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.

Appellate Court Again Sides with BB&K Client in Groundwater Rights Dispute

14 Jul 2016 00:00:00 -0800

On behalf of the City of Santa Maria, Best Best & Krieger LLP Managing Partner Eric Garner and Partner Jeffrey Dunn secured an appellate victory in a long-running groundwater rights dispute. In an opinion certified for publication by the Sixth District Court of Appeal, handed down June 24, 2016, the court held that a lower court was correct to quiet title to a groundwater basin for a group of landowners.

The landowners unsuccessfully asserted that, for the trial court to quiet title, it must have quantified the proportionate prescriptive right to the pumped groundwater as to each property owner. The Appellate Court rejected the argument, finding that the quantification was unnecessary at the time of judgment — as the basin was not in overdraft. However, should there be future periods of overdraft, then the court could consider a quantification of each landowner’s groundwater right.

The opinion follows a 2012 published opinion that upheld the City’s prescriptive right to groundwater and court-imposed groundwater management plan by the City of Santa Maria and other groundwater users. The two decisions provide guidance to California courts as to how to allocate increasingly scarce groundwater supplies.

The case is City of Santa Maria et al v. Richard E. Adam, H041133

BB&K Secures CEQA Appellate Victory in Water Project

13 May 2016 00:00:00 -0800

A team of Best Best & Krieger LLP attorneys, led by Partner Michelle Ouellette and including Sarah Owsowitz and Jennifer Lynch, helped to secure a sweeping appellate victory against six lawsuits challenging a proposed water transfer public-private partnership project. The Fourth District Court of Appeal upheld the project on May 10, 2016, finding that challenges brought under CEQA and other laws lacked merit.

The attorneys represent the Santa Margarita Water District, which is partnering with private landowner, Cadiz, Inc., to pump fresh groundwater from an aquifer in the Mojave Desert. The water would otherwise become unusable after mixing with highly salinated brine water and evaporating. The project will prevent the waste of water and transport it to water customers in Los Angeles, Orange, Riverside, San Bernardino and Ventura counties.

Lawsuits alleged the project was improperly approved under CEQA, and claimed the District was wrongly designated as the project’s lead agency. San Bernardino County’s approval of the project was also unsuccessfully contested. In a detailed analysis, the appellate court rejected the challenges — thus bringing the project closer to fruition at a time when the region is desperate for innovative projects like these to boost water supplies.

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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 Team Wins Case Dismissal in Complex Business Litigation

26 Feb 2016 00:00:00 -0800

Best Best & Krieger LLP Partner Franklin C. Adams, Of Counsel Thomas J. Eastmond and Associate Cathy Ta obtained summary judgment for an individual client in a highly complex and hard-fought financial and business litigation suit alleging causes of action of elder financial abuse, fraudulent misrepresentation and breach of fiduciary duty.

BB&K’s client was the principal in a pension benefits administration firm when he connected some of his high net worth clients with developers raising capital to buy, renovate and eventually sell commercial property. The project was a success: the property sold and the investors received a profitable return. However, one of the investors continued to work with the developers on other projects without BB&K’s client’s involvement, as he had left that business. When a dispute arose between the developers and the investor, the client was named as a defendant in the lawsuit filed by the investor.

The Riverside County Superior Court sided with the BB&K team’s arguments that there was no evidence of causation, harm, compensation or legal misrepresentation — all required to sustain the causes of action for trial. The client was dismissed from the action.

BB&K Wins Overtime Ruling in Appellate Court for Client

27 Jan 2016 00:00:00 -0800

Best Best & Krieger LLP Partner Howard Golds and Associate Elizabeth Han secured a ruling from a California Appellate Court that a business client’s formula for calculating an employee’s overtime rate on flat sum bonuses paid in the same pay period in which they are earned is lawful.

Dart Container Corporation of California was sued in Riverside Superior Court by a former employee, who sought class action status, claiming that Dart did not properly compute bonus overtime under California law. Dart’s written policy is to pay a $15 attendance bonus to employees who attend their regularly-scheduled weekend shift. Dart included the attendance bonus when calculating the regular rate for overtime purposes, but the former employee claimed that Dart used an incorrect formula in doing so.

When the Superior Court dismissed the case in favor of Dart on summary judgment, the former employee appealed. The Fourth District Court of Appeal published an opinion upholding the lower court’s ruling. The Court of Appeal agreed with the BB&K team’s argument that Dart’s overtime flat sum bonus formula complies with federal law, which is lawful because there is no California law on point.

To read the full opinion in Alvarado v. Dart Container Corp. of California, click here.

BB&K Successfully Defends CEQA Challenge to City of Riverside Power Project

13 Nov 2015 00:00:00 -0800

Best Best & Krieger LLP attorneys Michelle Ouellette, Charity Schiller and Alisha Winterswyk successfully defended the City of Riverside against claims its environmental review of a power transmission project were inadequate. Power to the City of Riverside, the largest city in the Inland Empire with a population of 313,670, is currently delivered by a single transmission line.

To address potential power shortages, the City designed the Riverside Transmission and Reliability Project. The RTRP would provide a second connection to the transmission grid and protect Riverside against the blackouts that occur whenever service through the existing line is interrupted. The Project includes two new substations, several 69 kV subtransmission lines to deliver power to areas throughout Riverside, and a 230 kV transmission line — a portion of which would be within the city limits of the City of Jurupa Valley. The City of Jurupa Valley filed a California Environmental Quality Act lawsuit challenging the Project approvals and Riverside’s Environmental Impact Report under CEQA.

All of Jurupa Valley's claims were rejected via a judgment entered on May 1, 2014 in the Los Angeles Superior Court. On Nov. 6, 2015, the Second District Court of Appeal affirmed the judgment in full and ruled that Riverside’s EIR fully complied with CEQA.