By Mark Gutglueck
The prosecution in the Colonies Lawsuit Settlement Public Corruption Case alleges that the November 2006 vote by then supervisors Bill Postmus, Paul Biane and Gary Ovitt to confer a $102 million settlement on the Colonies Partners was tainted by extortion before the vote was taken and the delivery of bribes in the form of $100,000 contributions to the political action committees of key participants in the vote’s aftermath.
In the opening statements by Raj Maline and Stephen Larson, the defense attorneys, respectively, for the two defendants charged with tainting that process, Jim Erwin and Jeff Burum, the point was made that the decision to end the lawsuit relating to flood control issues bought by the Colonies Partners against the county that had persisted over a four-year period was a well-reasoned one that has since been acknowledged by county officials as justified given the facts of the case and the course of the litigation to that point. That litigation had cost the county more than $6.9 million in legal fees. What’s more, the county by continuing the lawsuit, both Maline and Larson suggested, would have exposed taxpayers to a potential liability exceeding $300 million. Maline and Larson cited previous rulings and findings by two San Bernardino County Superior Court judges, Judge Peter Norell and Judge Christopher Warner, that were unfavorable to the county and in favor of the Colonies Partners. Norell in 2003 ruled that the county’s flood control easements on the Colonies Partners’ property in Upland had been “abandoned,” though the Fourth District Court of Appeal reversed him on that finding. After holding a bench trial on the matter, Warner had entered an intended statement of decision which held that that the county had substantially overused the flood control easements on the Colonies Partners’ property, damaging the company by interfering with its development plans and ability to complete and market the homes being built there. Warner found that the county had made misrepresentations about its actions that were so egregious that the easements had been extinguished, that is, were no longer applicable.
To support their assertions that the board of supervisors majority was wholly justified in its in 2006 vote to ratify the $102 million settlement, Maline and Larson cited the consideration that when the county sought to have the settlement recorded with the court, there was no public protest filed to oppose the validation of the $102 million payout that is at the heart of the case.
Maline’s and Larson’s assertions, however, were contradicted by an Upland-based attorney who contested the validation, along with several individuals who were in attendance at the March 15, 2007 validation hearing. Rather, the court record and documentation filed with the court’s clerk indicates a protest was indeed made. Moreover, the extraordinary manner in which the filing stamp on a court document filed in conjunction with the protest document was altered has revived charges of judicial misconduct that have persisted throughout the case but which have for some time lain dormant.
Even before the $102 million settlement was reached, a group of Upland residents, calling itself Taxpayers For Fair Resolution, had had misgivings about the legal wrangling with the county over the Colonies project. There were concerns that the Colonies Partners’ asserted right to proceed with the Colonies at San Antonio residential and Colonies Crossroads commercial subdivisions on property in northeast Upland might represent a liability for the residents of both Upland and San Bernardino County.
In 1997, Jeff Burum and Dan Richards, the managing principals in the Colonies Partners, and 21 of their minority partners, had purchased for $16 million 434 acres from the San Antonio Water Company, which had previously used it for recharging the local aquifer. The property included a defunct rock, sand and gravel quarry, the mouth of which covered 31 acres, and which was traditionally used as a catch basin for storm water. The county had also recorded four flood control easements on the property, in 1933, 1934, 1939 and in 1962. Taxpayers For Fair Resolution’s members, conscious that the City of Upland had dispensed with a significant portion of its land use/planning division personnel and its city engineer in the 1990s, were concerned that the city’s failure to obtain a clear understanding among all parties with regard to the responsibility for the provision of the infrastructure to accommodate the development and defraying the cost of the same would create an untenable situation all the way around. Moreover, they had concern that the City of Upland, which was then dominated by the political machine run by Mayor John Pomierski, whose political career was being bankrolled in large measure by the Colonies Partners through campaign donations, was in the act of transferring the financial burden of paying for the Colonies Partners’ project-related infrastructure to the taxpayers. Taxpayers For Fair Resolution retained Claremont-based attorney Robert Ferguson to represent them.
Marjorie Mikels, the wife of former Second District San Bernardino County Supervisor Jon Mikels, was an Upland resident with a law practice in Downtown Upland. She found herself at the periphery of the Taxpayers For Fair Resolution. Her husband, in whose Second District the Colonies projects were located, had consistently voted against having the county defray any of the infrastructure costs at the Colonies projects, in so doing triggering the enmity of Burum and Richards, who together with the Colonies Partners minority share holders put together $70,000 in campaign funding for then-Rancho Cucamonga Councilman Paul Biane in his candidacy for supervisor in 2002. Ultimately, Biane defeated Mikels in that race, supplanting him on the board of supervisors.
