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SUPERIOR COURT OF CALIFORNIA

COUNTY OF SAN FRANCISCO

Document Scanning Lead Sheet
Jul-30-2015 2:44 pm

Case Number: CGC-15-547125
Filing Date: Jul-30-2015 2:39
Filed by: ROSSALY DELAVEGA
Juke Box: 001

Image: 05014377

COMPLAINT

MARINA COAST WATER DISTRICT VS. CALIFORNIA-AMERICAN WATER
COMPANY, A CALIFORNIA ET AL

001C05014377

Instructions:
Please place this sheet on top of the document to be scanned.

SUM-100

SUMMONS

FOR COURT USE ONLY
(SOLO PARA USO DE LA CORTE)

(CITACION JUDICIAL)
NOTICE TO DEFENDANT:
(AVISO AL DEMANDADO):
CALIFORNIA-AMERICAN WATER COMPANY, a California corporation;
MONTEREY COUNTY WATER RESOURCES AGENCY; and DOES I through
50. inclusive

YOU ARE BEING SUED BY PLAINTIFF:
(LO ESTA DEMANDANDO EL DEMANDANTE):
MARINA COAST WATER DISTRICT

NOTICE! You have been sued. The court may decide against you without your being heard unless you respond within 30 days. Read the information
below
You have 30 CALENDAR DAYS after this summons and legal papers are served on you to file a written response at this court and have a copy
served on the plaintiff. A letter or phone call will not protect you. Your written response must be in proper legal form if you want the court to hear your
case. There may be a court form that you can use for your response You can find these court forms and more information at the California Courts
Online Self-Help Center (www.courtinfo.ca.gov/selfhelp), your county law library, or the courthouse nearest you. If you cannot pay the filing fee, ask
the court clerk for a fee waiver form. If you do not file your response on time, you may lose the case by default, and your wages, money, and property
may be taken without further warning from the court.
There are other legal requirements. You may want to call an attorney right away. If you do not know an attorney, you may want to call an attorney
referral service. If you cannot afford an attorney, you may be eligible for free legal services from a nonprofit legal services program. You can locate
these nonprofit groups at the California Legal Services Web site (www.lawhelpcalifornia.org), the California Courts Online Self-Help Center
(wwwcourtinfo.ca.gov/selfhelp), or by contacting your local court or county bar association. NOTE: The court has a statutory lien for waived fees and
costs on any settlement or arbitration award of $10,000 or more in a civil case. The court's lien must be paid before the court will dismiss the case.
!AVISO! Lo han demandado. Sino responde dentro de 30 dias, Ia corte puede decidir en su contra sin escuchar su version. Lea Ia informacion a
con tin uacion
T1ene 30 DiAS DE CALENOAR/0 despues de que le entreguen est a citacion y papeles legales para presentar una respuesta par escrito en esta
corte y hacer que se entregue una copia a/ demand ante. Una carta o una II am ada telefonica no lo protegen Su respuesta por escrito tiene que estar
en formato legal correcto si desea que procesen su caso en Ia corte. Es posible que haya un formu/ario que usted pueda usar para su respuesta.
Puede encontrar estos formularios de Ia corte y mas informacion en el Centro de Ayuda de /as Cortes de California (www.sucorte.ca.gov), en Ia
biblloteca de /eyes de su con dado o en Ia corte que le que de mas cerca. Sino puede pagar Ia cuota de presentacion, pida a/ secretario de Ia corte
que le de un formulario de ex en cion de pago de cuotas. Sino presenta su respuesta a tiempo, puede perder el caso par incumplimiento y Ia corte Je
podra quitar su sue/do, dinero y bienes sin mas advertencia.
Hay otros requisitos legales. Es recomendab/e que /lame a un abogado inmediatamente. Sino conoce a un abogado, puede llamar a un servicio de
remision a abogados. Sino puede pagar a un abogado, es posible que cumpla con los requisitos para obtener servicios legales gratuitos de un
program a de servicios legales sin fines de Iuera. Puede encontrar estos grupos sin fines de /ucro en e/ sitio web de California Legal Services,
(www.lawhelpcalifornia.org), en el Centro de Ayuda de las Cortes de California, (www.sucorte.ca.gov) o poniendose en con/acto con Ia corte o el
colegio de abogados locales. A VI SO: Por ley, Ia corte tiene derecho a reclamar las cuotas y los costas exentos por imponer un gravamen sabre
cualquier recuperacion de $10,000 o mas de valor recibida mediante un acuerdo o una concesion de arbitraje en un caso de derecho civil. Tiene que
pagar el gravamen de Ia corte antes de que Ia corte pueda desechar el caso.
CASE NUMBER
The name and address of the court is:
(Numero del Caso)
(EI nombre y direcci6n de Ia corte es):
The Superior Court of California, County of San Francisco
400 McAllister Street
San Francisco, California 94102
The name, address, and telephone number of plaintiffs attorney, or plaintiff without an attorney, is:
(EI nombre, Ia direcci6n y el numero de telefono del abog ado del demandante, o del demandante que no tiene abogado, es):
For MARINA COAST WATER DISTRICT:

3.

D
under

4.

D

on behalf of (specify):

D
D
D
D

CCP 416.10 (corporation)
CCP 416.20 (defunct corporation)
CCP 416.40 (association or partnership)

D
D
D

CCP 416.60 (minor)
CCP 416.70 (conservatee)
CCP 416.90 (authorized person)

other (specify):
by personal delivery on (date):
Pa e 1 of 1

Form Adopted for Mandatory Use
Judtctal CounCil of California

SUM-100 [Rev July 1, 2009]

SUMMONS

Code of Civil Procedure§§ 41220, 465
www.cow·tinfo.ca gov

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JAMES L. MARKMAN (Bar No. 43536)
jmarkman@rwglaw.com
B. TILDEN KIM (Bar No. 143937)
tkim@rwglaw.com
KYLE H. BROCHARD (Bar No. 293369)
kbrochard@rwglaw.com
RICHARDS, WATSON & GERSHON, A P.C.
355 South Grand Avenue, 40th Floor
Los Angeles, California 90071-3101
Telephone: 213.626.8484
Facsimile: 213.626.0078

7

MARK FOGELMAN (Bar No. 5051 0)
8 mfogelman@ffiedmanspring.com
RUTH STONER MUZZIN (Bar No. 276394)
9 rmuzzin@friedmanspring.com
FRIEDMAN & SPRINGWATERLLP
10 33 New Montgomery Street, Suite 290
San Francisco, California 94105
11 Telephone: 415.834.3800
Facsimile: 415.834.1044
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Attorneys for Plaintiff
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MARINA COAST WATER DISTRICT
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SUPERIOR COURT OF THE STATE OF CALIFORNIA

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COUNTY OF SAN FRANCISCO

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17 MARINA COAST WATER DISTRICT,
18
Plaintiff,
v.
CALIFORNIA-AMERICAN WATER
20 COMPANY, a California corporation;
MONTEREY COUNTY WATER
21
RESOURCES AGENCY; and DOES 1
through 50, inclusive,
22
23
24
25

Defendants.

Case No.

