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City disputes lawsuit by 'greedy' business owners

After reviewing a class-action lawsuit filed by business owners seeking compensation for removing their signs under the city’s sign code, Federal Way city attorney Bob Sterbank called the suit “meritless.”

“It’s a classic example of greedy plaintiff lawyers trying to inappropriately use a suit to get taxpayer money,” he said.

Five business owners, who represent an estimated class of 580, are seeking compensation from the city under the state Scenic Vistas Act, which mandates that the state, cities and towns must compensate business owners located along state highways if they are required to conform their signs.

The five businesses representing the class — Jet Chevrolet, Kuecker Ltd. Partnership, Clerget Management Corp., Davco Enterprises, Inc. and Beatrice Rhodes — claim they suffered declines in business after removing their signsm in addition to the costs incurred by replacing noncompliant signs.

The city did not offer monetary compensation to Pacific Highway South business owners under its sign code. Instead, city officials gave business owners a 10-year amortization period, which assistant city manager Derek Matheson said city officials felt was a generous allowance.

Sterbank said there is no evidence the plaintiffs’ losses stemmed from the city’s sign code, which required business owners to remove pole signs and replace them with ground-mounted or pedestal signs.

“Their economic circumstances were due to their own making or the recession,” he said.

City and state law require people seeking compensation from the city to file a claim with the city prior to filing a lawsuit.

Sterbank said none of the plaintiffs has filed a claim.

The class-action lawsuit, which was served on the city last Wednesday, was the second blow to the city’s sign code ordinance this year.

Early this month, an appellate court upheld a King County Superior Court decision in favor of two property owners, Harry Horan and David Rhodes, who sued the city in August 2000 after receiving notices of sign ordinance violations.

The city fines noncompliant businesses $100 a day.

Horan and Rhodes hired Des Moines attorney Drake Bozarth to challenge the city code under the Scenic Vistas Act. They didn’t sue for compensation; rather, their suit challenged the city’s authority to fine them to remove their signs.

A Seattle-based billboard company — Ackerley Communications — helped pay for the lawsuit and lent some of their attorneys and legal assistance to the suit.

Ackerley also had a claim pending with the city after the company received notices of violation for its billboards. But the city held off on Ackerley while it worked through Horan’s and Rhodes’ lawsuit because many of the issues addressed in the lawsuit were the same, Sterbank said.

A Superior Court judge ruled in favor of the property owners last year. The city appealed the decision, but appellate court judges agreed with the Superior Court decision earlier this month.

Sterbank said the city will take the Appeals Court decision to the state Supreme Court soon, but said city officials had not yet decided when to file.

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