County’s Colonies Recovery Suit Vs Upland And Trans Agencies Dismissed

The egregious misconduct of former San Bernardino County officials obviates the county’s contention that the city of Upland, Caltrans and the county’s own transportation agency should reimburse any part of the $102 million legal settlement the board of supervisors conferred upon the Colonies Partners in 2006, a San Diego Superior Court judge ruled this week.
In his tentative ruling entered last week and officially confirmed on February 5, San Diego Superior Court Judge Ronald Prager dismissed the gist of a lawsuit the county brought against those three entities, leaving only a minor and peripheral issue in the case yet to be litigated.
The Colonies Partners sued San Bernardino County in 2002 over the county flood control division’s design and construction of a storm drain on behalf of the city of Upland. The Colonies Partners alleged that storm drain, which collected water originating in the northwestern portion of Upland, vectored water onto property at the Colonies at San Antonio subdivision, which damaged the company in that it inhibited the development and sale of that property.
In 2004, the county filed suit against Upland, the county’s own transportation agency,  San Bernardino Associated Governments (known as SANBAG), and  the California Department of Transportation (Caltrans), which had constructed the 210 Freeway in that vicinity, necessitating that the storm drain’s terminus be placed upon the Colonies Partners’ property, located in northeast Upland. That suit, which alleged both  transportation agencies and Upland  were at least partially responsible for the county’s undertaking of the project, known as the 20th Street Storm Drain, sought to have those entities partially defray the county’s costs if the Colonies Partners prevailed in the lawsuit.
Four years of legal wrangling over the matter included a trial before former Superior Court Judge Christopher Warner. Before Warner ruled with regard to the damages the Colonies Partners had sustained as a result of the placement of the storm drain, the board of supervisors, then led by board chairman Bill Postmus, in November  2006 voted 3-2 to end that litigation by conferring the $102 million settlement on the Colonies Partners, which had as its co-managing partners Jeff Burum and Dan Richards.
In 2010, Postmus, who was no longer on the board of supervisors, was indicted and charged with conspiracy, soliciting a bribe, accepting a bribe, fraud, perjury and criminal conflict of interest in conjunction with the settlement vote. In March 2011, Postmus pleaded guilty to 14 felony counts, in so doing acknowledging that he had been bribed by Burum to vote to approve the settlement. In May 2011, Burum was indicted along with Paul Biane, a former member of the board of supervisors who had voted with Postmus to approve the settlement, as well as Mark Kirk, the chief of staff of the other supervisor, Gary Ovitt, who had approved the payout. The indictment alleged conspiracy, bribery, extortion, fraud, perjury, misappropriation of public funds and conflict of interest stemming from the vote and Burum’s provision of separate $100,000 donations to political action committees controlled  by Postmus, Biane and Kirk.
Lawyers for Upland,  SANBAG and Caltrans held the settlement was tainted by bribery, extortion and other illegal actions that included corruption on the part of key county officials who were party to that settlement, rendering the county’s suit invalid.
San Diego Superior Court Judge Ronald Prager, to whose courtroom the case was removed to prevent a conflict of interest that might ensue in San Bernardino Superior Court, this week confirmed a tentative ruling he made last week that the county’s settlement vote was so tainted by the corruption of the officials who made it that the county has no basis to recover any damages from the other three public agencies.
The county maintained that its filing of the suit two years before the settlement was made centered on issues that had nothing to do with how the settlement was arrived at. Upland, Caltrans and SANBAG bore responsibility for mishandling the flood control issues at the center of the suit brought by the Colonies Partners against the county, the county claimed.
But Prager ruled that the county cannot compel Upland, SANBAG, and Caltrans to pay for a settlement that violated state law. He referenced both the state’s conflict of interest code, Government Code Section 1090, and Penal Code Section 182, the prohibition against bribery.
“Postmus’ guilty plea is evidence of a violation of section 1090,” Prager noted. He also cited the consideration that “the county issued a press release on April 8, 2011 admitting the settlement violated section 1090,” which he said rendered the settlement with the Colonies Partners null and void. “SANBAG presented evidence that Postmus pled guilty to conspiracy to accept a bribe, in violation of penal code section 182 and having a conflict of interest in violation of section 1090 by accepting bribes from Jeff Burum to vote in favor of the settlement agreement,” Prager wrote. The activity Postmus and others engaged in was “unseemly… disgusting” and representative of the “worst of the worst” in government, Prager said, making it “fundamentally wrong to perpetuate this case.” Prager all but directed the county to seek to recover the money from the Colonies Partners rather than pursuing  redress from the three governmental entities it had sued.  “I don’t understand why the County of San Bernardino is not going after the Colonies and getting their money back,” Prager said.
A single element of the case Prager will allow to proceed to trial is the county’s claim against Upland that it was responsible for the ownership of the storm drain and shared responsibility with Caltrans for certain elements of its design that led to the underlying suit brought against the county by the Colonies Partners.

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