$2 awarded in housing case

Mathys not liable; Fresno to pay nominal amount

By Jerry Bier

The Fresno Bee, August 30, 2003

A $27 million lawsuit ended at a couple of dollars Friday.

A federal court jury decided in favor of former City Council Member Chris Mathys and at the same time concluded that any damage caused by a council decision against two developers six years ago should be limited to $1 apiece.

The verdicts ended — at least for the time being — six years of litigation which began when developers Peter Herzog and Michael Conway, owners of Affordable Housing Development Corp., were denied bond financing for a 324-unit low-income apartment project called Wellington Place in northwest Fresno.

The developers sued, seeking $27 million, and the case concluded Friday after four weeks of trial.

The six women and three men on the jury deliberated part of Thursday and into Friday afternoon before concluding that AHDC and Conway’s Ashwood Construction should not receive any major damage award for the council action.

What the jury did decide was that the effect of the city’s decision to deny the apartments did “cause a significant adverse or disproportionate impact on persons seeking affordable housing because of their race, national origin or familial status.”

But they also concluded that the City Council would have reached the same decision even if those groups were not affected.

Thus, the jurors, as directed by a lengthy, 13-question verdict form, awarded $1 each to AHDC and Ashwood.

Herzog, who had called the council’s actions denying the project racist and discriminatory, declined to comment outside the courtroom.

William J. Davis, who represented AHDC, said the jury verdicts “are not the last of it.”

“My prediction is this is not the final outcome,” Davis continued, adding that an appeal will be filed.

City Attorney Hilda Cantu Montoy, who did not defend the city at trial but sat through most of it, said she was “extremely pleased with the verdict.

“This has been a cloud on the city over six years, and we’re glad it’s over.”

Lawyer Douglas T. Sloan, who represented the city, said it was “clear the jury found no intent to discriminate” by the city.

Mathys was not in the courtroom for the verdict, but his lawyer, Nancy Jenner, said she also was pleased with the verdict and “that Mr. Mathys was vindicated and the jury found he did not discriminate against anyone.”

The jurors left the federal courthouse quickly after they were thanked and excused by U.S. District Judge Oliver W. Wanger.

The jury member who was the last to leave declined to comment to a reporter.

Mathys led the fight to block the development and allayed the fears of neighborhood residents who complained that apartments would increase crime, crowd schools and depress property values.

In a telephone interview after the verdicts, Mathys said he was glad the trial was over.

“People’s freedom of speech has been preserved, and their right to voice their concerns without the fear of being sued,” Mathys said.

All of the 324 units would have been made available to low-income groups as part of the developers’ agreements for federal bonds to help fund the project.

Herzog estimated that they had spent about $500,000 just to get the project to the council hearing where it was rejected in a 5-2 vote on March 25, 1997.

Much of the time it took to bring the lawsuit to trial was spent in courtroom battles over whether it should be dismissed.

Two years ago, Wanger threw out the lawsuit, granting motions by the city, Mathys and the neighborhood residents who had objected to the complex planned on 23.5 acres near Herndon and Polk avenues.

But Davis asked for reconsideration, and last year Wanger, citing recent higher-court decisions, reversed his earlier ruling and reinstated the case against the city and Mathys.

However, the 12 neighborhood residents and other council members who opposed the development were dismissed as defendants.

Although the jury award seems minimal, the fact the jurors found an impact on minorities and families indicates a violation of the Fair Housing Act and opens the door for Herzog and Conway to seek attorneys’ fees, which could run over $1 million.

Since the project was denied, AHDC has begun development of a 138-unit complex on Fig Garden Drive north of Bullard Avenue that would offer 20% of the apartments for low-income renters, Herzog said.

That site is about a mile from the site where Wellington Place would have been constructed, a 23.5-acre parcel that was later rezoned to single-family uses and remains undeveloped.