Officially on the hook for $30 million, plus. Click here for the entire Court Document.
In a decision that came sooner than expected, the Court of Appeal of the State of California, Third Appellate District denied the Town of Mammoth Lakes’ appeal in the Hot Creek litigation case on Dec. 30. Therefore, the Town is now liable for $30 million in damages, plus more than $2.3 million in attorney fees to Mammoth Lakes Land Acquisition, the plaintiff in the case.
According to the official report, none of the Town’s contentions from its appeal had merit in the Court’s eyes. By failing to move forward with the hotel/condominium project at the Mammoth Yosemite Airport unless the FAA’s objections were resolved was ruled by the Court to be a breach of contract, i.e. the development agreement that the Town had in place with Mammoth Lakes Land Acquisition.
The document cites, “Another clause requiring the parties to comply with the rules and regulations of the FAA did not excuse the Town from performing on the development agreement because the FAA’s objections were based on grant assurances made by the Town to obtain FAA funding, not on FAA rules or regulations.”
Within the 66-page document, Airport Manager Bill Manning is quoted as saying “I believe that [the FAA representative’s] form of correspondence was ridiculous. If he had issues or comments that he wanted me to deal with, I believe he would have sent me a formal FAA letter. We correspond regularly with the FAA. This — the fax notes were highly irregular. I just felt like it wasn’t an official correspondence and I wasn’t obligated to respond to it.”
The development agreement was signed nine days after the FAA made known to the Town its reservations regarding the document.
It is unclear at this time what the Town’s next step will be. Offices were closed on Dec. 31 for the holiday. Previously, the Town Council had been preparing for a potential negative verdict by exploring several options. These included filing a Petition for Review with the California Supreme Court, challenging the denial of the Town’s insurance coverage, and seeking legal advice on municipal bankruptcy options.
The Town had re-argued the appeal on Dec. 20 after a Justice that had heard the original argument on Oct. 18 had retired. A decision could have taken up to 90 days, but instead took a mere 10.