SAN JUAN CAPISTRANO : City, Lawyer Settle Long-Running Suits

A bitter, nearly three-year-old series of lawsuits pitting a local attorney against the city of San Juan Capistrano ended quietly this week with both sides agreeing to give up the fight.

Attorney Carlos F. Negrete and the City Council agreed Tuesday to settle the lawsuits over an alleged misuse of public funds by dismissing all pending litigation, claims and appeals and agreeing not to sue each other for five years. The agreement also stipulates both sides pay their own attorney fees, which for the city totaled more than $1 million.

Negrete and a group of other residents who called themselves the Committee to Restore Integrity in San Juan Capistrano sued the city and eight city officials beginning in March, 1991, claiming a contract with former City Manager Stephen B. Julian was a misuse of public funds.

Most of the lawsuits were dismissed in Superior Court, but Negrete and the committee appealed and another court ruling was expected by this summer, according to city officials.

The agreement came by a 4-1 vote with Councilman Gil Jones dissenting.

“I have some serious concerns about this agreement,” Jones said before the vote. “I have always held the position that we have prevailed in the courts and we would prevail ultimately at the appellate court level. . . . This is something a judge should decide.”

A judge’s decision “would restore some confidence in the community about our innocence,” Jones added.

The settlement frees Negrete from a ruling requiring him to pay the city $814,000 in legal fees incurred during the lawsuits. Further legal actions since that ruling upped the total spent by the city to “slightly over $1 million,” according to City Atty. Richard K. Denhalter.

Councilwoman Carolyn Nash called it “discouraging” to settle without collecting the fees from Negrete.

“Even if we do win on appeal, we are not going to get the money back,” Nash said.

Mayor Collene Campbell agreed, adding that “if I thought there was a prayer to recoup the money that was awarded to us, I would not enter this agreement. . . . It’s a hard pill to swallow, but I am relieved the city will no longer have to put money in this pot.”

Negrete said Wednesday he was “very pleased. . . . I stood by my principles throughout the whole case.”