The firm represented a lease-leaseback contractor performing work for the Torrance Unified School District. A third party filed a lawsuit against the contractor and the District claiming multiple lease-leaseback agreements were illegal and seeking repayment from the contractor of all sums it had been paid by the District. The amount in controversy exceeded $109,000,000.00.
ON REMAND, THE CASE WENT TO TRIAL.
On remand, following the initial appeal in this matter, the case went to trial on a single cause of action alleging a conflict of interest. We defended the case based on the plaintiff’s lack of diligence causing the action to become moot as the school construction projects at issue all completed prior to trial. Following a bench trial, the trial court granted judgment in favor of the firm’s client. The third party challenger appealed.
SECOND DISTRICT COURT OF APPEAL AFFIRMS JUDGEMENT IN FAVOR OF CLIENT.
The Second District Court of Appeal again agreed with the firm’s client and affirmed the judgment in favor of Balfour Beatty and the District. The court recognized the plaintiffs’ failure to timely prosecute the reverse validation action allowed the challenges to the agreements to become moot, requiring dismissal.
Validation and reverse validation actions serve an important function in quickly determining the legality of the award of certain public entity contracts. Timely determination of validity is a key public policy. This important decision impacting lease-leaseback contractors and public entities confirms prompt resolution of the claims is required.
A copy of the published decision can be viewed here.
(2020) 49 Cal.App.5th 814
Counsel: Jason R. Thornton and Daniel P. Scholz