City, PetSmart, Costco, The Vitamin Shop, and Pick Up Stix. Many had executed leases or letters of intent to lease on the Dalidio property, and subsequently canceled those agreements to sign leases with Madonna family properties.

“At an International Council of Shopping Centers Conference, the broker representing Pick Up Stix, Inc. was told by Madonna’s broker (John Rossetti of Rossetti Company) that Pick Up Stix, Inc. should relocate elsewhere as the Dalidio property would never be built,” McCain says in his declaration. “On October 5, 2005, I received notice that Pick Up Stix, Inc. was terminating its lease due to the failure to deliver.”

In response to the allegations, Madonna Enterprises Real Estate Manager Clint Pearce said that he had not courted any of Dalidio’s contracted properties, adding that he is unsure what actions his brokers might have taken.

“We have been careful to mind our own business,” Pearce said. “We had nothing to do with No on J or the LLC.”

Rossetti contends he is not contracted by the Madonna family as a retail property broker.

“In regards to the Madonna family, I don’t represent them on leasing any of their retail properties. I do represent the leasing at Madonna Plaza,” Rossetti said. “I have been asked by respective tenets on numerous occasions what I think the future of the Dalidio property will be, and my standard comment is that there is no way to know if or when it will be built, though it will probably take a while.”

Attorneys for the defendants contend Dalidio’s lawsuit should be dismissed due to anti-SLAPP statutes allowing a judge to dismiss a suit at the onset. SLAPP or “Strategic Lawsuits Against Public Participation” refer to lawsuits often filed by developers and government officials against individuals and community groups for speaking out on civic or government issues.

If the judge rejects the anti-SLAPP claims, the case will move on to the discovery phase in which Dalidio’s attorneys plan to request the unveiling of the LLC’s elusive members.

“The lawsuit isn’t about punishing and revenge; it is about trying to get back what has been lost,” Pick added. “There are real damages. Dalidio has been trying to build for 20 years. He needs to be reimbursed for losses due to the delay. It is very similar to the Caruso case”

In 2004, Caruso Affiliated Holdings sued General Growth Properties for trying to block the Cheesecake Factory chain from opening a store at Caruso’s property in Glendale California. Caruso claimed General Growth illegally interfered in his lease negations with store chains. General Growth also collected enough signatures to hold a referendum on the project, though voters eventually approved the project. The unfair competition held up the project for approximately four years.

In November, 2007, a jury in a Los Angeles federal court awarded Caruso $76 million in compensatory damages.

Tags:, Copeland, Dalidio


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3 Comments

  1. ccn_debate says:

    Member Opinions:
    By: Anonymous on 3/28/08 [Delete]
    Hey!, Bottomline. Instead of trying to fuck up San Luis why don't you just move to L.A., they have everything your little heart desires and probably more.

    What amazes me is you're too fucking stupid to realize that you are advocating a community where the costs of development (things like traffic, air pollution, loss of open space, crime, loss of property values from all of the above) are against you're own interests. In a way I commend you for making yourself worse off so developers can enrichen themsevles.

    By: Anonymous on 3/28/08 [Delete]
    What really pisses off all you enviro-nazis is that Ernie's project will go in no matter how much crap you throw at it…and…Most of you will shop there! LOL

    Get a hobby and let us take care of running things!

    By: Anonymous on 3/24/08 [Delete]
    Stephen,
    Now THAT is FUNNY!!!

    By: Anonymous on 3/24/08 [Delete]
    Recent comments here have hit the nail on the, um, head: Dalidio has been blocked by commie gays forcing their homo agenda on the good people of our town. If Ernie won't build a bathhouse, sex toy store and Homo Depot on his property, then they're not going to let him build anything. I'm just glad Alex Madonna isn't around to see his entire town turning pink.

    Why, just yesterday I went into Pottery Barn (AKA Buggery Barn) to scorn their socialist underpriced furnishings, and some guy with a sweater over his shoulders and a recent haircut smiled at me. I resisted the temptation to bash his head in with a halogen floor lamp and just high-tailed it out of there before I caught gay. I went in Pete's Coffee and asked for a cup of black Folger's to steel my resolve and they didn't know what I was talking about. I looked around and the place was full of goateed slackers using MacBooks (probably to browse homo sites on the world wide wank).

    Mark Foley and Larry Craig are right: the gay agenda is destroying America and the only answer is a constitutional amendment banning basic cable TV interior design shows.

    By: Anonymous on 3/23/08 [Delete]
    I think that there is some long hidden truth being revealed from the comments. Yes SLO has become that bastion of socialist, elite, gay, emasculated nitwits being led around by the unknowning clods that some how get elected, appointed or jockey themselves to where they can leverage their narrow points of view to assume the illusion of being the "majority". Not only do we need new commerce and shopping, we need new "leaders" who aren't afraid to speak the truth and do the right thing for a change.

    (-1) 1 Total Votes - 0 up - 1 down
  2. ccn_debate says:

    By: Anonymous on 3/23/08 [Delete]
    Why doesn't Ernie just submit an application to the County. Even if a group could gather enough signatures put a referendum on the ballot and raise any money at all to fight the project they'd still lose.

    So why doesn't Ernie stop waisting money with all this legal BS and just go and submit the application to the County. He has a solid 3 votes to accept the application and more than likely approve the project.

