CARSON REDEVELOPMENT AGENCY v. MICHAEL

Filed 6/28/06

CERTIFIED FOR PUBLICATION

IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA

SECOND APPELLATE DISTRICT

DIVISION TWO

APPEAL from a judgment of the Superior Court of Los Angeles County.

Haley J. Fromholz, Judge. Affirmed.

Jay M. Coggan & Associates, Jay M. Coggan, Heather E. Sterling; Law Offices of Joseph W. Singleton and Joseph W. Singleton for Defendants and Appellants.

Aleshire & Wynder, William W. Wynder, Sunny K. Soltani and Anthony R. Taylor for Plaintiff and Respondent.

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When a public official violates the Hobbs Act, title 18 of the United States Code section 1951(a), by soliciting and obtaining an extortion payment in exchange for approval of a public contract, that contract runs afoul of Government Code section 1090[1] and may be avoided pursuant to section 1092.[2] Regardless of whether the third party who obtained the public contract is an innocent victim, the public entity is entitled to recover all consideration it paid to the third party. With this holding in mind, we conclude that the trial court properly granted summary judgment in favor of respondent Carson Redevelopment Agency (the Agency) on its complaint to recover $850,000 from appellants Michael and Bertha A. Padilla (the Padillas). The $850,000 was paid to the Padillas through a public contract that was approved and signed only after they paid $75,000 in extortion money to Agapito Diaz Fajardo (Fajardo), the former mayor pro tempore of the City of Carson.

We affirm the judgment entered in favor of the Agency.

FACTS

The Padillas are the owners of a 45-unit senior housing complex known as Camino Senior Village in the City of Carson. In 1994, the Padillas and the Agency signed the Affordable Housing Agreement (the Housing Agreement). It established that the Agency would provide the Padillas rental assistance for six years, â€