1 2 3 4
GERALD A. I
5 6
Attorneys for Plaintiff SAN JUAN HILLS GOLF CLUB, LP
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8
IN THE SUPERIOR COURT OF THE STATE OF CALIFORNIA
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FOR THE COUNTY OF ORANGE, CENTRAL JUSTICE CENTER
10 11 12 13 14 15 16 17
SAN JUAN HILLS GOLF CLUB, LP, a ) ) California limited partnership, ) ) Plaintiff, ) ) vs. ) CITY OF SAN JUAN CAPISTRANO, a ) ) municipal corporation; SAN JUAN ) BASIN AUTHORITY; and DOES 1 ) through 100, inclusive, ) ) Defendants.
CaseNo. _ _ _ _ _ _ __ Civil Unlimited COMPLAINT FOR: (1) BREACH OF CONTRACT; (2) TRESPASS AND CONVERSION OF WATER; AND (3) NEGLIGENCE; REQUEST FOR DAMAGES AND PERMANENT INJUNCTION; DEMAND FOR JURY TRIAL
__________________ )
18 19
PlaintiffS an Juan Hills Golf Club, LP, a California limited partnership ("The Golf Club"), alleges
20
as follows against defendants City of San Juan Capistrano ("The City"), San Juan Basin Authority
21
(the "SJBA"), and Does 1 through 100, inclusive (collectively "Defendants").
22 23
THE PARTIES 1.
The Golf Club is a California limited partnership doing business in Orange County,
24
California. The Golf Club owns approximately 145 acres of land and a golf course that has been open
25
to the general public for almost half a century. The Golf Club is one of the largest employers in The City
26
and is the centerpiece of several planned residential communities adjoining its boundary.
27 28
2.
On information and belief, The City is a municipal corporation located in Orange County,
California.
1 42854vl
COMPLAINT; DEMAND FOR JURY TRIAL
1
3.
The SJBA is a water authority doing business in Orange County, California.
2
information and belief, the San Juan Basin water supply is among various water resources managed by
3
the SJBA which was created in 1971 as a joint powers authority for the purpose of carrying out water
4
resources development and management of the San Juan Basin. The members of the SJBA consist of
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the Santa Margarita Water District, Moulton Niguel Water District, South Coast Water District, and
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The City.
7
4.
Does 1 through 100, inclusive, are defendants whose identities have not yet been They are individuals, partnerships, corporations, or some other business entity. On
8
ascertained.
9
information and belief, each Doe defendant was somehow responsible for the damages caused in this
10
case. As soon as the true identities and capacities of the Doe defendants have been ascertained, the
11
complaint will be amended to reflect the true names and capacities of each Doe defendant.
12
13
5.
Each Defendant was the agent, alter-ego, employee, principal, partner, joint venturer,
employer, or in some other capacity derivatively responsible for each of the acts of the other Defendants.
14
6.
All of the acts at issue in this case occurred in Orange County, California.
15
THE GOLF CLUB'S PRIMARY WATER RIGHTS AND
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DEFENDANTS' WRONGFUL USURPATION OF THOSE RIGHTS
17
7.
The facts set forth below outline the water rights at issue and explain why The Golf Club
18
has superior water rights which now Defendants have wrongfully misappropriated for their own
19
enrichment.
20
A.
21
22
The Nature of Riparian Water Rights 8.
The right to use water has been an important issue in California since its founding. Water
rights are so important that they are protected by the California Constitution.
23
9.
24
(the "Aquifer").
25
10.
The Golf Club sits above a moving stream of underground water in the San Juan Basin
Because The Golf Club's property lies directly above the Aquifer, the rights of The Golf
26
Club to access the water are considered by law to be overlying water rights. This means The Golf Club
27
has a primary right to use water that is generally superior to those who do not possess such rights.
28
III 2
42854vl
On
COMPLAINT; DEMAND FOR JURY TRIAL
1
11.
As an overlying user, The Golf Club may use whatever amounts of water are reasonably
2
necessary to maintain its property. This right includes irrigating The Golf Club's property and keeping
3
all trees and vegetation healthy. 12.
