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City of Stockton et al v. Central San Joaquin Water Conservation District

January 11, 2012


(Super. Ct. No. CV021870)

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

City of Stockton v. Cent. San Joaquin Water Conserv. Dist.



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 This opinion has not been certified for publication or ordered published for purposes of rule 8.1115.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 September 2003 plaintiffs City of Stockton (City) and California Water Service Company (Cal Water) brought an action for breach of contract against defendant Central San Joaquin Water Conservation District (Central). Plaintiff Stockton East Water District (Stockton East) filed a complaint in intervention.

As the five-year deadline to bring the case to trial neared, plaintiffs obtained Central's written stipulation extending the deadline to April 1, 2009. After plaintiffs failed to meet this deadline, Central filed a motion to dismiss, which the trial court denied. Central filed a petition for a writ of mandate, which we granted, issuing an alternative writ. (Central San Joaquin Water Conservation Dist. v. Superior Court (July 31, 2009, C062205) [order granting alternative writ] (Central v. Superior Court).) Ultimately, the trial court granted Central's motion to dismiss and awarded attorney fees.

Plaintiffs appeal, arguing Central waived the five-year limit, the May 2009 trial date was timely, the court erred in changing its ruling without giving plaintiffs an opportunity to be heard, and the award of attorney fees should be vacated. We shall affirm the judgment.

FACTUAL AND PROCEDURAL BACKGROUND Background to the Current Litigation

In 1983 the United States Department of the Interior, Bureau of Reclamation (Bureau) entered into contracts with Central and Stockton East to provide water from the New Melones reservoir to Central and Stockton East. In reliance on these contracts, Stockton East entered into two contracts, one with City and Cal Water and the other with Central, to pay for construction and operation of wheeling facilities that would convey, or "wheel," the water.

The agreement entered into by Central and Stockton East required Stockton East to wheel Central's water through the Stockton East facilities to Central's service area, and required Central to pay a fee for the wheeling. The agreement also specified the procedures for calculating the annual payment reimbursing Stockton East for the costs of building and operating the conveyance facilities.

When the wheeling facilities were completed, the Bureau refused to make available the amount of water it had agreed to provide to Stockton East and Central. (Stockton East Water Dist. v. United States (Fed.Cir. 2009) 583 F.3d 1344, 1348-1349.) In 1993 Stockton East, Central, City, and Cal Water jointly sued the Bureau.

While the federal suit was pending, Central purchased water from the Bureau and had it wheeled by Stockton East using wheeling agreement facilities. Stockton East calculated the amount Central owed for the water under the wheeling agreement. From 1995 through 2008, Stockton East billed Central approximately $400,000 to $700,000 per year. Central paid either $150,000 per year or nothing. Central argued it did not have the money to pay what it owed because of the Bureau's breach of contract. City and Cal Water paid Central's debt to Stockton East.

According to City and Cal Water, these circumstances placed them in a quandary. Central's suit against the Bureau was ongoing. If Central won the suit, it could reimburse City and Cal Water, obviating the need for a suit by the latter parties. However, City and Cal Water faced the five-year statute of limitations on their claims against Central.

Current Litigation

City and Cal Water filed a complaint against Central on September 11, 2003. The complaint alleges (1) Central breached the wheeling agreements, which required it to pay capital and operating costs relating to the conveyance facilities; (2) City and Cal Water paid what Central was obligated to pay; (3) Stockton East assigned its rights to City and Cal Water; and (4) City and Cal Water are entitled to reimbursement. The complaint includes counts for breach of contract, indebitatus assumpsit, and equitable subrogation. Stockton East intervened as a plaintiff on February 23, 2005. Stockton East sought the same relief as City and Cal Water. In February 2007 the federal court concluded that Stockton East, Central, City, and Cal Water failed to prove their case and entered judgment for the Bureau. Discovery in the current litigation began in 2009.

Based on the date that City and Cal Water filed their complaint, the five-year deadline to bring the case to trial was September 11, 2008. (Code Civ. Proc., § 583.310.) In April 2008 the parties stipulated that "[T]his matter shall be brought to trial at a time beyond the time limit set forth in Code of Civil Procedure section 583.310 and the time for said trial to commence is extended until April 1, 2009."*fn1 The court approved the stipulation.

On December 17, 2008, the trial court held a trial setting conference. No court reporter was present. The parties vehemently disagree over what happened next.

City and Cal Water's Version of Subsequent Events

According to Cal Water's counsel, "During this conference, Mr. Roberts [Central's counsel], the Court and I discussed the trial setting. Based on its calendar, the Court initially suggested a date in mid-April, beyond the date specified in the April, 2008 stipulation. Due to a conflict in my schedule I then requested that the trial be set for mid-May, 2009. The Court stated in substance that it wished to avoid any issues regarding Code of Civil Procedure Section 583.310 et seq.'s five year deadline, and asked the parties if they would agree to a May 18, 2009 trial date. Mr. Roberts said in substance that he was available for trial starting on May 18, 2009, and that he would communicate with his client about a waiver of the 5 year statute." The court set the matter for trial on May 18, 2009.

Following the trial setting conference, the parties added new counsel to take discovery and try the case. In February 2009 the parties participated in a long conference call, discussing procedures for discovery and preparing the case for trial. The May trial date was discussed several times. The new counsel agreed they would stipulate to continue the trial from May to August 2009 pending client approval. Mr. Vignolo, counsel for Central, volunteered to draft the stipulation.

Over the next few weeks, Central's counsel sent several e-mails reporting that Central's board was considering the proposal to continue the trial until August and that he expected a decision soon.

During the next month, the parties exchanged documents and took depositions. During discovery, Central's counsel never suggested ...

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