Caruso Sued for Damaging Construction Effects in Pacific Palisades

By Sue Pascoe

Caruso Affiliated is being sued by two of the four remaining businesses on Swarthmore Avenue for the construction of Palisades Village, which has resulted in noise, dirt, dust, fumes, debris and vibration caused by jack-hammering, drilling and truck traffic. The result has been a loss of customers and the possibility of the shops closing.

Erica Simpson, owner of P2, a clothing and skateboard shop, and Isabella Solis, co-owner of Solis Salon, a beauty/hair salon, both represented by Drew Pomerance, co-managing partner of Roxborough, Pomerance, Nye & Adreani, LLP, filed separate complaints on October 11 with the Los Angeles County Superior Court.

“We have no problem with Caruso or his development,” attorney Drew Pomerance told the News. “But in the process, the developer can’t destroy existing businesses—those that have been fixtures of their local communities for years.”

Shops on the north side of Swarthmore are suing Caruso over lost business due to construction.
Shops on the north side of Swarthmore are suing Caruso over lost business due to construction.

P2 Skate has been on Swarthmore since 1999 and Solis Salon since 1988. The suits allege nuisance, negligence, trespass and interference with prospective economic advantage. Simpson and Solis are seeking unspecified compensatory and punitive damages as well as an injunction directing

Caruso Affiliated to stop engaging in the activities alleged in the complaint.

Caruso bought the property on north Swarthmore Avenue that extends to Monument Street from the alleyway just north of Sunset in 2012. During inspection, it was discovered that the former Emerson-LaMay Cleaners had poured toxic material in the soil.

Remediation, which started at the beginning of 2015, included relocating a storm drain on Swarthmore, included closures on that street, as well as hauling truckloads of toxic dirt out of Pacific Palisades.

With the city’s approval of the Palisades Village project this last May, the remainder of the buildings and some of the trees have been razed [all are slated to be destroyed]— and the right-turn lane onto Swarthmore going west was eliminated.

According to both complaints, “Caruso Affiliated’s blog falsely claims that ‘all of the retailers on Swarthmore have finalized their plans to relocate or take a break so [Caruso Affiliated] can begin preparing for demolition.’”

Pomerance points out that his clients’ businesses are still open, but few would know this after reading Caruso’s signs post- ed nearby, advertising that Swarthmore Avenue is closed for the next two years.

“Neither Solis nor Simpson will last another two years while their businesses are subject to continuous physical interference and damage,” Pomerance said.

There is precedent for such lawsuits. When Caruso Affiliated was developing the 15.5-acre Glendale mall, he was sued by recording studio owners Backroom Entertainment. They claimed that construction is- sues had forced the recording studio to close.

According to a February 2011 L.A. Times story, “Los Angeles Superior Court Judge Richard Rico sided with Backroom Entertainment owners, who argued that ground vibrations from demolition of nearby buildings in 2005 during construction of the 15.5-acre Americana forced the recording studio to close.

“Attorneys for the city and Caruso said that the financially strapped studio had failed to show its troubles were caused by Americana construction and that the disruptions were a routine part of a large project. Rico disagreed.

“‘Backroom Entertainment was literally and figuratively driven out of business,’ Rico wrote.”

It was reported that studio owners Brad Schmidt and Tim Feehan sought more than $1 million in damages and a jury trial was set for April 19 to decide damages.

Four days before the start of the jury trial, the Times reported “Americana at Brand developer Rick Caruso and the owners of a former recording studio have settled their legal dispute, according to a Los Angeles County Superior Court official.

“The terms of the settlement were not disclosed and representatives for Caruso Affiliated and the studio, Backroom Entertainment Inc., declined to comment.”

Caruso was also involved with a suit with Ray Patel, the owner of the adjacent Golden Key Hotel in Glendale. Patel alleged that his business had been disrupted during construction.

In a L.A. Times 2010 story it was reported “Patel filed a lawsuit against the Glendale redevelopment and Caruso in 2008. He alleged this his business was damaged by noise, dust and traffic associated with construction of the mall, thereby causing it to lose its Best Western affiliation and that noise and operations at the mall such as trash collections continue to hurt business.”

News sources reported that Caruso bought the building that had housed the studio for $4.1 million. A few weeks later, Caruso bought the Golden Key Hotel, which is next to the studio, for $16.2 million. Pomerance, whose law firm specializes in providing expert legal counsel and representation to the California business community, was asked if his clients had received offers from Caruso for the disruption to their businesses. “I have not seen anything yet,” he said and noted, “Once Caruso Affiliated is served, they have 30 days to respond.”

The next steps in this suit would be litigation and discovery, leading to a jury trial. “I want to vindicate my clients’ rights,” explained Pomerance.

He was asked if his clients would be willing to settle. “Of course we would prefer to amicably resolve this, but so far they haven’t approached us, so that leaves us with no choice but to pursue litigation,” Pomerance told the News.

Caruso Affiliated was asked about the lawsuits. “We do not comment on legal matters,” said spokesperson Liz Jaeger.

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