This article is the seventh 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 story, we will further simplify the settlement agreement covered in part six and also attempt to provide some little known issues related to the settlement.

To better translate the financial and other points of the settlement we provide the following:

Colonies Partners, L.P.                 County of San Bernardino
Receives $102 million                      Receives title to 72 acres of
                                           of which 67 acres is appraised
                                           in 2006 at $85 million.
Colonies transfers                         Receives possession and control
$2 million back to Flood Control           Basin A, Basin B, and related
District upon settlement of current        channels, and other structures
related litigation with City of Upland.    constructed by Colonies Partners
                                           at a cost of $22 million.
Colonies waives claim to $22 million
in costs related to the design and
construction of Basin A, Basin B, and
other flood control structures.
Colonies waives claim to legal expenses
of $6 million.
Colonies waives claim to damages of
$43 million due to expenses caused by
cloud on title related to constructed
lots.
Colonies waives claim to damages of
$11.5 million in lost revenue from
increased infrastructure costs per lot
sold due to the elimination of 300 lot
sites within the 67 acres transferred
to the Flood Control District.
Colonies waives claim for $36 million
in damages due to a three-year delay
in the development of phase two.

In an effort to reach a successful resolution to the long-standing dispute it was recommended that all sides mutually select a neutral third-party mediator with the qualifications and background to understand the technical nature of the litigation, judge the risks to all parties, and be of a stature and character to make a recommendation.

All sides agreed to Edward Panelli, a retired California Supreme Court Justice with impeccable credentials. Panelli’s fee was very expensive and equally shared by all sides.

Panelli’s qualifications and background is covered in part six.

One of the driving factors that played into the settlement was loss of confidence in outside legal counsel. The firm of Jone Day resigned as the outside attorney on the case just prior to settlement. The reason given by Jones Day was they felt the settlement was too high and the County would win on appeal.

Some members of the board however felt attorneys fees were motivating the drive to appeal Judge Christopher Warner’s decision against the County. After all, nothing is more appetizing than a deep-pocket governmental client.

Jones Day had nine attorneys assigned to the case and the county’s fees alone were skyrocketing towards ten million dollars.

A proposal was made to Jones Day that if the County appealed Warner’s ruling, would Jones Day place their fees for the appeal at risk? In other words, we (the county) lose on appeal, you lose the fees paid to you for handling the appeal.

The law firm declined.

County attorneys were afraid to sign off on the settlement agreement. Panelii wasn’t.

InlandPolitics is in the process of obtaining court transcripts for some of the proceedings for the Warner trial.