JUDGE REJECTS PLEA FOR OUTSIDE REFEREE IN ASH ST. TAXPAYER SUIT
Several key depositions may be allowed to go forward
A San Diego Superior Court judge rejected an emergency request Tuesday to order a third-party referee for future depositions in a taxpayer lawsuit seeking to void the city’s lease of the former Sempra Energy headquarters at 101 Ash St.
Judge Joel R. Wohlfeil also refused to delay additional depositions in the case until defendants’ lawyers could make a more detailed argument in favor of bringing in a referee to monitor the proceedings, which recently have been acrimonious.
“I’m very reluctant to issue this relief on an ex parte application,” Wohlfeil said near the close of the hourlong hearing.
Instead the judge ruled that lawyers for the city of San Diego, the Ash Street landlord and its lender may present a more thoroughly supported request before a scheduled hearing March 17, when he already is expected to consider whether to order a witness to answer specific questions.
His ruling Tuesday is significant because several important depositions are scheduled to be held in the next few weeks, including one involving Jay Goldstone, Mayor Todd Gloria’s chief operating officer. Goldstone, who is due to be deposed next week, has met with lobbyist Christopher Wahl over the past year.
Wahl represents Cisterra Development, the landlord in the Ash Street deal. Wahl has been meeting with city officials, including City Attorney Mara Elliott, to try and resolve the Ash Street litigation.
The deposition of W. Kyle Gore, an executive with CGA Capital, also is scheduled next week. CGA Capital is the finance and investment company that paid Cisterra Development more than $92 million for the Ash Street lease.
CGA Capital expected to collect $535,000 a month over 20 years — or $128 million — though the building was appraised for $67.5 million months before the lease was signed. The city suspended lease payments in 2020 because the building is unsafe to occupy.
The lender; Cisterra Development’s subsidiary, 101 Ash LLC, and the city of San Diego are all being sued by San Diego taxpayer John Gordon, who claims the city’s 2016 lease for 101 Ash St. is illegal because
it was never put to a public vote. The depositions from Gordon’s lawsuit prompted the request for a referee.
The city of San Diego also has separate lawsuits against Cisterra, CGA Capital and others. The city has said it should be allowed out of its leases, in part because it was given real estate advice by a volunteer consultant with a conflict of interest.
Jason Hughes, the “volunteer” real estate adviser to former Mayor Kevin Faulconer, did not appear for his scheduled deposition last week, but he also is expected to answer questions under oath ahead of the March 17 hearing.
Hughes has acknowledged being paid almost $10 million for his work on the Ash Street lease and on another city deal for a nearby property, even though he and Faulconer represented for years that Hughes’ service to the city was strictly as a volunteer.
Earlier this month, after Gordon’s legal team deposed Wahl, lawyers for CGA Capital sought the appointment of a deposition referee.
The Wahl deposition had been delayed for months until Wohlfeil issued a court order requiring the witness to appear. That interview took place over two days earlier this month and testimony was repeatedly interrupted by objections from Wahl’s and Cisterra’s lawyers.
Wahl’s legal team repeatedly objected to questions by Gordon’s lawyers, frequently citing Wahl’s role in confidential mediation proceedings to resolve the other lawsuits’ claims out of court.
The attorney representing CGA Capital told Wohlfeil on Tuesday he had no choice but to seek the referee due to the behavior of Gordon’s lawyers during the Wahl deposition and others.
“It has been borderline horrendous. It is shocking the behavior we have seen,” lawyer Craig Ganz told the judge. “The unprofessional behavior, the abusive behavior has to stop.”
The lawyer for the Ash Street lender complained that Gordon’s lawyers presented “outright lies and fabrications” during the Wahl testimony but did not cite specific misrepresentations.
Cisterra and lawyers representing the city also said the plaintiff ’s attorneys needed to be monitored by a referee.
Michael Aguirre and Maria Severson represent Gordon. Severson told the judge that nine of 10 depositions conducted to date were held without incident.
However, throughout the Wahl deposition, Severson said, the witness and his lawyers refused to explain how some testimony might be privileged due to his role in the mediation process when he began working for Cisterra eight months before the city filed suit.
She also said her review of the deposition transcript showed the Cisterra and Wahl lawyers objected to questions on 110 pages of the 190-page document.
“We took the depositions as best we could,” Severson said. “Sure, it is contentious when you are trying to get the witness to answer questions, and you have these two attorneys blocking you.”
While lawyers representing Gordon continue to depose witnesses in advance of the January 2023 trial date of that case, lawyers for the city of San Diego have yet to depose any witnesses in its lawsuits.