Preview
[Exempt From Filing Fee
Government Code § 6108]
Ryan S. Bezerra, #178048
AndrewJ. Ramos, #267313
BrittanyN. Brace, #825670
Bartkiewicz Kronick & Shanahan
A Professional Corporation
1011 Twenty-Second
atoms Soe 95816-4907
‘Telephone: (916) 446-4254
Facsimile: (916) 446-4018
E- com E-FILED
9/25/2020 5:58 PM
McComnick, Barstow, Sheppard, Superior Court of California
Wayte & Camuth LLP County of Fresno
ChnistopherS. Hall, #203901 By: K. Daves, Deputy
christo hall@mccormickbarstow.com
Ben Nicholson, #239893
bennicholson@mocormickbarstow.com
7647 North Fresno Street
10 Fresno, Califomia 93720
Telephone: (559) 433-1300
11 Facsimile: (559) 433-2300
12 Attomeys for Plaintiff JAMES IRRIGATION
DISTRI!
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SUPERIOR COURT OF THE STATE OF CALIFORNIA
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COUNTY OF FRESNO
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JAMES IRRIGATION DISTRICT, Case No. 19CECG00769
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Plaintiff, REQUEST FOR JUDICIAL NOTICE IN
18 SUPPORT OF MOTION FOR LEAVE TO
Vv. FILE A FIRST AMENDED COMPLAINT
19 AND MOTION TO BIFURCATE
KINGS RIVER WATER ASSOCIATION;
20 STEVE HAUGEN, solely in his official
River Water Master, Judge: Hon. Kristi Culver Kapetan
21 BURRELL DITCH COMPANY; October 21, 2020
LOVELACE WATER CORPORATION (fka Time: 3:30 p.m.
22 CIRCLE “L” FARMS); CLARK’S FORK Dept. 403
RECLAMATION DISTRICT NO. 2069;
23 TULARE LAKE RECLAMATION
DISTRICT NO. 761 (aka COHN CENTRAL for All Purposes to:
24. CONSOLIDATED DISTRICT NO. 761) Hon. Kristi Culver Kapetan
CORCORAN IRRIGATION COMPANY,
25 CRESCENT CANAL COMPANY ; EMPIRE
WEST SIDE IRRIGATION DISTRICT;
26 OHN HEINLEN MUTUAL WATER
COMPANY; LAGUNA IRRIGATION Action Filed: = March 1, 2019
27 DISTRICT; LAST CHANCE WATER Trial Date: December 7, 2020
DITCH COMPANY ; LEMOORE CANAL &
28 IRRIGATION COMPANY ; LIBERTY
CANAL COMPANY; LIBERTY MILL
MCCORMICK, BARSTOW,
‘SHEPPARD, WAYTE &
CARRUTH LLP. REQUEST FOR JUDICIAL NOTICE IN SUPPORT OF MOTION FOR LEAVE TO FILE A FIRST AMENDED
76ST NORTH FRESNO STREET
-RESNO, CA93720, COMPLAINT AND MOTION TO BIFURCATE
RACE COMPANY ; PEOPLES DITCH
COMPANY ; REED DITCH COMPANY ;
RIVERDALE IRRIGATION DISTRICT;
SOUTHEAST LAKE WATER COMPANY;
STINSON CANAL & IRRIGATION
COMPANY ; STRATFORD IRRIGATION
DISTRICT; TRANQUILLITY IRRIGATION
DISTRICT; TULARE LAKE BASIN
WATER STORAGE DISTRICT; TULARE
LAKE CANAL COMPANY; UPPER SAN
JOSE WATER COMPANY ; and DOES 1 to
100, inclusive,
Defendants.
TO ALL PARTIES AND TO THEIR ATTORNEYS OF RECORD HEREIN:
10 Plaintiff JAMES IRRIGATION DISTRICT (“JID” ”) requests that the Court take judicial
11 notice of the following documents pursuant to Califomia Evidence Code sections 452 and 453:
12 1 Plaintiffs Complaint, filed on March 1, 2019, a true and correct copy of which is
13 attached hereto as Exhibit “A.”
14 This Request For Judicial Notice is being submitted in support of JID’s Motion to Amend
15 Complaint and Motion to Bifurcate.
16 Evidence Code Section 452(d) provides that judicial notice may be taken of the records of
17 any Court of the State of Califomia. (Evid. Code§ 452(d).) Evidence Code Section 453 provides
18 in pertinent part:
19 The trial court shall take judicial notice of any matter specified in
Section 452 if a party requests it and: (a) Gives each adverse party
20 sufficient notice of the request, through the pleadings or otherwise, to
enable such adverse party to prepare to meet the request; and (b)
21
Fumishes the court with sufficient information to enable it to take
22 judicial notice of the matter.
23 The instant request is made with regard to specific records of a Court of this State—
24. specifically this tribunal. Judicial notice is proper.
25 //1
26 //1
27 //1
28 //1
McCormick, BARSTOW, 2
SHEPPARD, WAYTE &
CARRUTH LLP. REQUEST FOR JUDICIAL NOTICE IN SUPPORT OF MOTION FOR LEAVE TO FILE A FIRST AMENDED
76ST NORTH FRESNO STREET
FRESNO, cA 93720 COMPLAINT AND MOTION TO BIFURCATE
1| Dated: September
25, 2020 McCORMICK, BARSTOW, SHEPPARD,
WAYTE & CARRUTH LLP
2
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3
4 By:
Christopher S. Hall
Ben Nicholson
Attomeys for Plaintiff JAMES IRRIGATION
DISTRICT
037795-000000 7119514.1
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McCormick, BARSTOW, 3
SHEPPARD, WAYTE &
CARRUTH LLP. REQUEST FOR JUDICIAL NOTICE IN SUPPORT OF MOTION FOR LEAVE TO FILE A FIRST AMENDED
76ST NORTH FRESNO STREET
FRESNO, cA 93720 COMPLAINT AND MOTION TO BIFURCATE
EXHIBIT “A”
Ryan S. Bezerra, State Bar No. 178048 E-FILED
Andrew J. Ramos, State Bar No. 267313 3/1/2019 3:50 PM
Patrick K. Fitzgerald, State Bar No. 295257
Bartkiewicz Kronick & Shanahan FRESNO COUNTY SUPERIOR COURT
A Professional Corporation By: A. Rodriguez, Deputy
1011 Twenty-Second Street
Sacramento, California 95816-4907
Telephone: (916) 446-4254
Facsimile: (916) 446-4018
E-Mail: rsb@bkslawfirm.com
Christopher S. Hall, State Bar No. 203901
Ben Nicholson, State Bar No. 239893
McCormick Barstow LLP
P.O. Box 28912
Fresno, CA 93729-8912
Telephone: (559) 433-1300
Fax: (559) 433-2300
10
11
Attorneys for Plaintiff
12 JAMES IRRIGATION DISTRICT
Exempt from Filing Fees
13 Gov. Code, § 6103
as
Be
is 14 SUPERIOR COURT FOR THE STATE OF CALIFORNIA
1S COUNTY OF FRESNO
é
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19CECG00769
17 JAMES IRRIGATION DISTRICT, Case No.
18 Plaintiff, VERIFIED COMPLAINT BY JAMES
IRRIGATION DISTRI
19 Vv.
20 KINGS RIVER WATER ASSOCIATION;
STEVE HAUGEN, solely in his official
21 capacity as Kings River Water Master;
BURRELL DITCH COMPANY; LOVELACE
22 WATER CORPORATION (fka CIRCLE “L”
FARMS); CLARK’S FORK RECLAMATION
23 DISTRICT NO, 2069; TULARE LAKE
RECLAMATION DISTRICT NO. 761 (aka
24 COHN CENTRAL CONSOLIDATED
DISTRICT NO. 761); CORCORAN
25 IRRIGATION COMPANY; CRESCENT
CANAL COMPANY; EMPIRE WEST SIDE
26 IRRIGATION DISTRICT; JOHN HEINLEN
MUTUAL WATER COMPANY; LAGUNA
27 IRRIGATION DISTRICT; LAST CHANCE
WATER DITCH COMPANY; LEMOORE
28 CANAL & IRRIGATION COMPANY;
LIBERTY CANAL COMPANY; LIBERTY
037795-000000 5760655.1 {00123982.1}
VERIFIED COMPLAINT BY JAMES IRRIGATION DISTRICT
MILL RACE COMPANY; PEOPLES DITCH
COMPANY; REED DITCH COMPANY;
RIVERDALE IRRIGATION DISTRICT;
SOUTHEAST LAKE WATER COMPANY;
STINSON CANAL & IRRIGATION
COMPANY; STRATFORD IRRIGATION
DISTRICT; TRANQUILLITY IRRIGATION
DISTRICT; TULARE LAKE BASIN WATER!
