Recent Colonies Case Developments Include Filing And Sentencing Delay

Judge Michael Smith last week continued the sentencing of former county supervisor and assessor Bill Postmus until July 19. In March 2011, Postmus entered into a plea deal with prosecutors, acknowledging he was guilty of perjury, conspiracy, bribe soliciting and bribe taking in connection with his vote as a member of the board of supervisors in November 2006 to confer a $102 million payment on the Colonies Partners. That payment was made to settle a lawsuit that development company brought against the county over flood control issues at the Colonies at San Antonio project in north Upland.

Bill Postmus

Prosecutors maintain Colonies co-managing principal Jeff Burum with the assistance of former county sheriff’s deputies union/assistant assessor Jim Erwin bribed Postmus and former supervisor Paul Biane, together with Mark Kirk, the former chief-of-staff to supervisor Gary Ovitt, by routing separate $100,000 contributions to political action committees Postmus, Biane and Kirk controlled. Postmus, Biane and Ovitt provided the three votes needed to make the $102 million settlement with the Colonies Partners.
Biane, Burum, Erwin and Kirk were indicted in May 2011 on extortion, bribery, and conspiracy charges. All four are maintaining their innocence. As part of his plea arrangement, Postmus agreed to testify against the four defendants when the case comes to trial.
Criminal proceedings in the case have been suspended pending an appellate court ruling on conflicting filings by both sides. The appellate court is considering the prosecution’s effort to reinstate some of the charges that were dismissed against three of the defendants last summer by Judge Brian McCarville in response to demurrers filed by defense attorneys. The appellate court is also considering motions by defense attorneys to dismiss even more of the charges.
The four defendants are set to return to court on April 20 for a discovery motion and lawyers said they seriously doubted the case will go to trial before July, which will perhaps entail a further delay in Postmus’s sentencing.
In the meantime, lawyers for Burum and the Colonies Partners are seeking dismissal of a civil lawsuit brought by two citizens groups seeking the return of the $102 million legal settlement to taxpayers.
In February, the Inland Oversight Committee and Citizens for Responsible Equitable Environmental Development filed suit, alleging that the indictment of Burum, Biane, Erwin and Kirk along with the guilty plea by Postmus presented grounds upon which to void the settlement and force the Colonies Partners to disgorge the $102 million.

Jeff Burum

Four lawyers from two different law firms – Stephen Larson, Steven Bledsoe and Jonathan Phillips of Los Angeles-based Arent Fox and Scott Summer of San Francisco-based Pillsbury Winthrop Shaw Pittman – assert in a demurrer on behalf of Burum that the citizens groups do not have standing to file the lawsuit, that their legal argument is flawed and that the statute of limitations has lapsed.
Because the nonprofit citizens groups were not parties to the initial litigation, according to the demurrer, they do not have standing to bring the lawsuit. Moreover, according to Larson, Bledsoe, Phillips and Summer, the suit is six years late and should have been brought at the time of the settlement, putting it beyond the statute of limitations for a civil proceeding.
According to the demurrer, a trial relating to the flood control issues had been held in which the judge, Christopher Warner, had found in the Colonies favor but had not ruled as to the amount of damages.  Therefore, the demurrer states, “Plaintiffs’ complaint is a misguided, untimely and legally unsupported attempt to unwind the settlement and force Colonies to return the $102 million paid pursuant to the judgment.”
The demurrer further states “because plaintiffs are not parties to the settlement, they lack standing to bring an action” and that the “Plaintiff’s complaint fails because it is legally unsupported and untimely on its face.”
According to the demurrer, a validation action was carried out and completed by early 2007, in which those wishing to contest the settlement could have done so. None did so by the deadline, according to the demurrer, and so the settlement is now validated and irrevocable, attorneys say. The demurrer states, “as recognized by the court the validation judgment ‘binds and permanently enjoins and restrains all persons or entities, public or private, from the institution of any action or proceeding or maintaining any action or proceeding challenging, inter alia, the validity of the settlement agreement [or] the judgment.’”
But the matter is not that simple, said Cory Briggs, the attorney representing the Inland Oversight Committee and Citizens for Responsible Equitable Environmental Development in the suit. He said there are provisions in the law, specifically Government Code Section 1090, which prohibits an elected official from having a financial interest in any matter he or she votes on and that bribes paid to an elected official in return for a vote benefitting the bribe giver constitutes financial interest on the part of the elected official. He said the statute of limitations on a civil suit runs from the time that a plaintiff has firm and convincing evidence that something actionable occurred. That evidence manifested for the public, Briggs said, when Postmus entered his guilty plea.
“Bill Postmus pleaded guilty of violating Code 1090,” Briggs said. “The Supreme Court has said that a violation of Section 1090 required the beneficiary to return all the money. For that reason, the Colonies Partners have to give back the $102 million they obtained through governmental action tainted by bribery.”

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