Jury Sends a Signal About Urban Decay : Courts: Owners of L.A. gang hangout are ordered to pay neighbors $266,000.

Sending a strong message to slumlords--on behalf of one of the city’s most notorious real estate speculators--a Los Angeles Superior Court jury has unanimously ordered two property owners to pay $266,000 to neighbors for tolerating gang activity in a South-Central Los Angeles house.

The winner in this battle against urban decay was no community activist, but a real estate magnate who himself has been accused of preying on inner-city neighborhoods: William D. Little.

In an odd twist, Little and a former tenant sued neighboring property owners Marvin and Karen Perriseau of Sunland, alleging that the couple caused a decline in the neighborhood by allowing their rental house to be taken over by the 18th Street gang.

To hear Little’s attorney, this is a case in which two citizens--Little and Alma Flores, who lived rent-free while managing Little’s building--decided to clean up a crime-ridden neighborhood. But the Perriseaus and their lawyer have a different view, saying that after refusing to sell their property to Flores, the Perriseaus were slapped with a lawsuit holding them responsible for the actions of a street gang that even police cannot control.

For two decades Little has been a fixture in Los Angeles’ poor communities, where he has bought and sold thousands of properties through the foreclosure process. In an 11-year period beginning in 1977, Little filed more than 2,200 complaints, mostly evictions, in Los Angeles Municipal Court.

“I don’t know how I could describe him that would be publishable,” said Herschel T. Elkins, senior assistant attorney general in the fraud division of the state attorney general’s office. “It is certainly ironic in the extreme. He was certainly accused by many of cheating and taking advantage of the elderly and poor people for a number of years.”

Little was unavailable for comment. His attorney Steven C. Smith said his client is a shrewd businessman who filed the litigation against the Perriseaus because he wanted to improve the neighborhood.

“Despite some of the bad press, he’s a very good guy,” Smith said. Rather than scrutinize Little’s motives for filing the suit, look at what has been accomplished, Smith said.

“This puts landlords on notice that they have got to take care of their properties and if they do not, the neighbors can come after them for damages,” he said.

It all began three years ago when Flores moved into the seven-unit, two-story stucco building next to the Perriseaus’ rental home. There, she hoped to raise her two sons, Christopher, then 7, and Gilbert, then 13. Under an arrangement with Little, Flores worked as a manager.

But she quickly realized her home was no safe haven. Next door she and other neighbors saw people buying drugs and disputes often erupting into gunfights. Children were afraid to walk on the sidewalk in front of what had become the gang’s house.

In January, 1994, alarmed by the unabated decline in the crime-plagued neighborhood, Little and Flores filed a lawsuit against the Perriseaus under California’s “drug house” nuisance law to force the couple to remove their tenants, and to recover money for lost income, reduced property values and emotional distress.

After hearing the evidence, including testimony from Los Angeles police officers and a Sheriff’s Department gang expert, the jury Tuesday found that the Perriseaus allowed members of the 18th Street gang to use their house--an action that Smith says led to shootings, drug sales, graffiti and other vandalism in the neighborhood.

Dale Atherton, the Perriseaus’ attorney, said no drug dealing went on in the house and that the couple should not have been held responsible for a gang that has long claimed the neighborhood as its turf.

“Think about all the people on Isabel Street. Can they be sued because they didn’t stop that gang from congregating in the street?” asked Atherton, referring to the recent case in which a 3-year-old girl was killed after her family’s car was attacked by gang members in Cypress Park.

Atherton also voiced concerns that the jury as well as Flores had been manipulated.

“It’s been our contention all along that something funny is going on here, that Alma Flores is a pawn,” he said.

Little has bought and sold the apartment building on Smiley Drive several times, Atherton said. When the owners did not make good on payments, Little reacquired the property, Atherton said. In 1994, Little sold the building for $283,331 to Flores, who testified that she earned $1,200 a month as a real estate assistant, Atherton said.

“It doesn’t add up,” he said.

Flores was unavailable for comment. She offered the Perriseaus $80,000 for their house, but they declined the offer.

The Perriseaus, who own several properties in the Los Angeles area, contended that the jury had not weighed the facts before reaching a decision after an almost three-week trial.

Jurors said they were moved by Flores, who said she left the building because of safety concerns.

“This was a fabulous woman who just stood up to the gang members,” said juror Rita Luther. Times correspondent Maki Becker contributed to this story.