PLJ — La Jolla’s nonprofit business improvement district — serves the village merchants using funds collected from business assessment taxes. Two La Jolla business owners, Nancy Warwick and Bob Collins, ran in PLJ’s Oct. 2007 election and then sued the organization after learning two winning incumbents were ineligible. Collins and Warwick were the next highest vote-getters.
San Diego Superior Court Judge John S. Meyer ruled PLJ should have seated them, siding with Warwick and Collins, who also asked PLJ to disclose public records. PLJ appealed Meyer’s decision but the higher court denied the request.
Although both sides said they wanted to settle the matter, neither accepted an offer until now.
“We offered a settlement last April or early May, [though] we were seated on the board,” Warwick said. “They continued to engage in legal actions to prevent us from being on the board.”
Warwick said she offered to settle, asking PLJ board members to accept the two members without additional litigation. Warwick said she agreed not to ask for attorneys’ fees.
But Marengo said the litigation resulted in substantial losses for PLJ, adding that Warwick and Collins asked for documents that don’t exist.
“Our greater concern as a board is the repercussions this action had on our budget planning because we have such little funding each year … every dollar counts,” Marengo said in a written release. “In the end this action has cost the organization over $8,000 in FY 09 because of pro-active steps that we had to take and increased insurance premiums.”
According to Steve Haskins, attorney for Warwick and Collins, Marengo hired a firm to represent PLJ in the election case but hired an additional attorney representing the organization for other needs, he said.
“Marengo has presented herself as a victim when she said the insurance was covering the legal fees but the premiums went up,” Haskins said. “We have always been told that attorneys’ fees were paid for by insurance, but they had to hire an additional attorney to advise them on the Brown Act that, clearly, they violated.”
Marengo hired attorney Leslie Devaney to represent PLJ regarding Brown Act matters relating to public disclosure for nonprofit groups, Haskins said.
“Following the Brown Act and the Public Records Act is a matter the board of directors takes very seriously, and the board has engaged legal counsel as a result of this action,” Marengo said. “To our members, this cost amounts to eight months of trash pick-up and street cleaning that can’t happen because the funds are being used elsewhere.”
Although Devaney advised PLJ board members on Brown Act matters, the law firm Gordon & Rees represented PLJ during the Collins and Warwick case.
“Bob and Nancy were paid for by insurance. The other case was their own problem,” Haskins said. “They needed [Devaney] to advise them on how to comply with the law because they were violating the law and they didn’t want to. They chose to do it because they wanted to maintain control.”
PLJ meets the second Wednesday of the month at 6 p.m. at La Jolla Recreation Center, 615 Prospect St.
For more information, visit www.lajollabythesea.com.