The Park Foundation, a Sonora non-profit blocked by a temporary court injunction from completing the purchase of 112-acres of the Sonora Union High School District-owned Wildcat Ranch, has accused the district board of illegally canceling the purchase and sale agreement.
On May 14, the district board of trustees voted 3-1 to undo the agreement — which would have given $1 million to the district over a period of about a year and a half. They cited the mounting legal costs of an ongoing lawsuit from the Tuolumne County Farm Bureau challenging the sale.
Ron Jacobs, president of the Park Foundation, described the decision as “erroneous and illegal” in an open letter sent to the district and media outlets on Tuesday because it was a unilateral decision on a legally binding document signed by both parties.
Jacobs said the letter was sent to Superintendent Mark Miller and Board President Jim Riggs at the district.
He declined to comment on whether the Park Foundation would seek legal action against the district or provide citations in the purchase and sale agreement for the accusation. He said the non-profit would not comment until the district responded to the letter.
Miller said the district could not directly comment on the claims made the Park Foundation letter until the pending litigation with the farm bureau was concluded.
“It's impossible to separate a response to the Park Foundation and the pending litigation with the farm bureau and so at this point, until that litigation comes to an end, I believe we’re going to have attorneys litigate,” Miller said.
Miller said litigation from the Park Foundation was a “real possibility,” but added he was not aware of any conditions set forth in the purchase and sale agreement which would designate the decision by the board as legal or illegal. He said he has not had any interaction with representatives of the Park Foundation since he notified them of the board decision.
“Legal grounds often depend on which lawyer you ask and that’s why we have courts,” Miller said.
Board members Erik Andal, Kim Norton and Nancy Scott voted to rescind the sale. Board president Jim Riggs voted against and trustee Jeanie Smith was absent.
According to the purchase and sale agreement signed by district and Park Foundation representatives on Dec. 4, 2018, both parties have legal recourse if they claim the opposite party violated the terms of the agreement.
The agreement makes no mention of a nullification of the decision by the district board, but does outline a series of circumstances that can cause the agreement to be dissolved.
According to the Purchase and Sale section, if the Park Foundation does not complete the first payment by the close of escrow, they would be in default.
“In the event of a default by the purchaser under this section, this agreement shall be deemed terminated and the seller has available to it all remedies in contract and in law,” the document said.
This section does not define the close of escrow date as March 31, 2019, but that date is identified in another section of the agreement. The Park Foundation was to pay $500,000 to the district, followed by a second payment of $250,000 by Sept. 30, 2019 and third payment of $250,000 by March 31, 2020). T
hat was blocked by a temporary restraining order by a Tuolumne County Superior Court Judge on March 28.
Judge Kevin M. Seibert issued a temporary injunction on April 12 pending the conclusion of the Farm Bureau lawsuit because he said the district did not comply with the proper public notice requirements required to sell surplus property.
There are additional passages in the purchase and sale agreement that gives significant legal authority to the Park Foundation to contest any default on the sale by the district. The agreement makes multiple references to the binding nature of the contract to which the district could be beholden.
The document cites “no modification, waiver, amendment, discharge or change of this agreement shall be valid unless the same is in writing and signed by the party against which the enforcement” of the change is sought, the agreement said.
The agreement also stipulates that if a party seeks an action against the opposite party, the “prevailing party” would be “entitled to attorney fees, expert fees and other costs of such action.” Before legal recourse is sought in a court however, both parties committed to a dispute resolution process, beginning with “informal discussions and negotiations” convened through written notice. If not resolved within 30 days, it would be sent to mediation with a 60 day cap.
Jacobs said in the open letter the district must “correct” the action to rescind the purchase and sale agreement as well as remedy the preliminary injunction to close escrow on the property.
Farm Bureau attorney Kelly Aviles said she believed the Park Foundation claims were invalid because the close of escrow date had passed.
“I don't know that the Park Foundation has much of a leg to stand on,” she said. “You can’t now go back and be upset that people decide to do things in the manner the law requires.”
The Farm Bureau has sought nullification of the agreement via their lawsuit, alleging the district violated the Brown Act in their negotiations with the Park Foundation.
“You have to correct that problem,” Aviles said. “The Brown Act provides that the board can rescind an action taken in violation with the Brown Act.”
At the May 14 meeting, Miller estimated the district had spent approximately $70,000 on legal fees, but he expected those costs to rise to $200,000 by the conclusion of the lawsuit.
According to a Tuolumne County Superior Court employee, a case management conference on the Farm Bureau lawsuit is scheduled for June 18.
The Park Foundation planned to build a community park at the location and committed in the sale agreement to updating utilities on the 25 acres retained by the district as well as refurbishing a cross country course which ran through both properties.