OC will pay $1.7M to settle lawsuit by businesses impacted by COVID-19 restrictions

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Wednesday, January 18, 2023
OC will pay $1.7M to restaurants affected by COVID-19 restrictions
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Orange County has agreed to pay $1.7 million to settle a lawsuit from businesses who faced fees and expenses while restricted from operating during the COVID-19 pandemic.

COSTA MESA, Calif. (KABC) -- Orange County has agreed to settle a class-action lawsuit for $1.7 million to pay business owners for government fees and expenses incurred when they were shut down during the pandemic.

Among the businesses that will find some relief in the settlement is Pizzeria Ortica, which catered to the community near South Coast Plaza in Costa Mesa for 12 years. The challenges posed by the COVID-19 pandemic were too much for the restaurant to stay afloat.

"We lost a lot of great employees and the business permanently closed so we incurred a lot of losses and debt due to COVID," said owner Walter Schild.

Schild was among plaintiffs in the class-action lawsuit filed against Orange County last year.

"We have over $100,000 in loans just for this restaurant in Costa Mesa that we have to pay back to the government," Schild said.

He claimed the county collected property taxes and permit fees while the restaurant was required to follow COVID-19 restrictions that limited or shut down indoor dining.

"We were receiving bills from Orange County for the health department," Schild said. "We were receiving bills for inspections, for fire inspections, that didn't take place. We weren't operating so those bills came in and it exceeded $10,000."

The Orange County Board of Supervisors recently agreed to settle the lawsuit with terms calling for the county to pay $1.7 million to resolve the case.

This action provides some support and reimbursements to restaurant owners who couldn't operate.

Schild said his restaurant's share will at least help reduce maybe 3% or 4% of the debt.

Schild's attorney, Shant Karnikian with Kabateck LLP, said, "It'll be refunded if it's a restaurant that's no longer in business. It'll be credited to them if it's an ongoing operation and business has continued so it'll automatically go to everyone that's been affected by this."

The firm has filed similar lawsuits on behalf of business owners against counties throughout California, including Los Angeles.

"(Los Angeles) county hasn't yet stepped up and we're hoping that they do the same as Orange County and as a show of good faith indicate to these businesses that we have your back," Karnikian said.

Schild also owns restaurants in Los Angeles County and said they incurred $80,000 in fees there during the pandemic but couldn't operate.

He hopes the county will be able to provide some relief to his and other struggling businesses.

We reached out to LA County but did not hear back.

San Diego County recently settled a similar case for $4.5 million.