After the supervisors’ vote to approve the $102 million settlement in November 2006, Taxpayers For Fair Resolution began discussion of some form of legal action to stay or reverse the board of supervisors’ settlement vote, and included in that discussion the potential of filing a private party validation action (as per Code of Civil Procedure § 863). When county officials learned of Taxpayers For Fair Resolution’s discussion, deputy county counsel Mitch Norton, who had previously been detailed to representing the county in the Colonies civil suit, was tasked with preparing the county’s validation action. Thus, the county filed its ‘validation action’ first and in so doing made moot Taxpayers For Fair Resolution’s contemplated private party protest action via referendum on the board of supervisors’ vote. In a validation action, if no one responds to the court filing, then the public is forever prohibited from bringing an action challenging the boards’ action.
In its public noticing for that validation procedure, the county gave two deadlines for filing such a challenge with the court: March 5 and June 5. Among a number of San Bernardino County citizens, including members of Taxpayers For Fair Resolution, there was talk of lodging a challenge by responding to the county’s complaint. When Ferguson, who was yet representing Taxpayers For Fair Resolution, tarried and had not prepared a challenge to the validation as the March 5 deadline approached, Marjorie Mikels took it upon herself to draft and file a challenge on her own, a general denial and affirmative defenses in her protest answer to the county’s validation action. The main defenses were misuse of public funds and violation of the California Constitution. The proof of service shows it was deposited in the mail in Upland, California, on March 5, 2007; the answer was sent by U.S. Express Overnight Mail with proper filing fees on March 5, with instructions to deliver it to the clerk’s office before 10 a.m. When the answer arrived in the clerk’s office, the county had not yet filed any “request to enter default” and the clerk receiving the answer would by law and established procedure file the document as requested. At that point, deputy county counsel Mitch Norton received a separately posted copy of the answer. Norton went immediately to the clerk’s office to try to stop Mikels’ answer from being filed. Wanting to assure that Mikels’ answer was extinguished with the claim that it was late because it did not arrive in the clerk’s office until March 6th, county attorneys prepared an ex parte motion, and telephoned Mrs. Mikels to tell her to come to court on March 15, 2007 for a hearing at which they were purposed to ask the judge hearing the matter – Superior Judge W. Robert Fawke – to confirm entry of default and throw out Mikels’ answer for not being timely.
On March 15, 2007 attorneys for the county as well as the Colonies Partners came before Judge Fawke to argue that no challenge of the settlement validation and its bond issuance could be made since no appearance had been made or challenge had been filed at the courthouse by March 5. They brought a motion “to confirm entry of default against untimely purported answering party”.
When Mikels arrived in the courtroom, she had with her a response to the motion, defending the timeliness of her answer to the validation action, asserting the filing had been made, by U.S. Express Mail, on time, with proper fees and was properly served on opposing counsel in good faith. She also had with her, and handed to Fawke’s court clerk, Kim Allain, a recusal motion against Fawke, entitled “Sworn Challenge for Cause.” In that sworn challenge, Mikels called upon Fawke to disqualify himself from hearing the matter because of what she perceived as bias. Citing the close relationship between Judges Fawke and Judge Christopher Warner as well as Warner’s function as the trial judge in the Colonies Partners lawsuit against the county as an indication that Fawke could not be impartial in hearing a challenge to the $102 million settlement, Mikels quoted in her motion and attached thereto a narrative from the county bar association website relating to Fawke that stated, “His baptism in civil case judging came about in 1996, when at San Bernardino he and Judge Christopher Warner partnered in mentoring each other.”
Mikels motion went on to state, “If Christopher Warner “baptized” and “mentored” Judge Fawke, no one has reason to believe a fair hearing will be possible in this case. Judge Warner is the person who set up the play whereby the Colonies is being allowed to steal $102 million from the citizens of this county.”
At the opening of the March 15th hearing, Judge Fawke told the members of county counsel and the Colonies Partners’ attorneys present “The deadline was the 5th. I know what you are saying, but I remember from law school, unless they changed it, anything that’s in the mail is presumed to have been delivered. And if it was in the mail, why was it on the 6th? It was presumed to be in the possession of the people that it was addressed to. That’s the one concern I have.”
Upon Mikels’ arrival in the courtroom, Allain, Fawke’s clerk, put file stamps on both Mikels’ response to the county’s motion as well as on the recusal motion.
