Former SCAP director’s breach-of-contract lawsuit may proceed

A Stanislaus Superior Court judge said he would lift a stay on a 4-year-old civil case in which a former nonprofit housing executive seeks almost $500,000 in unpaid commissions from his former employer.

In a tentative ruling this month, Judge John Freeland granted a motion from Community Impact Central Valley to let the case proceed. William “Joe” Gibbs, the former development director for Stanislaus Community Assistance Project in Modesto, has sought at least $477,000 in unpaid commissions in a March 2012 lawsuit filed three months after SCAP fired him.

SCAP, a nonprofit housing agency, later changed its name to CICV. Gibbs was hired in February as executive director of the Merced County Food Bank. Formerly known as Joe Gibbs, he now uses the name Bill.

A stay on all discovery in the lawsuit was imposed in March 2014 because of an FBI probe that focused on Joe Gibbs and his wife, Denise, who was SCAP’s executive director.

Modesto attorney Alonzo Gradford, who represents Gibbs, appeared at a brief court hearing Thursday in an attempt to contest the tentative ruling. Freeland refused to hear a request from Gradford and said he would confirm the ruling.

Gradford had not filed a written opposition to CICV’s motion. The attorney and Joe Gibbs did not return messages Friday.

In May 2011, Joe and Denise Gibbs came under fire when he claimed $627,000 in compensation from SCAP for grant writing. The Modesto Bee revealed that Gibbs had an agreement giving him a 4 percent commission on the assets and income he produced for SCAP and that the compensation soared when the agency’s income spiked in 2010.

The article sparked outrage that such an amount was owed to a nonprofit agency employee who was supervised by his wife. A few days after it was published, Joe Gibbs said he was waiving $436,500 in bonuses in a letter emailed to The Bee. Gibbs claimed in his lawsuit the following year that he did not recall signing the letter.

FBI agents searched the Gibbses’ home in Riverbank and SCAP’s office in December 2011 after months of controversy over how SCAP spent $8 million in taxpayer funds and managed housing in a federal program.

The raid, assisted by the Department of Housing and Urban Development’s Office of Inspector General, came a week after SCAP’s board suspended Joe and Denise Gibbs. They were terminated in late December 2011.

The investigation has not resulted in any charges filed by federal authorities. The FBI has said it does not provide updates on its investigations.

Michael Farbstein, an attorney for CICV, said the agency that provides housing assistance to the homeless and disabled wants to put the case behind it. According to its request to remove the stay, CICV has not been able to take depositions from Joe and Denise Gibbs or obtain documents to establish a defense.

In court documents, CICV has said the FBI has not returned Joe Gibbs’ computer including emails, grant applications, financial records and board minutes, and his personnel files remain missing.

“The discovery stay was put in place because Mr. Gibbs was under investigation by the FBI and he indicated he and his wife, an essential witness, would both refuse to answer substantive questions at their deposition” based on their rights against self-incrimination, Farbstein wrote.

With the stay in place, the agency was not able to gather evidence to defend itself at trial, Farbstein added.

The ruling will allow the defendants to schedule depositions and start gathering evidence again. According to CICV, Gibbs has previously indicated that he should be owed additional bonuses on income that SCAP received after he was fired.

This story was originally published July 29, 2016 at 7:26 PM with the headline "Former SCAP director’s breach-of-contract lawsuit may proceed."