San Bernardino County’s insurance provider is suing the county to avoid paying a $69 million settlement to resolve developer Jeffrey Burum’s claims he was maliciously prosecuted by the county’s former district attorney.
Ironshore Specialty Insurance Co. claims their contract, and California law, exclude Ironshore from being responsible for the payment. The county already paid Burum and other litigants the $69 million.
The chain of litigation began in 1997, when Burum sued the county over flood control basin management that affected his planned Colonies Partners development in Upland. County supervisors voted 3-2 to settle that lawsuit for $102 million in 2006.
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Former San Bernardino District Attorney Michael Ramos accused Burum, lobbyist James Erwin, Inland Empire Political Action Committee founder John DeFazio, County Supervisor Paul Biane and County Supervisor Gary Ovitt’s Chief of Staff Mark Kirk, of reaching that settlement through bribery and corruption. Ramos lost those cases.
Burum, his company, Colonies, and the other defendants then sued the county for retaliation, conspiracy and malicious prosecution. They claimed Ramos fabricated evidence and had no basis for his corruption case.
“As part of an effort to portray a 2006 settlement in that controversy as ‘corrupt’ – and to boost their own careers – defendants targeted then-County Supervisor Paul Biane and others,” Biane’s complaint says.
The county settled those six cases in October, 2020, for $69 million, Ironshore says.
A copy of the county’s insurance policy with Ironshore, included as an exhibit, excludes malicious prosecution from being covered. Ironshore claimed the county agreed to the settlement without their approval, in violation of the insurance policy. The company also argues that California law prohibits Ironshore from paying for willful violation of civil rights, which is the charge the county settled for.
“Ironshore has no duty to indemnify the county for the Colonies II settlement or reimburse it for any defense costs it incurred in the Colonies II actions,” the complaint says.
The company wants declarative relief, for the court to say it has no responsibility to pay the county for either the settlement or for defense costs.
Case information
The malicious prosecution case numbers are 5:18-cv-00672, 5:18-cv-00420, 5:18-cv-01216, 5:18-cv-01597, 5:18-cv-02202 and 5:19-cv-00554.
Read Burum’s complaint against the county here.
Alexander Potente and Matthew Elmaraghi of San Francisco’s Clyde & Co. represent Ironshore.
Counsel for the county has not yet been announced.
California Central District Judge John Kronstadt presides.
Case number 5:22-cv-01524.
Read the complaint here.