STORAGE DISTRICT; TULARE LAKE
CANAL COMPANY; UPPER SAN JOSE
WATER COMPANY; and DOES 1 to 100,
inclusive,
Defendants.
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037795-000000 $760655.1_ {00123982.1}
VERIFIED COMPLAINT BY JAMES IRRIGATION DISTRICT
INTRODUCTION
1 In 1963, twenty-four Kings River water users commonly referred to as the
Lower River Units, including plaintiff James Irrigation District (“JID”), signed an agreement
that, among other things, governs the calculation of compensation for so-called “conveyance
losses” (i.¢., losses associated with deliveries of the users’ respective Kings River water
supplies and the allocation and use of Kings River water stored by Pine Flat Dam among those
water users as compensation for those losses). Paragraph 10 and Exhibit A of that agreement,
referred to in this complaint as the 1963 Lower River Agreement, sets forth the required
method for calculating the compensation the Kings River water users, including JID, are to
10 receive for such conveyance losses.
11 2. For water year 2016-2017, the defendants breached the 1963 Lower River
12 Agreement by applying a method to calculate JID’s compensation for conveyance losses in a
13 manner that is different from and contrary to paragraph 10 and Exhibit A of that agreement. (In
xi 14 California, water year generally is the period from October 1 of one calendar year to September
os
15 30 of the next.) This breach of the agreement resulted in JID’s storage account in Pine Flat
16 storage being significantly smaller going forward from the water year 2016-2017 than the
17 storage balance to which JID is entitled under the terms of the 1963 Lower River Agreement.
18 At this time, JID believes, and alleges, that the shortage in its storage account resulting from
19 defendants’ breach of the 1963 Lower River Agreement was 4,205 acre-feet of water.
20 3 JID brings this action to obtain damages for this wrongful denial of water under
21 the 1963 Lower River Agreement and to confirm that the defendants are required to
22 compensate JID for losses associated with its use of its Kings River water supplies according to
23 paragraph 10 and Exhibit A in the future or, alternatively, for the Court to impose on the
24 defendants a physical solution pursuant to Article X, section two, of the California Constitution
25 that sufficiently compensates JID for losses associated with its use of its Kings River supplies
26 in a manner other than that required by the strict terms of the 1963 Lower River Agreement.
27
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037795-000000 5760655.1 {00123982.1} 1
VERIFIED COMPLAINT BY JAMES IRRIGATION DISTRICT
PARTIES
4. JID is a California public agency organized under the Irrigation District Law,
Water Code sections 20500 to 29978. JID diverts Kings River water for agricultural uses on
approximately 23,000 acres in western Fresno County near the cities of Mendota and San
Joaquin.
5 Defendant Kings River Water Association (“KRWA”) is an unincorporated
association formed in 1927 by twenty-eight public and private water users who divert water
from the Kings River. JID names KRWA as a defendant in this action as authorized by Code
of Civil Procedure section 369.5, subdivision (a).
10 6. Defendant Steve Haugen is an individual and is the current Kings River Water
11 Master (“Water Master”) appointed by the KRWA Board of Directors. Mr. Haugen is sued
fy
12 solely in his official capacity as the Water Master and as an agent or employee of KRWA and
13 the Lower River Units other than JID. JID does not seek monetary damages from the Water
14 Master personally.
The Lower River Units are KRWA members and are all of the public entities
zNE 15 7.
16 and private corporations and individuals, except JID, who are the signatories to the 1963 Lower
17 River Agreement or their successors in interest (collectively, the “Defendant Units”): Burrell
18 Ditch Company; Lovelace Water Corporation (fka Circle “L” Farms); Clark’s Fork
19 Reclamation District No. 2069; Tulare Lake Reclamation District No. 761 (aka Cohn Central
20 Consolidated District No. 761); Corcoran Irrigation Company; Crescent Canal Company;
21 Empire West Side Irrigation District; John Heinlen Mutual Water Company; Laguna Irrigation
22 District; Last Chance Water Ditch Company; Lemoore Canal & Irrigation Company; Liberty
23 Canal Company; Liberty Mill Race Company; Peoples Ditch Company; Reed Ditch Company;
24 Riverdale Irrigation District; Southeast Lake Water Company; Stinson Canal & Irrigation
25 Company; Stratford Irrigation District; Tranquillity Irrigation District, Tulare Lake Basin
26 Water Storage District; Tulare Lake Canal Company; and Upper San Jose Water Company.
27 8. Defendants Does 1 to 100, inclusive, may have, or claim to have, interests in the
28 subject matter of this litigation, the exact nature of which are unknown to JID. The true names
037795-000000 $760655.1 {00123982.1} 2
VERIFIED COMPLAINT BY JAMES IRRIGATION DISTRICT
or capacities of Does 1 to 100, inclusive, are unknown to JID, who therefore sues these parties
by fictitious names.
VENUE
9, Venue for this matter is proper in Fresno County Superior Court under Code of
Civil Procedure sections 395(a), 395.2 and 395.5 because Fresno County is the county where:
(1) the defendants or some of them reside; (2) the defendants or some of them have their
principal place of business; and (3) the 1963 Lower River Agreement, or part of it, was to be
performed.
FACTUAL ALLEGATIONS
10 10. In 1927, numerous diverters from the Kings River who would become the initial
11 KRWA members signed an Administrative Agreement dated May 3, 1927 to, among other
12 things, create the KRWA to control and supervise the waters of the Kings River.
13 i. In 1963, the KRWA members executed the “1963 Intra-Association
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3E 14 Agreement,” which was formally called the Agreement Supplementing and Amending Water
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15 Right Indenture Dated May 3, 1927, and Administrative Agreement Dated May 3, 1927, Each
a 72
ge 16 as Amended and Supplemented June 1, 1949, Relating to Kings River Water Association dated
17 September 10, 1963. A true and correct copy of the 1963 Intra-Association Agreement is
18 attached here to as Exhibit A.
19 12. In paragraph 43 of the 1963 Intra-Association Agreement, the KRWA members
20 agreed that KRWA and the Water Master would administer the diversion into storage,
21 regulation and releases of waters of the Kings River that flow into Pine Flat Reservoir in a
22 manner consistent with the agreements between KRWA’s members.
23 13. Concurrent with execution of the 1963 Intra-Association Agreement, JID and
24 the Defendant Units executed the 1963 Lower River Agreement, which is formally called the
25 Amended and Restated Agreement Among Lower River Units of Kings River Water
26 Association for Operations Under Storage Conditions dated September 10, 1963. A true and
27 correct copy of the agreement is attached to this complaint as Exhibit B.
28
037795-000000 5760655.1 {00123982.1} 3
VERIFIED COMPLAINT BY JAMES IRRIGATION DISTRICT
14, Paragraph 5 of the 1963 Lower River Agreement provides that Water Master
and the Defendant Units are bound by the terms of the 1963 Lower River Agreement for the
allocation and manner of use of water of stored water in Pine Flat Reservoir.
