County of Solano v. Vallejo Redevelopment Agency

I

Introduction

The Vallejo Redevelopment Agency (Agency), a separate legal entity from the City of Vallejo (Vallejo), agreed to pay Solano County $3.2 million for capital improvements in Homeacres, an unincorporated neighborhood and blighted area of Solano County. The Agency instead used the money earmarked for capital improvements to pay off bonds that financed the construction of an elementary school in a new development within Vallejo. Solano County and the Homeacres Improvement Association (Association), a nonprofit corporation representing the interests of about 50 out of the approximately 3,000 people living in Homeacres, alleged causes of action against Vallejo and the Agency for breach of contract, breach of a duty of fair representation, misappropriation of funds, and unjust enrichment. The trial court held that the Agency was liable to Solano County because the Agency committed an anticipatory breach of contract, and that Vallejo was liable based on unjust enrichment. The court also found that the Agency breached a duty of fair representation to the residents of Homeacres. The court held for the Agency and Vallejo on the misappropriation claim. The court…