Upland’s Lawyer Fees Now Exceed Amount Of Settlement Offer

The city of Upland has now expended more in legal fees fighting a lawsuit brought against it by the county of San Bernardino over the Colonies Development than it would have paid if it had accepted a settlement offer on that suit previously made by the county.
Available city documents show Upland has paid its law firm, Richards Watson & Gershon, at least $2.2 million for legal work relating to the suit the county of San Bernardino brought against Upland. More recent billings by the firm, the precise amount of which have not yet been made publicly available, likely push that total to more than $2.4 million. County officials more than three years ago indicated they would have been willing to settle the case for $2 million.
At the basis of the lawsuit is the Colonies at San Antonio residential and Colonies Crossroads commercial developments in northeast Upland undertaken by the Colonies Partners, which the city gave final approval for in 2002. In 2002, the Colonies Partners sued the county after the county refused to pay for improvements necessitated by the extension of the 210 Freeway and the county’s construction of a flood control appurtenance for the city of Upland, known as the 20th Street storm drain. The issues were complicated by Caltrans’ construction of the 210 Freeway across roughly 40 acres of the 460 acres of the Colonies Partners’ property, for which the Colonies Partners were paid $17 million in severance damages.
The county and its flood control district filed a lawsuit in 2004 against the city, the county’s transportation agency, known as San Bernardino Associated Governments (SANBAG) and Caltrans, the state department of highways, seeking partial reimbursement for a possible future settlement.
In November 2006, a 3-2 vote of the county board of supervisors conferred a $102 million payment on the Colonies Partners as a settlement of the lawsuit. The settlement was supported by supervisor Gary Ovitt and then-supervisors Bill Postmus and Paul Biane. The county at that point moved ahead with the litigation against Upland, SANBAG and Caltrans, maintaining they shared responsibility for the freeway plan and the re-routing of storm water runoff onto the Colonies property that had created the circumstances underlying the original lawsuit.
The Sentinel has learned that nearly four years ago the county and its flood control district offered to drop all claims against the city for $2 million.
It is unclear how thoroughly that offer was shared with the Upland City Council. Current mayor Ray Musser, who was then a city council member, said he was never told of the $2 million settlement overture. At that time, then-mayor John Pomierski often gave directives to city staff without the full consent of the city council. City attorney Bill Curley was unavailable for comment.
Upland Councilman Ken Willis previously told the Sentinel that based upon the briefings he and the council had received from Curley, who is an employee of Richards, Watson & Gershon, he did not believe the county had a realistic case against Upland and the county had no legal basis to have Upland share in the cost of the $102 million settlement with the Colonies Partners.
The county’s lawsuit against Upland, SANBAG and Caltrans was removed to San Diego County Superior Court and the defendants made a motion in 2009 to have the case dismissed. But on April 3, 2009 San Diego County Superior Court Judge Jay M. Bloom ruled that the county and flood control district’s complaint “adequately alleges facts to support the causes of action” and the plaintiffs could proceed with the effort to obtain at least partial reimbursement of the $102 million.
Subsequently, the state attorney general’s office and the district attorney’s office brought charges against Postmus, Biane and Ovitt’s chief of staff at the time of the settlement, Mark Kirk, along with one of the managing principals of the Colonies Partners, Jeff Burum, alleging the $102 settlement was tainted by extortion, bribery and conspiracy.
Last year, Pomierski, who was mayor when the Colonies projects came to fruition, was indicted by a federal grand jury and charged with political corruption, including extorting individuals with business before the city of Upland. He has resigned from office.
The Sentinel has learned that around the time the county made the offer to settle the portion of the lawsuit against Upland for $2 million, Burum offered to split the cost with the city and put up $1 million of that settlement amount.
After the criminal charges were filed against Postmus, Biane, Kirk and Burum, the city made another motion to have the county’s case delayed pending the outcome of the criminal cases. Bloom denied that motion.
An earlier legal strategy contemplated by Richards, Watson & Gershon which was based upon asserting Upland should not be held to account for a settlement that was forged through  Postmus and Biane’s entanglement in a bribery and extortion scheme has been compromised by the federal government’s allegations that Pomierski was involved in similar activity.
While lawyers with Richards, Watson & Gershon maintain that the county has not yet propounded proof of Upland’s liability, the case has yet to be fully litigated. Taking the matter to trial is likely to cost the city of Upland another $2 million. In a claim filed against the city of Upland last November, former city manager Robb Quincey asserted that Richard, Watson & Gershon’s billing of the city was out of control.
Quincey said he had hired a third-party claims investigator, NovaPro, to audit  Richard, Watson & Gershon’s legal fees on litigation matters it was handling for the city in September 2010.  “The NovaPro’s audit disclosed that on one litigation matter brought by the San Bernardino County Flood Control District against the City of Upland, Richards, Watson & Gershon racked up charges of $105,830 for September only,” Quincey’s claim states. “On this matter alone, just for this month, Richards, Watson & Gershon billed for the time of seven partners and employees who charged up to $348 per hour; the total hours billed were 367.3 at $288 per hour.”

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