15. Paragraph 10 of the 1963 Lower River Agreement provides the sole and
mandatory method for KRWA to allocate water stored by Pine Flat Dam to compensate for and
alleviate river channel losses that result from delivering water to JID and the Defendant Units.
16. Paragraph 14 of the 1963 Lower River Agreement directs the Water Master to
administer the 1963 Lower River Agreement and to regulate the waters of the Kings River in
accordance with the terms and provisions of the 1963 Lower River Agreement.
10 17. Pursuant to the 1963 Lower River Agreement and other agreements conceming
11 the Kings River, for many years and depending on hydrologic conditions, JID allowed the
a 12 Defendant Units to use some or all of JID’s Kings River water rights and supplies in exchange
Zz
#3 13 for financing for water delivered to JID from the Sacramento-San Joaquin Delta through the
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14 Delta-Mendota Canal. JID’s supplies from the Delta have become steadily more constrained
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Sa 15 over time as pumping from the Delta has become more constrained. As a result of this factor
BE 16 and others, on January 1, 2016, JID reassumed full possession and use of its Kings River water
17 rights and supplies. The 2016-17 water year was the first time since 1963 that JID had
18 exercised full control of those rights and supplies itself.
19 18, Paragraph 16 of the 1963 Lower River Agreement provides that, if JID and
20 Tranquillity Irrigation District exercise their rights to Kings River water, then those entities and
21 the Defendant Units will negotiate terms to equitably compensate JID and Tranquillity
22 Irrigation District for river channel losses that result from delivering water to them. JID and
23 the Defendant Units are currently undertaking such negotiations, and, while such negotiations
24 are pending, have agreed that the terms of the 1963 Lower River Agreement apply.
25 19, Since 1963, JID and the Defendant Units have amended the 1963 Lower River
26 Agreement, but those amendments have not altered the significant rights and obligations
27 described in this complaint.
28
037795-000000 5760655.1 {00123982.1} 4
VERIFIED COMPLAINT BY JAMES IRRIGATION DISTRICT
20. In the Water Master’s accounting for the 2016-17 water year, he determined that
there was insufficient water in available storage behind Pine Flat Dam to fully compensate JID
and the Defendant Units for the losses associated with the delivery of their Kings River water
supplies in that water year. The 1963 Lower River Agreement does not refer to or create any
method for allocating stored water behind Pine Flat Dam to compensate parties to that
agreement for the losses associated with their use of their Kings River supplies, other than
those mandatory methods stated and described in that agreement’s paragraph 10 and its Exhibit
A. However, the Water Master applied an unauthorized and improper method to compensate
JID and Defendant Units for losses, which resulted in damages to JID.
10
FIRST CLAIM FOR RELIEF
11 Breach of the 1963 Lower River Agreement Against All Defendants, except Tranquillity
Irrigation District
i. 12
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21. JID realleges and incorporates herein, as if set forth in full, each and every
allegation contained in paragraphs | through 20, inclusive, of this complaint and further alleges
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Se as follows.
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22. JID, the Defendant Units and Does 1 to 100, inclusive, are signatories to the
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Ee 1963 Lower River Agreement or their successors in interest.
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23. Under the 1963 Intra-Association Agreement and the 1963 Lower River
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Agreement, JID and the Defendant Units intended that KRWA and the Water Master would be
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legally bound by the terms of the 1963 Lower River Agreement. Through their conduct and the
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1963 Intra-Association Agreement and the 1963 Lower River Agreement, KRWA and the
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Water Master agreed to be legally bound by the 1963 Lower River Agreement.
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24, JID did all, or substantially all, of the significant things that all applicable
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agreements required JID to do.
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25. Tranquillity Irrigation District is not named as a party to this cause of action
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because that district did not exercise its Kings River water rights, or otherwise take delivery of
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Kings River water, in the water year 2016-2017 and therefore was neither harmed nor benefited
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by the defendants’ conduct that is the basis of this claim for relief.
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037795-000000 5760655.1 {00123982.1} 5
VERIFIED COMPLAINT BY JAMES IRRIGATION DISTRICT
26, At all relevant times, KRWA and the Water Master were acting as the
authorized agents for, or on behalf of, the Defendant Units, and the Defendant Units, except
Tranquillity Irrigation District, authorized, directed, approved of, or adopted the actions of
KRWA and the Water Master.
27. The Defendant Units, except Tranquillity Irrigation District, by and through
their own actions and the actions of KRWA and the Water Master, breached paragraphs 5 and
10, Exhibit A and other provisions of the 1963 Lower River Agreement by: (1) applying,
allowing and failing to prevent the use by KRWA and the Water Master of an unauthorized and
incorrect method for allocating compensation from water stored by Pine Flat Dam; (2) failing
10 to keep proper records to support the water allocation decisions by KRWA and the Water
i Master; and (3) accepting the benefits of the unauthorized and improper allocation of stored
12 water by KRWA and the Water Master.
Zz 28. JID was harmed by these breaches of the 1963 Lower River Agreement, and that
28 13
14 harm was a substantial factor causing damages to JID in an amount to be proven at trial.
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15 29, To the extent JID was required to present a claim under the Government Claims
16 Act (Government Code sections 900 to 935.9) or any other applicable law before filing this
17 complaint, JID complied with that requirement by presenting a timely, written claim to the
18 Defendant Units that are public agencies.
19 SECOND CLAIM FOR RELIEF
Breach of the Implied Covenant of Good Faith And Fair Dealing With Respect To The
20 1963 Lower River Agreement Against All Defendants, except Tranquillity Irrigation
District
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30. JID realleges and incorporates herein, as if set forth in full, each and every
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allegation contained in paragraphs 1 through 29, inclusive, of this complaint and further alleges
23
as follows.
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31. JID, the Defendant Units and Does 1 to 100, inclusive, are signatories to the
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1963 Lower River Agreement or their successors in interest.
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32. Under the 1963 Intra-Association Agreement and the 1963 Lower River
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Agreement, JID and the Defendant Units intended that KRWA and the Water Master would be
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legally bound by the terms of the 1963 Lower River Agreement. Through their conduct and the
037795-000000 5760655.1 {00123982.1} 6
VERIFIED COMPLAINT BY JAMES IRRIGATION DISTRICT
1963 Intra-Association Agreement and the 1963 Lower River Agreement, KRWA and the
Water Master agreed to be legally bound by the 1963 Lower River Agreement.
33, Expressed and implied in the 1963 Lower River Agreement was and is a
covenant of good faith and fair dealing wherein KRWA, the Water Master and the Defendant
Units covenanted that they would, in good faith and in the exercise of fair dealing, deal with
JID fairly and honestly. The expressed and implied covenant requires, among other things, that
KRWA, the Water Master and the Defendant Units do nothing to impair, interfere with, hinder,
or potentially injure the rights of JID to receive the benefits of the 1963 Lower River
Agreement.
10 34. JID did all, or substantially all, of the significant things that all applicable
il agreements required JID to do.
5 12 35. Tranquillity Irrigation District is not named as a party to this cause of action
13 because that district did not exercise its Kings River water rights, or otherwise take delivery of
we 14 Kings River water, in the water year 2016-2017 and therefore was neither harmed nor benefited
oF
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15 hy the defendants’ conduct that is the basis of this claim for relief.
v2 At all relevant times, KRWA and the Water Master were acting as the
16 36.