As the proceedings began, Fawke had not examined the recusal motion, one copy of which Allain had handed him, and the judge seemed unaware of its contents. The attorneys for the county as well as for the Colonies Partners argued that Mikels’ answer on behalf of the taxpayers and all interested persons could not be heard because it had not been filed at the courthouse by March 5.
Mikels announced to the court that she was filing her opposition to the motion to confirm the default, but she was also filing “a written verified statement objecting to hearing or trial before your honor on the ground of reasonable. . . .”
The judge interrupted her, demanding to know what code section she was citing. Mikels told him “170.3(C)(1).” The judge said, “You are filing a 170.3?” After clarifying that opposing counsel in the courtroom had been served and the judge’s copy of the motion had been handed to the court, Mrs. Mikels began to say, “but you will have a choice to recuse yourself or. . .”
The judge said, “Oh I know what my options are. I’m just. . .”
At that point, Michael Weed, from the law firm of Orick Herrington representing the Colonies Partners, interrupted to state: “I think that Ms. Mikels is not permitted to file a motion to recuse because a default is entered against all parties.”
Mrs. Mikels stated: “The record should reflect I never received a request to enter a default nor did the moving party attach any default to their half an inch of paperwork they served on me yesterday afternoon, nor have I received back the paperwork that I filed, I sent for filing, on the 5th, by overnight mail. And, you know, nothing has come back. The check hasn’t come back. So I have no evidence—there’s no evidence before the Court and certainly no admissible evidence that a default was ever entered.”
Norton echoed Weed’s comments saying that he didn’t think Mikels had standing to file the motion until the court would rule in her favor on the issue of default. “I think it’s improper,” he said.
Fawke began reading and citing cases in support of entering a judgment confirming the validity of the public agency’s action, ignoring the motion to recuse him on the grounds that Mikels’ answer had already been defaulted so even though they had called her there on an ex parte motion for the judge to confirm her default, she had no standing to object to the judge because she had already been defaulted.
Fawke’s voice fairly thundered with anger within the confines of the small courtroom in response to the provocation of Mikels’ recusal motion. He then ruled that Mikels had failed to meet the “strict and mandatory timeliness” requirement in making her response to the county’s validation action and he confirmed a default had been entered.
Subsequently, Fawke instructed Allain to white out the file stamp. Fawke’s clerk complied with the judge’s request.
Under California’s Code of Civil Procedure, a 170.1 motion to recuse a judge, such as that one lodged by Mikels against Fawke, triggers an automatic application of Code of Civil Procedure Section 170.3, which prevents the judge from entering any sort of ruling with regard to the matter upon which his standing has been challenged. The law requires that the matter then go to the Superior Court’s presiding judge, who is charged with making a determination as to whether the judge should be disqualified from hearing the case.
Fawke, however, ignored those requirements, and he moved rapidly into a ruling against Mikels.
Mikels subsequently appealed that decision to the Fourth District Court of Appeal in Riverside, which took the matter under consideration. But before the appellate court ruled, the county, which had already paid the Colonies Partners $22 million, at the direction of the board of supervisors issued, in defiance of the Fourth District Court of Appeal’s authority, $80 million in bonds, the proceeds from which were used to make the final installment of the $102 million payout to the Colonies Partners.
Less than a week after the March 15 hearing in Fawke’s courtroom, Allain told ValleyWide Newspapers on March 20, 2007 that she had accepted the recusal motion but had altered it at Fawke’s request.
Gail Fry, a San Bernardino County resident, stated, “I was present in court the day of the hearing in front of Judge Robert Fawke. Attorney Mikels filed a recusal motion for cause that morning upon Judge Fawke. Judge Fawke proceeded with the hearing as if he were never served, finding in favor of the Colonies Partners. After the court hearing, Attorney Mikels handed me the recusal motion and asked me to refile the motion. When I looked at the document, I noticed a large area covered with whiteout. Upon further examination I was able to see that underneath was a court “filed” stamp. I believe this is a felony under Government Code Section 6200. The original document has been preserved. I am hoping that there will be a thorough investigation this time on behalf of the citizens of San Bernardino County and that the actions of the county officials are investigated. I have verifiable documentation to support my statements.”
Fry says that contrary to Maline’s and Larson’s opening statements, someone, namely Marjorie Mikels, did protest the validation of the $102 million settlement.
Fawke this week told the Sentinel, “You know, that was 2007. I have absolutely no recollection of that hearing. I thought it went to Pete Norell or another judge. I just had cursory contact with that case. I am not certain what that situation was about. I honestly can’t remember, so anything I would say at this time would be total speculation. Once it came in, I would allow time for my aids to do the research and then I would look at what they came up with to see if I agreed with their analysis or not.”