4
For generations, The Golf Club and its predecessors-in-interest exercised their superior
5
rights to use water from the Aquifer below its property.
6
B.
7 8
The Golf Club's Contract with the SJBA 13.
In or around 1997 the SJBA and The Golf Club's predecessor-in-interest locked horns
over the SJBA's attempt to usurp The Golf Club's water rights. 14.
9
Recognizing it was on dubious legal ground in the dispute, the SJBA entered into a
10
contract with San Juan Golf, Inc. (The Golf Club's predecessor-in-interest), entitled Water Use And
11
Protest Dismissal Agreement between SJBA and San Juan Golf, Inc. (the "Water Contract"). A copy
12
of the Water Contract is attached as Exhibit 1. 15.
13
Pursuant to paragraph 2 of the Water Contract, the SJBA specifically agreed to the
14
following: "The Authority agrees that it will not ... interfere with the diversion and use of up to and
15
including 550 acre feet per year of water by San Juan Golf .... " (See, Exhibit 1)
16
16.
In other words, even in the worst of droughts, the SJBA agreed The Golf Club would have
17
the right to draw up to and including 550 acre feet of water before the SJBA, or anyone drawing water
18
pursuant to SJBA authority, had a right to draw a drop of water that interfered with The Golf Club's
19
water rights.
20 21
17.
c.
22 23
For many years, each side honored the terms of the Water Contract.
The City's Construction of a Water Plant 18.
On information and belief, The City can purchase water on the open market for less than
it costs to extract water from the ground and process it through The City's ground water recovery plant.
24
19.
Recently, a concerned group of citizens sued The City for overcharging residents for
25
water. Judge Gregory Munoz found in favor of the citizens group and issued declaratory relief in favor
26
of the citizens group. 20.
27 28
While The City has extracted water from the Aquifer, it does not have a permit to extract
water. 3
42854vl
COMPLAINT; DEMAND FOR JURY TRIAL
21.
1
The City applied for a permit to extract water, but the State of California refused to issue
2
a permit to The City. Accordingly, The City entered into an agreement with the SJBA to allow The City
3
to extract water from the Aquifer beneath The Golf Club's property.
4
22.
On information and belief, there is no legal basis for the SJBA to allow this extraction of
5
water. However, the SJBA continues to allow The City to extract over one half billion gallons of water
6
each year from the Aquifer, depriving The Golf Club of water it needs for its property and threatening
7
to destroy the Aquifer, which would be an ecological and economic disaster.
8
D.
23.
9 10
The City's Extraction of One Half Billion Gallons of Water Each Year Currently, The City is extracting extraordinary amounts of water from the Aquifer- over
one half billion gallons each year.
11
24.
California is currently undergoing a severe drought.
12
25.
Starting in 2012, The City's water extraction facilities began to pull water out of the
13
Aquifer at a much faster rate than could be replaced by Mother Nature. Despite the fact water levels are
14
dropping faster than what is permitted for a "safe yield," The City continues to pull massive amounts of
15
water from the Aquifer at unsustainable rates. 26.
16
As a result of The City's unauthorized and illegal actions (which could only occur with
17
the permission of the SJBA), the water levels of the Aquifer dropped to the point where, in 2014, The
18
Golf Club could no longer extract enough water to irrigate its property, let alone extract the full550 acre
19
feet it was entitled to draw upon.
20 21
27.
such an extent that it damaged The Golf Club's pumping equipment.
22 23
28.
As a result of Defendants' actions, The Golf Club has been compelled to purchase water
from The City to compensate for the water effectively stolen by The City.
24 25
As a result of the dropping of water levels, the quality of the water supply diminished to
29.
In effect, The City is stealing The Golf Club's water and then charging extraordinary rates
to The Golf Club to purchase the water The City has stolen from The Golf Club.
26
30.
But The City's avaricious extraction of water is not only causing hardship for The Golf
27
Club, it is also creating a likely ecological disaster.
28
///
4 42854vl
COMPLAINT; DEMAND FOR JURY TRIAL
1
31.
Aquifers are delicate creations of nature. They can exist for thousands of years, so long
2
as there is a balanced "water budget" where the amount of water leaving the aquifer is roughly equivalent
3
to the amount of water returning to the aquifer.