17 authorized agents for, or on behalf of, the Defendant Units, and the Defendant Units, except
18 Tranquillity Irrigation District, authorized, directed, approved of, or adopted the actions of
19 KRWA and the Water Master.
20 37. By allowing and not seeking to prevent, and by accepting the benefits of, the
21 Water Master’s improper allocation of water stored by Pine Flat Dam according, KRWA and
22 the Defendant Units, except Tranquillity Irrigation District, breached the implied duty of good
23 faith and fair dealing by acting in a manner that denied JID the benefits of that stored water as
24 it would have been allocated under paragraph 10 and Exhibit A of the 1963 Lower River
25 Agreement.
26 38. KRWA and the Water Master breached the implied duty of good faith and fair
27 dealing by allocating water in a manner other than that required by the 1963 Lower River
28 Agreement that resulted in JID receiving compensation from water stored by Pine Flat Dam at
037795-000000 5760655.1 {00123982.1} 7
VERIFIED COMPLAINT BY JAMES IRRIGATION DISTRICT
a much lower percentage of its losses in the 2016-17 water year than dictated by that
agreement, while simultaneously compensating certain Defendant Units at a higher percentage
of their losses than dictated by that agreement.
39. JID was harmed by these breaches of the implied covenants contained within the
1963 Lower River Agreement, and that harm was a substantial factor causing damages to JID
in an amount to be proven at trial.
40. To the extent JID was required to present a claim under the Government Claims
Act (Government Code sections 900 to 935.9) or any other applicable law before filing this
complaint, JID complied with that requirement by presenting a timely, written claim to the
10 Defendant Units that are public agencies.
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THIRD CLAIM FOR RELIEF
i 12
13 41,
Breach of Fiduciary Duty Against KRWA and the Water Master
JID realleges and incorporates herein, as if set forth in full, each and every
14 allegation contained in paragraphs 1 through 40, inclusive, of this complaint and further alleges
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15 as follows.
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Se 16 42. KRWA and the Water Master agreed to act as trustees to administer and hold
17 appropriative water rights known as water-right Licenses Numbers 11517 through 11522 (the
18 “Trustee Water Rights”) on behalf of the KRWA member units, including JID, as beneficiaries.
19 KRWA and the Water Master acted on behalf of the KRWA member units for the purposes of
20 administering the Trustee Water Rights for the 2016-2017 water year.
21 43. The 1963 Intra-Association Agreement, the 1963 Lower River Agreement and
22 other agreements entered into by the KRWA member units create an affirmative duty on the
23 part of the KRWA and the Water Master to protect individual KRWA members, those
24 members’ water rights, and their rights under the various KRWA agreements.
25 44. In performing the actions and accepting the duties described in paragraphs 42
26 and 43, KRWA and the Water Master owed fiduciary duties to the KRWA member units,
27 including JID.
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037795-000000 5760655.1 {00123982.1} 8
VERIFIED COMPLAINT BY JAMES IRRIGATION DISTRICT
45. KRWA and the Water Master breached their fiduciary duties by: (1) applying,
allowing and failing to prevent the use by KRWA and the Water Master of an unauthorized and
incorrect method for allocating compensation from water stored by Pine Flat Dam; and (2)
failing to keep proper records to support the water allocation decisions by KRWA and the
Water Master
46. In taking the actions described in this cause of action, KRWA and the Water
Master acted arbitrarily and capriciously, and breached its duties of loyalty, impartiality, and
accounting to JID.
47. JID was harmed by these breaches of duty, and that harm was a substantial
10 factor causing damages to JID in an amount to be proven at trial.
11
FOURTH CLAIM FOR RELIEF
i 12
13 48.
Declaratory Relief Against All Defendants
JID realleges and incorporates herein, as if set forth in full, each and every
as
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14 allegation contained in paragraphs | through 47, inclusive, of this complaint and further alleges
15 as follows.
Nz 16 49, There exist one or more actual controversies related to the legal rights and duties
17 of JID, KRWA, the Water Master, the Defendant Units and Does 1 to 100, inclusive, under the
18 1963 Lower River Agreement.
19 50. JID contends that the express and implied terms of the 1963 Lower River
20 Agreement, and the fiduciary duties owed by KRWA and the Water Master to the KRWA
21 member units, require KRWA, the Water Master, the Defendant Units and Does 1 to 100,
22 inclusive, to apply paragraph 10 and Exhibit A of the 1963 Agreement to calculate the
23 Defendant Units’ conveyance losses and related compensation for the 2016-2017 water year
24 and in future years.
25 St. KRWA, the Water Master, the Defendant Units and Does 1 to 100, inclusive,
26 dispute JID’s contentions described in the preceding paragraph of this complaint.
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037795-000000 5760655.1 {00123982.1} 9
VERIFIED COMPLAINT BY JAMES IRRIGATION DISTRICT
FIFTH CLAIM FOR RELIEF
Imposition of Physical Solution Against All Defendants
52. JID realleges and incorporates herein, as if set forth in full, each and every
allegation contained in paragraphs 1 through 51, inclusive, of this complaint and further alleges
as follows.
53. Article X, section two, of the California Constitution (“Article X, section two”)
states, in relevant part, “The right to water or to the use or flow of water in or from any natural
stream or water course in this State is and shall be limited to such water as shall be reasonably
required for the beneficial use to be served, and such right does not and shall not extend to the
10 waste or unreasonable use or unreasonable method of use or unreasonable method of diversion
11 of water.”
12 34. The California courts have interpreted Article X, section two, to authorize and
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13 require the courts to consider and adopt, in some circumstances, methods of allocating
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14 available water in ways that may differ from the allocations that may be strictly required by the
15 affected parties’ respective legal rights, while still protecting the injured party’s water supplies.
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16 (See City of Lodi v. East Bay Mun. Utility Dist. (1936) 7 Cal.2d 316.)
17 55. To the extent necessary to comply with Article X, section two’s constitutional
18 mandates, the Court should impose on KRWA, the Water Master and the Defendant Units a
19 judgment that reasonably allocates available water stored by Pine Flat Dam while protecting
20 JID’s water supplies under the 1963 Lower River Agreement.
21 PRAYER FOR RELIEF
22 JID prays for relief as follows:
23 1 For damages awarded jointly and severally against all defendants, other than the
24 Water Master personally and Tranquillity Irrigation District, in an amount to be proven at trial.
25 2. For a judgment and order determining and declaring that the 1963 Lower River
26 Agreement requires all defendants to apply paragraph 10 of the 1963 Agreement to calculate
27 the Defendant Units’ conveyance losses and related compensation for the 2016-2017 water year
28 and in future years.
037795-000000 $760655.1 {00123982.1) 10
VERIFIED COMPLAINT BY JAMES IRRIGATION DISTRICT
3 For a judgment and order enjoining KRWA and the Water Master from
committing further breaches of their duties to JID.
4. To the extent necessary under Article X, section two, of the California
Constitution, for imposition of a physical solution that reasonably allocates available water
stored by Pine Flat Dam while protecting JID’s water supplies under the 1963 Lower River
Agreement.
5 For costs of suit.
6. For such other and further relief as the Court may deem proper.
Dated: February, 2019 Respectfully submitted,
10 BARTKIE) WICZ, KRONICK & SHANAHAN
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037795-000000 5760655.1_(00123982.1} 1
VERIFIED COMPLAINT BY JAMES IRRIGATION DISTRICT
VERIFICATION
I, Steven Stadler, declare as follows:
1 I am General Manager for James Irrigation District, the plaintiff in the above-
entitled matter,
2. I have read the foregoing VERIFIED COMPLAINT BY JAMES
IRRIGATION DISTRICT and know its contents. The same is true to my knowledge, except
to those maters stated upon information and belief, and as to those matters I believe them to be
true.
I declare under penalty of perjury under the laws of the State of California that the
10 foregoing is true and correct.
Il Executed at San Joaquin, California, on February 25, 2019.
