Best Best & Krieger News Feed

BB&K Successful in Post-Redevelopment Case for City Client

28 Sep 2016 00:00:00 -0800

Best Best & Krieger LLP partners Victor L. Wolf, Iris P. Yang and Danielle G. Sakai successfully represented the City of Fontana in challenging the California Department of Finance’s refusal to approve payments owed under a long-standing Owner Participation Agreement following the dismantling of redevelopment agencies. The decision, handed down in August, preserved the City’s ability to receive settlement payments under the OPA amounting to an estimated $50-$70 million over the next 15 years.

The legislation that dissolved redevelopment agencies in 2012 requires successor agencies to periodically file a Recognized Obligation Payment Schedule listing payments that are owed on the obligations that the successor agencies inherited from the dissolved redevelopment agencies. The ROPS must be approved by the successor agency’s oversight board and, ultimately, by the Department of Finance. The DOF disapproved the payments to the developer due under the OPA, preventing the developer from making settlement payments due to the City, on the grounds that the OPA violated public policy and other provisions of the Dissolution Law.

The OPA and its amendments were previously validated by the San Bernardino County Superior Court in four separate judgments pursuant to Code of Civil Procedure Sections 860, et seq. Despite these judgments and despite approving the OPA payments on seven previous ROPS, the DOF suddenly changed course. Following the precedent set in the recent ruling that Victor and Danielle secured in Macy v. City of Fontana 244 Cal.App.4th 1421 (2016), the trial court found that, because the OPA had been validated, it could not be challenged based upon the later-enacted Dissolution Law. As a result, the court held that the OPA constitutes an enforceable obligation and the DOF abused its discretion in refusing to approve the OPA payments.

The case is City of Fontana v. Michael Cohen, Director of Department of Finance, Sacramento County Superior Court Case No. 34-2015-80002138.

BB&K Represents City in Successful Recovery of Redevelopment Loans

19 Sep 2016 00:00:00 -0800

Best Best & Krieger LLP Partner Iris Yang represented the City of La Habra in its successful effort to recover millions of dollars in redevelopment financing.

The legislation that dissolved redevelopment agencies in 2012 provided that, in general, agreements between a redevelopment agency and the city (or county) that created it were invalid with a couple of exceptions. One exception was agreements executed in connection with a financing.

To receive property taxes to be able to make payments on their various obligations, successor agencies (the entities created after redevelopment agencies were dissolved) must periodically file a Recognized Obligation Payment Schedule. The ROPS must be approved by the successor agency’s oversight board and, ultimately, by the California Department of Finance. The DOF can overrule an oversight board’s determination.

In 1998, La Habra issued Certificates of Participation to refinance bonds issued several years earlier by the former Redevelopment Agency. The City and Redevelopment Agency made a loan agreement whereby the Agency agreed to make payments to the City that were equal to the payments that the City had to make under the COPs documents.

The Successor Agency listed the loan agreement payments on its various ROPS. DOF approved payments under the loan agreement for several cycles, but then began disapproving them. DOF did not like the fact that the Agency had to pay accrued interest on payments that it was unable to make for a period of time, so it determined that the entire loan agreement was invalid.

The trial court agreed that the penalty provision was a standard provision in any loan agreement, and that DOF had abused its discretion in denying that the loan agreement was a valid enforceable obligation. For example, if one doesn’t make a mortgage payment, interest will accrue on the unpaid amount until both the accrued interest and unpaid amount are fully repaid.

For La Habra, this represents being able to recover about $9 million, which includes about $5.5 million in accrued interest and principal payments that were advanced by the City General Fund to make payments on behalf of the former Redevelopment Agency.

The case is City of La Habra and City of La Habra Successor Agency v. Michael Cohen in his Capacity as Director of the Department of Finance, et al., Sacramento Superior Court Case No. 34-2015-80002208.

California Supreme Court Sides with Public Agencies on Precondemnation Access Issue

26 Jul 2016 00:00:00 -0800

Best Best & Krieger LLP Partner Kendall MacVey filed an amicus curiae brief with the California Supreme Court in a critical eminent domain case. The Court ruled that numerous statutes grant public entities the authority to enter and engage in official activities on private property, including activities related to precondemnation. The brief supported upholding the right-of-entry statute at issue in the dispute.

The ruling and the brief, filed on behalf of the Riverside County Transportation Commission, stem from Property Reserve, Inc. v. Superior Court, S217738. In a unanimous opinion issued July 21, 2016, the Court upheld the State’s precondemnation right of entry statutes as constitutional, reversing a March 2014 appellate court ruling. The Court’s opinion referred to the Third District Court of Appeal’s ruling as “counterintuitive,” and evades the need for extensive statutory changes in how agencies access properties for necessary inspections and testing prior to commencing eminent domain actions.

The ruling is important to public agencies like RCTC and the California Department of Water Resources, which was seeking access to private properties to conduct environmental and geological studies for a possible water transportation tunnel.

BB&K Team Helps L.A. County Get State Funding for Exide Contamination

26 Feb 2016 00:00:00 -0800

Best Best & Krieger LLP is pleased to have assisted the Los Angeles County Board of Supervisors in securing $176.6 million to test and clean up contaminated areas near the now-closed Exide battery recycling facility in the City of Vernon. BB&K attorneys John Holloway and Gene Tanaka, as well as BB&K’s Director of Governmental Affairs Syrus Devers, accompanied supervisors and community members at an Assembly hearing on the clean-up efforts and discussions with legislators in Sacramento to help secure funding from Gov. Jerry Brown.