COMPLAINT OF MARINA COAST
WATER DISTRICT FOR
(1) BREACH OF WARRANTIES AND
REPRESENTATIONS; (2) BREACH
OF CONTRACT; (3) PROMISSORY
ESTOPPEL;
(4) UNJUST ENRICHMENT; AND
(5) VIOLATION OF LAW OR CPUC
ORDERS OR DECISIONS
JURY TRIAL DEMANDED
[Exempt from fees - Gov. Code § 61 03]

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COMPLAINT OF MARINA COAST WATER DISTRICT

13 4. Marina Coast Water District ("Marina"') is a public entity. water distribution system and wastewater collection system for the City of Marina and 6 neighboring communities within Monterey County ("the County"). 9 3. Agency is governed by the five elected members ofthe Monterey County Board 14 of Supervisors sitting as Agency's governing board ("Supervisors").• THE PARTIES AND VENUE 2 I. California American Water Company ("CAW") is. 7 2. venue is proper in this judicial 21 district because this is an action brought by a local agency against another local agency. Monterey County Water Resources Agency ("Agency") is a public entity. and at I 0 all relevant times was. 18 Marina will amend this complaint to allege their true names and capacities when ascertained. inclusive. 23 FACTUAL ALLEGATIONS 24 LONG-STANDING WATER SUPPLY CRISIS 25 7. the State Water Resources Control Board ("State Water Board") issued 26 order No. and therefore sues these defendants by such fictitious names. and at all relevant times was. requiring CAW to adopt conservation measures and find replacement 27 sources sufficient to allow CAW to cease and desist diverting 70% of the water it had been 28 appropriating illegally annually from the Carmel River. neither 22 ofwhich is located in this county. 8 a California corporation regulated by the California Public Utilities Commission ("CPUC"). Marina does not know the true names and capacities of defendants sued herein as 17 DOES 1 through 50. 16 5. The parties herein have agreed to file this action in the San Francisco Superior 20 Court. The Supervisors are 15 advised by an eleven-member Board of Directors. and at all relevant 3 times was. -1COMPLAINT OF MARINA COAST WATER DISTRICT . WR 95-10. 6. found at 4 Division 12 of the California Water Code. Pursuant to Code of Civil Procedure section 394( a). In 1995. found at Chapter 52 ofthe Appendix to West's Annotated 12 California Water Code. a Water Resources Agency created pursuant to the Monterey County 11 Water Resources Agency Act. a special district formed in 1960 under the County Water District Law. for the purpose of installing and operating a water 5 supply.

In September 2004. which recognized 2 the long-standing water supply crisis on the Monterey Peninsula and required the CPUC to 3 identify and implement a long-term alternative to a dam proposed by CAW. Marina would own and operate the desalination plant (required by a 27 Monterey County ordinance to be publicly-owned) and would take about one-sixth of the 28 product water to serve its own customers in lieu of drawing on its existing sources in the -2COMPLAINT OF MARINA COAST WATER DISTRICT . Under the RDP alternative. 11 10.") 03-09-022. Agency would own and operate the brackish 26 sourcewater intake wells.03-09-022 was never sought. 2) the 18 Regional Desalination Project ("RDP") alternative for a public-private partnership between 19 CAW. 15 11. In September 2003. Agency and Marina using subsurface vertical or slant wells for intake of brackish 20 desalination source water. setting 6 forth procedures for conducting environmental review of a desalination project application 7 instead of a dam. 24 25 THE PROPOSED REGIONAL DESALINATION PROJECT 12. Ultimately. also using subsurface wells for intake.") 04-09-019. Rehearing of the CPUC's lead agency decision was never requested and direct 10 court review of D.8. the 5 CPUC issued Decision ("D. In 1998. Application ("A. dismissing CAW's original dam application. CAW's CWP proposal in A. and finding that the CPUC should be the lead agency under the California 8 Environmental Quality Act ("CEQA") for environmental review ofCA W's replacement water 9 supply project. requesting the CPUC issue to it a 13 certificate of public convenience and necessity ("CPCN") authorizing CAW to construct and 14 operate a replacement water supply desalination project.04-09-019 came to encompass three 16 desalination project alternatives: 1) CAW's initial proposal to use open ocean seawater intake 17 through the existing once-through cooling system at the Moss Landing power plant. the Legislature enacted Assembly Bill ("AB") 1182. after an extensive scoping and public comment process. 4 9. except that 22 the North Marina alternative would use slant wells only instead of vertical wells and would be 23 wholly-owned by CAW rather than a public-private partnership. and 3) an exclusively CAW-owned North Marina alternative that 21 would be very similar to the RDP alternative. CAW filed its Coastal Water 12 Project ("CWP") application. pursuant to CPUC direction.

direct court review ofD.0928 12-017 became final and non-appealable in January 2010. For the 8 RDP alternative. for which Marina possessed water 2 rights. through the Outfall of the Monterey Regional Water Pollution Control 18 Agency.09-12-017. a public entity. as well as to storage facilities on the Monterey 4 Peninsula. Rehearing of the CPUC's EIR certification 27 decision was never requested. On October 20. a site for the desalination plant owned and/or controlled by Marina. On December 17. 20 WR 2009-0060 (the "CDO"). As envisioned in the proposed settlement. 2009. -3COMPLAINT OF MARINA COAST WATER DISTRICT . the source water wells for the RDP and the desalination facility would be 9 located in the Salinas Valley Groundwater Basin. the CPUC certified the Final 24 Environmental Impact Report ("EIR") for a project that would provide a long-term water 25 supply for CAW's Monterey District and generate CAW's compliance with the above26 referenced orders of the State Water Board. the waste product from 17 the desalination process. Marina's service area is located within the Salinas Valley Groundwater Basin.09-12-017 was never sought.Salinas Valley Groundwater Basin in Monterey County. the State Water Board issued a Cease-and-Desist Order. and CAW would own and operate the system for delivery of about five-sixths of the 3 desalinated product water to its own customers. modifying Order WR 95-10 and requiring CAW to undertake 21 additional specific measures to incrementally reduce the above-mentioned illegal diversions of 22 water from the Carmel River by no later than December 31. 23 16. as 16 required by County ordinance. and D. the RDP 13 would make use ofMarina's lawful right to take water from the Salinas Valley Groundwater 14 Basin.2009. land owned by Marina that could accommodate source water wells for the desalination 15 process. 2016.04-09-0 19 and which was 12 ultimately concluded in April of 2010. ~~ ~~ 19 15. The Carmel River is located outside the Salinas Valley Groundwater Basin. The concept of the RDP alternative was finalized in a CPUC-mandated 11 alternative dispute resolution process which involved all parties to A. 5 13. in D. 10 14. and Marina's right to dispose ofbrine. 6 CAW's Monterey Peninsula service area is located outside the Salinas Valley Groundwater 7 Basin.

and Weeks insisted that Marina cooperate to have Collins engaged 14 for pay to work on issues involving the RDP. agreed that 6 RMC Water and Environment ("RMC"). Marina is informed and believes and based on that information and belief 20 alleges: Collins offered to submit his resignation from Agency's Board of Directors to Weeks 21 in or about January of2010 in order to avoid a conflict of interest while he worked as a sub22 consultant advocating for the RDP. Collins did not resign from Agency's Board of Directors in 25 2010. and during 2010. 10 18. for 13 CPUC approval of the RDP. and Weeks assured Collins and 28 Heitzman that there would not be an actual conflict of interest if Collins followed the advice of -4COMPLAINT OF MARINA COAST WATER DISTRICT . at the suggestion and insistence of Agency 4 Supervisor Louis Calcagno ("Calcagno") and Agency General Manager Curtis Weeks 5 ("Weeks''). CAW and Agency. Jim Heitzman. then a member of Agency's Board ofDirectors. an engineering and consulting firm employed by 7 Marina to assist with the RDP on behalf of Marina. In or about January of2010 Weeks represented to Heitzman that the Supervisors 11 and Weeks considered Collins' engagement as a paid sub-consultant crucial to obtaining 12 support among the agricultural community.THE COLLINS CONFLICT OF INTEREST 2 3 17. as a sub-consultant for the 9 RDP. 26 21. In or about early January of 2010. Collins made at least one offer to resign 23 from Agency's Board of Directors in the presence of Supervisor Calcagno and Deputy County 24 Counsel Irven Grant ("Grant"). In 2010. could engage Stephen 8 Collins ("Collins"). including the Ag Land Trust ("Ag Land"). and Heitzman was assured by Weeks that Agency had a legal opinion of County Counsel 18 that there would be no cont1ict of interest. Heitzman questioned Weeks as to whether there would be a conflict of interest if 16 Collins remained on Agency's Board of Directors while he would be paid to advocate for the 17 RDP. 15 19. Weeks represented to Heitzman that the Board of Supervisors did not 27 want Collins to resign from Agency's Board of Directors. ~~ ~~ 19 20. ("Heitzman") Marina's General Manager at the time.

