As many of you may have heard, the 6th District Appellate Court issued an opinion Tuesday on the final of three appeals from various Town Center lawsuits involving Wells Fargo and Sand Hill (Peter Pau). The opinion favors Wells Fargo in all respects and orders the lower court to dismiss all five of the causes of action in the lawsuit filed by Sand Hill against Wells Fargo. This is significant, and residents are rightly wondering what the ruling means. I’ll try to set it in perspective.
Under the current circumstances, Wells Fargo has been unable to market the property to interested bidders because the existing lawsuit creates what’s called a “cloud on title,” meaning uncertainty over the ownership of the property. Any prospective developer would need to purchase something called “title insurance” to safeguard against a threat to the developer’s ownership of the property while the work is being done. Not surprisingly, insurance companies are unwilling to issue title insurance to any developer as long as a “cloud on title” exists. And developers generally will not take on a project of this size without title insurance. So the litigation has effectively barred Wells Fargo from marketing the property to anyone other than Sand Hill (which could eliminate the cloud on title at will by dropping its lawsuits).
If Tuesday’s ruling becomes final, it should eliminate the cloud on title as it firmly establishes Wells Fargo’s ownership of the property. Whether it will become final isn’t certain at this point. Under court rules, Sand Hill could request rehearing by the appellate court or file a petition asking the California Supreme Court to review the case. We should know more within the next 30 days. If Sand Hill does request rehearing or review by the Supreme Court, those courts have to act within a matter of weeks or months, rather than years, so we should have an idea of the status within a relatively short time.
We’ve been down this road before, and anything could conceivably happen. But Tuesday’s ruling gives us the strong possibility of seeing the Town Center project start up again for real – maybe even before my term as Mayor expires in December.
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