City of Atwater facing second lawsuit 

By ROBIN SHEPARD
Times Correspondent

The City of Atwater faces an additional lawsuit in connection to alleged conspiratorial actions within the city’s Community Development Department, which includes the Planning, Building, and Engineering divisions.

In his civil case, filed in Merced Superior Court on Dec. 31, 2024, local developer Mohammed Jawad alleges the Building Division, under the supervision of Community Development Director Greg Thompson, and working in consort with Mayor Mike Nelson, contract engineer Michael Hayes, chief building official Mark Pereida, and two administrative staff members, sought to defraud him and his associated companies, and to defame him personally.

Thompson-owned company Rhyolite Development & Construction, Inc., and Hayes-owned VH Design Group/VVH Consulting & Engineers, are also named as defendants.

Jawad, Golden State Realty Association, J. Dean Construction , Inc. and Apex Investment Group, LLC, are listed as plaintiffs in the suit, which is seeking unspecified monetary, nonmonetary, and punitive damages and relief.

Jawad’s lawsuit is the second to be filed against the City of Atwater since September 2024, joining local builder and developer Brad Kessler who alleges similar official misrepresentations and misdeeds, resulting in potentially several hundreds of thousands of dollars in claims.

Both plaintiffs are represented by Fresno attorney Brian K. Cuttone of Cuttone & Associates.

With 31 separate causes of action, the lawsuit alleges city officials conducted various breach of contract, breach of public trust, fraud, extortion, civil conspiracy, and conflict of interest actions in a conspiracy to impose “discriminatory procedures” against the plaintiffs, as well as implementing “costly” and “burdensome” requirements intended to hinder Jawad’s real estate and construction activities within the city.

The lawsuit further alleges the city published false statements about Jawad’s supposed failure to pay fees and submit timely plans and other required documents. The lawsuit also alleges city staff informed Jawad’s current and potential business clients that “they would be better served working with other developers and contractors.”

According to Jawad, he presented a claim in the amount of no less than $500,000 to the city in May 2024. The city, according to the lawsuit, rejected the claim in July 2024.

The lawsuit further alleges four instances in which the defendant City of Atwater and its officials acted to intentionally obstruct Jawad’s business interests in town, including a planned development of a lot located at 295 E. Bellevue Road, a planned development on Bell Drive, and construction and maintenance of two residences within the city limits.

According to the lawsuit, in the case of the Bellevue Road project, the City of Atwater required an easement for access to adjoining city property and underground utilities, which was granted by the plaintiff in March 2023. The City then required Jawad provide “joint trench plans” for the installation of public utilities. The lawsuit states that the City denied that plan for an undisclosed reason.

Thompson’s Rhyolite Development & Construction, Inc., the lawsuit states, had been contracted by Jawad for “entitlement services” for a 30-unit multi-family housing project at the Bellevue Road site. During a meeting with city officials, Jawad claims that Thompson presented him with a request to sell a portion of the property to the City.

As a result of this request, Jawad successfully applied for a lot split, and sold the newly created lot to the City, allowing for the development of a “proposed treatment site.”

Then, according to the lawsuit, “The City verbally denied the proposed multi-family project once plaintiffs sold the lot to [the] City.”

After selling his lot to the City of Atwater, Jawad claims Thompson told him that the City would deny him use of the newly created easement for his project’s utilities.

Jawad claims the incomplete project has resulted in payment of $9,200 per month on a construction loan, and additional losses of potential rent at about $8,700 per month.

Regarding the Bell Drive project, Jawad alleges he bought the property from the City during a surplus sale. Eighteen months after acquiring the property, Jawad alleges that Thompson approached him with plans to develop the property in partnership with his own Rhyolite company, providing “in-kind entitlement services” as a financial means to add value to the project.

Jawad alleges that in January 2024, Rhyolite withdrew from the joint project “due to Thompson’s conflict of interest.”

According to City Manager Chris Hoem, Thompson’s employment with the City of Atwater was terminated on March 21.