Professional Documents
Culture Documents
3
4
5
6
7
8
9
10
11
ELECTRONICALLY
FILED
Superior Court of California.
County of San Francisco
APR 16 2014
Clerk of the Court
BY: WILLIAM TRUPEK
Deputy Clerk
12
13
14
15
CALIFORNIA-AMERICAN WATER
COMPANY, a California corporation,
16
Plaintiff,
17
(Code ofCiv. Proc. 1060)
VS.
18
20
21
Defendants.
22
19
23
24
25
26
27
Cross-Complainant,
vs.
CALIFORNIA-AMERICAN WATER
COMPANY, a California corporation;
MONTEREY COUNTY WATER
RESOURCES AGENCY; and ROES 1
through 50, inclusive,
28 I!--------'C""r-"-os=s-'-D~e""fi""en=d=a=nt=s'-.---~
Dept.: 304
Judge: Honorable Curtis E.A. Kamow
Trial Date:
Vacated
Complaint Filed:
October 4, 2012
Cross-Complaint Filed: November 19, 2012
1
2
3
vs.
5
6
Cross-Defendants.
8
9
10
11
12
13
1.
The Agency is and at all times herein mentioned was a local public agency organized
14
and existing under and pursuant to the Monterey County Water Resources Agency Act ("Agency
15
2.
16
Cross-defendant Marina Coast Water District ("MCWD") is and at all times herein
17
mentioned was a county water district organized and existing under and pursuant to the County
18
3.
19
20
herein mentioned was a California corporation organized and existing under and pursuant to the laws
21
of the State of California and doing business in Monterey County. Cal-Am is a privately owned
22
water utility regulated by the California Public Utilities Commission ("CPUC"). Cal-Am owns and
23
operates a water distribution system within Monterey County that provides domestic drinking water
24
to thousands of consumers.
4.
25
The Agency is ignorant of the true names and capacities of cross-defendants ZOES 1
26
through 10, inclusive and, therefore, sues those cross-defendants by those fictitious names. The
27
Agency is informed and believes and thereon alleges that each of the fictitiously named cross-
28
lJw Office; ol
-2MfMarkA.Wasser----------C-=:R:::-O::CS::C:S,-c-C:c'O"':oM-=:P:-:::L-AC::IN-=:T-------------111111111
responsible for the matters alleged herein and is interested in this proceeding. The Agency will
amend this complaint to set forth the true names and capacities of thdictitiously named cross-
defendants when the same have been ascertained. Each allegation in this cross-complaint regarding
5.
historic water shortage on the Monterey Peninsula. The area has few adequate sources of potable
water. For many years, Cal-Am has diverted water from the Cannel River to serve its thousands of
residential and business customers on the Monterey Peninsula. However, as a result of orders issued
by the State Water Resources Control Board, Cal-Am must reduce its diversions from the Cannel
I0
River and develop alternative sources of potable water by December 31, 2016.
11
6.
12
Agency, Cal-Am and MCWD jointly entered into five written contracts for the purpose of
13
developing, constructing and operating a regional desalination project that would provide an
14
alternate source of potable water for Cal-Am's Monterey Peninsula customers and meet the
15
requirements of the orders issued by the State Water Resources Control Board.
16
7.
17
project was memorialized in the five contracts, which consisted of the Settlement Agreement, the
18
Reimbursement Agreement, the Credit-Line Agreement, the Water Purchase Agreement and the
19
Project Management Agreement. Throughout this proceeding, the parties have referred to the five
20
contracts, collectively, as the "RDP Agreements." The Reimbursement Agreement was approved on
21
February 26,2010. The Settlement Agreement, Water Purchase Agreement, Credit-Line Agreement
22
and Project Management Agreement were approved effective January 11,2011. The Agency, Cal-
23
Am and MCWD were parties to all the RDP Agreements. RMC Water and Environment ("RMC")
24
8.
25
The RDP Agreements were an interdependent and integrated set of contracts that,
26
collectively, represented the parties' agreement and meeting of the minds on the development,
27
9.
28
In or about April, 2011, and after the RDP Agreements had been approved and
1-ow Ollice> ol
-3~~~A.~--------------------~C~RO~S~S--C~O~M~P~L-A-!N-T---------------------------
executed, conflict of interest allegations arose regarding Stephen P. Collins, who was a long-serving
It was publicly revealed that Collins had been secretly retained as a consultant by
RMC and paid to advocate approval of the regional desalination project and the RDP Agreements
11.
The Agency retained the law firm of Remcho, Johansen & Purcell to investigate the
matter. In a report released in June, 2011 (the "Remcho Report"), the firm concluded Collins had
12.
MCWD retained the law firm of Richards, Watson & Gershon to investigate the
10
matter. In a report signed by James Markman and released in July, 2011 (the "Markman Report"),
11
that firm also concluded Collins had violated Government Code section 1090. The Markman Report
12
reached the additional conclusion the RDP Agreements were not void, despite Collins' violation of
13
section 1090.
14
13.
Thereafter, in letters dated July 7, 2011, July 20, 2011 and August 22,2011 and in
15
other public statements, the Agency announced the RDP Agreements were void as a result of
16
Collins' conduct.