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037795-000000 $760655.1 (00123982.1} 12
VERIFIED COMPLAINT BY JAMES IRRIGATION DISTRICT
Preview
[Exempt From Filing Fee Government Code § 6108] Ryan S. Bezerra, #178048 AndrewJ. Ramos, #267313 BrittanyN. Brace, #825670 Bartkiewicz Kronick & Shanahan A Professional Corporation 1011 Twenty-Second atoms Soe 95816-4907 ‘Telephone: (916) 446-4254 Facsimile: (916) 446-4018 E- com E-FILED 9/25/2020 5:58 PM McComnick, Barstow, Sheppard, Superior Court of California Wayte & Camuth LLP County of Fresno ChnistopherS. Hall, #203901 By: K. Daves, Deputy christo hall@mccormickbarstow.com Ben Nicholson, #239893 bennicholson@mocormickbarstow.com 7647 North Fresno Street 10 Fresno, Califomia 93720 Telephone: (559) 433-1300 11 Facsimile: (559) 433-2300 12 Attomeys for Plaintiff JAMES IRRIGATION DISTRI! 13 SUPERIOR COURT OF THE STATE OF CALIFORNIA 14 COUNTY OF FRESNO 15 16 JAMES IRRIGATION DISTRICT, Case No. 19CECG00769 17 Plaintiff, REQUEST FOR JUDICIAL NOTICE IN 18 SUPPORT OF MOTION FOR LEAVE TO Vv. FILE A FIRST AMENDED COMPLAINT 19 AND MOTION TO BIFURCATE KINGS RIVER WATER ASSOCIATION; 20 STEVE HAUGEN, solely in his official River Water Master, Judge: Hon. Kristi Culver Kapetan 21 BURRELL DITCH COMPANY; October 21, 2020 LOVELACE WATER CORPORATION (fka Time: 3:30 p.m. 22 CIRCLE “L” FARMS); CLARK’S FORK Dept. 403 RECLAMATION DISTRICT NO. 2069; 23 TULARE LAKE RECLAMATION DISTRICT NO. 761 (aka COHN CENTRAL for All Purposes to: 24. CONSOLIDATED DISTRICT NO. 761) Hon. Kristi Culver Kapetan CORCORAN IRRIGATION COMPANY, 25 CRESCENT CANAL COMPANY ; EMPIRE WEST SIDE IRRIGATION DISTRICT; 26 OHN HEINLEN MUTUAL WATER COMPANY; LAGUNA IRRIGATION Action Filed: = March 1, 2019 27 DISTRICT; LAST CHANCE WATER Trial Date: December 7, 2020 DITCH COMPANY ; LEMOORE CANAL & 28 IRRIGATION COMPANY ; LIBERTY CANAL COMPANY; LIBERTY MILL MCCORMICK, BARSTOW, ‘SHEPPARD, WAYTE & CARRUTH LLP. REQUEST FOR JUDICIAL NOTICE IN SUPPORT OF MOTION FOR LEAVE TO FILE A FIRST AMENDED 76ST NORTH FRESNO STREET -RESNO, CA93720, COMPLAINT AND MOTION TO BIFURCATE RACE COMPANY ; PEOPLES DITCH COMPANY ; REED DITCH COMPANY ; RIVERDALE IRRIGATION DISTRICT; SOUTHEAST LAKE WATER COMPANY; STINSON CANAL & IRRIGATION COMPANY ; STRATFORD IRRIGATION DISTRICT; TRANQUILLITY IRRIGATION DISTRICT; TULARE LAKE BASIN WATER STORAGE DISTRICT; TULARE LAKE CANAL COMPANY; UPPER SAN JOSE WATER COMPANY ; and DOES 1 to 100, inclusive, Defendants. TO ALL PARTIES AND TO THEIR ATTORNEYS OF RECORD HEREIN: 10 Plaintiff JAMES IRRIGATION DISTRICT (“JID” ”) requests that the Court take judicial 11 notice of the following documents pursuant to Califomia Evidence Code sections 452 and 453: 12 1 Plaintiffs Complaint, filed on March 1, 2019, a true and correct copy of which is 13 attached hereto as Exhibit “A.” 14 This Request For Judicial Notice is being submitted in support of JID’s Motion to Amend 15 Complaint and Motion to Bifurcate. 16 Evidence Code Section 452(d) provides that judicial notice may be taken of the records of 17 any Court of the State of Califomia. (Evid. Code§ 452(d).) Evidence Code Section 453 provides 18 in pertinent part: 19 The trial court shall take judicial notice of any matter specified in Section 452 if a party requests it and: (a) Gives each adverse party 20 sufficient notice of the request, through the pleadings or otherwise, to enable such adverse party to prepare to meet the request; and (b) 21 Fumishes the court with sufficient information to enable it to take 22 judicial notice of the matter. 23 The instant request is made with regard to specific records of a Court of this State— 24. specifically this tribunal. Judicial notice is proper. 25 //1 26 //1 27 //1 28 //1 McCormick, BARSTOW, 2 SHEPPARD, WAYTE & CARRUTH LLP. REQUEST FOR JUDICIAL NOTICE IN SUPPORT OF MOTION FOR LEAVE TO FILE A FIRST AMENDED 76ST NORTH FRESNO STREET FRESNO, cA 93720 COMPLAINT AND MOTION TO BIFURCATE 1| Dated: September 25, 2020 McCORMICK, BARSTOW, SHEPPARD, WAYTE & CARRUTH LLP 2 . 3 4 By: Christopher S. Hall Ben Nicholson Attomeys for Plaintiff JAMES IRRIGATION DISTRICT 037795-000000 7119514.1 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24. 25 26 27 28 McCormick, BARSTOW, 3 SHEPPARD, WAYTE & CARRUTH LLP. REQUEST FOR JUDICIAL NOTICE IN SUPPORT OF MOTION FOR LEAVE TO FILE A FIRST AMENDED 76ST NORTH FRESNO STREET FRESNO, cA 93720 COMPLAINT AND MOTION TO BIFURCATE EXHIBIT “A” Ryan S. Bezerra, State Bar No. 178048 E-FILED Andrew J. Ramos, State Bar No. 267313 3/1/2019 3:50 PM Patrick K. Fitzgerald, State Bar No. 295257 Bartkiewicz Kronick & Shanahan FRESNO COUNTY SUPERIOR COURT A Professional Corporation By: A. Rodriguez, Deputy 1011 Twenty-Second Street Sacramento, California 95816-4907 Telephone: (916) 446-4254 Facsimile: (916) 446-4018 E-Mail: rsb@bkslawfirm.com Christopher S. Hall, State Bar No. 203901 Ben Nicholson, State Bar No. 239893 McCormick Barstow LLP P.O. Box 28912 Fresno, CA 93729-8912 Telephone: (559) 433-1300 Fax: (559) 433-2300 10 11 Attorneys for Plaintiff 12 JAMES IRRIGATION DISTRICT Exempt from Filing Fees 13 Gov. Code, § 6103 as Be is 14 SUPERIOR COURT FOR THE STATE OF CALIFORNIA 1S COUNTY OF FRESNO é SE 16 19CECG00769 17 JAMES IRRIGATION DISTRICT, Case No. 18 Plaintiff, VERIFIED COMPLAINT BY JAMES IRRIGATION DISTRI 19 Vv. 20 KINGS RIVER WATER ASSOCIATION; STEVE HAUGEN, solely in his official 21 capacity as Kings River Water Master; BURRELL DITCH COMPANY; LOVELACE 22 WATER CORPORATION (fka CIRCLE “L” FARMS); CLARK’S FORK RECLAMATION 23 DISTRICT NO, 2069; TULARE LAKE RECLAMATION DISTRICT NO. 761 (aka 24 COHN CENTRAL CONSOLIDATED DISTRICT NO. 761); CORCORAN 25 IRRIGATION COMPANY; CRESCENT CANAL COMPANY; EMPIRE WEST SIDE 26 IRRIGATION DISTRICT; JOHN HEINLEN MUTUAL WATER COMPANY; LAGUNA 27 IRRIGATION DISTRICT; LAST CHANCE WATER DITCH COMPANY; LEMOORE 28 CANAL & IRRIGATION COMPANY; LIBERTY CANAL COMPANY; LIBERTY 037795-000000 5760655.1 {00123982.1} VERIFIED COMPLAINT BY JAMES IRRIGATION DISTRICT MILL RACE COMPANY; PEOPLES DITCH COMPANY; REED DITCH COMPANY; RIVERDALE IRRIGATION DISTRICT; SOUTHEAST LAKE WATER COMPANY; STINSON CANAL & IRRIGATION COMPANY; STRATFORD IRRIGATION DISTRICT; TRANQUILLITY IRRIGATION DISTRICT; TULARE LAKE BASIN WATER! STORAGE DISTRICT; TULARE LAKE CANAL COMPANY; UPPER SAN JOSE WATER COMPANY; and DOES 1 to 100, inclusive, Defendants. 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 037795-000000 $760655.1_ {00123982.1} VERIFIED COMPLAINT BY JAMES IRRIGATION DISTRICT INTRODUCTION 1 In 1963, twenty-four Kings River water users commonly referred to as the Lower River Units, including plaintiff James Irrigation District (“JID”), signed an agreement that, among other things, governs the calculation of compensation for so-called “conveyance losses” (i.¢., losses associated with deliveries of the users’ respective Kings River water supplies and the allocation and use of Kings River water stored by Pine Flat Dam among those water users as compensation for those losses). Paragraph 10 and Exhibit A of that agreement, referred to in this complaint as the 1963 Lower River Agreement, sets forth the required method for calculating the compensation the Kings River water users, including JID, are to 10 receive for such conveyance losses. 11 2. For water year 2016-2017, the defendants breached the 1963 Lower River 12 Agreement by applying a method to calculate JID’s compensation for conveyance losses in a 13 manner that is different from and contrary to paragraph 10 and Exhibit A of that agreement. (In xi 14 California, water year generally is the period from October 1 of one calendar year to September os 15 30 of the next.) This breach of the agreement resulted in JID’s storage account in Pine Flat 16 storage being significantly smaller going forward from the water year 2016-2017 than the 17 storage balance to which JID is entitled under the terms of the 1963 Lower River Agreement. 