Lincoln's unfair business practice claim moves forward in court, others dismissed in suit against TGI

A Placer County Superior Court judge issued a tentative ruling allowing the City of Lincoln to move forward with part of its lawsuit against The Gathering Inn (TGI) while dismissing several other claims against the nonprofit and the state Department of Social Services. The lawsuit alleges TGI fraudulently secured $6.4 million in state funds to open a medical respite center for unsheltered individuals near four schools without notifying the city until after the land was purchased. Tentative rulings were released Oct. 20. Parties of the lawsuit appeared at a case management conference on Oct. 21 to discuss the rulings. Tentative rulings with TGI Judge Trisha J. Hirashima reviewed whether the City of Lincoln had the legal right to bring a claim against TGI for "unfair business practices." According to the tentative ruling, TGI argued that Lincoln isn't allowed to file this kind of claim due to California law. California law states there are three ways to file: must be from a city of 750,000 people or more, special types of city governments that are both a city and a county, or if the city has a full-time prosecutor who gets permission from the district attorney to file the claim. TGI argued that Lincoln's city attorney does not count as a city prosecutor. Judge Hirashima noted that Lincoln City Attorney Kristine Mollenkopf does legal work for the city but isn't described as a city prosecutor under the law. The city argued that since it is asking the court for an injunction, this would allow any city attorney to bring this kind of case. The judge agreed with Lincoln, stating the law allows Lincoln's city attorney to move forward with the claim of unfair business practices. The court, however, did not favor with the City of Lincoln's claim of deceit or concealment. The tentative ruling stated the plain language of the Joint RFA and Form 6 do not require TGI to communicate with the city or with any specific stakeholder. "The SAC (second amended complaint) fails to plead facts to support a duty to disclose, reasonable reliance, non-speculative damages, or fraud based on a partial concealment theory," the tentative ruling stated. "For these reasons, the demurrer is sustained as to the fifth cause of action." The court also demurred Lincoln's argument of declaratory relief. The judge decided the city cannot move forward with its request for declaratory relief because the issue is about past actions, not a current or future dispute. The tentative ruling stating the SAC fails to allege an "actual controversy" between the parties and the city cites to no authority that supports a different conclusion. The judge also denied the city's Fraud and Concealment (Tort of Another Doctrine), which requests TGI to pay for the city's attorney fees. Tentative rulings with Department of Social Services (DSS) The judge denied the city of Lincoln's Petition for Writ of Mandate. A Writ of Mandate must include a clear and specific duty to act a certain way, which is called a ministerial duty. The city stated the DSS has a ministerial duty to deny TGI's request for reconsideration, to deem TGI to not be a "qualified grantee" under the CCE Program, to deem TGI's Lincoln project is not a "qualified project" under the CCE Program, and to cease any further funding of TGI's Lincoln project. The judge stated the Joint RFA is not a provision of law, nor does it have strict verbiage to act a certain way. "For example, the City directs the court's attention to part of the Joint RFA providing, 'Applications cannot be edited once submitted.' However, a plain reading of this language is not as narrow as the City contends it is," the tentative ruling stated. "The Joint RFA goes on to provide, 'Reviewers may request additional clarifying information from the applicant.' " The city put attention in its SAC to part of the Joint RFA requiring an applicant to engage the community and describe local support. "The City argues it has the right to be involved in the siting of TGI's project. However, the Joint RFA does not require an applicant to engage the City specifically — or any other specific community stakeholder, for that matter, nor does it or Form 6 require engaging community stakeholders regarding facility 'siting.' " A Writ of Mandate must have a direct and personal stake in the issue, which is called a beneficial interest. The city stated it will not have the public safety resources needed to accommodate the medical respite center, nor does it have the financial ability to add to their resources if the Lincoln site was open. The tentative ruling stated the city alleged how it will be impacted but not that it has suffered an actual injury. "This is insufficient for the beneficial interest requirement of mandamus," the document said. "The demurrer is sustained as to the third cause of action." The court also denied Lincoln's argument of declaratory relief against the DSS. The judge decided the city cannot move forward with its request for declaratory relief because the issue is about past actions, not a current or future dispute. Similarly to Lincoln's declaratory relief argument against TGI, the tentative ruling stated the SAC fails to allege an "actual controversy" between the parties and the city cites to no authority that supports a different conclusion. What's next? Erin Frey, the city of Lincoln's economic development and communications specialist, said there isn't a final ruling yet, "and the Judge indicated she hopes to have a final decision published within 6 weeks." In a press release, TGI said it looks forward to the final ruling of the case. "The Gathering Inn appreciates the Court's careful consideration of the facts and looks forward to the final ruling and the opportunity to present its evidence on the remaining claims in the case," the nonprofit wrote. The next scheduled Case Management Conference is set for Dec. 9 at 8:30 a.m. in Department 42 at the Roseville Santucci Justice Center.