City Makes Case for Ruby's Lawsuit

The city of Seal Beach is taking Ruby’s Diner from its landmark pier to a Santa Ana courtroom.

The iconic 50s diner closed its pier location in January, and city officials contend the company breached its contractual obligation to complete $570,000 in upgrades to the facility, leaving taxpayers on the hook for the repairs.

On Tuesday, city officials defended the decision to take the popular chain to court.

“The City had an agreement with Ruby’s and we expected them to do what they promised,” City Manager Jill Ingram said in a written release. “We don’t think the residents of Seal Beach should foot the bill for more than half-a-million dollars in upgrades and maintenance that Ruby’s signed a contract and said they would do.”

According to the city, the lawsuit was a last-resort, following failed efforts to collect money for the repairs that were required ad part of Ruby’s lease agreement.

The lawsuit alleges Ruby’s agreed to make at least $400,000 in improvements to the Pier before the end of its lease but failed to make the repairs or do regular maintenance, accumulating $170,000 in deferred maintenance. The city claims the rundown condition of the property is forcing officials to assess conditions for health and safety standards The building will not be ready for another restaurant to open until the city can further asses the situation.

A spokesman for Ruby’s refuted the city’s claims in a recent interview with Patch.

“The city has stated that they believe we have not fulfilled the obligation of the lease, and we believe we have,“ said Tad Belshe, Ruby's executive vice president of operations.  “We have had our (legal) counsel review the lease and believe we have fulfilled the obligation of the lease, so there’s a difference opinion here."

 “We maintained the building. We did all sorts of different repairs,” Belshe added. “Someone one on the city's side believes the language (of the contract) is stating one thing, and our full belief is that it's another."