18 At this time, JID believes, and alleges, that the shortage in its storage account resulting from 19 defendants’ breach of the 1963 Lower River Agreement was 4,205 acre-feet of water. 20 3 JID brings this action to obtain damages for this wrongful denial of water under 21 the 1963 Lower River Agreement and to confirm that the defendants are required to 22 compensate JID for losses associated with its use of its Kings River water supplies according to 23 paragraph 10 and Exhibit A in the future or, alternatively, for the Court to impose on the 24 defendants a physical solution pursuant to Article X, section two, of the California Constitution 25 that sufficiently compensates JID for losses associated with its use of its Kings River supplies 26 in a manner other than that required by the strict terms of the 1963 Lower River Agreement. 27 28 037795-000000 5760655.1 {00123982.1} 1 VERIFIED COMPLAINT BY JAMES IRRIGATION DISTRICT PARTIES 4. JID is a California public agency organized under the Irrigation District Law, Water Code sections 20500 to 29978. JID diverts Kings River water for agricultural uses on approximately 23,000 acres in western Fresno County near the cities of Mendota and San Joaquin. 5 Defendant Kings River Water Association (“KRWA”) is an unincorporated association formed in 1927 by twenty-eight public and private water users who divert water from the Kings River. JID names KRWA as a defendant in this action as authorized by Code of Civil Procedure section 369.5, subdivision (a). 10 6. Defendant Steve Haugen is an individual and is the current Kings River Water 11 Master (“Water Master”) appointed by the KRWA Board of Directors. Mr. Haugen is sued fy 12 solely in his official capacity as the Water Master and as an agent or employee of KRWA and 13 the Lower River Units other than JID. JID does not seek monetary damages from the Water 14 Master personally. The Lower River Units are KRWA members and are all of the public entities zNE 15 7. 16 and private corporations and individuals, except JID, who are the signatories to the 1963 Lower 17 River Agreement or their successors in interest (collectively, the “Defendant Units”): Burrell 18 Ditch Company; Lovelace Water Corporation (fka Circle “L” Farms); Clark’s Fork 19 Reclamation District No. 2069; Tulare Lake Reclamation District No. 761 (aka Cohn Central 20 Consolidated District No. 761); Corcoran Irrigation Company; Crescent Canal Company; 21 Empire West Side Irrigation District; John Heinlen Mutual Water Company; Laguna Irrigation 22 District; Last Chance Water Ditch Company; Lemoore Canal & Irrigation Company; Liberty 23 Canal Company; Liberty Mill Race Company; Peoples Ditch Company; Reed Ditch Company; 24 Riverdale Irrigation District; Southeast Lake Water Company; Stinson Canal & Irrigation 25 Company; Stratford Irrigation District; Tranquillity Irrigation District, Tulare Lake Basin 26 Water Storage District; Tulare Lake Canal Company; and Upper San Jose Water Company. 27 8. Defendants Does 1 to 100, inclusive, may have, or claim to have, interests in the 28 subject matter of this litigation, the exact nature of which are unknown to JID. The true names 037795-000000 $760655.1 {00123982.1} 2 VERIFIED COMPLAINT BY JAMES IRRIGATION DISTRICT or capacities of Does 1 to 100, inclusive, are unknown to JID, who therefore sues these parties by fictitious names. VENUE 9, Venue for this matter is proper in Fresno County Superior Court under Code of Civil Procedure sections 395(a), 395.2 and 395.5 because Fresno County is the county where: (1) the defendants or some of them reside; (2) the defendants or some of them have their principal place of business; and (3) the 1963 Lower River Agreement, or part of it, was to be performed. FACTUAL ALLEGATIONS 10 10. In 1927, numerous diverters from the Kings River who would become the initial 11 KRWA members signed an Administrative Agreement dated May 3, 1927 to, among other 12 things, create the KRWA to control and supervise the waters of the Kings River. 13 i. In 1963, the KRWA members executed the “1963 Intra-Association ag gk 3E 14 Agreement,” which was formally called the Agreement Supplementing and Amending Water Ss BS 6a 15 Right Indenture Dated May 3, 1927, and Administrative Agreement Dated May 3, 1927, Each a 72 ge 16 as Amended and Supplemented June 1, 1949, Relating to Kings River Water Association dated 17 September 10, 1963. A true and correct copy of the 1963 Intra-Association Agreement is 18 attached here to as Exhibit A. 19 12. In paragraph 43 of the 1963 Intra-Association Agreement, the KRWA members 20 agreed that KRWA and the Water Master would administer the diversion into storage, 21 regulation and releases of waters of the Kings River that flow into Pine Flat Reservoir in a 22 manner consistent with the agreements between KRWA’s members. 23 13. Concurrent with execution of the 1963 Intra-Association Agreement, JID and 24 the Defendant Units executed the 1963 Lower River Agreement, which is formally called the 25 Amended and Restated Agreement Among Lower River Units of Kings River Water 26 Association for Operations Under Storage Conditions dated September 10, 1963. A true and 27 correct copy of the agreement is attached to this complaint as Exhibit B. 28 037795-000000 5760655.1 {00123982.1} 3 VERIFIED COMPLAINT BY JAMES IRRIGATION DISTRICT 14, Paragraph 5 of the 1963 Lower River Agreement provides that Water Master and the Defendant Units are bound by the terms of the 1963 Lower River Agreement for the allocation and manner of use of water of stored water in Pine Flat Reservoir. 15. Paragraph 10 of the 1963 Lower River Agreement provides the sole and mandatory method for KRWA to allocate water stored by Pine Flat Dam to compensate for and alleviate river channel losses that result from delivering water to JID and the Defendant Units. 16. Paragraph 14 of the 1963 Lower River Agreement directs the Water Master to administer the 1963 Lower River Agreement and to regulate the waters of the Kings River in accordance with the terms and provisions of the 1963 Lower River Agreement. 10 17. Pursuant to the 1963 Lower River Agreement and other agreements conceming 11 the Kings River, for many years and depending on hydrologic conditions, JID allowed the a 12 Defendant Units to use some or all of JID’s Kings River water rights and supplies in exchange Zz #3 13 for financing for water delivered to JID from the Sacramento-San Joaquin Delta through the Qs ge 14 Delta-Mendota Canal. JID’s supplies from the Delta have become steadily more constrained ZS Sa 15 over time as pumping from the Delta has become more constrained. As a result of this factor BE 16 and others, on January 1, 2016, JID reassumed full possession and use of its Kings River water 17 rights and supplies. The 2016-17 water year was the first time since 1963 that JID had 18 exercised full control of those rights and supplies itself. 19 18, Paragraph 16 of the 1963 Lower River Agreement provides that, if JID and 20 Tranquillity Irrigation District exercise their rights to Kings River water, then those entities and 21 the Defendant Units will negotiate terms to equitably compensate JID and Tranquillity 22 Irrigation District for river channel losses that result from delivering water to them. JID and 23 the Defendant Units are currently undertaking such negotiations, and, while such negotiations 24 are pending, have agreed that the terms of the 1963 Lower River Agreement apply. 