4 5
32.
However, when substantially more water is extracted from an aquifer than is replaced, the
"water budget" goes out of balance, creating a potential ecological catastrophe.
6
33.
Defendants' actions are creating a situation where there is significantly less water in the
7
Aquifer than there should be. As a result, the structure of the Aquifer has been compromised, resulting
8
in a very real danger of subsidence and collapse of the Aquifer. If the Aquifer collapses, it will be gone
9
forever, resulting in ecological disaster and financial ruin for both The Golf Club and the community.
10
FIRST CAUSE OF ACTION FOR BREACH OF CONTRACT
11
(Against the SJBA and Does 1-100) 34.
12 13
though fully set forth.
14 15
The Golf Club incorporates by reference paragraphs 1 through 33 of this complaint as
35.
Pursuant to the Water Contract (Exhibit 1), the SJBA and Does 1-100 agreed that The
Golf Club would have a superior right to the first 550 acre feet of water from the Aquifer.
16
36.
Pursuant to the express terms of the Water Contract, the SJBA could not take any steps
17
which would interfere with The Golf Club's right to make reasonable use of up to 550 acre feet of water
18
from the Aquifer.
19
37.
Notwithstanding the express and implied terms of the Water Contract, the SJBA allowed
20
The City to extract over one halfbillion gallons of water from the Aquifer annually, which interfered with
21
The Golf Club's right to make reasonable use of up to 550 acre feet of water from the Aquifer.
38.
22
As a result of this breach of contract, The Golf Club has suffered damages in an amount
23
to be proved at trial but in excess of the minimum jurisdiction of this court. Moreover, The Golf Club
24
is in danger of losing the Aquifer, which is critical to the operation of The Golf Club.
39.
25
26
Ill
27
Ill
28
Ill
The Golf Club, therefore, seeks damages according to proof.
5 42854vl
COMPLAINT; DEMAND FOR JURY TRIAL
1
SECOND CAUSE OF ACTION FOR TRESPASS AND CONVERSION
2
(Against All Defendants)
3 4
40.
this complaint as though fully set forth.
5 6
41.
The City does not own any legal right to extract water from the Aquifer. At best, it is an
appropriator of water. 42.
7 8
The Golf Club incorporates by reference paragraphs 1 through 33 and 35 through 39 of
None of the Defendants have any right to extract water from the Aquifer that impairs The
Golf Club's rights to extract all the water it reasonably needs for the maintenance of its property.
9
43.
Notwithstanding the lack of any legal right to extract water, The City (with the permission
10
and authority of the other Defendants) has knowingly and willfully extracted and continues to extract
11
over one half billion gallons of water from the Aquifer each year- a rate that greatly exceeds the "safe
12
yield" of the Aquifer, especially during a persistent drought.
13
44.
As a result of this extraordinary extraction of water from the Aquifer, The Golf Club no
14
longer has access to adequate water reasonably necessary to maintain its property, even though its water
15
rights are superior to those of Defendants.
16
45.
Defendants' improper and unauthorized extraction of water from the Aquifer in violation
17
ofThe Golf Club's water rights, constitutes a trespass against and a conversion ofThe Golf Club's water
18
rights since 2013.
19
46.
Based upon this intentional wrongful conduct, The Golf Club seeks:
20
according to proof; and (2) an injunction against Defendants from pumping water from the Aquifer until
21
static water levels in the Middle Sub-Basin reach 15 feet below ground surface measured at SJBA
22
monitoring well MW4.
23
THIRD CAUSE OF ACTION FOR NEGLIGENCE
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(Against All Defendants)
25 26
47.
28
The Golf Club incorporates by reference paragraphs 1 through 33, 35 through 39, and
41 through 46 of this complaint as though fully set forth.
27
48.
In taking the actions set forth above, Defendants acted negligently and unreasonably.
Ill 6
42854vl
(1) damages
COMPLAINT; DEMAND FOR JURY TRIAL
1
2 3 4 5
6
49.
As a result of Defendants' negligent conduct, The Golf Club has suffered damage,
including loss of access to water and damage to real and personal property. 50.
