LAFAYETTE — A Contra Costa Superior Court judge has upheld a ruling that allows a lawsuit against developers and the city of Lafayette to move forward.

Judge Judith S. Craddick affirmed Aug. 9 a tentative ruling rejecting the city and developer O’Brien Land Company’s request that the lawsuit filed by the San Francisco Bay Area Renters’ Federation not move forward.

The city and developer filed the demurrer challenging the legal basis — but not the merits — of SFBARF’s suit. The group claims Lafayette broke state housing law when the city council approved a 44-home development that replaced 315 moderate-income apartments known as the Terraces of Lafayette originally pitched for a hillside above Highway 24.

“I’m thrilled that we won at this stage,” said Sonja Trauss, the group’s founder. “The next step is to prepare for a trial.”

City Manager Steve Falk said the ruling was “not entirely surprising” given the judge’s earlier tentative judgment, which rejected in part the city and developer’s arguments SFBARF had exceeded the statute of limitations to file its legal challenge.

“No one has won or lost the lawsuit yet,” Falk said. “It’s just kind of a step along the way.”

SFBARF’s suit asks the court to revoke changes to Lafayette’s general plan allowing the housing development on a site formerly zoned for administrative and professional offices or multifamily housing with a land use permit.

The city and developer agreed to build the home development and accompanying dog park, play field and other public amenities as an “alternative” to the apartment project, which O’Brien and landowner Anna Marie Dettmer pitched at the site of a former rock quarry above the corner of Deer Hill and Pleasant Hill roads.

Last week, the City Council denied an appeal by the group Save Lafayette challenging the issuance of a grading permit to the developers. The group filed a legal challenge against the city earlier this year after lawmakers rejected a referendum petition requesting voters be allowed to approve or reject the development. A judge ruled against that suit in June.

Jennifer Modenessi covers Lamorinda and Walnut Creek. Contact her at 925-943-8378. Follow her at twitter.com/jmodenessi.