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By Brian Hews
At the May 20, 2015 Montebello City Council meeting, in a 2-2 vote with one abstention, Montebello Mayor Jack Hadjinian inexplicably voted to settle a simple claim filed by Michael Minasian and his company Garfield Financial Corporation (Garfield) against the City for over $3.5 million, despite the fact the international law firm of Squire, Patton, and Boggs (Squire), which was hired by the City to examine the item, strongly asserted that Garfield’s claim was “extremely weak.”
Michael Minasian is the father of Mo Minasian. Mo Minasian was the campaign manager for Hadjinian’s 2011 City Council Campaign.
Reliable sources told HMG-CN that Mayor Hadjinian, a long-time friend of the Minasian family, led the charge for a yes vote on the issue.
Some people are calling the yes vote by Hadjinian to give Garfield over $3.5 million “a massive and unprecedented gift of public funds.”
The questionable vote to settle is centered on an agreement between Garfield and the Montebello Redevelopment Agency (RDA).
In early 2000, an Owner Participation Agreement (OPA) entered into between Minasian and the RDA agreed that Garfield would develop 20 single-family detached homes, designated as affordable housing to low and moderate income buyers.
The project was called Natasha Lane (Project), located at 125 East Whittier Boulevard.The Project was completed in 2005.
Impending Litigation Causes Settlement Agreement
On November 1, 2005, to avoid what both parties saw as impending litigation, Garfield and the RDA executed a Settlement Agreement (Agreement) signed by both parties and their attorneys that provided the City “a general release of all claims, known or unknown that Garfield might have.”
Also in the Agreement, Garfield agreed they owed the City $1.5 million, and agreed to pay off the $1.5 million using funds from the sale of the last five lots/houses that remained.
The Agreement, as far as the City was concerned, and confirmed by their attorneys, stood on solid legal ground, secured by Deeds of Trust on each house.
But that did not stop the Minasian family from attempting to break the agreement and then devising a long-term plan to attempt to get the $3.5 million, using their lifelong friend Jack Hadjinian.
Demand Letters From Minasian
In December 2006, and again in early January 2007, Garfield sent letters addressed to Richard Torres, then-Montebello City Administrator, demanding that the City reimburse Garfield for more than $3 million in “public improvement costs” and “miscellaneous costs” incurred by Garfield on the Project.
According to Squire, the statute of limitations had run out, therefore the claim would not have been valid. Minasian had to file the letter within one year of the November 2005 Agreement.
But that did not deter Minasian.
In late January 2007, Garfield’s attorney sent a letter to John Pringle, then City Attorney, this time accusing the City of having entered into the 2005 Agreement “in bad faith,” an illogical argument since Garfield executed and signed the Settlement Agreement.
The letter demanded that the City release over $3,1 million related to the new homes in the Project.
Garfield would have had to otherwise pay the RDA the $3.1 million.
Six Years Pass and More Letters
Then Garfield and the Minasian family waited over six years to begin sending demand letters once again.
The letters started just months after Michael Minasian’s son Moe, who was Hadjinian’s campaign manager, helped Hadjinian get elected in November 2011.
In August 2013, Garfield sent two letters addressed to Francesca Tucker-Shulyer, the Montebello City Administrator, restating the charges of the January 2007 letter. Garfield increased their alleged damages to over $3.5 million.
Five months later, Garfield filed a claim, this one slammed by the attorneys at Squire as extremely weak, if not damn anemic.”
The attorneys cited several reasons why Garfield’s case was extremely weak, which further called into serious question the vote by Hadjinian to award Minasian and Garfield over $3.5 million:
1. The statute of limitations would bar a lawsuit on a majority of the claim.
Garfield’s claim was a “tort claim” not a “contract claim.” Montebello’s own code (3.08.030) states that any tort claims must be filed within 90 days after the incident, which indicates Minasian needed to file any claim against the city in 2004, over 10 years ago.
2. It was the Redevelopment Agency (RDA) that signed the agreement with Garfield not the city, and Garfield has never filed or submitted a claim against the RDA.
The city was not party to any agreement with Garfield, yet Garfield in its claim, is suing the city. The RDA is a separate legal entity. The attorneys at SPB stated that Garfield “has been barking up the wrong tree for ten years.”
3. Lack of evidence to support Garfield’s claim.
One Squire attorney met with Michael Minasian’s other son Raffi Minasian, VP of Garfield, and their attorney, Mark Austin, in an effort to assess Garfield’s case. According to the attorney, neither produced any documents that would indicate “a smoking gun.”
4. Settlement Agreement between Garfield and the RDA.
Out of all the points outlined by the attorneys, the most egregious, in relation to Hadjinian’s vote, is the 2005 settlement agreement between the RDA and Garfield.
In the agreement, Garfield provided “a general release of all claims, known or unknown that it might have.”
Also in the settlement, Garfield agreed they owed the city $1.5 million, which would come from the sale of the last five lots/houses that remained.
One Montebello resident, who did not want to be identified said, “this is Quid Pro Quo, that is, something for something between the Minasian family, and Hadjinian, and the Montebello’s election is coming up so you can kind of guess what this vote was for.”
Calls and emails into Hadjinian went unreturned.
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