More than two months after three of the defendants in the Colonies Lawsuit Settlement Public Corruption Case were acquitted in total and a separate jury for the fourth defendant was unable to reach a verdict, the lead attorney for the central defendant in the case issued a $45.2 million demand against San Bernardino County.
Jeff Burum was one of the managing principals in the Colonies Partners, a Rancho Cucamonga-based company which in 2002 sued San Bernardino County and its flood control district over storm water drainage issues at the Colonies at San Antonio residential and Colonies Crossroads commercial subdivisions in northeast Upland. After more than four years of increasingly acrimonious litigation, the county board of supervisors voted 3-2 to bring the legal wrangling to an end by conferring a $102 million payout on the Colonies Partners. A little more than three years later, however, the California Attorney General’s Office and the San Bernardino county District Attorney’s Office filed criminal charges against Bill Postmus, one of the supervisors who had voted for the settlement, and former sheriff’s deputies’ union president Jim Erwin, who had worked as a consultant for the Colonies Partners.
That criminal filing against Postmus and Erwin alleged the settlement was tainted by extortion and bribery, and involved fraud, conflicts of interest, the misappropriation of public funds and perjury. After 13 months of maintaining his innocence, Postmus pleaded guilty to the entirety of the case against him and testified before a grand jury, which in May 2011 indicted Erwin along with Jeff Burum, a managing principal in the Colonies Partners; Paul Biane, one of the supervisors who had voted with Postmus to settle the litigation with the Colonies Partners, and Mark Kirk, the chief of staff to then-supervisor Gary Ovitt, who had supplied the third crucial vote in favor of the settlement. The indictment enlarged upon the charges filed in 2010 against Postmus and Erwin, and alleged conspiracy, bribery, conflict of interest, misappropriation of public funds, perjury, fraud, and income tax evasion. Allegations of extortion were wrapped into the narrative and description of the overt acts committed by the defendants, but extortion was not enumerated as a charge.
After five years of legal sparring between prosecutors and defense attorneys during which motions for dismissal were made, various charges were dismissed, appeals were made to both the appellate court and the California Supreme Court, resulting in dismissals of some charges being sustained and others overturned, the case went to trial in January 2017 before two juries, one hearing the case against Burum, Biane and Kirk, and the other panel considering the charges, evidence and testimony against Erwin.
Even before the first jury exonerated Burum, Biane and Kirk and the second jury deadlocked in its consideration of the charges against Erwin, talk was emanating from the defense camp about a civil action alleging malicious prosecution being brought against the district attorney’s office and the California Attorney General’s Office. The basis for such a suit, the defendants and their supporters said, was prosecutors’ willful presentation of false, fabricated or unreliable evidence and testimony to the grand jury to obtain the indictment followed by the presentation of the same evidence to the two juries hearing the case.
No such malicious prosecution nor civil rights violation lawsuit nor the claims relating to those types of suits have been lodged to this point. On Tuesday, however, Stephen Larson, a former federal judge who served as Burum’s lead defense attorney in the criminal matter and who is also representing the Colonies Partners as a civil attorney, signaled that the Colonies Partners is now intent on recovering from the county the costs the company incurred as a consequence of the legal contretemps with the county over the last 15 years.
The Colonies Partners is owed that money, Larson maintains, because the settlement the county and the Colonies Partners forged in 2006 contained an indemnification clause which committed the county and the flood control district to hold the Colonies Partners harmless in the event that any further claims, demands, damages or legal action relating to the settlement of the underlying litigation ensued. That commitment, the Colonies Partners contend, required the county to defend the Colonies Partners with legal counsel or defray the company’s legal costs.
Larson went before the board of supervisors at its Tuesday morning meeting after having presented the county with an indemnification claim. The gist of his statement, consisted of his reading the cover letter accompanying the claim.
“I am here on behalf of the Colonies Partners,” Larson said. “This morning I had delivered to each of your offices a binder which lays out the Colonies Partners’ indemnity claims against the County of San Bernardino and the San Bernardino County Flood Control District. I have also served a copy on Jean Rene’s office as well as Mr. Theodora’s office.” Jean Rene-Basle is the county’s top in-house lawyer, who has held that position since 2010 and is scheduled to depart at the end of the month. Todd Theodora is an attorney who heads a firm which represents the county in litigating the county’s claims against its insurance carriers.
“In 1999, Jeff Burum and Dan Richards co-managing partners of the Colonies, met with then-supervisor Jon Mikels in an attempt to amicably resolve the Colonies’ dispute with the County of San Bernardino. and the San Bernardino County Flood control district over flood control issues on the Colonies project,” Larson read from the cover letter, continuing, ”Mr. Burum and Mr. [Dan] Richards [a second co-managing principal in the Colonies Partners] offered to split the cost of building the now-famous basin, which would have amounted to a $12.5 million investment for each side, and further offered to donate the acreage required for the basin to the district. Mr. Burum and Mr Richard tried to give supervisor Mikels information substantiating and supporting the Colonies’ position, much the way that I am doing so this morning, and in response supervisor Mikels told them they could ‘take the information and stick it where the sun don’t shine.’ In the nearly two decades that have followed that unfortunate response, the Colonies has been forced to litigate three cases involving this dispute, and has won all three decisively. Colonies won the underlying civil action against the county and the district, winning two separate trials before two separate Superior Court judges, defeated a taxpayer lawsuit brought in 2011 on behalf of the county, with the Court of Appeal ordering the county to dismiss the lawsuit with prejudice, and now Mr. Burum has resoundingly defeated the district attorney in the criminal case with acquittals across the board.”
Larson continued, “As we have told the county’s attorneys on numerous occasions, Colonies sincerely wishes to end this wasteful and unnecessary dispute. As part of our effort to do so, we are providing the enclosed binder for your review. This binder sets forth the legal and the factual bases for Colonies’ indemnification claim against the county and the [flood control] district, pursuant to the November 2006 settlement agreement. All we ask is unlike supervisor Mikels, you carefully consider this material.”
At that point, Larson’s three minutes of allotted speaking time had elapsed, and he was cut off in mid sentence. The Sentinel has obtained from Larson’s firm the remaining verbiage in the cover letter. The final two sentences of the cover letter read, “All we ask is that, unlike supervisor Mikels, you carefully consider this material, consult with your legal counsel in closed session during your December 5, 2017 board meeting, and then do the right thing and fulfill your indemnification obligations under the settlement agreement. Otherwise, we will have no choice but to once again vindicate both Colonies’ and Mr. Burum’s rights through litigation.”