Top Plaintiffs' Verdict by Impact: Western Riverside Council of Governments v. City of Beaumont

After a four-week trial, an Orange County Superior Court judge ruled against the city of Beaumont in a multimillion-dollar transportation fee dispute that alleged the city failed to comply with its municipal ordinance.

The city had previously been a member of the Western Riverside Council of Governments, a governmental entity made up of 15 Riverside County cities and the county itself.

Under one of the group's programs, its members - including Beaumont - enacted an ordinance to assess fees on new development in their respective locales to support regional transportation infrastructure.

Over time, the council came to suspect Beaumont wasn't fulfilling its obligation to hand over its fees, according to court documents. It sued the city for misappropriation of public funds to recover the missing money.

Going into the suit, the council was unaware of how much money hadn't been remitted, said lead counsel Jeffrey V. Dunn, a partner at Best Best & Krieger LLP. It was only through discovery, and with the help of a team of forensic accountants, that the council learned the extent of the problem, he said.

Dunn argued in trial that Beaumont misdirected the funds, creating tax and traffic burdens on its own residents.

Orange County Superior Court Judge David Chaffee found that Beaumont engaged in a "pattern and practice of deception" and failed to comply with the municipal ordinance requiring it to collect and hand over fees.

He ordered the city pay nearly $43 million in withheld fees and more than $14 million in prejudgment interest. Western Riverside Council of Governments v. City of Beaumont, 357976 (Orange Super. Ct., filed March 29, 2010).

Nearly all of the funds will go toward paying for regional transportation in western Riverside County, Dunn said, which will particularly impact traffic along the I-10 corridor.

The case is now on appeal in the 4th District Court of Appeal. Defense attorney Walter McNeill could not be reached for comment.

- Kylie Reynolds