Stephen Larson, the defense attorney for Colonies Partners co-managing partner Jeff Burum, speaks during public comments at the San Bernardino County Board of Supervisors meeting on Tuesday, Nov. 14, 2017. Colonies Partners, the Rancho Cucamonga developer embroiled in years of litigation with San Bernardino County including this yearÕs failed public corruption prosecution, wants the Board of Supervisors to restore $45.2 million the partnership spent to successfully defend itself in both civil and criminal court. The amount includes $32 million in legal fees and $13.4 million in lost profits on hasty land sales made to help defray legal costs. (Stan Lim, San Bernardino Sun/SCNG)

By Joe Nelson | | San Bernardino Sun
PUBLISHED: December 14, 2017 at 2:16 pm | UPDATED: December 15, 2017 at 12:51 am

An attorney for Rancho Cucamonga investor group and developer Colonies Partners LP filed a claim Thursday against San Bernardino County seeking more than $45 million in damages, alleging the county failed to indemnify Colonies in two legal actions.

A November 2006 settlement agreement between the county and Colonies Partners, according to the claim, ensured the county would indemnify the developer or any of its agents in any future legal challenges to the negotiated $102 million settlement, in Colonies’ favor, which ended a nearly 5-year legal battle over flood control improvements at Colonies’ 400-plus acre residential and commercial development in Upland.

The two legal actions include the failed criminal prosecution of Colonies co-managing partner Jeff Burum and three former top county officials in connection with the $102 million settlement and a subsequent civil lawsuit brought against Colonies and the county in February 2012 by two taxpayer groups that was ultimately dismissed.

Last month, attorney Stephen G. Larson, who represents Colonies Partners and successfully defended Burum in the criminal case, hand-delivered a demand letter to the Board of Supervisors and spoke publicly during the board’s regularly scheduled meeting. He also provided to supervisors nearly inch-thick binders of summaries, supporting legal documents, and a breakdown of costs — including $32 million in legal bills — sent to each supervisor’s office as well as the County Counsel.

The claim states that the county failed to indemnify Colonies by not defending the validity of the settlement and “assisting the San Bernardino County District Attorney’s Office and California Attorney General’s Office in their efforts to invalidate the Settlement Agreement and criminally prosecute Jeffrey Burum.”

“Under the settlement agreement, the (flood control) district agreed to indemnify and defend Colonies against “all actions whatsoever” arising out of, among other things, the district’s obligations under that settlement,” according to the claim. “The taxpayer action and criminal action are subject to this indemnity and defense obligation because both actions were based on the theory that the district’s payment of $102 million to Colonies was illegal.”

Prosecutors alleged bribery drove the historic $102 million settlement, not rising damages being accrued by Colonies due to the prolonged litigation and tentative rulings by two San Bernardino Superior Court judges in favor of Colonies Partners. One of those judges, Christopher Warner, charged the county with acting in bad faith, playing “hide the ball” with Colonies and endangering public safety.

County spokesman David Wert said in an email today, “The county carefully considers all claims and acts in the best interests of everyone involved.” He said the Board of Supervisors will determine what course the county will take, but the initial reaction of the county’s attorneys is that neither Colonies Partners nor the county Flood Control District intended for the indemnity clause in the settlement to cover criminal defense costs for bribery-related charges.

Colonies Partners’ claim is the second to be filed against the county since the ill-fated Colonies criminal case ended in September with all charges dropped against defendant Jim Erwin, a former county assistant assessor after his jury announced it was “hopelessly deadlocked.” In August, another jury acquitted Burum, former county Supervisor Paul Biane, and Mark Kirk, former chief of staff for former county Supervisor Gary Ovitt, after about a day of deliberating.

On November 1, Erwin’s attorney, Rajan Maline, filed $25 million claims against the county and state alleging malicious prosecution, false arrest/imprisonment, fabrication of evidence, negligence, intentional infliction of emotional distress, retaliation, and civil rights violations in connection with the 8-year-old criminal case and marathon trial that began Jan. 4 and ended Sept. 22.

More to come.