Brown originally proposed just $8.5 million for the effort, which involves testing for and removal of lead-contaminated soil from the most contaminated homes in an approximately 1.7-mile radius from the plant. This long-standing and high-profile contamination matter arises from the emissions of a former battery recycling facility, which operated for more than 30 years without proper permits and safety upgrades. High exposure to lead can cause a host of health concerns, and the State estimates that up to 10,000 homes may be impacted.

“This funding will bring immediate relief to thousands of families who have been voiceless for too long,” Supervisor Hilda Solis said in a thank you letter to those who assisted in the effort. This week, the Board of Supervisors acknowledged the lead partners’ work on the Exide clean up with a Commendation “in recognition of dedicated service to the affairs of the community and for the civic pride demonstrated by numerous contributions for the benefit of all the citizens of Los Angeles County.”

BB&K Successful in Appellate Court in Post-Redevelopment Case for City Client

26 Feb 2016 00:00:00 -0800

Best Best & Krieger LLP partners Victor L. Wolf and Danielle G. Sakai won an appeal for the City of Fontana in a lawsuit over the City’s liability following the dismantling of redevelopment agencies. The Fourth District Court of Appeal affirmed a San Bernardino Superior Court decision on Feb. 23 that a successor agency, not the city that controls it, may be held liable for preexisting obligations of a redevelopment agency.

Before the California Legislature dissolved redevelopment agencies in 2011, the plaintiffs sued the Fontana Redevelopment Agency for allegedly failing to provide required low- and moderate-income housing. The City of Fontana was named as a defendant after the dissolution, in its capacity as a successor agency and as the municipality in control over the agency. The BB&K team won the City’s dismissal in a demurrer, which the appellate court affirmed. The court found that, while the City controlled the agency, neither it or its general fund were liable for the previous obligations of the redevelopment agency.

The case is Macy et al. v. The City of Fontana, D068508

BB&K Successfully Defends Client in Racial Discrimination/Retaliation Case

18 May 2008 00:00:00 -0800

Daniel Villanueva v. City of Colton

BB&K Partner John Higginbotham represented the City of Colton in Daniel Villanueva v. City of Colton. The case involved claims by an employee that he was suspended and later included in a reduction-in-force because of his race, and in retaliation for whistle-blowing activity. BB&K prevailed on summary judgment, and then brought a motion for recovery of its attorney fees against the employee. The motion was granted in its entirety, resulting in a judgment of over $44,000 against the plaintiff. On appeal, the Court of Appeal affirmed the judgment in its entirety and decided to publish the case.

BB&K Prevails on Summary Judgment in Discrimination Case; Recoups Nearly All Attorneys’ Fees for Client

27 Apr 2006 00:00:00 -0800

Richard Gonzales v. City of Colton

BB&K Partners John Higginbotham and Cynthia Germano obtained summary judgment and a substantial attorney fee award in favor of firm client, City of Colton, in San Bernardino County Superior Court. The case involved claims by a current employee that he was passed over for a promotion because of his race and in retaliation for whistle-blowing activity. The employee also sued two of his supervisors for retaliation, defamation and intentional infliction of emotional distress. The BB&K team eliminated the claims against the supervisors at the demurrer stage based on deficiencies in the employee's government tort claim. Subsequently, the BB&K team convinced the court that the promotional decision was fair and unbiased, and that the employee lacked any credible evidence of race discrimination or retaliation.

Following the summary judgment, the BB&K team brought a motion for recovery of its attorneys' fees against the employee. The motion was granted and the City was awarded the sum of $39,060.00, which represented over 93% of its attorneys' fees for the entire case.

Colton City officials were obviously ecstatic with the outcome and the firm's work on their behalf, particularly given the deterrent effect that this case may have on like-minded employees who might otherwise file similarly baseless employment lawsuits against the City.

BB&K Eliminates Discrimination Claims; Recoups Litigation Costs for Client

15 Aug 2005 00:00:00 -0800

Lorraine June v. City of Colton, et al.

BB&K Partner John Higginbotham represented the City of Colton in Lorraine June v. City of Colton, et al. The case involved claims by a long-time employee that she was constructively terminated because of a disability and that the City failed to reasonably accommodate her. The employee also sued her department director and the City Manager for various intentional torts. BB&K eliminated the claims against the individuals at the demurrer stage based on plaintiff’s failure to comply with the Tort Claims Act. BB&K then disposed of the rest of the case on summary judgment by showing that the actions it took against plaintiff were for legitimate, non-discriminatory reasons unrelated to her disability. Judgment was entered in favor of the City and its employees for several thousand dollars in litigation costs.

BB&K Achieves Dismissal of Wrongful Death Case

21 Jul 2005 00:00:00 -0800

Olga Ulloa v. City of Colton, et al.

BB&K Partner John Higginbotham represented the City of Colton in Olga Ulloa v. City of Colton, et al. This wrongful death case involved a car accident in which plaintiff’s husband was killed while crossing a street at night. Plaintiff alleged a dangerous condition of public property due to broken street lights and obstructed visibility. After successfully demurring to the plaintiff’s first amended complaint, BB&K persuaded plaintiff to dismiss the City from the case.

BB&K Prevails on Summary Judgment in Discrimination/Wrongful Termination Case

19 Jul 2005 00:00:00 -0800

Mir Fattahi v. City of Corona, et al.

BB&K Partners Howard Golds and John Higginbotham represented the City of Corona in Mir Fattahi v. City of Corona, et al. The case involved claims by a Middle Eastern-origin employee that he was subjected to offensive comments about his race and religion by his supervisor and then terminated because of his national origin and religion. BB&K prevailed on summary judgment by convincing the court that plaintiff was terminated for poor performance and other reasons unrelated to plaintiff’s national origin or religion. Judgment was entered in favor of the City for its litigation costs.