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In final ruling, judge declines to combine Ash Street-related lawsuits

The judge overseeing the city of San Diego’s two lawsuits over disputed lease-to-own agreements for the 101 Ash St. high-rise and Civic Center Plaza upheld his tentative ruling from last week and declined to combine those lawsuits with an outside case.

In a final ruling issued Monday, Judge Timothy Taylor said consolidating the city’s complaints with a separate lawsuit filed by San Diego taxpayer John Gordon would further complicate an already complex dispute.

“While it is true that some of the issues overlap, not all of them do, and the court fears that consolidation will create more case-management problems than it solves,” Taylor wrote.

Consolidating the cases — two of which the city filed as plaintiffs, and the third of which names the city as a co-defendant — “will not be in the interests of justice,” the judge added.

Taylor also added that it would not be proper to remove a case from a fellow judge who has put so much work into a case that has seen more than 400 documents filed and will be two years old as of next month.

Judge Joel Wohlfeil “has read many briefs and declarations, made numerous rulings, held no fewer than 18 hearings in the case, and has other important motions on calendar in the near future,” Taylor wrote.

“There is something unseemly about one judge poaching a challenging and interesting case from a highly respected colleague after he has done all this work,” he added.

Lawyers for San Diego sought to combine the two cases the city filed against entities created by Cisterra Development, its lender, CGA Capital of Maryland, and real estate broker Jason Hughes with the Gordon claim.

They argued at a hearing Friday that not consolidating the case could lead to conflicting verdicts.

“The reason it’s necessary is simple: Think about the possibility of inconsistent verdicts in this case,” argued attorney Dick Semerdjian, a private lawyer hired by the city to prosecute the city’s cases and defend the Gordon suit.

The final decision was issued one day before the San Diego City Council is scheduled to consider a partial settlement in the two cases filed by the City Attorney’s Office.

That proposed agreement, which would buy out leases for the 101 Ash St. property and the nearby Civic Center Plaza for $132 million, was negotiated by Mayor Todd Gloria’s staff but is strongly opposed by City Attorney Mara Elliott.

Gloria said the settlement was negotiated over 18 months and is the best path forward for taxpayers because it provides the city certainty in its future real estate planning and avoids what he said could be five to eight more years of litigation.

Among other concerns, Elliott told the City Council in a legal opinion she issued last month that the buyout would be a disservice to the public and wrongly indemnify Cisterra and CGA Capital from future litigation costs.

Hughes, who was paid $9.4 million for his consulting work on the two leases, would remain a defendant in the city’s cases.

He says he told at least six city officials that he would seek to be paid for his work on the Ash Street deal. He also provided a statement to then-city real estate chief Cybele Thompson indicating that he intended to seek compensation for his work, and that Thompson accepted the information presented to her. Hughes previously provided real estate expertise to the San Diego mayor on a volunteer basis.

All three lawsuits are scheduled for trial in January.

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