TUSD Proclaims Victory in Balfour Case; Opposing Attorney Vows to Keep Fighting
TUSD announced today that it prevailed in a long outstanding legal battle that challenged its relationship with Balfour Beatty. Public Information Officer Tammy Khan declared victory via a media release proclaiming the following:
The Torrance Unified School District announced today that it prevailed in a lawsuit brought by local resident James McGee and the California Taxpayers Action Network (“CTAN”), of which Rick Marshall, another local resident, is the Treasurer, challenging the validity of the lease-leaseback agreements for the modernization of Hickory Elementary School, Madrona Middle School, North High School, Towers Elementary School, Riviera Elementary School, and Torrance High School. In the lawsuit, McGee and CTAN alleged that the District improperly awarded the lease-leaseback agreements and sought to invalidate the agreements. The District has been defending itself against these lawsuits since 2013.
In 2016, the state Court of Appeals affirmed the dismissal of six of the causes of action, leaving only the alleged conflict of interest as the basis for invalidating the lease-leaseback agreements. At trial, Judge Michael Vicencia, ruled that McGee and CTAN’s sole basis for challenging the lease-leaseback agreements was moot because the six different projects being challenged were now complete. Judge Vicencia noted that McGee and CTAN did not seek an injunction to stop work on the projects nor did they avail themselves of the procedures to expedite the resolution of these types of cases in the courts.
Torrance Unified School District’s Superintendent, Dr. George Mannon, is very pleased with the ruling. “After six years of litigation, the District has prevailed in all aspects of the lawsuits,” he said. “School districts shouldn’t have to spend their limited financial resources defending themselves against such baseless lawsuits when a contractor who provides professional services to the District can have their agreements challenged in court. Regardless, this is a significant victory for the District as well as for the other California public school districts that use this project delivery method. The important thing is that our school facilities are being modernized to meet 21st century learning needs.”
Plaintiff’s attorney, Kevin Carlin, is not ready to cede the victory and plans to appeal the decision. In an e-mail, Carlin called the decision a “temporary setback” and proclaimed that “it’s not over.” Carlin then explained that:
“Before getting to the merits of my clients’ claim (that Contractor had a conflict of interest that required 100% disgorgement of all monies received by Contractor) the Judge let the Contractor put on its defense that no relief could be granted to Plaintiffs because the construction projects which were the subject of the conflicted contracts had been completed and therefore Plaintiffs’ claims were moot.
Obviously we will ask the Court of Appeal to reverse this Superior Court Judge’s ruling on the grounds that it is contrary to longstanding California law and public policy based on the following:
- “The pivotal question in determining if a case is moot is … whether the court can grant the plaintiff any effectual relief.” Wilson & Wilson v. City Council of Redwood City (2011) 191 Cal.App.4th 1559, 1574.
- Here Plaintiffs’ claims are not moot because the School District is legally entitled to the remedy of 100% disgorgement if there is a conflict of interest even if the contracts are fully performed. Thomson v. Call (1985) 38 Cal.3d 633, 652.
- In fact, the Court of Appeal to which we are headed previously ruled in the 2006 case Carson Redevelopment Agency v. Padilla (2006) 140 Cal.App.4th 1323 that the 100% disgorgement required by Thomson is automatic…”
The trial brief submitted by Carlin which provides a more detailed summary of the issues can be be found here.