17
14.
18
obtained approval from the CPUC to pursue an alternative project for development of the necessary.
19
20
15.
The parties spent several months trying to mediate a resolution to their claims against
21
each other over the failed regional desalination project. Although Cal-Am and the Agency were able
22
to negotiate a settlement with each other, no settlement was reached with MCWD. MCWD
23
continued to assert that the RDP Agreements were valid and enforceable and that the regional
24
desalination project should be developed, constructed and operated despite the corruption that
25
26
16.
This action was commenced on October 4, 2012 when Cal-Am filed its complaint for
27
declaratory relief. Although Cal-Am did not, at that time, take a position whether the RDP
28
Agreements were void or valid, it acknowledged the controversy between the Agency and MCWD
lo...- Ol!ices oi
-4IIIMarkAWasser-----------CR_O_S_S--C-=O:!:M_P_L_A_JN-T-------------l:UIIIIIi
in that regard and requested a determination from the Court as to whether the RDP Agreements are
void or valid.
17.
MCWD answered Cal-Am's complaint for declaratory relief and filed a cross-
complaint on November 19,2012. In its cross-complaint, MCWD admitted Collins had been
retained as a paid consultant by RMC while he served as a member of the Agency's appointed board
of directors, that he participated in obtaining approval of the regional desalination project and that
MCWD alleges that, despite Collins' conduct, the RDP Agreements are still valid
because they were approved by the CPUC and can no longer be challenged and, also, because they
10
are "contracts" within the meaning of the Government Code section 53511, Water Code section
11
30066 and section 52-39 of the Agency Act and are subject to the 60-day statute oflimitations in
12
13
14
25,2014 this Court issued its Order denying MCWD's motion for summary judgment on its cross-
IS
complaint and ruling judicial challenge to the RDP Agreements is not barred as a result of their
16
17
18
20.
Agency Act and that Cal-Am is, thereby, barred from challenging the RDP Agreements.
21.
19
20
The Court found the RDP Agreements have been validated by section 52-39 of the
The Court also found the Agency is not barred from challenging the RDP
Agreements.
21
22.
An actual controversy has arisen and presently exists between the parties in that the
22
Agency contends the RDP Agreements are void as a result of Collins' conduct and financial interest
23
in the RDP Agreements, whereas MCWD disagrees and contends the RDP Agreements are valid.
24
25
23.
26
27
The Agency requests a declaration of the parties' rights and duties with respect to the
24.
28
25.
The controversy alleged herein affects the parties' substantial rights as well as the
\aw Oi!ices of
-5IIMarkA.Wasser-----------;:;CR;;;:-O;;::S::;:S;-:-C:;:OO-:M-;:P::;:L-;A-;:INC::T:;--------------IIIII II II
substantial public interest in the integrity of government and the honesty of public officials. Its
prompt resolution is in the best interests of the parties and the public.
WHEREFORE, the Agency prays for a declaratory judgment determining the parties' rights
and duties with respect to the RDP Agreements and declaring the RDP Agreements void, awarding
the Agency its reasonable attorney's fees and costs and providing such other relief as this Court
deems just.
By:
10
11
12
13
NO VERIFICATION REQUIRED
14
Code of Civil Procedure 446
15
16
17
18
19
20
21
22
23
24
25
26
27
28
-6-
lew OUice> ol
IIMarkA.Wasser----------C:;:::R;:cO;:cS::-;::S-;-C::':'O":;M-;:P::"L--cA-;:lN-;:T;:---------------
PROOF OF SERVICE
2
3
4
6
7
[ ]
8
9
VIA FEDERAL EXPRESS: I caused each such envelope to be delivered via Federal
Express overnight service to the address listed below; and/or
VIA FACSIMILE: I caused each such document to be sent by facsimile machine number
(916) 444-6405 to the following persons or their representative at the address and the
facsimile number listed below by Amy Remly; and/or
10
11
12
13
14
VIA EMAIL: I caused each such document to be sent by electronic mail to the email
address listed below:
[X]
15
16
BY U.S. MAIL: I placed such sealed envelope, with postage thereon fully prepaid for
first-class mail, for collection and mailing at Law Offices of Mark A Wasser,
17
18
Robert Moore
Allen Matkins LLP
Three Embarcadero Center, 12th Floor
San Francisco, California 94111
Email: rmoore@allenmatkins.com
19
20
James L. Markman
B. Tilden Kim
Richards, Watson & Gershon
355 South Grand Avenue, 40th Floor
Los Angeles, California 90071
Email: jmarkman@rwglaw.com
Email: tkim(a)rwglaw.com
21
Mark Fogelman
Friedman Springwater LLP
33 New Montgomery Street, Suite 290
San Francisco, California 941 05
Email: mfogelman@friedmanspring.com
22
23
24
2S
,. " )
/) .
I declare under penalty of perjury that the foregoing is true and correct. Executed at
Sacramento, California, on April 16, 2014.
~~Y'vT \UJ~~v\ ,
26
27
Amy Rem1y
~-\
'(
28
-1-
caw Office of
~~~A.~-------------------P~R~O~O~F~O~F~S=E=R~V~IC=E~--------------------------