The Macpherson Lawsuit is probably the most serious and important detrimental issue facing Hermosa Beach. While investigating this issue, Hermosa Residents and attorneys have examined various documents, and discovered what they believe is a serious flaw in the 1995 election PROPOSITION E, the “STOP OIL DRILLING” voter initiative.
The most significant part of the claim for damages by MacPherson in his lawsuit is his claim for “lost profits” in the hundred of Millions of dollars. This claim is based on a fundamental tenet/principal of law that damages for “Breach of Contract” entitles the injured party to claim lost profits.
However, in the Voter pamplet/booklet provided to the voter for this election, the “Impartial Analysis of Proposition E” prepared the City Attorney Michael Jenkins RWG Law Firm made no mention whatsoever of this potential, if not highly probable, consequential detrimental impact on the City should this measure be passed (read below). Had this consequence of the passage of this measure been presented to the voters, there could have been a substantial difference in the number of registered voters voting, as well as the election results.
“Beginning in April 1994 the Hermosa Beach Stop Oil Coalition began a campaign to qualify a ballot initiative to end the Macpherson project and to reinstate the comprehensive prohibition on oil drilling in the City by deleting from the Municipal Code the two exceptions from the ban that had been approved in 1984. (Hermosa Beach Mun.Code, § 21-10, subds. (a) & (b).) The measure, Proposition E, appeared on the November 1995 ballot.” (Stop Oil I, supra, 86 Cal.App.4th at pp. 543-544.)
“The ‘Impartial Analysis of Proposition E’ by the Hermosa Beach City Attorney circulated to all voters explained, ‘The effect of this measure, if adopted, would be to amend the Municipal Code to prohibit oil and gas exploration, drilling and production on these two sites [the two sites then excepted from the citywide prohibition], and eliminate from the Code the authority to use these sites as a potential source of oil and gas revenue for the restricted purposes stated in the Code. [¶] The City has leased the City maintenance yard site to a private entity for oil and gas exploration and production activities which have not yet commenced. All permits necessary for this project have not been issued and have been delayed by pending litigation. If Proposition E is adopted, the law is not clear exactly how the measure would affect the project proposed by the lease.’ The ballot arguments in favor of and against Proposition E focused on the potential environmental risks and economic benefits of the Macpherson project on the City Yard Site."Proposition E passed by a narrow margin of only 565 votes.
1) Why hasn’t MacPherson (or his attorneys) at any time raised these election issues (the basis of the lawsuit) and at least requested (if not insisted) that the election be held again, this time with the requisite information/warning to the voters of the significant detrimental financial impact on the City.
2) Why hasn't City Management, City Attorney, or the various law firms representing the Hermosa Beach raised this issue and least requested (if not insisted) that the City Council rule that the election should be held again? This time with the requisite information/warning to the voters of the significant detrimental financial impact on the City.
3) Could damages even have been awarded TO MACPHERSON by a jury (under directions provided by the presiding judge) due to failure of Macpherson Oil to make reasonable efforts to mitigate damages over the past 15+ years, as required under California law, by NOTIFYING CITY OFFICIALS THAT THE ELECTION WAS FLAWED AND insisting on a new vote with a new proper City Attorney Impartial Analysis?
With regard to issue 1:
“A party cannot recover for loss which he could have avoided or mitigated through his reasonable efforts.” Clearly, MacPherson will likely have a difficult time explaining he should be entitled to any damages due the fact that Macpherson made no effort to call for a new election this time with the proper impartial analysis containing warnings of potentially disastrous ramifications for the City.
With regard to issue 2:
This raises the distinct possibility that the City may well be entitled to damages from the law firms representing the City to recoup its legal costs which have soared in to the Millions of dollars which could have likely been avoided had this issue been raised.
As a general rule, the objective of contract damages is to insure that the aggrieved or injured party should receive what he or she expected from the bargain. To the extent that an award of money can do so, the aggrieved party should be placed in the same position as though the contract had been fully performed. This is what is known as protecting the expectation interest of the parties. (Rest.2d §344(a))
Loss of Profits
Loss of profits, present or future, as an element of special or consequential damages, may be recovered for a breach of contract if; 1) The loss is the direct and natural consequence of the breach, 2) It is reasonably probable that the profits would have been earned except for the breach, and 3) The amount of loss can be shown with reasonable certainty.
An injured party may recover for a breach of contract the amount which will compensate the party "for all the detriment proximately caused by the breach, or which, in the ordinary course of things, would be likely to result from the breach." (Cal.Civ.Code §3300.)
Limitations on Damages
There are several limitations on awarding damages to make the non breaching party whole: A party cannot recover for loss which he could have avoided or mitigated through his reasonable efforts. (Rockingham Cty. v. Luten Bridge Co. 35 F.2d 301 (4th Cir. 1929); Rest.2d §350)
Read more about recovery of damages in lawsuit.
