SBCO Seal

Sunday, August 11, 2013 – 12:00 p.m.
Last Modified: Sunday, August 11, 2013 – 09:30 p.m.

This news has been suppressed for nearly a year now.

But officials on the Fifth Floor of the San Bernardino County Government Center have started letting it out there, so it must not be a classified secret any longer.

San Bernardino County, California, and it’s Flood Control District, has recovered more than $45 million, including accrued interest since 2006, against the $102 million it paid out to settle a long-running lawsuit brought by Colonies Partners L.P.

Yes, you read it correctly! The county has recouped more than $45 million against the $102 million it paid Colonies Partners. A settlement labeled by some as being a result of corrupt conduct.

Here’s how the story goes.

After agreeing, in 2006, to settle with developer Colonies Partners L.P., the county eventually filed a claim with insurer California State Association of Counties Excess Insurance Authority. The authority was, at the time, insured by AIG.

Both sides agreed to present their case to a “binding” arbitration panel of three judges from the highly-respected Judicial Arbitration and Mediation Service (JAMS). The three judges were selected as follows; one by the county; one by the insurance authority, and one by mutual agreement. All three judges, acting independently from one another, unanimously found in favor of the county, with the third judge having the final determination on damages.

After presenting all the evidence related to the inverse condemnation and quiet title dispute, along with evidence from an underlying 2006 Superior Court trial decided in Colonies favor, the panel found the county liable for intentionally violating the developers property rights, causing monetary damages. The panel ordered the authority, and its insurer, to reimburse the county an amount equal to its share of liability in the settlement.

An unsuccessful attempt at appealing the binding award was recently concluded. After all, doesn’t binding actually mean binding!

The aforementioned arbitration case routinely appears on the Board of Supervisors closed session agenda under the caption: San Bernardino County, et al. v. California State Association of Counties Excess Insurance Authority, JAMS Arbitration Reference No. 1200043903.

Of course, this little nugget was never announced out of closed session by the county, which is now under scrutiny for withholding legal settlement information from county taxpayers.

The development also calls into question the motivations of the county to drop a related civil case against San Bernardno Associated Governments (SanBag), California Department of Transportation (Caltrans) and the city of Upland. A case to determine liability of those respective agencies, in regards to the amount paid to Colonies.

Earlier this year, Board of Supervisors Chair Janice Rutherford successfully pressed her colleagues to drop the case, via a walkaway settlement, after the county had spent some $26 million in litigation costs.

Was that pressure politically-motivated? Or was it a favor to San Bernardino County District Attorney Michael Ramos?

The law firm Theodora and Oringher handled both the binding arbitration, and the aforementioned civil action.

There’s another question needing to be asked here. That question is; What was the legal recommendation in regards to dropping the county lawsuit against SanBag, Caltrans and Upland?

Sources tell InlandPolitics.com that Attorney Todd Theodora repeatedly counseled the Board of Supervisors as to the strong merits to their civil lawsuit. The same sources also says Theodora made a 45-minute presentation to the superviors on how there was no conceivable criminal case against the four defendants targeted by Ramos.

So if county supervisors went against any legal recommendation to continue their litigation, the next question becomes why?

The arbitration award raises questions surrounding dubious and unethical claims, by Ramos, that Colonies suffered no harm, and the settlement was an orchestrated criminal scheme to fleece taxpayers.

An interesting twist here? The fact that Ramos used drug possession and government malfeasance-related charges to leverage former Assessor Bill Postmus into entering a plea bargain agreement, which backfired against the county, by unexpectedly complicating the aforementioned civil case against SanBag, Caltrans and Upland. However, since that plea arrangement, Postmus has given conflicting testimony to federal prosecutors looking into the settlement.

A development already made public.

At this point, it’s quite obvious the settlement has been, and continues to be, a political football for some county supervisors, and even Ramos himself, whose legal and political career is on the line.

It should be noted that Ramos has dragged California Attorney General Kamala Harris and Governor Jerry Brown into his own personal and political vendetta, using the Colonies settlement to neutralize perceived political enemies. It’s surely something both can’t be too pleased about these days.

Will those truly responsible for orchestrating this mess be held politically, legally and financially responsible?

The answer is yes.

And the fact this insurance recovery was kept secret for so long, in itself, is troubling.

It also stinks of politics.