Please ensure Javascript is enabled for purposes of website accessibility
New Lawsuit Filed by Fresno Contractor Over Gaston 'Lease-Leaseback' Contract
gvw_nancy_price
By Nancy Price, Multimedia Journalist
Published 2 months ago on
February 15, 2024

Share

Getting your Trinity Audio player ready...

A new civil lawsuit seeks to stop Fresno Unified from paying for Harris Construction’s defense costs in the Gaston contract lawsuit.

The suit was filed by local contractor Stephen Davis, who also filed the original lawsuit.

The lawsuit asks the court to find that using taxpayer dollars to defend Harris would be “an impermissible gift of public funds.”


The Fresno contractor who is suing Fresno Unified School District and Harris Construction over a 12-year-old middle school construction contract is asking the Fresno County Superior Court in a new lawsuit to prevent Fresno Unified from covering Harris’ defense costs.

The new lawsuit was filed Feb. by attorney Kevin Carlin on behalf of Stephen Davis. Davis is the plaintiff in a 2012 lawsuit that alleges the lease-leaseback contract that the district signed with Harris Construction to build Gaston Middle School was an illegal agreement because of the financing method and also because Harris had acted as a consultant to the district on building the middle school.

In an email Thursday afternoon to School Board members, Carlin said that Harris now owes the district nearly $63 million — the original $36 million, plus 7% interest compounded over the past decade to total nearly $27 million. He’s asking the board to add an item to next Wednesday’s agenda to specifically discuss the 2012 lawsuit.

Davis, president of Davis Moreno Construction, filed both lawsuits as a private taxpayer and resident of the district. The named defendants are Harris, Fresno Unified, and the seven current School Board members.

Davis’ original lawsuit, which seeks to force Harris to repay the $36 million in construction costs to the district, has been upheld by the Fifth District Court of Appeal and California Supreme Court and returned to Fresno County Superior Court for trial. The original lawsuit is scheduled for a jury trial on March 18.

Harris has argued that most of the $36 million was spent on materials and paid to subcontractors.

The new suit alleges that the district should not be covering Harris’ defense costs under paragraphs in the pre-construction services agreement and facilities lease in which the district agrees to “indemnify, hold harmless and defend” Harris from any legal challenges of the contracts. “District further agrees to pay all costs of any kind, including but not limited to attorney’s fees, discovery costs, investigative costs or costs of experts, to defend such actions described above, and to pay all judgement or fines assessed or rendered against Contractor in any such action.”

‘Gift of Public Funds’

The lawsuit maintains that such contract terms are illegal and unenforceable, and that using taxpayer dollars to defend Harris would “constitute an impermissible gift of public funds,” in violation of the California Constitution.

The lawsuit also alleges that the district, in response to a public records request, acknowledged that there are communications between Harris and the district in which Harris has demanded the district provide defense and indemnity in the original lawsuit.

An exhibit attached to the new lawsuit is a letter from attorney Mark Creede, who represents Fresno Unified, denying Carlin’s public records request for the communications while the original and new lawsuits are being litigated.

However, it appears from Creede’s letter that the district may have shared the documents “for settlement purposes only.”

A case management conference for the new lawsuit has been scheduled for June 6

The two sides reportedly are in mediation in talks to settle the original case.

District spokeswoman Nikki Henry said Fresno Unified officials would not comment on the new lawsuit. “We will not be commenting on any pending or ongoing litigation,” she said.

Carlin did not immediately respond Thursday morning to a text message seeking comment.

In his emailed letter to the trustees later Thursday, Carlin said the district has been wasting taxpayer dollars by opposing Davis’ lawsuit, which is intended to return to the district that Davis contends were improperly paid to Harris.

Carlin said he was informed by Creede that Harris has been “insisting (behind the scenes)” that Fresno Unified is contractually obligated to defend and indemnify Harris.

“A public entity is not legally required to defend or indemnify a party against paying back money to the public entity that the party was not legally entitled to in the first place. That would be the same as making the victim of physical assault pay the medical bills of their abuser when the abuser injures their knuckles when engaged in the assault,” Carlin wrote in the letter to the board.

