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Central San Joaquin Water Conservation District v. Stockton East Water District

June 28, 2011

CENTRAL SAN JOAQUIN WATER CONSERVATION DISTRICT, PLAINTIFF AND RESPONDENT,
v.
STOCKTON EAST WATER DISTRICT, DEFENDANT AND APPELLANT.



Super. Ct. No. 39201000234681CUMCSTK

The opinion of the court was delivered by: Raye , P. J.

Central San Joaquin Water Conserv. Dist. v. Stockton East Water Dist.

CA3

NOT TO BE PUBLISHED

California Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or relying on opinions not certified for publication or ordered published, except as specified by rule 8.1115(b). This opinion has not been certified for publication or ordered published for purposes of rule 8.1115.

In this long-simmering dispute between Central San Joaquin Water Conservation District (Central), which supplies surface water to agricultural customers, and Stockton East Water District (Stockton East), which operates the conveyance system through which the water flows, the trial court granted Central a preliminary injunction limiting the amount Stockton East could charge for transporting (wheeling) Central's water. At issue in the underlying declaratory relief action brought by Central is the question of what "fair compensation" is due Stockton East under the provisions of Water Code section 1811, subdivision (c). In its appeal, Stockton East urges us to decide issues that had not been decided by the trial court when it granted a preliminary injunction to maintain the status quo pending trial. The thrust of Stockton East's appeal is that the court erred by ruling as a matter of law that it could only recover incremental costs associated with wheeling Central's water rather than a pro rata share of the capital, operation, and maintenance costs of the project. Because we conclude the trial court has not determined what fair compensation is, did not rule that Stockton East could only recover incremental costs as a matter of law, and did not abuse its discretion by issuing a preliminary injunction, we affirm the judgment.

FACTS

Few facts are relevant to the narrow scope of the issues properly before us. As an owner of a water conveyance system, Stockton East must transport water for others for fair compensation if it has unused capacity. (Wat. Code, § 1811, subd. (c).) Central, a neighboring water district, delivers surface water it purchases from the federal government to agricultural customers to irrigate crops and water stock in lieu of pumping groundwater.

In 1990 and 1991 the two districts entered into two wheeling contracts that have been the subject of much controversy and protracted litigation. For many reasons irrelevant to our appeal, the parties agreed to a wheeling rate of $21.15 per acre-foot of water, an amount Central was unable to pay in full. The disputes arising from the 1990 and 1991 wheeling contracts are the subject of entirely different lawsuits.

Apparently Stockton East never stopped wheeling Central's surface water supplies despite the ongoing dispute over past-due payments. In 2008, however, Stockton East gave notice it would terminate the contracts effective January 1, 2009, and proposed that the two districts consolidate. While consolidation negotiations were pending, the parties agreed to a one-year contract providing that Central would pay Stockton East the wheeling rate of $5.00 per acre-foot. By the fall of 2009 consolidation discussions had broken down.

In November 2009 Stockton East informed Central it would not wheel water for Central in 2010. Central reminded Stockton East of its statutory obligation to wheel water. In response, Stockton East calculated fair compensation to be $41.50 per acre-foot by apportioning a pro rata share of Stockton East's costs to Central, anticipating that Central's surface water would consist of 37.97 percent of all water moving through Stockton East's facilities in 2010. Yet Stockton East was willing to wheel water for the discounted rate of $21.15 per acre-foot, the wheeling rate the parties had negotiated in the 1990 and 1991 contracts.

In February 2010 Central filed a complaint for declaratory relief, challenging the $21.15 wheeling rate, and for injunctive relief to enjoin Stockton East from withholding wheeling services from Central during 2010. A more detailed description of the hearing on the motion for a preliminary injunction follows. Suffice it to say, the trial court granted a preliminary injunction with a wheeling rate of $5.00 per acre-foot to preserve the status quo. The court explained its practical dilemma this way: "Now, the $5 a foot apparently was too little but I'm kind of stuck with a choice between the $5 per acre foot figure, which the parties did agree to, perhaps with consideration given on both sides, but it was agreed to versus the 21 and change charge that Stockton East is now looking for." Stockton East appeals the order granting the preliminary injunction. There has been no trial.

DISCUSSION I

We agree with Central that Stockton East's appeal is based on faulty premises about what occurred in the trial court proceedings. We must examine those proceedings to ...


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