This article is the fifth in a series of in-depth stories related to the controversy surrounding the settlement of Quiet-Title litigation between the County of San Bernardino Flood Control District, County of San Bernardino, and Colonies Partners, L.P.

In this segment, we make available to you the 2006 Intended Statement of Decision by Christopher Warner, Supervising Superior Court Judge of the Civil Division.

The litigation was resolved prior to the Warner decision being entered as a final judgment.

To view the Statement of Intended Decision in PDF format click here: 2006 Intended Statement of Decision by Superior Court Judge Christopher Warner

Judge Warner used the 2005 Unpublished Opinion by California Court of Appeal, Fourth District, Division Two as a template for the retrial of the Colonies litigation in order to properly conform to the instructions and findings by the appellate court.

The findings made by the Court of Appeal and adopted as binding law of the case by Judge Warner is spelled out on page three of the ruling.

The Court of Appeal findings are as follows.

* “We reverse the judgment. We hold that substantial evidence shows the relevant easements still exist for flood control purposes but may be limited in scope than Basin A as designed and constructed. On remand the trial court must decide the scope of the flood control easements, especially the 1933 and 1939 easements.” (Opinion at 3)

* “We decide the easements exist for general flood control purposes but are limited to the extent of their original grants.” (Opinion at 9)

* “Both statute and case law provide that the extent of an easement is determined by the terms of the grant.” (Opinion at 10)

* “The 70 year history of using the easements for omnibus flood-control purposes makes untenable the plaintiff’s argument that the easements were only meant to control from watershed B.” (Opinion at 11)

* “We reject, however, the districts argument that the flood-control easements have been expanded by sand and gravel quarries over the years to include much greater use than was originally permitted.” (Opinion at 11)

* “Basin A exceeds the original grant of the 1933 easement”. (Opinion at 13)

* “[T]he District’s easement rights continue to be confined to their original extent.” (Opinion at 13)

* “The easements have not been abandoned.” (Opinion at 15)

The Court of Appeal remanded this case for consideration of the scope of the 1933 an 1939 easements and “whether basin A is allowed under them.” (Opinion at 17). The Court of Appeal also noted that certain equitable defenses “may have viability in this proceeding or a subsequent proceeding.”

Judge Warner determined the “Scope of Issues” on remand as follows:

* The interpretation of the 1933. 1934, and 1939 Easements, including their scope and any surcharge of those easements;

* What portion of basin A is claimed by Defendant, as well as whether Defendant is responsible/obligated to maintain, construct, and repair it;

* Whether Basin A falls within the scope of any of the flood control easements, particularly that of 1939;

* Whether construction of a basin such as Basin A would fall within any of the flood control easements, and particularly within the 1939 easement;

* Whether Plaintiff is barred by estoppel or laches from asserting that Defendant’s easements are insufficient to support of Basin A;

* Whether the 1939 Easement imposed an obligation on Defendant to construct flood control improvements such as Basin A or whether it gave Defendant merely the right to do so; and

* Whether the 1999 Agreement between Plaintiff and Defendant restored the 1939 Easement to its full scope and/or constituted a new conveyance of an easement sufficient to encompass the construction of a basin the size of Basin A.

Judge Warner determined the following matters were not within the scope of the trial before him;

* Whether a basin sufficient to meet flood control purposes could have been constructed within the original footprint of Basin 6;

* Damages to which Plaintiff may be entitled by virtue of a taking of its real property; and

* Any claims of indemnity for any damages suffered.

The following term is key to findings By Judge Warner;

v. To impose an additional cost or burden (usually excessive).

n. A court fine imposed on a fiduciary for failure of duty.

Key conclusions by Judge Warner include the following:

* Defendant (District) failed to produce any plausible evidence as to why it did not assume responsibility and control of the 20th Street Storm Drain.

* Witnesses from both parties agreed that Basin A was properly sized to handle discharge from the 20th Street Storm Drain.

* The construction of Basin A was required due to discharge from the 20th Street Storm Drain onto Plaintiff’s (Colonies) property. Patrick Mead, Director for Defendant (District) testified that the construction of Basin A at county expense would have been required regardless of whether or not Plaintiff’s (Colonies) development occurred.

* The construction of Basin A on Plaintiff’s (Colonies) property would not have been necessary if the 20th Street Storm Drain had not been constructed to discharge onto Plaintiff’s property.

* Basin A exceeds the scope of the 1933 Easement.

* The 1939 Easement is limited in scope.

