Editor’s Note: This story has been updated to include comments from a Harbor Partners representative.
Boaters participating in the class-action lawsuit against the Dana Point Harbor Partners over an increase in slip-fee rates may not see the case go to trial after the judge overseeing the case granted summary judgment—ruling that no facts are in dispute in the case.
Dennis Winters, who represents the boaters in the lawsuit, explained that unless the boaters appeal the judgment, Judge Lon Hurwitz effectively ended the lawsuit when he granted the Dana Point Harbor Partners summary judgment on Friday, June 30.
The ruling largely hinged on determining whether the boaters were “intended beneficiaries” or “incidental beneficiaries” of the harbor Master Lease agreement. Hurwitz concluded that boaters were the latter.
Judge Glenda Sanders, who oversaw the case until her retirement this year, had previously stated she was “inclined to find (the boaters) were intended third-party beneficiaries,” which would have given boaters the standing to sue in the class-action lawsuit.
In making the determination that boaters are not an interested third party, the summary judgment noted that the purpose of the Master Agreement between the county and Dana Point Harbor Partners is to facilitate, manage and pay for the $400 million harbor redevelopment and not to protect the boaters against expensive slip rates.
In the summary judgment, Hurwitz noted that though boaters generally benefit from the Master Lease through their Slip Lease Agreements, “this is not sufficient to authorize Plaintiffs to sue Defendant under the third-party beneficiary doctrine.”
The summary judgment also noted that the county only oversees whether the Harbor Partners’ methodology for determining what constitutes “market rate” slip rate pricing is “reasonable.”
Hurwitz said the county had the opportunity to reject the Harbor Partners’ methodology when it reviewed the proposed increase before it took effect in 2021.
According to the summary judgment, Thomas Miller, chief real estate officer for Orange County, attested “that the County concluded the methodology used by Defendant in comparing slip rates at the Harbor to other Orange County marinas ‘was reasonable based upon the market for users and slip licensees in the Harbor and therefore not in violation of the Lease.’ ”
Additionally, Hurwitz stated that the boaters do not have the right to claim that the methodology to determine slip-fee increases is not market rate.
Allowing boaters to challenge the Harbor Partners’ methodology to determine market rate pricing “would make (the Harbor Partners’) performance substantially more burdensome,” the summary judgment said.
Winters said he hoped the Orange County Board of Supervisors would be “more sympathetic than the county has been up to this point” in the future regarding additional slip-fee increases.
Ahead of Hurwitz’s judgment, Sanders had overruled the Harbor Partners’ arguments against three of the boaters’ causes of action, or legal claims. The suit was expected to proceed primarily based on three arguments the boaters had raised: injunctive relief, breach of contract, and unfair business practices.
“I felt like we were making good progress until recently,” Winters said of the class-action lawsuit. “I was, frankly, surprised and very disappointed with the decision to grant the motion for summary judgment.”
“I think it’s something that is subject to being appealed, if we decide to appeal. We have not made that decision yet,” Winters continued. “But if we do, I would think we have a relatively good chance of prevailing on appeal.”
The summary judgment ruled that the boaters did not have the standing to bring forward an argument on breach of contract and noted that the boaters “have not established the existence of triable issues of material fact” regarding their unfair business practice claim.
Joe Ueberroth, founder and president of Bellwether Financial Group, developer of the new marina and a member of the Dana Point Harbor Partners, said that while the Harbor Partners are not taking a victory lap, he feels personally vindicated.
“To win on summary judgment means that the allegations have zero merit, no merit at all,” Ueberroth said. “We’ve always said it was baseless, and so to win on summary judgment confirms what we’ve said.”
“It’s just been a waste of resources, energy and time,” Ueberroth continued. “But there’s a light with it. At least, it confirms our position in every aspect, so we were just very pleased how thorough the judge was.”
In its newsletter, the Dana Point Boaters Association said, “the boaters’ Class Action attorneys are considering an Appeal to the District Court of Appeals.”
“Since the marina was built for boaters, is a public asset and not private property, and the bulk of revenue from the marina comes from boaters, it is difficult to conceive how boaters would not be interested parties with the right to enforce contract provisions intended to protect those boaters,” the newsletter said. “The attorneys believe the Court of Appeals will closely scrutinize this misguided legal ruling.”
Responding to the prospect of an appeal, Ueberroth said he felt it would be “a continuation of a waste of resources.”
“There’s no merit to it,” Ueberroth said. “It’ll be costly for the property, and it’s not where we need to focus our time and energy as we’re looking to develop one of the gems of our community.”
Winters noted that he was “disappointed with the ruling.” “We feel it wasn’t decided correctly, and we anticipate that we will be looking strongly towards an appeal, but that