School district, developers head back to court School district, developers head back to court (July 02, 2004)

Hearing will be first since judge ruled against Neal School agreement
by Jeb Bing

Attorneys involved in the legal skirmishes between the Pleasanton school district and two developers will be back in Superior Court Judge Ronald Sabraw's courtroom July 12 for the first time since he ruled that the builders don't have to pay any of the costs to build Neal Elementary School.

In his decision April 16, the Alameda County judge said that an agreement the district signed with Signature Properties and Standard Pacific Homes three years ago is unenforceable because it failed to reference a state code exempting projects like Neal from public bid requirements. In that document, the developers agreed to finance the upfront costs and actually build Neal School for $8.5 million, to be repaid over time. The school district and the city of Pleasanton have contended that the developers also agreed to pay any costs over the $8.5 million out of their own pockets.

The developers said they never signed such an open-ended agreement, and, with Neal's construction costs now estimated at $13.5 million, asked the court to clarify its obligation.

Sabraw, in ruling that the agreement, itself, was not enforceable, never addressed the specifics of the document. At the July 12 hearing, the school district will ask him to consider all points in the Amended Cooperative Fee Agreement.

At the same time, the district has filed a notice of appeal, asking that the First District Court of Appeal in San Francisco reverse Sabraw's ruling.

The school district also has filed fraud and deceit charges against Signature executives Jim Ghielmetti, President and Chief Executive Officer, and Jim McKeehan, Signature's Executive Vice President. In his April 16 ruling, Sabraw allowed the district to proceed on that complaint, although it will not be part of the July 12 hearing.

Also on July 12, Sabraw will be asked to rule on a motion by the developers to force the school district to reimburse the companies for their legal expenses so far.

The hearing will be held starting at 3 p.m., Monday, July 12, in Sabraw's courtroom on the fourth floor of the Alameda County courthouse in Oakland.

In another case, City Attorney Michael Roush filed the city's opening brief in the Third District Court of Appeal in Sacramento this week to overturn a lower court decision on a sales agreement. Early this year, a Sacramento Superior Court judge ruled against Pleasanton in its bid to force San Francisco to sell an undeveloped three-acre parcel of land near City Hall at a discounted price of $500,000.

Roush said Pleasanton had received verbal assurances at public hearings involving the purchase agreement for the Bernal property to include the Old Bernal Avenue site at that price. But after the Bernal transaction was completed, the city received word from the San Francisco Public Utilities Commission, which actually owns the parcel, that any sale would be based on the land's appraised market value of $3,485,000.

The lower court ruled that the agreement to sell the property was made verbally, and that there was no written contract to require San Francisco to hold to a verbal agreement.

"We have some compelling arguments that the trial court was in error and we are asking the Court of Appeal to reinstate our complaint," Roush said.

Roush also is awaiting a hearing in the First District Court of Appeal on an appeal by the Alisal Improvement Club. The Happy Valley homeowners association is appealing a decision by Judge Bonnie Sabraw in Hayward Superior Court, who dismissed the club's suit to force Pleasanton to build a bypass road before opening its new Callippe Preserve municipal golf course next spring.

Hearings on both the First District and Third District appeals are not likely before next year, Roush said.

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