25 19, Since 1963, JID and the Defendant Units have amended the 1963 Lower River 26 Agreement, but those amendments have not altered the significant rights and obligations 27 described in this complaint. 28 037795-000000 5760655.1 {00123982.1} 4 VERIFIED COMPLAINT BY JAMES IRRIGATION DISTRICT 20. In the Water Master’s accounting for the 2016-17 water year, he determined that there was insufficient water in available storage behind Pine Flat Dam to fully compensate JID and the Defendant Units for the losses associated with the delivery of their Kings River water supplies in that water year. The 1963 Lower River Agreement does not refer to or create any method for allocating stored water behind Pine Flat Dam to compensate parties to that agreement for the losses associated with their use of their Kings River supplies, other than those mandatory methods stated and described in that agreement’s paragraph 10 and its Exhibit A. However, the Water Master applied an unauthorized and improper method to compensate JID and Defendant Units for losses, which resulted in damages to JID. 10 FIRST CLAIM FOR RELIEF 11 Breach of the 1963 Lower River Agreement Against All Defendants, except Tranquillity Irrigation District i. 12 13 21. JID realleges and incorporates herein, as if set forth in full, each and every allegation contained in paragraphs | through 20, inclusive, of this complaint and further alleges 14 Se as follows. Zz 15 22. JID, the Defendant Units and Does 1 to 100, inclusive, are signatories to the SE 16 Ee 1963 Lower River Agreement or their successors in interest. 17 23. Under the 1963 Intra-Association Agreement and the 1963 Lower River 18 Agreement, JID and the Defendant Units intended that KRWA and the Water Master would be 19 legally bound by the terms of the 1963 Lower River Agreement. Through their conduct and the 20 1963 Intra-Association Agreement and the 1963 Lower River Agreement, KRWA and the 21 Water Master agreed to be legally bound by the 1963 Lower River Agreement. 22 24, JID did all, or substantially all, of the significant things that all applicable 23 agreements required JID to do. 24 25. Tranquillity Irrigation District is not named as a party to this cause of action 25 because that district did not exercise its Kings River water rights, or otherwise take delivery of 26 Kings River water, in the water year 2016-2017 and therefore was neither harmed nor benefited 27 by the defendants’ conduct that is the basis of this claim for relief. 28 037795-000000 5760655.1 {00123982.1} 5 VERIFIED COMPLAINT BY JAMES IRRIGATION DISTRICT 26, At all relevant times, KRWA and the Water Master were acting as the authorized agents for, or on behalf of, the Defendant Units, and the Defendant Units, except Tranquillity Irrigation District, authorized, directed, approved of, or adopted the actions of KRWA and the Water Master. 27. The Defendant Units, except Tranquillity Irrigation District, by and through their own actions and the actions of KRWA and the Water Master, breached paragraphs 5 and 10, Exhibit A and other provisions of the 1963 Lower River Agreement by: (1) applying, allowing and failing to prevent the use by KRWA and the Water Master of an unauthorized and incorrect method for allocating compensation from water stored by Pine Flat Dam; (2) failing 10 to keep proper records to support the water allocation decisions by KRWA and the Water i Master; and (3) accepting the benefits of the unauthorized and improper allocation of stored 12 water by KRWA and the Water Master. Zz 28. JID was harmed by these breaches of the 1963 Lower River Agreement, and that 28 13 14 harm was a substantial factor causing damages to JID in an amount to be proven at trial. Za 15 29, To the extent JID was required to present a claim under the Government Claims 16 Act (Government Code sections 900 to 935.9) or any other applicable law before filing this 17 complaint, JID complied with that requirement by presenting a timely, written claim to the 18 Defendant Units that are public agencies. 19 SECOND CLAIM FOR RELIEF Breach of the Implied Covenant of Good Faith And Fair Dealing With Respect To The 20 1963 Lower River Agreement Against All Defendants, except Tranquillity Irrigation District 21 30. JID realleges and incorporates herein, as if set forth in full, each and every 22 allegation contained in paragraphs 1 through 29, inclusive, of this complaint and further alleges 23 as follows. 24 31. JID, the Defendant Units and Does 1 to 100, inclusive, are signatories to the 25 1963 Lower River Agreement or their successors in interest. 26 32. Under the 1963 Intra-Association Agreement and the 1963 Lower River 27 Agreement, JID and the Defendant Units intended that KRWA and the Water Master would be 28 legally bound by the terms of the 1963 Lower River Agreement. Through their conduct and the 037795-000000 5760655.1 {00123982.1} 6 VERIFIED COMPLAINT BY JAMES IRRIGATION DISTRICT 1963 Intra-Association Agreement and the 1963 Lower River Agreement, KRWA and the Water Master agreed to be legally bound by the 1963 Lower River Agreement. 33, Expressed and implied in the 1963 Lower River Agreement was and is a covenant of good faith and fair dealing wherein KRWA, the Water Master and the Defendant Units covenanted that they would, in good faith and in the exercise of fair dealing, deal with JID fairly and honestly. The expressed and implied covenant requires, among other things, that KRWA, the Water Master and the Defendant Units do nothing to impair, interfere with, hinder, or potentially injure the rights of JID to receive the benefits of the 1963 Lower River Agreement. 10 34. JID did all, or substantially all, of the significant things that all applicable il agreements required JID to do. 5 12 35. Tranquillity Irrigation District is not named as a party to this cause of action 13 because that district did not exercise its Kings River water rights, or otherwise take delivery of we 14 Kings River water, in the water year 2016-2017 and therefore was neither harmed nor benefited oF 24 15 hy the defendants’ conduct that is the basis of this claim for relief. v2 At all relevant times, KRWA and the Water Master were acting as the 16 36. 17 authorized agents for, or on behalf of, the Defendant Units, and the Defendant Units, except 18 Tranquillity Irrigation District, authorized, directed, approved of, or adopted the actions of 19 KRWA and the Water Master. 20 37. By allowing and not seeking to prevent, and by accepting the benefits of, the 21 Water Master’s improper allocation of water stored by Pine Flat Dam according, KRWA and 22 the Defendant Units, except Tranquillity Irrigation District, breached the implied duty of good 23 faith and fair dealing by acting in a manner that denied JID the benefits of that stored water as 24 it would have been allocated under paragraph 10 and Exhibit A of the 1963 Lower River 25 Agreement. 26 38. KRWA and the Water Master breached the implied duty of good faith and fair 27 dealing by allocating water in a manner other than that required by the 1963 Lower River 28 Agreement that resulted in JID receiving compensation from water stored by Pine Flat Dam at 037795-000000 5760655.1 {00123982.1} 7 VERIFIED COMPLAINT BY JAMES IRRIGATION DISTRICT a much lower percentage of its losses in the 2016-17 water year than dictated by that agreement, while simultaneously compensating certain Defendant Units at a higher percentage of their losses than dictated by that agreement. 