New Lawsuit

RELATED TOPICS:

DON'T MISS

Surprising Ways and Places You Can Use SNAP EBT Food Benefits

DON'T MISS

Californians Worry About Crime, Setting up a Ballot Measure Showdown

DON'T MISS

The Pickle Flavor Frenzy and Its Rise in Food Trends

DON'T MISS

Kate Hudson Had a Lifetime to Make a Record. The Result is ‘Glorious,’ Out in May

DON'T MISS

Long-Lost First Model of USS Enterprise from ‘Star Trek’ Boldly Goes Home

DON'T MISS

California Leaders Take Sides in Monumental Supreme Court Case on Homelessness

DON'T MISS

Man Sets Himself on Fire Outside Trump Hush Money Trial Court

DON'T MISS

McDonald’s Ice Cream Machines Are So Unreliable They’re a Meme. They Might Also Be a Climate Solution.

DON'T MISS

Real Estate Experts Talk Fresno’s Economic Future. Are Tough Times Ahead?

DON'T MISS

Unlocking the Secrets to Fresno State’s Superb Baseball Season

UP NEXT

Long-Lost First Model of USS Enterprise from ‘Star Trek’ Boldly Goes Home

UP NEXT

‘This Is How to Improve Reading Proficiency. We Just Have To Execute It’: FUSD Board President

UP NEXT

Rare House Vote Sees Ukraine, Israel Aid Advance as Democrats Join Republicans

UP NEXT

Full Jury and 6 Alternates Seated in Trump’s Hush Money Trial

UP NEXT

Barbara Corcoran: 1% Interest Rate Drop Will Send Housing Prices ‘Through the Roof’

UP NEXT

Juror Dismissed From Trump Hush Money Trial. Prosecutors Seek to Hold Former President in Contempt

UP NEXT

Biden Backs House’s Aid Package for Ukraine, Israel While Speaker Johnson Battles to Retain Position

UP NEXT

Local Leaders Must Put Their Shoulders Into Making Fresno ‘Education City USA’

UP NEXT

EdSource Welcomes Fresno News Veteran Jim Boren to Its Board

UP NEXT

Myanmar’s Ousted Leader Suu Kyi Moved From Prison to House Arrest Due to Heat, Military Says

Nancy Price,
Multimedia Journalist
Nancy Price is a multimedia journalist for GV Wire. A longtime reporter and editor who has worked for newspapers in California, Florida, Alaska, Illinois and Kansas, Nancy joined GV Wire in July 2019. She previously worked as an assistant metro editor for 13 years at The Fresno Bee. Nancy earned her bachelor's and master's degrees in journalism at Northwestern University's Medill School of Journalism. Her hobbies include singing with the Fresno Master Chorale and volunteering with Fresno Filmworks. You can reach Nancy at 559-492-4087 or Send an Email

Kate Hudson Had a Lifetime to Make a Record. The Result is ‘Glorious,’ Out in May

1 day ago

Long-Lost First Model of USS Enterprise from ‘Star Trek’ Boldly Goes Home

1 day ago

California Leaders Take Sides in Monumental Supreme Court Case on Homelessness

1 day ago

Man Sets Himself on Fire Outside Trump Hush Money Trial Court

2 days ago

McDonald’s Ice Cream Machines Are So Unreliable They’re a Meme. They Might Also Be a Climate Solution.

2 days ago

Real Estate Experts Talk Fresno’s Economic Future. Are Tough Times Ahead?

2 days ago

Unlocking the Secrets to Fresno State’s Superb Baseball Season

2 days ago

‘This Is How to Improve Reading Proficiency. We Just Have To Execute It’: FUSD Board President

2 days ago

Does Dyer Support (or Endorse) Bredefeld for Supervisor?

2 days ago

Get a 3D First Look at Merced’s High-Speed Rail Station Design

2 days ago

Surprising Ways and Places You Can Use SNAP EBT Food Benefits

Did you know that SNAP EBT benefits used to be called food stamps and that recipients can use those benefits to get healthy food in places o...

11 hours ago

11 hours ago

Surprising Ways and Places You Can Use SNAP EBT Food Benefits

11 hours ago

Californians Worry About Crime, Setting up a Ballot Measure Showdown

1 day ago

The Pickle Flavor Frenzy and Its Rise in Food Trends

1 day ago

Kate Hudson Had a Lifetime to Make a Record. The Result is ‘Glorious,’ Out in May

1 day ago

Long-Lost First Model of USS Enterprise from ‘Star Trek’ Boldly Goes Home

1 day ago

California Leaders Take Sides in Monumental Supreme Court Case on Homelessness

2 days ago

Man Sets Himself on Fire Outside Trump Hush Money Trial Court

2 days ago

McDonald’s Ice Cream Machines Are So Unreliable They’re a Meme. They Might Also Be a Climate Solution.

MENU

CONNECT WITH US

Search

Send this to a friend