A group of 157 tenants at the Oakridge Mobile Home Park in Sylmar would divide $1 million and get a two-year rent freeze under a settlement reached by attorneys in a restraint-of-trade lawsuit that has bitterly divided the park's residents.
The out-of-court settlement still must be approved by Los Angeles Superior Court Judge Christian E. Markey Jr.
Had it come to trial, the suit would have been the first to give a jury a chance to rule on a common and controversial practice in the mobile home industry, lawyers in the case said.
In the practice, called "closing a park," the management of a mobile home park requires tenants to buy their homes from one mobile home dealer.
Steve Ruben, the Los Angeles attorney representing Oakridge residents, predicted the settlement will deter park owners from entering into such agreements.
"I'm very pleased with this settlement," Ruben said of the agreement, which he called the result of "some tough compromising on both sides."
The settlement was tentatively approved by the judge, but his final ruling will not come until after a May 23 hearing at which the 157 park residents taking part in the class-action lawsuit will be invited to comment on the agreement.
In the 2-year-old lawsuit, Oakridge residents charged that the park's owners had made an exclusive deal with a Van Nuys-based mobile home dealer to shut out competing dealers. The arrangement forced Oakridge tenants to pay an average of $13,000 more for their homes than they would have if they could have shopped around, the suit alleged.
$6 Million Sought
The lawsuit had asked for $2 million in repayments for alleged overcharges and $4 million in punitive damages.
Attorneys on both sides said the cash settlement would give each resident in the suit $6,300. Their rent would be frozen for two years, with increases limited to 6% per year for three years after that.
Ruben said the rent provisions were worth at least $3,000 to each tenant family.
The average rent at Oakridge is about $300 a month, lawyers in the case said. Ruben said the average age of Oakridge's residents is 53 and that many are retired.
Fight for Loyalties
Throughout the dispute, the two sides fought hard for residents' loyalties, with the park's owners offering two-year rent freezes and other benefits to those willing to drop out of the lawsuit.
Residents said a deep rift developed between those who stayed in the lawsuit and those who took the park management's offers. Friendships were broken and families argued over the case, they said.
At the time of last week's agreement, 174 had opted out of the lawsuit, which originally included tenants of all of Oakridge's 331 lots.
"I think the plaintiffs did very well for themselves," said Joseph Coyne, an attorney for the park's owners.
Action Called Legal
Coyne said the settlement was not an admission of wrongdoing by the park. "I don't think there's any question that what our clients did was legal," he said. "But, given the costs of litigation and the vagaries of juries, we thought this was the best way to go."
Oakridge is owned by a network of companies and partnerships overseen by Continental Mobile Housing Inc. Since 1978, the company has given exclusive sales rights at Oakridge to Fuller-Western Sales Inc. of Van Nuys, also named as a defendant in the lawsuit.
Coyne would not say whether the park would continue to require tenants to buy their homes from one dealer.
The park's management argued that the exclusive sales arrangement was designed to make sure that Oakridge homes were sold by a trustworthy dealer. Coyne said tenants' claims that such agreements violate antitrust laws were "without intellectual merit."
Asked for his clients' reaction to the settlement, Coyne said, "No one likes to lose a million dollars."