39. JID was harmed by these breaches of the implied covenants contained within the 1963 Lower River Agreement, and that harm was a substantial factor causing damages to JID in an amount to be proven at trial. 40. To the extent JID was required to present a claim under the Government Claims Act (Government Code sections 900 to 935.9) or any other applicable law before filing this complaint, JID complied with that requirement by presenting a timely, written claim to the 10 Defendant Units that are public agencies. 11 THIRD CLAIM FOR RELIEF i 12 13 41, Breach of Fiduciary Duty Against KRWA and the Water Master JID realleges and incorporates herein, as if set forth in full, each and every 14 allegation contained in paragraphs 1 through 40, inclusive, of this complaint and further alleges KE 15 as follows. Ne Se 16 42. KRWA and the Water Master agreed to act as trustees to administer and hold 17 appropriative water rights known as water-right Licenses Numbers 11517 through 11522 (the 18 “Trustee Water Rights”) on behalf of the KRWA member units, including JID, as beneficiaries. 19 KRWA and the Water Master acted on behalf of the KRWA member units for the purposes of 20 administering the Trustee Water Rights for the 2016-2017 water year. 21 43. The 1963 Intra-Association Agreement, the 1963 Lower River Agreement and 22 other agreements entered into by the KRWA member units create an affirmative duty on the 23 part of the KRWA and the Water Master to protect individual KRWA members, those 24 members’ water rights, and their rights under the various KRWA agreements. 25 44. In performing the actions and accepting the duties described in paragraphs 42 26 and 43, KRWA and the Water Master owed fiduciary duties to the KRWA member units, 27 including JID. 28 037795-000000 5760655.1 {00123982.1} 8 VERIFIED COMPLAINT BY JAMES IRRIGATION DISTRICT 45. KRWA and the Water Master breached their fiduciary duties by: (1) applying, allowing and failing to prevent the use by KRWA and the Water Master of an unauthorized and incorrect method for allocating compensation from water stored by Pine Flat Dam; and (2) failing to keep proper records to support the water allocation decisions by KRWA and the Water Master 46. In taking the actions described in this cause of action, KRWA and the Water Master acted arbitrarily and capriciously, and breached its duties of loyalty, impartiality, and accounting to JID. 47. JID was harmed by these breaches of duty, and that harm was a substantial 10 factor causing damages to JID in an amount to be proven at trial. 11 FOURTH CLAIM FOR RELIEF i 12 13 48. Declaratory Relief Against All Defendants JID realleges and incorporates herein, as if set forth in full, each and every as gk xE Be 14 allegation contained in paragraphs | through 47, inclusive, of this complaint and further alleges 15 as follows. Nz 16 49, There exist one or more actual controversies related to the legal rights and duties 17 of JID, KRWA, the Water Master, the Defendant Units and Does 1 to 100, inclusive, under the 18 1963 Lower River Agreement. 19 50. JID contends that the express and implied terms of the 1963 Lower River 20 Agreement, and the fiduciary duties owed by KRWA and the Water Master to the KRWA 21 member units, require KRWA, the Water Master, the Defendant Units and Does 1 to 100, 22 inclusive, to apply paragraph 10 and Exhibit A of the 1963 Agreement to calculate the 23 Defendant Units’ conveyance losses and related compensation for the 2016-2017 water year 24 and in future years. 25 St. KRWA, the Water Master, the Defendant Units and Does 1 to 100, inclusive, 26 dispute JID’s contentions described in the preceding paragraph of this complaint. 27 28 037795-000000 5760655.1 {00123982.1} 9 VERIFIED COMPLAINT BY JAMES IRRIGATION DISTRICT FIFTH CLAIM FOR RELIEF Imposition of Physical Solution Against All Defendants 52. JID realleges and incorporates herein, as if set forth in full, each and every allegation contained in paragraphs 1 through 51, inclusive, of this complaint and further alleges as follows. 53. Article X, section two, of the California Constitution (“Article X, section two”) states, in relevant part, “The right to water or to the use or flow of water in or from any natural stream or water course in this State is and shall be limited to such water as shall be reasonably required for the beneficial use to be served, and such right does not and shall not extend to the 10 waste or unreasonable use or unreasonable method of use or unreasonable method of diversion 11 of water.” 12 34. The California courts have interpreted Article X, section two, to authorize and gz 13 require the courts to consider and adopt, in some circumstances, methods of allocating as 8e te 5 14 available water in ways that may differ from the allocations that may be strictly required by the 15 affected parties’ respective legal rights, while still protecting the injured party’s water supplies. N 16 (See City of Lodi v. East Bay Mun. Utility Dist. (1936) 7 Cal.2d 316.) 17 55. To the extent necessary to comply with Article X, section two’s constitutional 18 mandates, the Court should impose on KRWA, the Water Master and the Defendant Units a 19 judgment that reasonably allocates available water stored by Pine Flat Dam while protecting 20 JID’s water supplies under the 1963 Lower River Agreement. 21 PRAYER FOR RELIEF 22 JID prays for relief as follows: 23 1 For damages awarded jointly and severally against all defendants, other than the 24 Water Master personally and Tranquillity Irrigation District, in an amount to be proven at trial. 25 2. For a judgment and order determining and declaring that the 1963 Lower River 26 Agreement requires all defendants to apply paragraph 10 of the 1963 Agreement to calculate 27 the Defendant Units’ conveyance losses and related compensation for the 2016-2017 water year 28 and in future years. 037795-000000 $760655.1 {00123982.1) 10 VERIFIED COMPLAINT BY JAMES IRRIGATION DISTRICT 3 For a judgment and order enjoining KRWA and the Water Master from committing further breaches of their duties to JID. 4. To the extent necessary under Article X, section two, of the California Constitution, for imposition of a physical solution that reasonably allocates available water stored by Pine Flat Dam while protecting JID’s water supplies under the 1963 Lower River Agreement. 5 For costs of suit. 6. For such other and further relief as the Court may deem proper. Dated: February, 2019 Respectfully submitted, 10 BARTKIE) WICZ, KRONICK & SHANAHAN A Profes: 11 a: By: 12 Ryay Bezerta ag 13 %E 14 MCCORMICK BARSTOW LLP Sz ZA 15 16 17 Attorneys for Plaintiff JAMES IRRIGATION DISTRICT 18 19 20 21 22 23 24 25 26 27 28 037795-000000 5760655.1_(00123982.1} 1 VERIFIED COMPLAINT BY JAMES IRRIGATION DISTRICT VERIFICATION I, Steven Stadler, declare as follows: 1 I am General Manager for James Irrigation District, the plaintiff in the above- entitled matter, 2. I have read the foregoing VERIFIED COMPLAINT BY JAMES IRRIGATION DISTRICT and know its contents. The same is true to my knowledge, except to those maters stated upon information and belief, and as to those matters I believe them to be true. I declare under penalty of perjury under the laws of the State of California that the 10 foregoing is true and correct. Il Executed at San Joaquin, California, on February 25, 2019. 12 13 14 SE 15 16 17 18 19 20 21 22 23 24 25 26 27 28 037795-000000 $760655.1 (00123982.1} 12 VERIFIED COMPLAINT BY JAMES IRRIGATION DISTRICT