The amount of damages will be proved at trial, but are in excess of this court's
jurisdiction. WHEREFORE, The Golf Club prays as follows:
As to the First and Third Causes of Action:
7
1.
For damages according to proof;
8
2.
For costs of suit;
9
3.
For all relief the court deems fair and appropriate;
10
As to the Second Cause of Action:
11
4.
For damages according to proof;
12
5.
For the injunction requested above;
13
6.
For costs of suit; and
14
7.
For all relief the court deems fair and appropriate. KLEIN & WILSON
15 16 17
Dated: August 28, 2014
18 19
DEMAND FOR JURY TRIAL
20 21
Plaintiff San Juan Golf Club, LP demands a jury trial in this matter. KLEIN & WILSON
22 23 24 25
Dated: August 28, 2014
By:
~G~e-ra~l~d~A~.~~~~~~-----------
Attorneys for
26 27 28
7 42854vl
COMPLAINT; DEMAND FOR JURY TRIAL
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: .: . . Protest Dlsml~-.1 .Air.,emeilt ·· ··: · :. ·,, :_, : ·betWeen . . ·. San Juan. Basin ·Authority and. San Juan GOlf, Inc. .
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· . ~: ~:Thi~ Agteem'ent Is· en~r.ed ~lntt) effectiVe this fl~enth day of March, 1997, by. and: · betWeen· San )u'an. Basln Authority, a~iotnt powers ~uthorltY' ("Authority".) and S~n Juan . Golf, lnc.,·tiC31~fomta c:9rooradon·{~~San Ju~n·Ciolf').: · · · ·
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R~~ITALS
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.tSali )pan Golf owns. certall1:r.ealpropetty 'Yhlch 'Is more speciftcai~y d~crlbed In ~EXh!blt· A heretO.. Sa" ]l(an. (jql( ~ses Its 'prQp~rty wr golf cou.-se P'-lmos~, and . . · 'PUmps w~ter ·from. the Sao Juan· B~Jn to lrrJgate' the golf <:ourse~.ustrar wells..locatea· , . ·on property owned by the CitY of• Sa~ Juan Cclplstiano.. San Juan ·Golf Is ·:also. . ~O'ntractilally· o~l_i8'aud· to s~rve c~~in City of San ]tia~ Qplstraho ·property and ,<·.fiom.eowners'·p~operty pursuant to aereements atta'ched heretO as Exlilblts B·and.. c.. . .. ·Th~ ·property .de~crtb~d h1 Exhibit 'A, and· the property San Juan yolf 1$ obilaate4 to
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Th~ A~~.onty has applle.d to the 'St3~ Wa~r·:Resourc~ .Con~ol Boa~d ("'S.WRCB 1') · for ·a pennlt t0 approprlate.water from the San Juan ~Basin, Application' No. · · . · · ·~lof23, for a·desaltej.~nd water d~veloplllent pro)~t. .. · · . · · ·
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t.: · ~~~n·Juan.Jiolf ha5. flied a ·pro~ to Application 30 1'2 3 based ·J.Jpon vested rights, . ..• . .e:,.~~tnlrig that San J¥afi ·Golf has a P.rlor'rlparlan'rlght which It exerc,ses to lf1'1gate · ' the ~roperty. . . . .- . . . ·
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·~D. ··.··. ~an ;uan (;oif al~t> lias ~pQed ~ the S~~GB ~~; a·.'~iml~ ~ aPPropriate 450 ~~~~
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. . .re·et· ~e'i' year of .water fipitt ;the Sa~r Juan Ba~tn, _Appllcadon ·No•.Jo i 71 , .~ enable ·rt w:~cqndnue .to lrrJgate th~ Property. ·San Juan Golf may elect for or against .......mafritalnlng Its Appllt:atlon 30171.. ;{ · · ~ ~-. · If
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EXHIBIT 1
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:· Water Use and Protest..Distntssal Agreement