In or about January of 2010. CAW. Marina materially changed its 26 position to its detriment and incurred consulting. should the project be approved by Marina. 2010. On several occasions in 2010. 8 23. and which were to be repaid by Marina and Agency from long-term RDP 21 financing. Marina. WATER PURCHASE AND RDP SETTLEMENT 14 AGREEMENTS 15 24.1 0-08-008.• Agency in performing his duties as a member of Agency's Board ofDirectors. Agency and Marina entered into the 16 Reimbursement Agreement. In reliance on CAW 25 and Agency's promises in the Reimbursement Agreement. 23 26. in excess of$25. Agency and the CPUC and thereafter 22 become operational. No court challenge was timely made to D. Neither Collins nor Weeks ever showed Heitzman a copy of 11 any written County Counsel opinion confirming Collins' lack of a conflict of interest. Agency's Board of Supervisors approved the Reimbursement 17 Agreement during a regular public meeting on February 26. Collins reached agreement on a sub-consulting 3 contract with RMC. 5 Weeks consistently responded to Heitzman that there was an opinion of County Counsel that 6 authorized Collins' concurrent roles as an Agency Director and as a paid sub-consultant for 7 RMC's work on the RDP. 13 THE REIMBURSEMENT.1 0-08-008. 28 27. 18 25. although 12 Heitzman repeatedly asked to see it. 2 22. 2010 24 in D. Subsequent to entering into the Reimbursement Agreement. On or about February 26.000. engineering and other expenses related to the 27 proposed RDP. Heitzman asked Weeks to provide a copy ofthe purported opinion of County 9 Counsel authorizing Collins to be paid working to advocate for the RDP while retaining his 10 position as an Agency Director. -5COMPLAINT OF MARINA COAST WATER DISTRICT . 2010. The Reimbursement Agreement was approved by the CPUC on August 12. CAW. in an amount to be proved at trial. Heitzman expressed concern to Weeks that 4 Collins might have a conflict of interest due to his position on Agency's Board ofDirectors. The Reimbursement Agreement provided for reimbursement by CAW of certain 19 Marina and Agency expenses related to the proposed RDP that were incurred prior to CPUC 20 approval of the RDP.

Agency.000./) 0 :::r: 0:::: w . through its General Manager Weeks. including Surfrider Foundation and the Public Trust Alliance.04-09-0 19 and entered into the RDP Settlement 3 Agreement." 11 z z 0 0 >= (. and the RDP. Upon receiving said authorization Weeks executed the RDP 22 Settlement Agreement and the WPA. Agency's Board of Directors. and 0 0 (. 26 33. z :::r: u 0"' 0:::: 15 g: -3: 0:::: <( 14 RDP Settlement Agreement. 10 A true and correct copy of the fully executed WP A is attached hereto as Exhibit "A. ff- 18 32. 2010 that Collins had been retained by RMC in 28 January 2010 under a sub-consulting contract to do work related to the proposed RDP while he -6COMPLAINT OF MARINA COAST WATER DISTRICT . and/or some or all of the 27 Supervisors were aware prior to April 6.9 . the WPA. Marina materially changed its position to its detriment and incurred consulting. conditioned on the CPUC's final approval of the "' 1-<( (. adopted a motion recommending that Agency approve :5 f- <( <fl 17 the Settlement Agreement and the WPA. Agency. "'- "'"'w 3 <( ~ I 31.Agency and other parties. Agency and CAW. 24 engineering and other expenses related to the proposed RDP. 2010. The RDP Settlement Agreement required the parties to request CPUC approval 5 of the RDP as the least costly. by action ofthe Board of Supervisors. and only feasible replacement 6 water supply project of the three proposed CWP project alternatives that were analyzed in the 7 Final EIR. 2 reached a proposed settlement of A./) On April 5." G:. the appointed advisory 16 board of which Collins was a member.. and authorized the execution ofthe RDP Settlement 21 Agreement and the WPA. with Collins voting "yes. Also on April 5.:. <:::> 0 a 13 approved Marina's participation in the RDP. which was executed by the parties in April 2010.:( -z z 30. by its Resolution 2010-20 and relying on the CPUC's Final u \./) 12 EIR. in an 25 amount to be proved at trial. On April6. Marina approved execution ofthe RDP Settlement Agreement and the WPA. a 9 contract between Marina. conditionally approving the Regional Desalination Project. which was intended to result in the implementation ofthe RDP. in excess of$25. 2010. The RDP would be implemented by the Water Purchase Agreement ("WPA"). passed and <( ~~ ::~ 19 adopted Resolution 10-091. 2010. In reliance on CAW and Agency's promises in the 23 WP A. 20 contingent on final approval by the CPUC. 4 28. most environmentally benign. 8 29.

in which event Agency would be responsible for reimbursing Marina instead. the WPA and the RDP. CAW was also aware. would constitute 8 theCA W-owned portion of the project (the "CAW Only Facilities"). as of 2 no later than May of 2010. MARINA TERMINATES PAYMENTS FOR COLLINS 18 ~~ ~~ 19 36. 9 35. Kelly Cadiente. In or about August of2010. After Heitzman consulted with Cadiente. Heitzman consulted with Marina Director of 20 Administrative Services. CAW would be obligated to reimburse Marina for any and all costs or 11 expenses incurred by Marina in connection with the RDP. 25 38. in or about August 2010 Heitzman determined that Collins had not confined his work 24 for RMC to the agreed scope of outreach to the agricultural community. 14 During 2010. asking the CPUC to approve their settlement. but CAW would not be required to z 12 reimburse Marina if the failure to reach Substantial Completion was due to an Event of Default <::> 1<( "' "' 0 u 0 "- 13 of Agency. Pursuant to section 7. CAW President Rob MacLean ("MacLean") also promised Heitzman that CAW 15 would reimburse Marina for its expenditures in connection with the RDP. in order to ensure that Marina did not 28 pay for any of Collins' sub-consulting services. the parties to the RDP Settlement Agreement filed a motion 6 with the CPUC. under the WPA. in or about August 2010. including charges for Collins' work. if. 22 37. that Collins was working as a sub-consultant to RMC while 3 retaining his position as a Director of Agency.• 1 simultaneously retained his seat on Agency's Board of Directors. and Marina reversed and took a credit for amounts 27 that Marina had already paid RMC for work by Collins. -7COMPLAINT OF MARINA COAST WATER DISTRICT . and to 7 grant CAW a CPCN to construct the delivery facilities that. Upon Heitzman's subsequent detailed inspection of Collins' charges for work on 23 the RDP. 5 34. but CAW took no steps until April of 2011 to 4 disclose this information to the CPUC. concerning Cadiente's detailed inspection of RDP21 related invoices from RMC. according to the 16 CPUC's orders and whether or not the project was completed. for any reason the RDP did not reach 10 Substantial Completion.4 of the WPA. On April 7. Marina 26 ceased paying RMC for work by Collins. and Marina relied on MacLean's 17 promise. 2010.

