A judge has dismissed all damages claims in a lawsuit by San Bernardino County against Upland and two transportation agencies in which the county sought reimbursement for a portion of a legal settlement the judge maintains was corrupt, it was announced Wednesday.

After calling the county's landmark $102 million settlement with Rancho Cucamonga investor group Colonies Partners LP "unconscionable, unlawful and sordid" and "the worst of the worst" at a motions hearing last week, San Diego Superior Court Judge Ronald S. Prager on Tuesday affirmed his tentative ruling: that the county was not entitled to be reimbursed by the defendants for a portion of the settlement.

The case was heard in San Diego County to avoid a potential conflict of interest.

"Their damages claims have been gutted," said Ken MacVey, attorney for San Bernardino Associated Governments, or SanBAG, the county's transportation planning agency and one of the defendants in the suit along with Caltrans.

The county argued that its lawsuit, filed in November 2004, was to compel the defendants to reimburse the county for damages the defendants were liable for, the design and construction of an Upland storm drain, built near the Colonies' 434-acre property during the 210 Freeway extension project. The storm drain diverted floodwater onto Colonies' property and damaged it, thwarting development of a housing tract and retail center.


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Colonies' co-managing partner Jeff Burum sued the county in March 2002 after the county denied his request to pay for flood-control improvements on the property, propelling a nearly 5-year legal battle that ended on Nov. 28, 2006, when county Supervisors Bill Postmus, Paul Biane and Gary Ovitt approved the $102 million settlement.

Neither the county's outside counsel nor its in-house legal counsel ratified the settlement.

But the county's lawsuit against Upland, Caltrans and SanBAG came two years before the controversial settlement, and the county maintains those liabilities will continue to exist even if the settlement is rendered void.

The Board of Supervisors spent a combined total of eight hours in closed session on Wednesday and Monday to discuss Prager's decision and how to respond to it, but reached no decision as of Wednesday The supervisors will reconvene in closed session at 2 p.m. Tuesday, board Chairwoman Janice Rutherford said.

"We'll see if we can reach some reportable action at that point," Rutherford said.

The Colonies settlement is now the focus of a broad criminal case involving the state Attorney General's and the District Attorney's offices.

Burum, along with Biane, former Assistant Assessor Jim Erwin and Mark Kirk, Ovitt's former chief of staff, were charged in April 2011 in a criminal conspiracy and bribery case.

All four defendants deny any wrongdoing.

Prosecutors allege the defendants conspired to steer the settlement in Colonies' favor in exchange for a total of $400,000 in bribes.

Postmus, under a plea bargain with prosecutors, pleaded guilty in March 2011 to 15 felony charges in connection with the Colonies case and a companion corruption case involving the Assessor's Office, which he formerly headed. He admitted to taking a $100,000 bribe from Burum in exchange for his vote approving the Colonies settlement.

Defense attorneys maintain that the settlement was not only fair, but potentially saved the county hundreds of millions of dollars more had it continued fighting the developer in court and lost. Two trial court judges had issued tentative decisions in favor of Colonies Partners before the settlement.

Furthermore, Burum's $400,000 in contributions to political action committees tied to the supervisors who approved the settlement were completely transparent and legal - merely a gesture of good faith to rebuild bridges fractured by the prolonged and heated legal battle, defense attorneys maintain.

MacVey argued that Postmus' conviction voided the county's claims. Judge Prager agreed. 

"Here, SanBAG presented evidence indicating that Postmus had a financial interest in the $102 million settlement. More specifically, Postmus' guilty plea, grand jury testimony and plaintiff's admissions establish said financial interest," Prager wrote in his 5-page decision.

Deputy state Attorney General Melissa Mandel, the lead prosecutor in the criminal case, declined to comment Wednesday on the impact Prager's decision could have on the criminal case. She said she had not yet seen Prager's decision and therefore felt it inappropriate to comment.

Deputy District Attorney John Goritz, who is prosecuting the case with Mandel, could not be reached for comment Wednesday.

The criminal case remains suspended pending a state Supreme Court decision on whether or not it will review a request by prosecutors to reinstate bribery and other charges against Burum and the other defendants, which were dismissed by a trial court Judge.

Prager let stand a claim by the county alleging that the defendants designed and built the 20th Street storm drain in Upland that is blamed for the flooding to Colonies' property. MacVey said the county and defendants will argue the merits of the remaining claim at trial.

The county has spent roughly $26 million in the last nine years on the case, county spokesman David Wert said.

MacVey said SanBAG has spent roughly $9 million defending itself in the lawsuit.

He doesn't believe the county's remaining claim will hold water, either because the claim didn't even surface until years into the litigation.

"They waited years and years to raise this claim, so we don't think there's any merit to the claim," he said.