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. .AGREEMENT· · ·:
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·•The Authqrley attd s~n ]ua~ i:ioif ~ereby ~iree ~s foii.oWs:
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·: · · · · .1. · · San ]J.iaD Golf Water Dtyerslon and Use. San ]u~n .Golf shall not divert'·· ~oril the ·: . , · ·.· ' .•.:~: .: ~San Juan Basin surf~ce·or subsurface supplies ~n amount grea~r than 550 acre 'feet per : ~.:~. ·· · year of water,. and .shall use that W~ter .fQr goif C9Urse Irrigation and· other prop~r riparian·.·· ' .pu,.Poses onlY~ PtQper.·rJparlan uses shall b'e·as· deflned by Caiifomla···law. The water shall· :-•\:· used only on t,be. Property. · ~ · ~ ~ ... , · :. • ·· , i;
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.2.: . ·Nq·.Obfectlon tp San Juan· Gplf Yfater Dlyers~~- pnd Use. _4"he A..~thorltfa~ees . ·:~ : ~: . · · · ·:'that It wltl not protest,· obJect to or Interfere with the dtverslon and use of up tb and , · ~- . . ~,~ltfd,ng~s:SQ. acre feet per ~~ar of water oy San Juan Golf, provlded·,that such. ·~.tverslo~ · . · ' . , .... .,. ~ . ···a.,<;t·.use :Is conslsten~ wltll San Juan (jolf's obOgadons pursuant to this Agreement.· .•..
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San Juan GOlf Pernjlt/LJCense Condldon. Immediately upon full execut(9n hereof; f ., ···Authority. and San Juan Goii shall each r~quest ln. wrtdng th.at the SWRCa .Include the. ··. . .·provision~.' ~;··p~i'agraph t lr;a. any ~a~t rights. perini~ andl~r- Uc~nse Issued. ~Y the SWRC.B. . ' · ; ~· ··· • · to.San· )uan·-.Qolf pursuant.to Application· ~Ol7h At this dme, Sal') )~an Golf· does not· :. . Intend ot anticipate any:ot:her appllcation.for:a water rlghts·perrt1ft and/or ltcellse..o ·rn· th~· · · . ev~o.~·that;dle:ne~d·for any such .Permtt ~r it~erise:should arl~e h1 the future,.San )uan·Go~f. · •I ·• ../ ~· · ll.,r~by co"enant:S and agrees that arty such permit or license ISsued to San Juan Golf to· · · divert watet ftom ·th~ Sail Juan Basin shail ~ J..-nlor to the At~thorlt~l's then eXiStinti water .. ..right$,,: and San Juan (iolf:Shalt r~duce or tease any diversions In e~~ess of the amount , · · atrihoi1ied putsQant to this Aaree"'ent as necessary m:ensure·~t·adequate w~ter.ls. ·"·A:: ~~·av:anabte tO,satJsfy . ~e·.Authorlty'~·water rlghd•. The Authorlty·dQe$ .n~~ waive any·of tts ;.. . ; rigl,lu, lnciU,dlng but not lirplted ~~ tight.~ protest or otherw.lse OPP
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'f/t~ ·NcfObJe¢qn;.to Authgrtc;y· DIVersfq_n _and Use. ':San"].uao Golf'agrees .'~a.t ttwiU ·~ ~: ~· . ' ·. withdraw and~~~s~tsS Irs protest ~. the Authority's W,a~r Jights Appllqtlon· 3()l2·3 '.' .. lmmedhiteJy':upon ·.fuil- execution of..tllls Agree~ent. ·$an··Juan ·G&Jif wtll not otherwls~ . . ~. \. ,··. qblect to or.:~n~r:fere ~Jth:the A'uth~~ty's or Its mea:nbers' dlyerslon and ~s~ Q.f·Via.ter iil,.an .. . .. . \.~. amount n~ to·~)C(~ed the amountTequested In APP.Dcation ~0·123;. p~vld~d·that th4!. . ~ .. :. 1 ·.. ~-· Authorlcy'.ls nofln· material breaCh of ·ItS. o~Jigatlons. -~()ntalhed'ln this Agreement, and ~ . ' . . further provld~d that·the Auth~rlty's diversion Is' consiStent\vlth the water quality· temi'se( 1.
