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SunCal Sues the City of Alameda

As promised by SunCal’s attorney Louis Miller, SunCal, through their local development entity, SCC Alameda Point LLC, has filed suit against the City of Alameda in U.S. District Court. According to a copy of the complaint provided by SunCal on their website, the suit was filed on August 4th, in the Southern Division of the District Court’s Central Division of California.

In their suit, SunCal named the City of Alameda, the Alameda Reuse and Redevelopment Authority, the Community Improvement Commission of the City of Alameda, and John Does 1 through 10 as defendants; the stated complaint is for breach of contract, violation of the contract clause of the United States Constitution, and they ask the court to force the City to perform to the Exclusive Negotiation Agreement (ENA) that the City of Alameda allowed to effectively expire on July 20th. In the complaint, Miller wrote that the “true names capacities” of Does 1 through 10 “are unknown to SCC Alameda Alameda at this time” and that SunCal will amend the complaint to “allege tehir true names and capacities after they are ascertained.” Presumably SunCal is hoping that the City’s response to their July 12th public records request will provide information that will allow them to specifically name additional defendants.

Miller asserts that federal court is the correct jurisdiction for their complaint, “in that the action arises under the Contract Clause of the United States Constitution” and that the Central District of California (Orange County) is the correct venue as SunCal signed the ENA and amendments in Orange County. SunCal’s headquarters is in Irvine, in Orange County; SCC Alameda Point LLC is organized in Delaware, according to the ENA.

SunCal has also asked the Court to issue an order that the ENA be automatically extended past July 20, 2010, and that the City of Alameda be prevented from contending to the contrary.

12 comments to SunCal Sues the City of Alameda

  • If SunCal were a jilted suitor, he’d be arrested for stalking…or RAPE!

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  • Barb

    Not only is SUNCAL financially bankrupt, this proves it is morally bankrupt as well. SUNCAL/Tam and her group of followers can keep this going forever. Trying to blame that scheming, “brilliant but manipulative” Gallant for detecting how poorly SUNCAL was performing in terms of the ENA and how ill suited it was to perform on the nebulous contract of development which it proposed we buy into. Then she schemingly caught Tam sending confidential emails to SUNCAL. If it weren’t for Gallant, SUNCAL might have been able to pull off the greatest ripoff of Alameda of the millennium. We need to stand behind the City Manager and Attorney and let them do the jobs they are being paid to do as best they see fit.
    Skippy & Son have underdone themselves in terms of the lawsuit however. They aren’t asking the court to have all Alamedans stand up and apologize to SUNCAL while writing checks for all everyone’s funds to SUNCAL/Skippy & Son, as damages for telling SUNCAL to get lost.

    I like the thought of the City filing bankruptcy. While it moves forward with the non-profit organization to develop the Point.

  • Incredulous

    Barb: I think suggesting bankruptcy for the City of Alameda is far too dire.

    I read SCC Alameda Point, LLC’s Complaint, as well as the ENA and its two amendments, and noted that there are many provisions in that “contract” that work to the City’s favor.

    For example, the contract says that the City can’t be sued for monetary damages; that City employees can’t be sued; and that the City may in its sole discretion turn down SunCal’s entitlement applications. That last provision is entirely consistent with basic principles of California and Federal police powers doctrines, vesting land use, planning and zoning powers in local municipalities’ elected officials.

    So I don’t think things are as dire as many pundits make them out to be, and the provisions of the “contract” itself certainly make Skip Miller’s threats to sue City staff, and sue the City for money damages, in the days leading up to and on the night of 8/20 to appear incredibly boorish.

    While looking online for the case file on the SunCal v. Alameda case, I stumbled on yet another lawsuit filed by SunCal’s owner, Bruce Elieff.

    In May 2010 Mr. Elieff sued a Hong Kong based tax advisor or investment broker who allegedly did terrible things to Mr. Elieff, causing Mr. Elieff and his wife to have Federal tax deductions from a certain time period disallowed, and allegedly to cause them to owe an additional $500,000 in Federal income taxes. In this additional Federal case, Mr. Elieff alleges that the defendants were selling investments in distressed Chinese real estate, such as defaulted mortgages on Chinese buildings, which would generate approximately $18 Million per year in legitimate tax write offs for the Elieffs, but that, in essence, the investments/tax shelters sold to the Elieffs didn’t work in the eyes of the IRS.

    The Federal court docket shows that the defendants in that case are taking a variety of steps to take that case out of the U.S. District Court or get it dismissed.

    While the facts are not the same, the creative complaint writing is, even though Mr. Elieff is using yet a different set of lawyers to represent him than the is using in the case against the City of Alameda. I suspect the City of Alameda will use similar legal theories and maneuvers as defendant Groves lawyer is using to derail or move that case out of the Federal courts.

