Falcos granted second trial in lawsuit against City of Menifee

Tony Falco has been operating his plumbing business out of this property on the corner of Menifee Road and Garbani Road. Menifee 24/7 photo by Doug Spoon

By Doug Spoon, Editor

The date has been set for a new jury trial in litigation that has lasted more than two years and has cost the City of Menifee more than a quarter million dollars to defend.

Following a deadlocked jury in a trial last month, a March 20 date has been set in Riverside Superior Court for a new trial in the case of Tony and Rosa Falco vs. the City of Menifee.

The Falcos own Accurate Leak Locators, Inc., a plumbing company that has been in business since 1997, according to its website. The business was previously run at a location at 29135 Leeanne Lane, with access to the public from the south end of the property at Garbani Road and Pitman Lane.

At that address, the Falcos were involved with a dispute with a neighbor and ultimately were fined a total of nearly $24,000 by the City for code violations, according to court documents. The Falcos negotiated with the City of Menifee and entered into an agreement to move the business a few doors west, to 29025 Roche Lane, with the property facing the northeast corner of Garbani Road and Menifee Road.

The agreement was necessary because the locations involved are zoned as residential. The Jan. 7, 2016 settlement agreement stated that the Falcos would have until Dec. 31, 2019 to find a suitable location at a site zoned for business. The conditions under which the Falcos could run their business at the new location have been interpreted differently by the two parties, however, resulting in the Falcos filing a lawsuit on April 14, 2017.

Section F of the agreement states that “property owners and City agree that it is appropriate to allow property owners until Dec. 31, 2019 to achieve full code compliance with respect to the Accurate Leak Locators business operations on the new property.”

Then the Falcos were issued warnings of several code violations at the new property in March 2016, shortly after Accurate Leak Locators moved onto that property. In their lawsuit, the Falcos state that they should not have had to incur what they claim were $50,000 in expenses to address the reported violations.

Therein lies the argument. The Falcos believe they had more than three years to come into compliance and would not be found in violation during that time. City officials stated in their response to the lawsuit that the agreement did not prohibit the City from enforcing the Menifee Municipal Code for violations that “endangered the public health, safety and welfare.”

The City defends its right to enforce the March 2016 reported violations, citing a clause in the agreement stating “notwithstanding the foregoing, property owners understand and agree that City may at any time it deems appropriate enforce such legal requirements as are necessary to protect the public health, safety and welfare.”

Three years later, the situation remains unresolved. Tony Falco told Menifee 24/7 last week that he has signed a three-year lease for a building on Illinois Avenue in Perris, on the east side of the 215 Freeway north of Ethanac Road, and is preparing to move his business out of Menifee. Meanwhile, according to the court document of a Jan. 8 trial setting conference, the City of Menifee is considering filing a counter complaint, alleging breach of contract on the part of the Falcos because they didn’t vacate their current property by Dec. 31.

“The City forced me to do this,” Falco said about the move. “I’m moving my business out of the city. They won’t have the tax from the $17,000 to $18,000 a month I spend in gas for my vehicles. Our employees won’t shop local anymore. They lose all that tax money.

“Let them come after me. They will keep sending me notices of violation. That won’t stand up in court.”

Armando Villa, city manager for the City of Menifee, wrote in an emailed response to Menifee 24/7 questions that the code violations noted by the City against the Falcos in March 2016 were warnings and that fines were not issued. The cost incurred by the Falcos was simply the cost to bring the property into compliance, he said.

Code violations requiring attention at that time, according to Villa and court documents, included “building code, plumbing code, grading, and metal shipping container violations.” In his email to Menifee 24/7, Villa restated the City’s position that the City was within its right to enforce the code violations, the agreement notwithstanding.

“The settlement agreement explicitly retained the City’s ability to utilize code enforcement,” Villa wrote. “Mr. and Mrs. Falco always understood that the City retained this power as it related to the enforcement of public health, safety, and welfare issues; that was expressly spelled out in the settlement agreement.

“Further, the settlement agreement did not allow Mr. and Mrs. Falco to move on to the property and create new violations of the Menifee Municipal Code, as they did. These new violations were the subject of the notice of violation that is at the heart of the litigation.

