11:18 PM PDT on Thursday, May 12, 2011

The Press-Enterprise

San Bernardino County Supervisor Janice Rutherford is suggesting the county drop its lawsuit against three other public agencies involving a $102 million flood control settlement paid to indicted developer Jeff Burum’s company.

The county sued Caltrans, Upland and San Bernardino Associated Governments in 2004, contending that the three agencies were responsible for flooding that damaged property owned by Burum’s firm, Colonies Partners, in Upland.

The suit, amended in 2008, sought repayment of some of the $102 million settlement county supervisors approved in November 2006.

“The county has spent millions of dollars,” Rutherford said of the court battle. “Upland, SANBAG and Caltrans have spent millions of dollars. This is all taxpayer money. So it’s taxpayers fighting taxpayers over something I think there is a very wide acknowledgement was the result of a crime.”

Prosecutors this week indicted Burum and three former county officials — former Supervisor Paul Biane; former assistant assessor Jim Erwin; and Supervisor Gary Ovitt’s former chief of staff Mark Kirk — charging them with 29 counts as part of a bribery conspiracy to get the Board of Supervisors to approve the settlement with Colonies.

Given the criminal allegations, Rutherford said the county “needs to stop the insanity” of government agencies suing each other, racking up large legal bills that now top $25 million.

The property dispute goes back nearly a decade to the design and construction of Highway 210, which led to flooding of Colonies-owned land. Caltrans, Upland and SANBAG all had roles in the highway’s construction. Colonies sued the county, which is in charge of flood control.

Rutherford is the only supervisor to say the suit against the agencies should be dropped.

“I hope they’re open to persuasion,” she said of her board colleagues.

But some county officials said it might be tough to end the suit.

Earlier this week, Supervisor Neil Derry called the new charges “concerning” but declined to say whether the county should change its legal strategy.

Board Chairwoman Josie Gonzales said it’s premature for the county to make that decision until it has analyzed all the information. For now, she said the board majority supports its current legal strategy.

“As far as I know there is no easy way out that can allow us to just drop the indemnity suit,” she said.

Supervisor Brad Mitzelfelt did not return a call seeking comment. A representative for Supervisor Gary Ovitt said he would have no comment.

Legal experts have said that Postmus’ admission to bribery could open the door to invalidating the lawsuit settlement.

Because the lawsuit between the county and the other agencies is based on the $102 million deal supervisors struck with Colonies at the heart of the corruption probe, the case against the three agencies should be tossed, said lawyer Ken MacVey, SANBAG’s lawyer on the case.

But county officials, who said they are researching their options in challenging the settlement, said ending the lawsuit doesn’t resolve the flood control issue.

“This is because of a mistake that Caltrans, Upland and SANBAG made,” said county spokesman David Wert.

The lawsuit claims SANBAG, Caltrans and Upland bear responsibility for any damages the county paid. If those agencies were found to bear some responsibility, they could also try to recoup their money from Colonies.

Pursuing the money paid to Colonies will be a “huge undertaking,” Wert said.

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