Later in that same September 27. 2010.000 in sub-consulting services in support ofthe proposed 25 RDP. at a regular public meeting of Agency's Board 19 of Directors. On December 2. both Collins and Director Silvio 22 Bernardi recused themselves from a vote due to their "ongoing" relationships with Ag Land. 12 42. Collins billed RMC and was paid 24 by RMC for approximately $160. Heitzman informed Weeks and Lynde! Melton 2 ("Melton"). in August 9 2010 Weeks again failed to provide Heitzman with any written legal opinion concerning 10 Collins' work as a sub-consultant for RMC in relation to the proposed RDP while remaining a 11 Director of Agency. 2010. -8COMPLAINT OF MARINA COAST WATER DISTRICT . THE CPUC APPROVES THE RDP 27 28 46. As with all of Heitzman's requests for such a written legal opinion. Heitzman again asked Weeks for the written legal opinion that 6 purportedly permitted Collins to work as a sub-consultant for RMC in relation to the proposed 7 RDP while remaining a Director of Agency. 21 44. Collins' final invoice to RMC was issued in late November. which was released on December 3. and 14 Marina reversed and fully credited CAW's prior reimbursements to Marina under the 15 Reimbursement Agreement of all of the Collins portions ofRMC's charges. In or about August or September of 2010. On or about September 27. 2010.39.2010. or Grant. 4 40. Charles McKee ("McKee"). As a result of 16 Heitzman and Marina's actions. From January 2010 through November 2010. at the behest of County Counsel. in D. Collins' sub26 consulting arrangement with RMC on the RDP was terminated by RMC on December 2. a principal at RMC. 23 45. When Heitzman informed Weeks of Marina's refusal to pay RMC for Collins' 5 sub-consulting services. Collins 20 recused himself from a vote due to his "ongoing" relationship with RMC. of Marina's action regarding invoices for Collins' sub3 consulting services and its refusal to pay for future Collins sub-consulting services. Heitzman informed MacLean of 13 Marina's refusal to pay for Collins' sub-consulting services and the reason for its refusal. 2010 meeting.10-12-016. 18 43. Also in or about August 2010. all of Collins' charges to RMC in 2010 were paid by RMC 17 alone. 8 41.

The CPUC filed a lead agency CEQA Notice of 24 Determination ("NOD") with the State Clearinghouse on December 6. 2009 set forth in Exhibit D to the WPA. The CPUC found in 0.8 million in costs through 20 December 31.l 0-12-016. the CPUC permitted CAW to later apply for rate recovery of 19 amounts paid to Marina under the WPA. 2010. Pursuant to D . rather. Marina's AprilS. would be incorporated in the rate base used to calculate the water rates paid by 8 CAW customers. all Salinas Valley Groundwater Basin 13 sourcewater for the RDP would be withdrawn from the basin by a public agency pursuant to an 14 existing right of withdrawal from the basin.1 0-12-016 and the WP A. 2010 RDP approval became final and effective after the 27 condition precedent of CPUC approval was satisfied on December 2. as well as Marina's RDP-related costs 21 22 going forward as advanced under the CAW Credit Line Agreement.10-12-016 that time was ofthe essence and the RDP 23 should commence without delay.10-12-016. No court 25 challenges were timely made to D.11-04-035.10-12-016 and the WPA. 6 47. Marina filed its 28 own CEQA responsible agency NOD with the State Clearinghouse and the Monterey County -9COMPLAINT OF MARINA COAST WATER DISTRICT . 50. 2010. 12 48. including Marina's $5. the desalinated product water would be 11 provided to CAW at the public agencies' cost of production. valued at approximately 7 $106 million.04-09-0 19 open to retain jurisdiction over future project matters.20 I 0 and modified by D. Agency's brackish source water 9 wells and Marina's desalination plant. 18 49. issued a CPCN to CAW authorizing it to ~ ~ 3 construct and operate its portion of the project facilities (the "CAW Only Facilities'') necessary 4 to deliver water to the Monterey Peninsula and to comply timely with the State Water Board·s 5 CDO. the RDP and the WPA. the CPUC granted the motion to finally approve the RDP 2 Settlement Agreement. In D. valued at approximately $300 million together. Pursuant to 0.. and kept 17 proceeding A.l0-12-016 reaffirmed the CPUC's 16 certification of the Final EIR and the CPUC's role as CEQA lead agency for the RDP. Pursuant to 0.10-12-016 or D. theCA W Only Facilities. including offset against Marina's refraining in part 15 from its historic and ongoing pumping from the basin. 26 51. D. would 10 not be incorporated into CAW's rate base.ll-04-035.

" 14 53. Based on information and 3 belief. 2011 the County Supervisors. 23 55. 7 Besides the Reimbursement Agreement. and the CAW Credit Line Agreement are 13 collectively referred to herein as the "RDP Contracts" or "the Agreements. and Agency's execution and performance ofthe RDP Contracts. and/or Supervisor Dave Potter ("Potter'') for the purpose of developing a 6 plan to remove Marina from the RDP. and Collins resigned from Agency's -10COMPLAINT OF MARINA COAST WATER DISTRICT . CAW 19 advanced funds to Marina under the CAW Credit Line Agreement in the approximate amount 20 of $3 million. 25 or Water Code Appendix § 52-39. On or about March 29. including the WPA.Recorder on December 10. 4 Supervisor Calcagno met with Weeks.2010. engineering and financing services. the Reimbursement Agreement. No party or member of the public challenged the validity of the RDP Contracts 24 within the statute oflimitations provided by Government Code§ 53511. CAW. 18 54. 26 27 AGENCY AND CAW USE COLLINS AS AN EXCUSE 56. Monterey County Administrative 5 Officer Lew Bauman. McKee. On January 11. 2011. the Settlement Agreement and the 8 WPA. pursuant to a draw request from Marina. In or about April 201 1. the Regional 12 Desalination Project Management Agreement. and 2) the 10 CAW Credit Line Agreement.2010. Marina filed an amended NOD on December 13. 2010 NOD. 2011 entered 9 into: 1) the Regional Desalination Project Management Agreement with RMC. in their capacity as the Board of 15 Supervisors for Agency. 2 correcting a typographical error in its December 10. reconsidered and gave final approval to the RDP and the RDP 16 Contracts. Water Code § 30066. Marina expended that $3 million and substantial additional funds on RDP21 related costs including for technical.1(c) of the 11 WP A. Collins. and on or about January 11. without Marina's knowledge. The Settlement Agreement. in relation to CAW's obligations under section 7. and in regard to 22 seeking a coastal development permit from the California Coastal Commission. 2011. Marina alleges that on or about December 10. 17 Agency filed a responsible agency NOD under CEQA on January 13.2010. Agency and Marina also negotiated. allegations concerning Collins' conflict of interest in his 28 dual role for the RDP were publicized in the local press. the WP A.