Fawke said he may have rejected Mikels filing “if it did not look like the person [Mikels] had standing to make the protest. I don’t know if that was my determination or not. You may be able to get that out of the court record.”
Asked if he recalled the order to Allain to white out the stamp on the recusal motion document, Fawke said, “Kim Allain was my clerk and she would have gotten it [the recusal motion] and received it. I don’t remember that at all. If that happened, there should be something in the case file to indicate why. Look in there to see why. There are law and motion papers that get reviewed. I would get a recommendation from a research attorney or research attorneys. If I agreed with the analysis, I entered a judgment. That is how it worked. As far as anything on that law and motion calendar and what I got back from the staff, I have absolutely no recollection of that. That hearing would have been conducted normally on a Friday. There should be some kind of record if there was a hearing on it.”
Informed that he had summarily dispensed with a recusal motion against him that was based on his relationship with Judge Warner, Fawke said, “We did know each other. I liked Judge Warner. But that we knew each other wasn’t meaningful. If I am asked to review one of his decisions, I am not necessarily going to go along with him. I would go into it to take an independent look at it. I would look at it very carefully. I wouldn’t just uphold him because he’s my buddy. I might overturn his decision if I disagreed, even though I know Judge Warner to be very qualified.”
In the statutes providing for “validation” actions, (Code of Civil Procedure § 860 et seq.) it says at Section 866, “The court hearing the action shall disregard any error, irregularity, or omission which does not affect the substantial rights of the parties.”
Maline’s and Larson’s references to the validation of the settlement and its nexus to the action by Fawke to obliterate any record of the protest against the settlement has resurrected charges that have never been fully laid to rest pertaining to misdeeds by the judges involved in the Colonies Litigation.
There have long been insinuations that Norell and Warner acted improperly or were in some fashion unduly influenced in their rulings on the case.
Norell’s ex-wife, Catherine, purchased a home in the Colonies at San Antonio subdivision, which Norell never disclosed. According to the FBI, Catherine Norell paid some $200,000 less for that home than what was then the going price. In 2005 it was reported that as the presiding judge, Norell had moved to shut down an investigation by the 2004-05 Grand Jury that was looking into accusations of bribes and kickbacks being offered to Postmus and Biane by the Colonies Partners. During the trial, Warner was spotted fraternizing with Richards.
Ruth Stringer, who was elevated to the position of county counsel after Dennis Wagner’s resignation as the county’s top in-house lawyer in the wake of the board approval of the Colonies settlement, recalled the peculiar intensity with which Norell worked to ensure that the Colonies Partners case was assigned to Warner after the Fourth District Court of Appeal sustained the county’s appeal and sent the case back to San Bernardino County Superior Court for trial.
“Judge Norell took a very exceptional step of assigning it to Judge Warner before he actually had jurisdiction returned to the trial court. That was a very odd thing to do or even attempt to do,” Stringer testified.
Norton told the grand jury that the county’s lawyers believed then and still believe there was a “possibility that he (Warner) committed inappropriate conduct in connection with the trial.”
Wagner testified that accusations about both Norell and Warner were raised. Jim Lindley, a one-time Postmus political ally who had been hired by the county as interim purchasing director as a result of Postmus’ sponsorship, said he heard Burum bragging that he played golf with one of the judges. Norell was seen on more than one occasion imbibing cocktails with Richards at the Red Hill Country Club in Rancho Cucamonga.
Wagner said he consulted with attorneys from the law firm Jones Day and it was recommended that a complaint pertaining to Warner and Norell be filed with the Commission on Judicial Performance. The complaint was filed on Sept. 11, 2006. Wagner said he felt making such a complaint was incumbent upon his office since, as he put it, “judicial misconduct, [if] that’s going on, that impacts the entire case.”
Previously, Norell told the Sentinel reports of his misconduct with regard to his handling of the Colonies Case were plain wrong. He called allegations that he had been offered or had accepted any order of bribe or improper payment to make rulings or take action favorable to the Colonies Partners “bullshit. There’s no basis for any of it,” he said.
He said he was unwilling to discuss in any detail the facts relating to the Colonies case. “I can’t tell you how I made that decision,” he said. “I ruled based on the case and facts before me and for no other reason.”
