Loyola trustees sue state for antideficiency statute

They seized vacant El Sereno homes at the start of the pandemic. Now, they face eviction and, many believe, a fine of up to $7 million under Los Angeles law.

On Feb. 7, the state attorney general filed a lawsuit against the Loyola Marymount trustees, alleging they acted in bad faith in selling off the homes.

A lawyer representing the trustees, John Stocks, a managing consultant for the Los Angeles office of the law firm of Jones Day, said the homes were part of a master-planned community, and there is an extensive public-private development plan for the campus.

He said the university had offered to sell the homes at a low price and then later declined to do that. Mr. Stocks said that was because the university had determined that it would have to take $2.5 million from the trust to cover the cost of the project.

“It has become the case, as is the case in every major capital project anywhere in the nation, that the developer is seeking to include the community in the project,” Mr. Stocks said. “And because of the very fact that the community is defined by the community, this is how the community is going to be defined. This is the reality of this community.

“So now the question is: Can these community members get back a good deal for their homes that they expected to be part of the development.”

Lawyers representing the Loyola trustees, on the other hand, contended that the homes were vacant properties and therefore not subject to the state’s antideficiency statute.

That statute can, in effect, force the state to pay a penalty for a state-created economic problem.

“The state is not seeking to take from the community anything that it has, except of course the opportunity to sue,” Mr. Stocks said.

The lawsuit was filed on Friday in Los Angeles County Superior Court by Mr. Stocks and Richard R. Fong, a lawyer with the law office of Mark Grossman

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