2011. Collins was indicted on two charges of criminal conflict of interest related to his simultaneous holding of a position on Agency Board of Directors and 22 acting as a sub-consultant to RMC in relation to its RDP activities . Prior to the August 12. 2011. 3 2011. CAW notified Marina by letter that. 4 Over the next several weeks. which CAW stated it viewed as an "anticipatory breach"' and a 14 "repudiation" of the RDP Contracts. CAW by letter to Marina and Agency invoked 28 and reaffirmed its September28. 20 21 61. 27 62. unilaterally stating that CPUC-sponsored -11COMPLAINT OF MARINA COAST WATER DISTRICT . July 20. CAW. solely on the basis 12 of Agency's stated position in its counsel's letters of July 7 and 20 and August 22. Weeks. CAW was exercising a purported right to "terminate" the 15 RDP Contracts. InN ovember 2011. in letters dated July 7. 2011 Coastal Commission meeting. 2 57. Following the publication of Collins' conflict of interest. 11 59. 16 60. 2011 letter. Supervisor 8 Potter. On September 28. On or about January 17. their CPUC-sponsored mediation 6 continued through January 2012. 1) related to the vote by 23 Agency Board of Directors to recommend Agency Board of Supervisors' approval of certain 24 RDP Contracts on April 5. Agency and Marina agreed to engage in mediation to 5 attempt to resolve their differences concerning the RDP. 7 58. 2011. stating its position 17 that CAW's attempt to terminate the RDP Contracts as well as its efforts to pursue mutually 18 exclusive alternate water projects constituted breaches of contract and violation of CPUC 19 decisions. Marina responded to CAW by letter on September 29. Agency declared that the RDP Contracts were void. 2012. and/or others sought to influence the Coastal Commission to delay its decision 9 on an application for a coastal development permit for the RDP test wells. 2011.Board of Directors on April 11. Collins was also indicted on other charges not related to the 26 RDP. 2011 and August 20. 2011 that 13 the RDP Contracts were void. and 2) related to the Board of Supervisors' earlier approval of 25 the Reimbursement Agreement. 2010. materially impeding I 0 the implementation of the RDP. Agency.

2012. CAW never presented a Government Code claim to Agency. 25 CAW presented Marina with a Government Code claim for damages in an amount in excess of 26 $6 million (the "CAW Claim"). in correspondence copied to County 15 Counsel. to uphold the validity of the RDP 19 EIR. CAW filed a complaint for declaratory relief against Marina -12COMPLAINT OF MARINA COAST WATER DISTRICT . 2012 and May 23. in 17 order to mitigate its damages and uphold its RDP Contract obligations. 9 64. CAW urged Marina to abandon its defense ofthe Ag Land lawsuit. and vindicate the CPUC' s exclusive jurisdiction over the 21 RDP. 27 28 THE DECLARATORY RELIEF ACTION 67. 2012. On October 4.mediation had terminated and that CAW had terminated the RDP Contracts. avoid a potential claim that Ag Land was the prevailing party in the litigation for purposes 20 of recovering attorney fees and costs. On or about June 28. 2012 12 Marina moved to intervene in A. Marina's motion to intervene in A. 22 66. CAW UNVEILS ITS "NEW'' PROJECT 4 5 63.12-04-0 19 that its new application would 10 rely on the same CPUC-certified EIR that the CPUC relied upon in approving the RDP and that 11 was the subject of a CEQA lawsuit filed by Ag Land against Marina. 2012.l 0-12- 8 016. 2012.2012.12-04-0 19. 14 65. CAW filed a new application. Marina presented Agency with a Government Code claim for damages in an amount 24 potentially in excess of $20 million (the "Marina Claim"). requesting the 6 CPUC to grant it a CPCN to implement a project virtually identical to theCA W-only North 7 Marina alternative project that was rejected by the CPUC as inferior to the RDP in D.l2-04-019 was 13 granted over CAW's objection. it was required to 18 continue its course of defending the Ag Land CEQA case. whereby the sole 2 basis stated for CAW's purported termination was the alleged repudiation of the RDP Contracts 3 by Agency. On or about September 18. Marina responded to CAW and stated its position that. Between May 8. On April 23. without conceding that such a procedure was 23 required.12-04-019. CAW represented to the CPUC in A. On April 30. including pursuit 16 of relief from the Court of Appeal. A.

2012 settlement. 15 71. 23 73.1 and Agency in the Monterey County Superior Court. On 21 January 29. and CAW's. 26 2015. and. the County's and Agency's entry into their December 4. which was effective beginning April 28 15. 2012 10 complaint as among CAW and Agency. CAW. 22 CGC-13-528312. the San Francisco Superior Court docketed the transferred case as Case No. -13COMPLAINT OF MARINA COAST WATER DISTRICT . expired on June 30. following intervening extensions. Marina and Agency entered into an agreement tolling the time limits for 24 commencement of litigation on all unexpired causes of action between them. seeking declaratory relief as to certain of its affirmative defenses to Cal-Am's 3 complaint. 2012. which was 25 effective beginning January 8. seeking: 1) a determination of 5 the validity ofthe RDP Contracts.2013 and. Marina timely answered and also filed a 2 cross-complaint. expired on June 30. Marina is informed and believes that CAW's filing of its complaint for 16 declaratory relief. purporting to settle all claims related to the October 4. following intervening extensions. On December 21. 72. 2012. 4 68. 11 70." 8 69. Marina and CAW entered into an agreement tolling the time limits between them for 27 commencement of litigation related to the CAW Claim. 2) ifthe RDP Contracts were determined to be valid 6 and not void. along with the County. 2015. CAW and Agency. 2013 and. 2012 17 settlement agreement constituted a collusive effort to damage Marina and gain an unfair 18 litigation advantage. 2013. As a part of their December 4. 9 executed a settlement agreement. CAW's complaint asserted two causes of action.72 of the Monterey County Code of 13 Ordinances that requires any desalination facility in Monterey County to be owned by a public 14 entity. On or before December 4. the Monterey County Superior Court granted Marina's 20 motion for transfer of venue and transferred the case to the San Francisco Superior Court. a determination that CAW had a right to terminate the RDP Contracts ''under the 7 doctrine of anticipatory repudiation. Agency and the County 12 agreed to waive application of the provision of section 10.

though it had asserted invalidity. 9 77. 2011 10 and could have asserted them at any time after May of2010 or September of2010. as to which the San Francisco 27 Superior Court found that Agency. among other things. and on April 14. rather than 24 the sixty-day statute oflimitations provided by Government Code § 53 511. Water Code 25 § 30066. 7 76. 11 but it failed to do so. at the latest. 5 75. The San Francisco Superior Court held a bench trial on December 2-5. but it failed to do so. the San Francisco Superior Court determined in a decision dated 20 April29. or Water Code Appendix§ 52-39. Agency knew the facts underlying Collins' conflict well before March 11. a cross-complaint 6 seeking to invalidate the RDP Contracts due to Collins' conflict of interest. 2014 on 13 the issue of contract validity. -14COMPLAINT OF MARINA COAST WATER DISTRICT . that 3 the Validating Act applied to preserve the validity of the RDP Contracts as against CAW's 4 complaint. CAW knew the facts underlying Collins' conflict well before March 11. the CAW Credit Line Agreement and D. After trial. holding. Agency sought leave to file. and that therefore Agency should prevail on its 26 cross-complaint (except as to the CAW Credit Line Agreement. 12 78. 2011 8 and could have asserted them at any time after April of 2010. ~~ ~~ 19 80. Water Code§ 30066. The San Francisco Superior Court granted summary adjudication in favor of 2 Marina on CAW's first cause of action on February 25.15-03-002. the CPUC approved CAW's 15 payments to Agency under the Reimbursement Agreement and 0. and Water Code Appendix§ 52-39 applied 22 to the RDP Contracts other than the RDP Settlement Agreement. 14 79.10-08-008 and it authorized 16 CAW's recovery ofthose payments in rates. In 0. 2015.2014. issued on March 18. amounts it had paid to Agency under the 18 WPA. although 21 Government Code§ 53511. Government Code 23 § 1092(b)' s four-year statute oflimitations for a conflict of interest should control.did not present evidence 28 of invalidity}. denying without prejudice CAW's request for 17 approval ot: and authorization to recover in rates. 2015 that Collins violated Government Code section 1090 and that.1 0-12-016. 2014 did file.74.

