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.