Contract dispute can escalate into complex litigation maneuvers

In California and elsewhere, land that is owned by a government entity may become the subject of a development contract in which the government agrees to allow a private developer to construct housing units on the land. This is the case in another state where a private housing developer has become embroiled in extended litigation with the county, city and school district governments. The fight is over a housing development project that was supposed to produce 262 homes on the subdivided lots.

The government entities reportedly first cancelled the deal in 2013 on the premise that the developer had failed to do enough advance work in getting the lots purchased and the project started. The developer countered that the governments could not give clear title to the lots. From there, the litigation has zigzagged through the courts without a decisive resolution.

Most recently, the government entities have accused the developer of meddling in the internal affairs of the property owners’ association. The issue was whether the developer had deliberately changed the voting rules in the association in order to pass bylaws that the developer wanted. The trial court sided with the governments and denied the argument of the developer, issuing a surprise ruling that effectively destroyed the development.

Recently, the developer filed an affidavit in support of a new trial in which he alleged that the judge met with the government coalition legal team just before issuing the ruling. The affidavit apparently relies on another affidavit that was filed by a member of the property owner’s association who said he witnessed the ex parte meeting in which there was no one from the developer’s team present. That is a very unusual litigation twist not seen often, but it is true under California law and the law of other jurisdictions that when a jurist meets with one side only during the trial, the due process questions raised can occasionally become grounds for a reversal of the judgment and an order for a new trial.

Source: bizjournals.com, “Bastrop housing development dispute takes an odd twist“, Michael Theis, June 28, 2016

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