in light ofits decision on Agency's cross-complaint it should reconsider its decision 3 to grant summary adjudication in favor of Marina on CAW's first cause of action. requirements and representations 23 incorporated in the RDP Contracts. the San Francisco Superior Court entered Judgment on CAW's 6 complaint. was 13 $18. ------ ------------- ------------------------- The San Francisco Superior Court also determined in an order dated April 29. all ofwhich were to be reimbursed or 28 repaid to Marina by CAW or. 14 85. 27 project management costs. 22 88. 2 2015 that. On June 30. 2014 order in that regard.- 1 81. As of June 11. 2015 Marina demanded payment from Agency of amounts due to 18 Marina for its necessary expenditures on the RDP.2015. in the case of a material breach by Agency.4 16 and 14 ofthe WPA or otherwise.336. as alleged herein whether under sections 7. WPA. On June 1. as alleged herein whether under sections 7.. Marina estimated its necessary expenditures on the RDP 12 pursuant to the RDP Contracts. Marina's cross-complaint and Agency's cross-complaint declaring each of the 7 Reimbursement Agreement. 2015. 11 84.2015. in the amount Marina estimated was due as of June 11. and declaring the CAW Credit Line Agreement not void. in the amount Marina estimated was due as of June 11. to implement the RDP. 2015. legal costs and funding costs.4 19 and 14 of the WPA or otherwise. 17 86. To date. CGC-13-528312. not including computation of interest accrued and accruing. 5 82. RDP Settlement Agreement and Project Management 8 Agreement void. Marina's expenditures on the RDP included technical and engineering costs. Marina justifiably expended substantial sums attempting in 24 good faith to perform its obligations under the RDP Contracts.. to be reimbursed or -15COMPLAINT OF MARINA COAST WATER DISTRICT . Marina has not received payment from either of CAW or Agency in 21 response to its demands of June 30.518. On June 3 0.. and to 25 defend its actions taken in the course of its good faith attempts. 9 83. 2015. 26 89. In reasonable reliance on the various promises. and it 4 vacated its February 25. 2015 Marina demanded payment from CAW of amounts due to 15 Marina for its necessary expenditures on the RDP. 20 87. 2015 10 Judgment ofthe San Francisco Superior Court in Case No. On June 30.2015 Marina filed its Notice of Appeal ofthe June 1.

0"" "' 0 u 12 approximate amount of $18. 94. due to CAW waiting until after March 2011 to question the validity of 3 the RDP Contracts in light of Collins' apparent conflict. 7 91. Further. 2 90.000 plus interest. Marina hereby incorporates by reference the allegations set forth in paragraphs 1 18 through 92. Marina has sustained actual damages. Agency 20 represented and warranted under section 17 ofthe WPA that it had the legal capacity and 21 22 authority to enter into that contract. 2010 or at any other time 23 constituted an illegal conflict of interest depriving Agency from validly contracting with 24 Marina and were known as such by Weeks. 26 96. inclusive. To the extent that Collins' actions on April 5. When Weeks executed the WPA on behalfofAgency on April6.000 plus interest.repaid to Marina by Agency. Further.4 ofthe WPA. 2010. To the extent that any of the causes of action set forth herein may be inconsistent 13 or mutually exclusive. 92. 14 FIRST CAUSE OF ACTION 15 (Breach ofWarranties and Representations -WPA) 16 (Against Agency and Does 1-50) 17 93. despite its full knowledge of the facts underlying the 5 Collins matter for many months before that time. and then refusing to implement the 4 RDP based upon that apparent conflict. Marina has sustained actual damages. in the 6 approximate amount of $18.000. in the 11 z '2 .000._ "'a. pursuant to section 7. and then refusing to implement the 9 RDP based upon that apparent conflict. 2010 and continuing through January 11. despite its full knowledge of the facts underlying the 10 Collins matter for many months before that time. Marina pleads them in the alternative. to be proven at trial. due to Agency waiting until after March 20 11 to question the validity of 8 the RDP Contracts in light of Collins' apparent conflict. When Agency performed its pre-effective date obligations under the WP A 27 beginning on April 6. it was acting pursuant to 28 its representations and warranties under section 17 of the WP A that it had the legal capacity -16COMPLAINT OF MARINA COAST WATER DISTRICT . Weeks' execution misrepresented Agency's 25 capacity and authority to enter into the WP A and thereby breached its warranty to Marina. 95. 2011. to be proven at trial.

has -17COMPLAINT OF MARINA COAST WATER DISTRICT . including but not limited to its 23 obligations under sections 7. 2012. 10 100. Agency continued to misrepresent its capacity and 4 authority to enter into the WPA and thereby breached its warranty to Marina. 12 SECOND CAUSE OF ACTION 13 (Breach of Contract. 2011. When Agency re-approved the RDP and the WPA on . Agency's breach of its warranty to Marina in the WPA has damaged Marina in 11 an amount to be determined at trial. Marina hereby incorporates by reference the allegations set forth in paragraphs 1 16 through 100.4 and 14 ofthe WPA to reimburse Marina for any and all costs 24 or expenses incurred in connection with the WP A. it again 6 represented and warranted under section 17 of the WP A as executed by Weeks that it had the 7 legal capacity and authority to enter into that contract. Agency's breach. 2011 and August 22.July 7 and 20. 28 105. 2 97. On January 11. except for those obligations for which performance was 19 excused or rendered impracticable or impossible. Agency again misrepresented its capacity and authority to 9 enter into the WP A and thereby breached its warranty to Marina.January 11. inclusive. Agency presented to Marina a clear indication that Agency did not intend to 22 perform its obligations under any ofthe RDP Contracts. Marina in good faith performed its obligations under each of the RDP Contracts 18 through at least January 16.Repudiation) 14 (Against Agency and Does 1-50) 15 101. if the fault for the RDP failing to reach 25 Substantial Completion was the sole fault of Agency. by its failure and refusal to perform the RDP Contracts. 20 103. 26 104. 17 102.and authority to enter into that contract. By its letters of . 2010 or at any other time 3 constituted an illegal conflict of interest. 8 99. To the extent that Collins' actions on April 5. 5 98. and by its actions as 21 alleged herein. 2011. 2011. Agency's repudiation ofthe RDP Contracts as expressed in its letters and 27 implied by its actions was not justified or excused.

including its 20 obligations under sections 7. CAW's breach. 109. except for those obi igations for which performance was 10 excused. inclusive. or an amount to be proven at 2 trial. 3 THIRD CAUSE OF ACTION 4 (Breach of Contract-Repudiation) 5 (Against CAW and Does 1-50) 6 106.2012.4 and 14 of the WP A. or an amount to be proven at 24 trial. Marina hereby incorporates by reference the allegations set forth in paragraphs 1 7 through 105. including the provisions of sections 7. 25 FOURTH CAUSE OF ACTION 26 (Promissory Estoppel) 27 (Against CAW. by its failure and refusal to perform the RDP Contracts. CAW's purported I6 unilateral termination of the RDP Contracts constituted a clear indication that CAW did not 17 intend to perform its obligations under any of the RDP Contracts. Marina in good faith performed its obligations under each ofthe RDP Contracts 9 through at least January 16. 22 II 0. CAW purported to 12 unilaterally terminate each of the RDP Contracts. Marina hereby incorporates by reference the allegations set forth in paragraphs 1 -18COMPLAINT OF MARINA COAST WATER DISTRICT . unless the fault for the RDP failing to reach I5 Substantial Completion was the sole fault of either Agency or Marina.2011 and January 17. CAW's failure and refusal to perform the RDP Contracts. Agency and Does 1-50) 28 11I. 11 108. 2012. constituted a material breach of each of 21 those contracts. has 23 damaged Marina in a minimum amount of $18 million dollars. including its obligations I8 under sections 7.4 and 13 14 ofthe WPA. impossible or impracticable.4 and 14 ofthe WPA.damaged Marina in a minimum amount of $18 million dollars. By its letters ofSeptember 28. 8 107. whereby CAW was obligated to reimburse Marina for any and all costs or 14 expenses incurred in connection with the WPA.