"As to what Mr. and Mrs. Falco are seeking money for, they are making several absurd claims. For example, Mr. and Mrs. Falco have attempted to sue the City for alleged damages before the notice of violation was even issued to them; indeed, they have even tried to get damages for work done on the property before the City even entered into the settlement agreement with them. They are also trying to obtain damages for improvements made on their personal residential property, which is not the property subject to this litigation."

Tony and Rosa Falco posed with the late Menifee Mayor Neil Winter, Gloria Sanchez and City Council members Lesa Sobek and Greg August at a free Thanksgiving dinner the Falcos help sponsor each year. File photo

The main items of contention among the violations appear to be the Falcos’ placement of a metal shipping container on the property and its alleged use for business purposes, and the placement of a structure that is used for business purposes.

“Mr. and Mrs. Falco constructed an addition to a mobile home that was attached on to the mobile home without any independent support and with inadequate ventilation,” Villa wrote. “This addition was going to be an office that Mr. and Mrs. Falco had their employees using and would be unsafe to them. They performed all of this construction without the benefit of a building permit and consequently appropriate building  inspections, which is required under both California and City law.”

John Siciliano, the Falcos’ attorney, disputes the City’s report of such violations.

“The city said they [the structures] can be on residential property if they are used in conjunction with a business,” he said. “Since the City said they could run their business from that property, the containers should be allowed. You rezoned that property as a business property for three years and now you want to claim this as a violation?

“And those codes listed … if you compare the language, the code doesn’t say the same thing as they are claiming. They have never addressed this fact when it has been brought up in court. They are hiding from that issue. You’ll never get them to address it.”

Another aspect in the trial, according to court documents, is the City’s contention that a loan the Falcos say they took from their business to help make the required improvements should not be considered financial damages suffered by the Falcos because the funds came from the corporation.

“The City told Tony if he bought the (current) property, they would allow him to run his business there,” Siciliano said. “As soon as he started moving the business, the City immediately started busting his chops with every kind of violation. The Falcos had to make all kinds of changes, so they borrowed money from their own corporation. Now the City is saying that the corporation is the one that is financially damaged, not the Falcos.”

Villa’s response:

“Corporations are separate legal entities. In fact, they are often set up to shield individuals from their business’ liabilities. But the opposite is true, too. Individuals cannot claim, when it is convenient for them, that the expenses of their corporations ought to be treated like their own personal expenses.”

The parties also disagree on whether a City code enforcement officer determined a plumbing violation by actual inspection before writing it up.

City attorneys have made multiple attempts to have the case dismissed, according to court documents. All such motions have been denied. As of October 2019, the City has spend $228,000 defending itself in this case.

Falco said he attempted to find a new location in Menifee that was zoned for business and purchased a parcel on Bailey Park Boulevard, south of Scott Road and bordering the 215 Freeway on the west side. He said the City has not allowed him to place a trailer on the property to begin construction until a conditional use permit fee of about $10,000 is paid – another claim Falco and his attorney dispute.

“He owns the property on Bailey Park,” Siciliano said. “He has submitted plans and it’s zoned so he can run his business there. But they’re giving him a hard time.

“The city attorneys are telling the city what to do. It’s the tail wagging the dog.”

Falco believes the Bailey Park situation is another example of the City doing everything it can to stop him.

“I said, 'Let me put a trailer there for now. I’m ready to build tomorrow,’” Falco said. “They said, 'We don’t allow temporary buildings in the city.’ I said, ‘Well, the city was using portables at City Hall.’”

Villa said the City’s requirements on the Bailey Park property are consistent with City codes.

“Based on the use proposed, zoning of the site and development code, the required applications are a CUP and Plot Plan under the existing zoning,” Villa wrote in an email. “The application fees are based on a fee study and the fees were adopted by the City Council and apply uniformly. Since there are no existing entitlements or permits for commercial use on the property, there are no existing conditions that would alleviate the requirement for a CUP or PP.”

The first jury trail ended Dec. 17 when jurors reported they were “hopelessly deadlocked”, according to court documents. Eight of the 12 jurors ruled in favor of the City of Menifee, but nine must agree in a civil case. They will do it all over again with a new jury in March.