* The 1939 Easement does not make reference to the term Basin.

* Plaintiff (Colonies) has the right to access the Easements.

* Any construction or repair of flood control structures is the responsibility of the Defendant (District) and at Defendant’s (District) cost.

* The 1939 Easement was not meant to turn Plaintiff’s (Colonies) property into some sort of public utility for flood-control purposes without regard to the impact on Plaintiff’s (Colonies) business.

* Defendant (District) held Plaintiff’s development hostage by dragging out negotiations for Defendant’s acquisition of Basin B and by virtue place a cloud on title.

* Defendant (District) played “hide the ball” regarding its intentions of diverting discharge onto Plaintiff’s (Colonies) property.

* Neither the 20th Street Storm Drain or Basin A falls within the scope of the 1939 Easement.

* Mr. Burum’s testimony was credible and unrebutted even though Ms. Vana Olson was on all of the Defendant’s witness lists.

* The Court did not find Mr. Ken Miller to be forthright or credible in his responses. Miller routinely gave non-substantive answers such as “I don’t recall”.

* In the fall of 2002, Mr. Miller initially advocated for the immediate construction of Basin A since the 20th Street Storm Drain had been made operational without proper safeguards. In the fall of 2003, Miller changed his position to say existing facilities, some of which had not even been constructed could handled the Storm Drain discharge. The court found the latter statement patently false.

* In 1999, Mr. Miller told Mr. Burum there would be no need to construct additional facilities on Plaintiff’s (Colonies) property to handle discharge from the 20th Street Storm Drain even though Miller must have known that was not possible.

* In 1999, Defendant (District) knew its easements were insufficient to handle flood control requirements and coerced and misled Plaintiff by holding the 1999 Agreement hostage.

* Defendant (District) turned its back on its obligations to Plaintiff (Colonies) and forced Plaintiff (Colonies) to either litigate or have its development fail.

* The evidence shows a deliberate course of action by Defendant (District) to shift to Plaintiff (Colonies) the obligation to build and pay for regional flood control facilities.

* Defendant’s (District) conduct would have endangered public safety, if not for the counter-veiling actions of the Plaintiff (Colonies).

Judge Warner made the following findings:

* Defendant (District) intentionally withheld information from and misled Plaintiff (Colonies),

* Defendant (District) intentionally failed to disclose to Plaintiff (Colonies) that it intended to make the 20th Street Storm Drain operational without designing, constructing, paying for, operating, or maintaining any facilities to safely convey the discharge from the 20th Street Storm Drain across Plaintiff’s property to the Cucamonga Creek Channel and that Defendant (District) would disavow any ownership of the 20th Street Storm Drain.

* Defendant (District) induced Plaintiff (Colonies) to act without knowing the true facts by telling Plaintiff (Colonies) that Defendant (District) would not recommend the Board of Supervisors approve the 1999 Agreement.

* Plaintiff (Colonies) acted in reliance on false and incomplete information it received from Defendant (District).

* The court rejects Defendants’ contention that it may not reach a finding of surcharge in this case.

* Implicit in the Court of Appeal’s remand is a direction to consider evidence of surcharge, due to the post-judgment completion of Basin A by the Plaintiff (Colonies). (Opinion p. 17)

* Defendant (District) continually violated and repudiated its obligations for flood control.

* Plaintiff (Colonies) is subject to substantial and unlimited risk of being found liable for flooding damages, personal damage and property damage, due to the presence of these regional flood control facilities on its private property and Plaintiff (Colonies) is unable to obtain insurance at its own cost or otherwise, to completely insure against such risks, which risks have been caused and created soley by the Defendant’s (District) wrongful conduct.

* When the Defendant (District) turned on the 20th Street Storm Drain and attempted to walk away, the Defendant (District) committed a massive, permanent, severe, and inseverable surcharge of the easements, which violates California Law.

* The Court finds the Defendant (District) has so grossly surcharged the 1933, 1934, and 1939 Easements, that Defendant’s (District) rights under those Easements have been wholly and permanently extinguished.

Judge Warner ruled in favor of Plaintiff (Colonies) as to the First (Declaratory Relief) and Third (Quiet Title) Causes of Action and against the Defendant’s two Affirmative Defenses of Estoppel and Laches.

After rendering his Intended Statement of Decision, Judge Warner delayed entering judgment against the San Bernardino County Flood Control District and urged the parties to reach a settlement.

In the next story in this series we will look at the Settlement Agreement.