Marina in good faith relied on the 5 promises of CAW and the Agency in each of those contracts. inclusive. or an amount to 18 be proven at trial. in performing the RDP Contracts. inclusive. 9 114. 15 116. 23 FIFTH CAUSE OF ACTION 24 (Quasi-Contract I Unjust Enrichment) 25 (Against CAW and Does 1-50) 26 118. including those later found by the San Francisco Superior Court to be 17 void ab initio. which Marina has appealed and 21 which thus is not final. Nonetheless. In April of2012. Marina seeks to enforce the promises made by CAW and the Agency. 10 the Reimbursement Agreement. 4 113. 19 117. 12 115. including incunence of 14 RDP-related costs in a minimum amount of $18 million. 2 112. Marina relied as well on 7 MacLean's promise to Heitzman that CAW would reimburse Marina for its expenditures in 8 connection with the RDP. or an amount to be proven at trial. Marina hereby incorporates by reference the allegations set forth in paragraphs 1 27 through 117. By this complaint. Marina relied on the promises of CAW and the Agency in entering 13 into each ofthe RDP Contracts. 2015 decision ofthe San Francisco Superior Court. including their promises to cany 6 out those contracts and to cooperate in implementing the RDP. 28 119. According to the April 29. Marina in good faith believed that it 3 was entering into a valid contract.through 11 0. CAW demanded and RMC provided to CAW RMC's work -19COMPLAINT OF MARINA COAST WATER DISTRICT . in 22 the interests ofjustice. In entering into each ofthe RDP Contracts. In entering into each of the RDP Contracts. Due to its reliance on the promises of CAW and the Agency in entering into each 16 ofthe RDP Contracts. the WP A and the RDP Project 11 Management Agreement were void ab initio. Marina incurred damages. in a minimum amount of $18 million. the Settlement Agreement. and notwithstanding the decision ofthe San Francisco 20 Superior Court finding the RDP Contracts to be void ab initio.

Marina hereby incorporates by reference the allegations set forth in paragraphs 1 -20COMPLAINT OF MARINA COAST WATER DISTRICT . which provides that each 17 party would deal fairly with the other. CAW and the Agency's violation of the implied covenant of good faith and fair 24 dealing have damaged Marina in an amount and to an extent to be determined at trial. ~~ ~~ 19 125. and Marina's expenditures 5 on its successful defense of the Ag Land CEQA litigation. Marina reasonably and justifiably expected to be compensated for its RDP- 7 related expenditures. 10 SIXTH CAUSE OF ACTION 11 (Breach of the Implied Covenant of Good Faith and Fair Dealing) 12 (Against CAW. inclusive. 23 126. CAW and the Agency have breached the implied covenant 22 of good faith and fair dealing and deprived Marina of the benefits of the RDP Contracts._ . and that no party would do anything to deprive the other 18 parties of the benefits of the agreements.product related to the RDP. 6 121. which work had been paid for in substantial part by Marina. By the acts alleged in this complaint. or Orders or Decisions ofthe CPUC) 27 (Against CAW and Does 1-50) 28 127.. 8 122. contained an implied covenant of good faith and fair dealing. z 2 . including but not limited to. the Agency and Does 1-50) 13 123. The RDP Contracts. including by their failure to carry out each 20 of the RDP Contracts in good faith and/or by their attempts to frustrate Marina's good faith 21 performance of the RDP Contracts. 2 120. CAW and the 16 Agency. Marina·s expenditures on consulting and engineering 4 work product intended to facilitate the implementation of the RDP. CAW received a benefit from Marina·s good faith performance under the RDP 3 Contracts. and the legal relationships between Marina. 15 124. CAW would be unjustly enriched if Marina were not compensated for its RDP- 9 related expenditures.. 25 SEVENTH CAUSE OF ACTION 26 (Public Utility Violation of Law.i 0 0. Marina hereby incorporates by reference the allegations set forth in paragraphs 1 "" u 0 14 through 122.

8 130.10-12-016 and 0. section 1. Having indicated to Marina on September 28. 15 133. as alleged herein. 16 as directed by the CPUC in D..1'') and 0. By its failure to pay Marina's RDP-related costs through December 31. This constituted another violation ofRule 1. tit. Section 2106 of the Public Utilities Code provides that exemplary damages may 6 be awarded by a court against a public utility that is liable for loss. 18 135. inclusive. By its failure to inform the CPUC of Collins' apparent conflict of interest during 19 2010 and 2011.1 0-12-016 damaged Marina. 28 138. 2011 a lack of intent to implement 24 the RDP as ordered by the CPUC. Section 2106 of the Public Utilities Code provides that a public utility shall be 3 liable for loss.8 million.1 through 126. By its failure to pay Marina's RDP-related costs incurred after January 11. as directed by the CPUC in 0. 23 13 7. as alleged herein.10-12-016. 21 136. By its failure to inform the CPUC of Collins' apparent conflict of interest during 22 2010 and 2011. 12 132. Cal-Am violated D. CAW violated 0. By its failure to honor its commitments in the Commission-approved RDP 11 Contracts. 20. damage or injury to those 7 affected by the utility's violation of law or of an order or decision of the CPU C. Code 20 Regs. CAW damaged Marina. damage or injury to those affected by the utility's violation of law or of an order 4 or decision ofthe CPUC. 2 128.10-12-016. CAW damaged Marina.10-12-016. 10 131. CAW then falsely represented to the CPUC in a filing on 25 November 28. 26 thereby providing the CPUC with the false impression that CAW did not decide to abandon the 27 RDP until2012. CAW 14 violated D.10-08-008. as alleged herein.1 (Cal. CAW's violation of D. 2011.1 (''Rule 1. CAW violated the CPUC's Rule of Practice and Procedure 1.1 by CAW. 17 134. 2009 in 13 the approximate amount of$5.! 0-12-016. 2011 that it was "not seeking to implement a different project" from the RDP. By making its false representations to the CPUC. By its failure to honor its commitments in the Commission-approved RDP 9 Contracts. CAW misled the CPUC and -21COMPLAINT OF MARINA COAST WATER DISTRICT . 5 129.l 0-12-016.

. 10 2. fA: I /- 1x_./f/7 ~ fj/ j.~ !::11-r (/---(_/ (/. thereby damaging Marina. 17 JURY DEMAND 18 Marina demands trial by jury in this action. 5 PRAYER FOR RELIEF 6 WHEREFORE. In the alternative.__ YxJ( •. ). 16 For such other relief as the Court may deem just and proper in the circumstances..prevented performance ofthe RDP Contracts. 12 3.1. --~()vc:.1.. 2015 RICHARDS.. 2 139.10-08-008 and D. WATSON & GERSHON a Professional Corporation FRIEDMAN & SPRINGWATER. Marina be awarded compensatory damages from Agency and/or CAW for their 9 respective breach of warranty and/or breach of contract. - t -JAMES L.10-12-016. MARKMAN Attorneys for Marina Coast Water District 26 27 28 -22COMPLAINT OF MARINA COAST WATER DISTRICT . plaintiff Marina Coast Water District prays for judgment as 7 follows: 8 1. ~c. That Marina recover from defendants its costs of suit herein.10-12-016. 20 21 22 23 24 25 July 30. Marina be awarded compensatory damages from CAW and/or 11 Agency on Marina's Fourth and Fifth Causes of Action. D. Marina was damaged by CAW. LLP ~"'/ . as permitted by law. Marina be awarded exemplary damages from CAW for the latter's violations of 13 CPUC Rule ofPractice and Procedure 1.J.1 04 08-008 and D. including attorney's 15 fees incurred to the extent allowed by law. D. 14 4. _____. As a public water district in Monterey County. By: . 3 Marina is entitled to damages from CAW on account of CAW's violations of Rule 1.