    For those who have the right internet service, one can see that “other” new lawsuit filed by Mr. Elieff, in May 2010, at U.S. District Court for the Central District of California, Case No. 2:10-cv-03879-VBF-JEM. Bruce Elieff v. Phil Groves and Distressed Asset Consulting, LLC.

  • Hot R

    Don’t be so hopeful. Gallant and Highsmith are the same manager and attorney who helped to find SunCal to begin with, right? The lawsuit is not evidence of their competence, but their incompetence in dealing with SunCal.

    This lawsuit is just to stop the development. The next one will follow the November election. Why oh why do we have city officials stating at luncheons we will develop the base ourselves or city staffers planning it when we had a contractual relationship with SunCal?

  • Susan

    Hot R, “…Gallant and Highsmith are the same manager and attorney who helped to find SunCal to begin with, right?”

    Debra Kurita was our City Manager when Suncal was selected. -Here’s a staff report she authored re: the history of the ENA.

  • Barb

    Hot R, I am still waiting for those code sections you maintain Gallant violated. Gallant works for the City Council. As does Highsmith. They enforce the policies set by the Council. Highsmith has apparently written plenty of protections into the ENA. No monetary liability, no causes of action against City officials, and so on as Incredulous cites above. (And bankruptcy was tongue in cheek, to suggest we imitate SUNCAL’s own practices.) Gallant became CM only after the ENA was already a signed deal upon the advice of Kurita. Firing a City Manager is a cumbersome proposition. It requires 3 votes, and it is more pragmatic to simply not renew contracts. It took the Council quite a while to recognize just how bad Kurita was. And Korade (I was the sole vote against Korade who had a complete lack of experience and knowledge when she was hired. She was out skin diving when the announcement closed for CA. She wrote and begged to be considered. Interested in hiring women, the Council agreed. First thing after being hired was to have her offices remodeled and a kitchen installed. Typical Korade) While in office she hired half a dozen attorneys to do her work, and still gave away the store.

    The Council includes Tam who was sending inside information to SUNCAL’s Keliher after 85% plus of the voters said to get rid of SUNCAL, and Gilmore, who failed to notify authorities when Tam was secretly blind copying Gilmore of Tam’s actions. I think this is a good situation for us and will get better. City staff will do what is necesary to get us out of it. The only concern is the upcoming election. SUNCAL was succcessful in keeping the campaign reform out. Now SUNCAL is free to dump its money into campaigns to change the Council and have them fire Gallant and Highsmith. It will do this based on surveys as to who is most electable, and the most favorable to SUNCAL. This is the most important technique for SUNCAL at this point. If Bonta, Tam, and Gilmore are elected, expect SUNCAL to waltz into the Council chambers and City treasury as if they own it. And the residents will fund the 200 million plus in improvements SUNCAL supposedly was to provide while our streets and tubes are clogged with SUNCAL created traffic.

  • I suggest we avoid that by supporting Frank and candidates for council who are not in cahoots with SunCal. We worked together to defeat Measure B, some of us did the same with Measure E, and we’re still flexing our muscles. We can certainly defeat Tam, Gilmore and Bonta!

  • Kurita was the City Manager when Alameda put out the RFP for Alameda Point. Johnson and Matarrese were pushing for Catellus. When it came down to vote on awarding the project, Tam motioned to select SunCal, deHaan seconded it, and Gilmore was the third vote that clinched it for SunCal.

    The City Council appoints the City Manager, City Attorney, and City Clerk. If there’s anything you don’t like about what the City Manager/Attorney are doing, responsibility for it ultimately rests with Council to correct it or replace them.

  • Barb

    So deHaan reversed his position after learning more, but Tam and Gilmore remain true to SUNCAL. Don’t think that will ever change. It is easy to join a losing vote and not tip one’s hand. So joining the 3 opposed to not extend the ENA may not reflect the true vote when it can make a difference. In this case I fear it will be to re-engage SUNCAL after the election. And if Bonta or Tam and IzzyAshcraft are there, to join Gilmore, SUNCAL can easily take over. Everyone needs to wake up and see that this is the most important election facing Alameda in decades. It is not just the candidates that must be analyzed, but who is filling their campaign coffers. Bonta is indeed scary. Honora Murphy is on his side.

  • Barb: Is the best strategy to simply oppose the candidates you refer to, or to support their opponents? I defer to your Alameda experience in politics. The only candidate I have any confidence in is Jean Sweeney. My partner and I once helped her husband, Jim, on his own campaign for city council. And i walked the Belt Line once with Jean and heard/saw her vision. Your ideas?

  • The case is: 10-cv-05178-CRB in US District Court for Nor Cal

  • ALAMEDA FIRE: Live fire training at AFD Training Center (Alameda Point) today, 9 am - 12 pm, and tomorrow, 9 am - 4… ,
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