HUB CITY SOLID WASTE SERVICES, INC., v. CITY OF COMPTON Part-I
<script src="http://www.google-analytics.com/urchin.js" type="text/javascript"> </script> <script type="text/javascript"> _uacct = "UA-1698443-1"; urchinTracker(); </script> <html ><br /> <head><br /> <title>HUB CITY SOLID WASTE SERVICES, INC</title><br /> </head><br /> <body><br /> <div><br /> <br/><b<br /> >HUB CITY<br /> SOLID WASTE SERVICES, INC., v. CITY OF </b><b<br /> >COMPTON</b><b<br /> ></b><br /> <br/> <br /> <br/> <br /> <br/> <br /> <br/> <br /> <br/> <br /> <br/> <br /> <br/> <br /> <br/> <br /> <br/> <br /> <br/>Filed 7/19/10<br /> <br/><b > </b><br /> <br/><b > </b><br /> <br/><b > </b><br /> <br/><b > </b><br /> <br/><b > </b><br /> <br/><b > </b><br /> <br/><b >CERTIFIED FOR<br /> PUBLICATION</b><br /> <br/> <br /> <br/> <br /> <br/> <br /> <br/> <br /> <br/> <br /> <br/>IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA<br /> <br/> <br /> <br/>SECOND APPELLATE DISTRICT<br /> <br/> <br /> <br/>DIVISION FOUR<br /> <br/><b > </b><br /> <br/> <br /> <br/> <br /> <table class=MsoNormalTable border=0 cellspacing=0 cellpadding=0<br /> ><br /> <tr ><br /> <td width=319 valign=top ><br /> <br/>HUB CITY SOLID<br /> WASTE SERVICES, INC., et al.,<br /> <br/> <br /> <br/> Plaintiffs, Cross-defendants, and<br /> Appellants,<br /> <br/> <br /> <br/> v.<br /> <br/> <br /> <br/>CITY OF COMPTON,<br /> <br /> <br/> <br /> <br/> Defendant, Cross-complainant, and<br /> Respondent.<br /> <br/> <br /> </td><br /> <td width=319 valign=top ><br /> <br/> B196639<br /> <br/> <br /> <br/> (Los Angeles<br /> County<br /> <br/> Super. Ct.<br /> No. BC323801)<br /> <br/> <br /> </td><br /> </tr><br /> </table><br /> <br/> <br /> <br/> <br /> <br/>APPEAL from a judgment of the Superior<br /> Court of Los Angeles<br /> County, Joanne O'Donnell, Judge. <br /> Affirmed.<br /> <br/>Philip D. Dapeer, A Law Corporation, Philip D. Dapeer; Law<br /> Office of Edward M. Medvene, and Edward M. Medvene, for Plaintiffs, Cross-defendants<br /> and Appellants.<br /> <br/>Goodstein & Berman, Gary J. Goodstein and Bruce A.<br /> Berman, for Defendant, Cross-complainant and Respondent.<br /> <br/> <br /> <br/> <br /> <br/>____________________________<br /> <br/>This conflict of interest case grew out of a suit and<br /> cross-action centering on the activities of appellants Michael Aloyan and HUB<br /> City Solid Waste Services, Inc. (HUB). <br /> The city of Compton had<br /> awarded a 15-year waste collection franchise to HUB. Some years later, Compton<br /> terminated the franchise. HUB sued for<br /> breach of contract. Compton<br /> cross-complained against HUB and Aloyan, seeking to void the contract and<br /> disgorge funds from appellants. <br /> <br/>The trial court found that Aloyan was HUB's alter ego, and<br /> granted summary adjudication in favor of Compton<br /> on its claim for declaratory relief<br /> that it did not breach the franchise agreement when terminating it. At trial, Compton advanced two conflict of<br /> interest theories under Government Code section 1090 (section 1090), arguing<br /> that Aloyan had a prohibited financial interest in the franchise because of his<br /> role in managing Compton's in-house waste division, and the franchise was void<br /> because members of the Compton city council had illegal interests related to<br /> campaign contributions and favors given by HUB and Aloyan. A jury unanimously found that appellants had<br /> violated section 1090 and were liable for over $22 million in damages to Compton. Compton's<br /> motion for nonsuit was then granted as to appellants' complaint. <br /> <br/> This<br /> appeal followed. Appellants argue<br /> section 1090 does not apply because neither Aloyan nor HUB was an official or<br /> employee of the city, and there was insufficient evidence to prove bribery of<br /> city council members. We disagree. Evidence presented at trial supported a<br /> finding that Aloyan, through AUS, acted as a public official in advising Compton<br /> on its waste collection operations. <br /> There also was sufficient evidence showing that the campaign<br /> contributions and jobs for the council members' relatives were provided in<br /> return for the council members' approval of the franchise agreement with<br /> HUB. The trial court did not abuse its<br /> discretion in allowing the introduction of evidence about Aloyan's prior<br /> involvement with payments to public officials in connection with government<br /> contracts. <br /> <br/>Appellants also claim that the trial court erred in<br /> determining that Aloyan was HUB's alter ego, and that disgorgement was not the<br /> appropriate remedy. As we shall explain,<br /> we do not agree.<br /> <br/><b >FACTUAL AND<br /> PROCEDURAL SUMMARY</b><br /> <br/>Following well-established<br /> rules on appellate review after a trial on the merits, we construe the facts in the light most<br /> favorable to the judgment. (<i >Woodman<br /> Partners v. Sofa U Love</i> (2001) 94 Cal.App.4th 766, 771.) <br /> <br/>Private vendors held franchises for Compton's<br /> waste collection operations. These<br /> agreements were due to expire in 2000. <br /> In 1999, Compton's assistant<br /> city manager, Lawrence Adams, was instructed to study the feasibility of the<br /> city internalizing its waste management services. Requests for proposals for new franchise<br /> agreements were suspended. A feasibility<br /> study and an associated business plan projected more than $700,000 in annual<br /> savings for Compton if it brought<br /> its waste management â€