A long-running lawsuit over how Fresno Unified hired a contractor to build Rutherford P. Gaston Middle School appears to be drawing to a close — at the Superior Court level, at least.

Fresno County Superior Court Judge Jeffrey Y. Hamilton Jr. on Wednesday issued a decision confirming his previous tentative decision finding that the defendants, Fresno Unified and Harris Construction, did not violate state law or commit fraud when the district hired Harris to be the general contractor as well as to provide preconstruction services on the $37 million project.

The opening of Gaston in 2014 marked the first time in decades that students in southwest Fresno could enroll at a neighborhood middle school instead of being bused to other areas in the city.

Hamilton’s decision discounted the claim of the plaintiff, Stephen Davis, that he filed the suit as a private citizen and taxpayer of the district. Rather,  Davis’ “primary motivations were for his and his company’s personal profit rather than a public benefit,” the judge ruled.

The judge’s ruling also found that Davis’ efforts to seek the return of the entire construction cost plus interest from Harris rather than any of the subcontractors that Harris paid “is further evidence of Davis’ true motivation, to eliminate his competitor, Harris.”

Davis’ attorney Kevin Carlin said last year that the construction costs plus interest totaled nearly $63 million. At that time, Carlin filed a separate suit, with Davis as the plaintiff, seeking to force the district to stop paying Harris’ defense costs. In January, Fresno Unified requested a continuance in that case pending the outcome of the 2012 lawsuit.

Davis’ Contracts Totaled $224M

Hamilton’s decision noted that Davis won similar lease-leaseback contracts with other school districts and only filed the lawsuit in 2012 after Davis Moreno was not selected as a qualified contractor or to do the concrete work portion of the project. The decision also noted that since the district discontinued lease-leaseback contracts in 2016, Davis’ company, Davis Moreno Construction, has won FUSD contracts totaling more than $224 million — $200 million more than its next closest competitor over the same time period.

Carlin did not respond to an email Wednesday afternoon seeking comment on Hamilton’s decision.

Mike Spencer, president of Harris Construction, said in an email Wednesday that company officials are “gratified” that the judge’s decision validates what the company has been saying since the suit was filed in 2012: “Harris Construction did nothing wrong and the agreements, prepared by Fresno Unified’s attorneys, were legal. We also agree with Fresno Unified that this case has wasted millions in taxpayer dollars that would have been better spent on educating students.”

In February when Hamilton’s tentative decision was first announced, Fresno Unified estimated that its legal fees had totaled $1,723,343.87.

Fresno Unified is “very pleased” that the judge is ruling in its favor, spokeswoman Nikki Henry said in an email Wednesday.

“We have firmly held the belief since the start of this litigation that the lease-leaseback contracting methodology was beneficial to the district and our community, and that our implementation was completely legal,” she said.

Appeals Raised Legal Costs

The lawsuit’s legal costs are estimated in the millions of dollars and ballooned in part because of appeals to the Fifth District Court of Appeal and California Supreme Court.

A decision by the Fresno County Superior Court to dismiss the 2012 suit was later overturned by the Fifth District, which ruled that the contract that went to Harris could not be validated because there was no competitive bidding. The California Supreme Court declined to hear the defendants’ appeal of the Fifth Circuit’s decision and ordered the case returned to the Fresno County Superior Court.

Hamilton’s decision, which came after two weeks of testimony and evidence, found neither conflict of interest nor violation of state law in the contract’s award.

Hamilton’s decision does not include the final judgment. He ordered attorneys for the defendants to prepare a proposed judgment for review by all parties and then submit the proposal to the court no later than April 11.

And Hamilton’s decision appears to recognize that there could still be further court action at the appellate level.

“Finally, although the court has found that Davis did not meet its burden of proof as above described, the court will comment on the ‘Safe Habor’ exception should the Appellate Court decide contrary to the trial court,” Hamilton wrote.

The decision said Harris would be protected under the “safe harbor” provision established by the state Legislature to limit disgorgement to profits only, in this case estimated at $236,129, instead of the entire project’s cost, so long as Harris believed the contracts were valid, the district was satisfied with the contractor’s performance, there was no fraud by the defendants in procuring or performing the contracts, and no evidence that state law was violated.