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· · slgnlflcant InJury t;o the ~uanw of water ,n·ecessary for senior teasonable ·and .~:, · ·be~eflclat·rtpar.lan'uses at·the·.s~~:Ju~· qolfProperty.an~ recoantz~d for·the ... ·.·.: · ·'San J~an Cree~ water.sh~d;lrt the Water.·Q~:~~IIty·CQrttrol. Plan· for the·San . · Basin.-· · · '· · ·.. ·,; . . ··:· :· · ... ·. :·. ·· · · Olecro '.f/1'. ... ' • •• I.
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. . ·. .7:· . ·Definition ·or·tropertV•! If. San Jtian·GQWs contr.actual obllgatlon·(s). to serve water puriuant to fhe.agreem~nt aitached·as EXhibit B., or the agreement attached as Exhibit G, \ ·. or botb, ceases·or ls.rreduced for:. arty reas()n, the definition of ''Property" fo.r purposes of · · ·~ ·.. ·thls.Aireenj·~n~ shalfbe'..(:om,m~ns~r~teiY. redu~ed. ·.JJte definitJon of'Properey shall n« be, •
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:\:~:·:. "9~. :·~.·,San '-~an.Gmf.:<;:lt¥'0{ ~~g-]ti~n ¥,ptsua;io ¥reeni~nt. · :Sa~ju~.Golf~~~~es.~~b· ·,. .~15'-Agr:e~a:nent In nc;> way alters·:tJ:le. teml~,~t:fghts and ,qbllga~oru se(·f~t1h·lli San Juan'''-.. .· ·. · ... ·~. ·.Golfs a~eement with f:he CitY .~f.··Sa.il Jijarf~plstrario ("Qty~Sari Juan ·Golf.Agreement11), · .·. : ·.. ·~copy·o.f\vhtch;~·auache
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as used In thiS: .Aireement mean$ once·every two·mdnths!~ . ·
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. .. . : . . ··: . . . . . .. . ·. '.. . . Changes .to Authority Application an.d/or Proies;t.: The. Autflorlty .reserves the rlittt 'to rtiake .any chang~ tO Its w~~r 11"'$5; ·wa~r rights ~appJ.I~adon. and/or proJect In lts·.sole. ·discretion. ~an Juan GQif shall. got protest, qbJ~ct to, or otherwise conteSt S\fCh·changes,' . except ~ enforce Its rightS under this Agreement In the manfler provided lierelri. · .
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· ~11. .suCQ,s~rs In ··lntet§t al]d ·Eui1ber: Acdons• ntiS Agt:eement shall be tilndlng up.on · ··fulf·exec:Udon·by or l?ehaif of all·'partie5.hereto. The parties agree.to take all actions { · ·:necessary or: convenient to carry out ttie.··purposes and:lntent of this AIJ'eement. This · ··:. . · ,:~11:eement sha.li Inure t:0 th~ benefit .of.and: tie. binding u~on successors and a,sslgns of the
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' · 13:...!: Captloris ·and lntemret.atlon. Paragraph,. tJtJes, or capdo~·contalned herelo are insetted as a matter .~f convenience -and for r~ference, and shall not .be con~ldered :In c6nstnili:llt. thiS' document: this Agreement ~nd e~ch. provision hereof shall be lnterprete~ as 'Jf dr;afted equally by all. p~i"d~. . · · · · :. ~. . . ; ·.· ,
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1.1. · Ameodrlt~~J. The' proylslon.s '?fi~ls Agree~~~~ may be ·m~dlth~d at an}i .dme·. ~ . . . agreement of the· part:fes•. AriY such agreeme~t bere~f'ter made shall.be Ineffective. to .
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iUitY.Prepal~,:regt~r~d qr certl.fted n:-all~.rew~ ~~elpt'~u~d~ ·~t:td-addr~ed to the • · . ...
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it; Goyetnlng ·Law. This· Agreem~nt fs ~ecu~a· ·a~d ·d~ii~er'd ~IIi the. State. of · ·. Call,fo~la; and shali 111, all re~p~Cts b,e . interpietedj;enf9~Ced an~·~~vemed 1by'the laws· Of.··
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