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Judge Removes Restraining Order, Allows Title to Point Molate to Pass to Guidiville Tribe & Upstream

Judge Dismisses Mayor Butt's written declaration against his City as "linguistic froth" and not providing any helpful information.

Photo by Pavel Danilyuk

By Robert Cheasty

Sparks were flying in the court case against the City of Richmond over Point Molate.

On August 18, 2022, Contra Costa County Superior Court Judge Clare Maier ruled decisively in favor of the City of Richmond (the defendant) and against the developer Winehaven Legacy LLC (the plaintiff).

The Developer, Winehaven Legacy LLC (an affiliate of southern California developer SunCal Inc.), is suing the City of Richmond and claims losses of hundreds of millions of dollars, alleging the City breached its agreements with the developer when the City refused to back the project financially and then refused to sell Point Molate to them.

Mayor Butt's "flawed' declaration:

In her ruling, the judge chastised the lawyers for the plaintiff developer for filing a flawed declaration from Richmond Mayor Tom Butt to support the plaintiff developer's claims. The plaintiff developer built much of its case around Mayor Butt's allegations of a large-scale conspiracy on the part of the City Council, allegedly joined by other agencies and elected officials, to have the City breach its agreements with Winehaven. Mr. Butt signed a declaration including his speculations about a conspiracy. However, the Court found the Butt declaration had "startling defects."

The Court sustained the City's objection that the Butt declaration was "entirely devoid of foundational facts, and is comprised of speculation, hearsay and political mudslinging."

The Court further commented: "the declaration does not set forth a single competent allegation.”

Mayor Butt's declarations contained much speculation about negative actions that his City Council might have taken about matters that were never even presented to them. The Court commented on the improper speculation saying: "This kind of linguistic froth has no evidentiary value." Further, the Court expressed disapproval of Mr. Butt's unfounded allegations of vast conspiracies.

Developer wants to force City to finance the development:

The developer ultimately seeks to have the Court order the City to back their development project financially and to sell Point Molate to them. The developer sought to have the Court block Richmond from selling Point Molate to Upstream and the Guidiville tribe until the developer’s litigation to force the City to finance the project and sell Point Molate to the developer winds its way through the Court. That is the purpose of the preliminary injunction.

City opposes; Court rules in City's favor:

The City hotly opposed the allegations that it breached its agreements with the developer.

The City stated that it was the developer that breached its agreements with the City. In documents filed with the Court, the City detailed multiple breaches in which the developer failed to make required payments, failed to provide required documentation, failed to provide proof of financial capability and failed to cure their breaches after the City gave them opportunities to cure the breaches.

In ruling in favor of the City and against the developer, the Court found "the City's evidence far more persuasive than plaintiff's" and the Court denied the injunction requested by the plaintiff developer on both procedural grounds and substantive grounds. Both grounds caused the requested injunction to be denied.

Procedural grounds:

The procedural ground for the ruling is that there is already a case in federal court governing the status of the property at Point Molate, thereby establishing that federal court's prior jurisdiction over the property. A long line of established case law prevents a later court from interfering with a court already asserting jurisdiction. That earlier case in federal court about Point Molate involved a lawsuit between the Guidiville Rancheria and Upstream Inc. together, against the City of Richmond, over money and rights to develop Point Molate.

That lawsuit was settled and the settlement was reduced to a judgment, later amended, with the federal court retaining jurisdiction to enforce the terms of the amended judgment.

One of the terms of that Settlement/Amended Judgment was that the Point Molate property be sold by the City and the proceeds from that sale be split between the settling parties (Guidiville/Upstream on one hand, City of Richmond on the other) by a certain date, later determined by everyone to be May 21, 2022.

After that date, if the property had not been sold to a third party, Guidiville/Upstream would have the right to purchase the property for $400 (four hundred dollars) and market it themselves.

The Court noted that plaintiff Winehaven failed to include all that information in their brief requesting a Temporary Restraining Order, despite being fully aware of that information. Under California Rules of Ethics, lawyers are required to inform courts of relevant facts like that affecting any matter brought before a court.

Given all these facts, the Court found it was procedurally blocked from granting the request for any injunction to stop the federal court and the parties to the federal case from moving forward with the terms of that Settlement/Amended Judgment.

Substantive grounds:

Under substantive grounds, the Court pointed out that the Court would be required to first conclude that plaintiff Winehaven was likely to prevail in its lawsuit against the City in order for the Court to grant an injunction freezing any action while the state case was being heard.

After a review of all the admissible evidence presented, and after oral argument was heard, the Court ruled that the plaintiff failed to show it was likely to prevail in the underlying case. The Court found just the opposite. The Court found the City had made a much stronger evidentiary case and that the City would likely prevail by showing it had acted properly and had not breached the agreements with the developer whereas the developer had breached the agreements.

What is next:

What is next is to decide the merits of the rest of the lawsuit filed by the developer.

There is a hearing (a demurrer) scheduled for September where the Court will rule on whether the plaintiff developer has made any viable claim that can go forward. The City has asserted that the plaintiff has failed to raise a viable claim. Even if the plaintiff developer's case survives past the hearing (demurrer), the future of the case looks bleak for the developer as the Court has already reviewed the evidence submitted and found the evidence fails to prove the plaintiff's case - and on the contrary, supports the defendant City of Richmond.

As to the Point Molate property, the Court included in its ruling that the Court expected the City to proceed promptly to transfer Title, through escrow, to the required parcels at Point Molate to a third party, presumably the Guidiville Rancheria and Upstream Inc.

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