Norell said he was not prepared to acknowledge that he had erred in ruling that the county’s flood control easements had been abandoned on the Colonies property, despite the appellate court’s ruling. “No, I don’t think so at all,” he said. “I never read the appellate opinion. I don’t know that was the appellate ruling. I don’t remember.”
His ex-wife’s ownership of a home in the Colonies at San Antonio project had no bearing on him or his decision, Norell insisted.
“As to my ex-wife’s ownership of a house in the Colonies, I was not married to her at the time,” former judge Norell said, and I had not been married to her for 12 years. My ex-wife inherited money from her parents after they passed away. I didn’t know anything about the contract. She paid all cash for it. I wasn’t paying alimony after the divorce.”
With regard to Norell’s action in shutting down the 2004-05 Grand Jury’s investigation into Postmus and Biane, there is a demonstrable variance between Norell’s version of events and the recollection of others.
The 2004-05 Grand Jury had formed an ad-hoc committee which was chartered to look into recurrent reports that Burum and Richards were providing Postmus, Biane and perhaps other county officials bribes, kickbacks or some other form of inducement to encourage the settlement of the lawsuit on terms that favored the Colonies Partners. At that point, using his authority as presiding judge, Norell, according to then-grand jury foreman Bob Burkhardt, confronted Burkhardt and grand jury advisor Clark Hansen, Jr. and persuaded them to shut down the ad-hoc committee’s inquiry.
Two other members of the 2004-05 Grand Jury confirmed that Norell quashed the investigation. Burkhardt said that upon being confronted by Norell and then Hansen, he elected to close down the investigation. Burkhardt said Norell used the term “witch hunt” in characterizing the investigation.
“I initially set up the group [i.e., the ad hoc committee] and decided to disband it after talking with our lawyer [Hansen] about what the judge [Norell] had said,” Burkhardt stated. “The decision to end the investigation was made between myself, the lawyer and the judge.”
Norell inserted himself into the matter, Burkhardt said, after Postmus and Biane became alarmed at the direction in which the grand jury was headed.
“Supervisor Biane spoke to the judge and said he was unhappy with one of our interviews with him,” Burkhardt said, going on to explain, “We don’t think he was very comfortable with the questions he was asked.”
Burkhardt said the ad-hoc committee was looking into reports that kickbacks and bribes relating to the Colonies project had been paid. “We heard a lot of rumors,” he said.
Burkhardt said he reluctantly backed down because Norell, as the presiding judge, had more power than he, as the grand jury foreman, did. “The judge has the authority to shut an in-vestigation down or to disband the grand jury,” he said. “He would have disbanded the grand jury if we continued. I had to decide if we would challenge the supervisors. My decision was we would not.”
Norell said he had not stopped any such investigation into the Colonies Partners, Postmus and Biane. He denied confronting Burkhardt and Hansen about the investigation.
“I never had a meeting with them,” Norell said. “I didn’t know what they were investigating.”
Any favoritism that Warner may have shown toward the Colonies Partners does not appear to have been driven by monetary considerations. Contemporaneous to the time he was hearing the Colonies case, Valley Wide Newspapers made a survey of the personal wealth of the county’s superior court judges, gleaned from available public records, including the statements of economic interest filed by the county’s jurists. Based upon that data, Warner ranked as the fourth wealthiest of the all of the judges serving in San Bernardino County. Thus, it would appear that Warner would have been impervious to the inducements of the type – mercenary considerations – prosecutors have alleged were brought to bear to corrupt the other officials caught up in the Colonies scandal.
Nevertheless, Warner, it seems, did have an Achilles heel that might have been exploited. According to another San Bernardino County Superior Court judge who once served with him, Warner is “a rabid Republican,” whose chambers came across as something akin to “a shrine to Ronald Reagan.” Virtually everyone involved in the Colonies scandal is a Republican. At the time of the Colonies lawsuit settlement, Bill Postmus was chairman of the board supervisors and chairman of the San Bernardino County Republican Central Committee, as well as county assessor-elect, the most powerful taxing authority in the county; Paul Biane was the vice chairman of the board of supervisors and vice chairman of the San Bernardino County Republican Central Committee; all of the political action committees controlled by the four recipients of $100,000 contributions from Burum were dedicated to promoting Republican candidates and causes; the Colonies Partners generally were, during the early and mid-2000s the single largest contributor, directly and indirectly to GOP candidates in San Bernardino County; and Colonies Partners co-managing principal Dan Richards was in 2006 a successful candidate for election to the Republican Central Committee.
Warner told the Sentinel he could offer no comment.
“I’ve been called as a witness by one of the parties,” he said. “I won’t say anything while the case is pending.”