    So why isn't he doing it?.

    By: Anonymous on 3/23/08 [Delete]
    SLO has become a socialist/gay hangout, which has destroyed the town’s charm. It has also destroyed free enterprise and commerce. They want this town for their own and will do whatever it takes regardless of the fairness or legality.
    Ernie knows this and so will stop fighting back the socialist’s attacks for the good of all the people.
    The project will be built and will many more in the future.
    SLO County will not succumb to these radical socialist tactics any longer.

    By: Anonymous on 3/22/08 [Delete]
    I agree with Warren that Dalidio has been ripped off. I agree, too, with Ernie Supporter, that Dalidio has made some unfortunate choices.

    Finally, I believe the notion that it is no longer about money that it is about being jacked around by non-stakeholders.

    My support continues to be with Dalidio as he is the David being clubbed by the Goliath of misguided elitist do-gooders, subtly conned by secret developers.

    By: Anonymous on 3/21/08 [Delete]
    First of all let me say that I have been in favor of Ernie’s project since day one.

    Having said that, I have watched in disbelief (for what, 16 years?) as he has made one blunder after another.

    Why did he partner with LA developer Bill Byrd, who many remember with distaste from his involvement as a project manager with the original developers of the Madonna Plaza who went BK?

    Why didn’t he hire from the beginning someone like RRM, who has respected local representatives who could Sheppard this project through the city?

    Why didn’t he accept the city’s offer to rezone the Costco portion of the property and deal with the remainder later?

    Why did he so seriously blunder the wording of Measure J?

    What is the business purpose of this RICO suit and why is using Pre Paid Legal to represent him?

    I really could go on and on and on, but the gist is that Ernie, who I admire and respect, has simply blundered from one self-inflicted wound to another for almost an entire generation, and I suspect he may not live to see his property developed.

    By: Anonymous on 3/21/08 [Delete]
    There is a double RICO case here. Its time to smarten up and learn that the self appointed so called powers that be can't do anything that they want to. I think there will be a high price to pay.

    By: Anonymous on 3/21/08 [Delete]
    About the timing killing this project. Ernie has been ripped off and it's more about principal in my opinion. There is no reason he should take this laying down. He needs to give them a swift kick in the butt and clean out their bank accounts. Go Ernie Go and get those holigans.

    By: Anonymous on 3/21/08 [Delete]
    There are at least two very good comments raised on this thread: (1) Why on earth would Ernie use McKiernan for anything? That seems suspect And (2) Given the recession, why would any new retail stores want to open. The timing is going to kill this project.

    (0) 0 Total Votes - 0 up - 0 down
  3. ccn_debate says:

    By: Anonymous on 3/21/08 [Delete]
    Mr. McKiernan's lawsuit is pure baloney. Measure J would have led to a major traffic breakdown in the area among other irreparable environmental damage. That's no ruse, just the facts. If anything, the developers are the conspirators.

    By: Anonymous on 3/21/08 [Delete]
    Yes, go Ernie go! Spend it all! You've already dug yourself quite a hole of desperation.

    After all you've spent grabbing at the gold ring, I bet your old life as a farmer isn't sounding so bad now, is it?

    But at least it's for a good cause—someday we may all be able to go shopping!!

    Yay for shopping!! Heaven knows we never get enough shopping! After all, Shopping = life!

    Oh, what's that? The economy's flailing? Large corporations are hesitant to commit on new projects? Hmmm. Good luck with that.

    Go, Ernie, go!

    By: Anonymous on 3/21/08 [Delete]
    Go Ernie! Do whatever it takes to beat down these environazi socialists!
    Build it Ernie! We will all come!

    By: Anonymous on 3/21/08 [Delete]
    It sure is fun to watch our local captains of schlock — Madonna, Copeland and Dalidio — duke it out to see who will cash in the most from the Los Angelization of SLO town. ("Hey, that Circuit City was mine! No fair!") But if Dalidio thinks the answer is more litigation, he may be pissing up the wrong tree. How is he paying his legal bills? Is James "Suspended by the State Bar" McKiernan working on a contingency?

    Is the County Superior Court named in the RICO suit? This article should have reminded readers that Measure J, the local ballot initiative to allow development on the Dalidio property, was ruled to be unlawful. Something tells me the judge who made that ruling is in cahoots with the vast anti-Dalidio conspiracy. I wouldn't be surprised if the New Jersey mob started setting Ernie's dumpsters afire.

    Interesting to see UncoveredSLO leaning towards Dalidio, who seems to be reaching Nixonian levels of bitterness, instead of playing it more evenhandedly. They might also cite some of the plentiful counterexamples of where RICO suits went nowhere.

    By: Anonymous on 3/21/08 [Delete]
    Interesting choice of legal counsel for Dalidio.

    Doesn't the Mckiernan office base its reputation on being junk yard dogs and ambulance chasers?

    Why did Dalidio stray from his regular, high-brow lawyers?

    By: Anonymous on 3/21/08 [Delete]
    I'm going to follow this story. It will be interesting to see how this all comes out. It sounds like Ernie has a good case.

    By: Anonymous on 3/21/08 [Delete]
    I hope Ernie kicks some butt and makes them pay bucks. Good Luck Ernie.

    (0) 0 Total Votes - 0 up - 0 down

Comments are closed.