Exhibit A .

WATER PURCHASE AGREEMENT By and Among MARINA COAST WATER DISTRICT. MONTEREY COUNTY WATER RESOURCES AGENCY And CALIFORNIA-AMERICAN WATER COMPANY Dated as of April 6. 20 I 0 100500094 DOC v 2} Exhibit A .

.................. 69 25.......................................................... ............ Other Provisions .......................................................... Cessation of Delivery and Use .................................................................................. 44 9.......................................... Fees and Expenses .. 33 6................................................................................................... :.............................................................. 63 18........ Measurement of Water ..... 61 17.... 69 26...........TABLE OF CONTENTS 1.................................................................................................................................. Advisory Committee ................................ .........................................46 10................... Events of Default and Remedies ........................ . 68 22............ Brackish Source Water Supply and Management ........................................................................... Engineering................................................................ Water Supply Obligations and Deliveries .......................................................................................................................................................................... Conditions Precedent ........... Limitation on Recourse ............................... Compliance with Laws ........................... 52 12...... :........................................... 59 13.......... Dispute Resolution .................. Construction and Permitting ofthe Regional Desalination Project................................................................ 59 15...................................... and CAW Facilities .......................................... 22 3.. Assignment............................................................................ Payment Provisions ......... Ownership ofMCWD.............................. 51 11............................................... 64 20................................... Representations and Warranties . Insurance ................................................................. 34 7....... Casualty Loss .. 59 14...................... Financing of the Project Facilities .....................................-............................................................... 69 24................................... 64 19................ 70 {00500094...... MCWRA................ Term .................................................................. 39 8.. 24 5............ 69 23...................................................................... 23 4. Force Majeure ..... Project Facilities and CAW Facilities Description ... 66 21. 60 16... No MCWD or MCWRA Responsibility for Delivery and Distribution of Water by CAW ..................... Representatives............. Indemnification................ Design............................ Governing Tenns ................DOC v 2) .................................. ............................................................. 3 2............ Notices ...................................................................................................

having its principal address at 893 Blanco Circle. to increase. MCWRA and CAW are active parties in Application No. including the control of groundwater extractions as required to prevent or deter the loss of usable groundwater through intrusion of seawater and the replacement of groundwater so controlled through the development and distribution of a substitute surface supply. MCWRA's boundaries are coextensive with the external boundaries ofthe C. 200610 I 04) analyzing {00500094 DOC v 2} -I- . issued a Draft Environmental Impact Report ("DEIR. a County Water District organized and operating under the County Water District Law. MCWRA is responsible under the Agency Act. 04-09-019 ("Application 0409-0 19") seeking approval of the Coastal Water Project (as defined in Application 04-09-0 19) from the California Public Utilities Commission ("CPUC"). Suite 200. a California corporation and regulated public utility ("CAW"). adjacent to MCWD Service Area and within the boundaries of MCWRA. MCWD acts on behalf of persons served within the MCWD Service Area to furnish water for beneficial use. MONTEREY COUNTY WATER RESOURCES AGENCY ("MCWRA"). MCWD. is by and among the MARINA COAST WATER DISTRICT. D." State Clearinghouse No. 2004. 04-09-019. among other things. Application No. 2005. and prevent the waste or diminution of the water supply. The current MCWD Service Area is depicted on Exhibit A attached hereto. dated as of April 6.THIS WATER PURCHASE AGREEMENT ("Agreement"). California. The current CAW Service Area is depicted in Exhibit B attached hereto. Marina. that includes lands within the City of Marina and certain other areas within Monterey County. as may be subsequently A. Sections 30000 and following of the California Water Code ("MCWD"). MCWRA and CAW are referred to herein individually as a "Party" and collectively as the "Parties. Salin~s. G." RECITALS: MCWD provides water service within a service area. County of Monterey. F. and to prohibit groundwater exportation from the Salinas Basin. including lands on the former Fort Ord (the "MCWD Service Area"). and to conserve the water supply for future as well as present use. E. and the application remains pending before the CPUC. 04-09-019 was amended on July 14. and within those boundaries. a duly constituted Water Resources Agency created pursuant to the Monterey County Water Resources Agency Act. including a service area in Monterey County (as may be subsequently amended or revised from time to time without the approval of the other Parties) (the "CAW Service Area"). CA 9390 I. acting as Lead Agency under CEQA. Each ofMCWD. having its principal address at II Reservation Road. having its principal address at I 033 B A venue. located in Monterey County. CAW filed Application No. On January 30. and CALIFORNIA-AMERICAN WATER COMPANY. On September 20. to protect the groundwater underlying MCWD. CAW provides water service in various areas within California. 2009. found at California Water Code Appendix Chapter 52. B. CA 93933. the CPUC. amended or revised from time to time without the approval of the other Parties. CA 92118. Coronado. 20 I 0 (the "Execution Date").

20 I 0. in Decision No. Application 04-09-019. {00500094 DOC' 2} -2- . 20 I 0.2009.the Moss Landing Project. and having fully considered all relevant environmental documents. The CPUC duly received and analyzed extensive public comment on the DEIR. each acting as a Responsible Agency under CEQA. 09-12-017 which was issued in Application 04-09-019." I. MCWD. individually and collectively.the potential environmental impacts of a project designated the "Coastal Water Project" and alternatives to it." The principal element of that latter alternative project is a regional desalination water supply project. approved this Agreement for a regional desalination project subject to CPUC approval. the CPUC. MCWD. duly certified a Final Environmental hnpact Report. MCWD. and on April 6. The Parties have also determined that the Regional Desalination Project best conserves and protects public trust assets. J. The Parties intend that the development. H. MCWRA and CAW. and is in the best interests ofthe customers served by each of MCWD and CAW and that the Regional Desalination Project as implemented by this Agreement serves the public interest and is consistent with the Agency Act. and a third alternative project variously referred to as the "Regional Alternative" and the "Regional Project" and "Phase I ofthe Regional Project. with other smaller elements. L. This Agreement does not contemplate or address any elements other than "Phase I of the Regional Project. construction and operation of the Regional Desalination Project occur in accordance with the FEIR and that MCWD and MCWRA each act as a Responsible Agency in accordance with CEQA to implement the Regional Desai ination Project. including the Final Environmental Impact Report. as Lead Agency. MCWRA. resources and values impacted by providing a water supply. MCWRA. The Final Environmental Impact Report described and studied three alternative projects which are being considered for approval by the Commission in the proceeding. the North Marina Project. MCWRA. MCWD. CAW has determined that purchasing Product Water from MCWD will allow CAW to provide its customers inCA W's Service Area with Product Water at a significantly lower cost than by means of any ofthe other proposed alternative projects described in the FEIR. The Regional Desalination Project contemplates the development. as more specifically described in Article 3 (the "Regional Desalination Project"). the most feasible ofthose projects. and CAW. found that the Regional Desalination Project is the least costly of the proposed alternative projects. as part of a settlement of issues pending in M. after considering all relevant environmental documents. have negotiated this Agreement and certain other agreements contemplated by the Settlement Agreement. as set forth in that certain Settlement Agreement to be filed with the CPUC in Application 04-09-019 (the "Settlement Agreement"). On April 5. construction and operation of a regional desalination water supply project as described and analyzed in the FEIR. N. and CAW provided comments on the DEIR. On December 17. have determined and K.