At the crux of Judge Ronald Prager's 4-page decision was former Board of Supervisors Chairman Bill Postmus' March 2011 guilty plea to a felony conflict-of-interest charge.
Postmus admitted he accepted a bribe from Rancho Cucamonga developer Jeff Burum in exchange for his vote approving the landmark settlement with Burum's investor group, Colonies Partners LP, in November 2006.
The settlement ended nearly five years of legal battle between the county and Burum over a flood-control project on a 434-acre Upland parcel that Colonies Partners bankrolled.
In motions filed with the court and heard Wednesday by Prager, the county argued that its lawsuit, filed in November 2004, was to show that the defendants - San Bernardino Associated Governments, Upland and Caltrans - should be held liable for a portion of the settlement payments, regardless of whether or not the settlement was corrupt.
The defendants argued in their motions that Postmus' guilty plea was an admission he violated state conflict-of-interest laws and therefore voided the settlement.
Prager sided with the defendants in his tentative ruling.
The judge cited a 2005 case in which the court found that evidence of a public official's guilty plea to a conflict-of-interest violation was a sufficient basis for dismissal of an indemnity claim. He also cited a 2008 San Bernardino County case that held that contracts in violation of Section 1090 of the state Government Code are against fundamental public policy.
"Here, SanBAG presented evidence indicating that Postmus had a financial interest in the $102 million settlement," Prager wrote in his decision. "More specifically, Postmus' guilty plea, grand jury testimony and plaintiffs' admissions establish said financial interest."
California Government Code Section 1090 says that "members of the Legislature, state, county, district, judicial district, and city officers or employees shall not be financially interested in any contract made by them in their official capacity, or by any body or board of which they are members."
Postmus told a criminal grand jury in April 2011 that Burum stated numerous times he would support Postmus financially in future offices and business ventures if Postmus secured the settlement in Colonies' favor. That also constituted proof of a conflict-of-interest violation, Prager said in his written decision.
Prager said the county even admitted in an April 2011 news release that a conflict of interest occurred when Postmus approved the settlement, and then failed to rebut Postmus' statements in his guilty plea and grand jury testimony.
Attorneys for both sides declined to comment Wednesday, opting to wait until Prager's final ruling.
Also charged in the criminal case are former Supervisor Paul Biane, former Assistant Assessor Jim Erwin and Mark Kirk, former chief of staff for Supervisor Gary Ovitt. They stand accused of accepting a total of $400,000 in bribes from Burum for their roles in the alleged conspiracy.
All four defendants deny any wrongdoing.
The county opted not to seek a suspension of its lawsuit after Postmus' guilty plea and the subsequent indictment against the four defendants. Postmus has agreed to cooperate with prosecutors and testify against the four defendants in exchange for leniency.
The county has spent roughly $25 million over the last nine years on the case, county spokesman David Wert said.
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