Landlord Dario Pini will get $1.38 million back from overcharged receivership fees related to a Santa Barbara code-violations case, a Superior Court judge ruled last week. 

The Santa Barbara City Attorney’s Office filed an unfair competition lawsuit against Pini in 2017 alleging more than 3,000 health and safety code violations at some of his rental properties.

Apartments were found to be overcrowded and in “severely substandard living condition” during surprise inspections.

Pini owns more than 100 properties in the city, including apartment buildings, hotels and motels. He owns additional properties throughout Santa Barbara County, according to court documents. 

A Superior Court judge appointed William J. Hoffman as the receiver to oversee repairs at eight of Pini’s Santa Barbara properties. Hoffman was tasked with taking over the properties, collecting income, caring for them, and filing regular reports with the court. 

Judge Colleen Sterne found that Hoffman “had essentially sold the receivership” to Trigild Partners and “left it to the management of others” without properly notifying other parties or getting permission from the court. 

Hoffman was removed as receiver and replaced by Kevin Singer, “who efficiently brought the underlying matters to a close” several years ago, Sterne wrote. 

Pini asked the court to claw back some fees paid to Hoffman’s former attorneys as part of the receivership, and alleged unauthorized services and fees in a surcharge motion. 

Hoffman’s attorneys in this matter have argued that Pini did not offer evidence that permitting delays were caused by Hoffman, or that the sale of Trigild damaged the receivership estate.

They also argued there wasn’t evidence that Hoffman’s legal fees were improper, even if they were higher than Singer’s. 

Sterne last week ordered Hoffman to pay about $1.18 million to Pini, and Trigild attorneys (Crosbie Gliner Schiffman Southard & Swanson LLP) to pay about $191,000, for a total of $1.379 million. 

Sterne did not award any punitive damages.

“Hoffman’s acts were deceitful and highly improper to the level of fraud, but not overtly malicious,” she wrote.

This case had “very unusual circumstances,” she added. 

“(Pini) came to this entire process with unclean hands, after having acted for many years in open disregard of ordinances requiring proper maintenance and management of his properties to the detriment of his tenants and the community at large,” Sterne wrote. 

Pini deserves fair compensation and fees, which the judgment awarded, but punitive damages “would be an overtly undeserved windfall,” she wrote. 

Hoffman’s attorneys did not respond to a request for comment. 

The judgment shows Pini “has prevailed” in the case against Hoffman and his former attorneys, said Pini’s attorney, Paul Burns. 

The litigation involving the receivership of eight Santa Barbara properties has lasted nearly a decade and cost millions of dollars in attorney fees, Burns noted. 

Repairs have been completed at all of the receiver properties, he added. 

The court appointed a receiver for apartments at 318-320 W. Valerio St.; 626-630 W. Cota St.; 313 W. Arrellaga St.; 320 W. Mission St.; 615 San Pascual St.; 329 E. Carrillo St.; and 104 Los Aguajes Ave.

It also appointed a receiver for the Tide Pool Villas property at 26 Chapala St. 

City Attorney John Doimas said in a statement that Santa Barbara was not party to the overcharge case involving Pini and Hoffman.

He confirmed that all the required repairs are finished. 

“The receivership proceedings concluded several years ago, and there is no active case remaining from that matter. All of the properties were ultimately brought into compliance and made legally habitable,” Doimas said. 

The cities of Santa Maria and Carpinteria have also filed code-violation cases against Pini to force repairs at his local rental properties. Both cases resulted in settlement agreements. 

12 Years of Construction at Dario Pini Hotel

The city asked the court to include Pini’s Fiesta Inn in the original receivership, but it was denied, Doimas noted.  

“I do not know the present status of it,” he said. 

Twelve years after renovations started at the 1816 State St. property, they are still unfinished. 

In 2015, Santa Barbara city officials ordered Pini to finish construction or face additional fines. 

Burns, Pini’s attorney, told Noozhawk that the former Fiesta Inn, now called the Mission Inn, “is scheduled for completion by this year’s end.”