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Scott K. Kuney, Esq., SB#111115
Ernest A. Conant, Esq., SB#89111
Steven M. Torigiani, Esq.,SB#166773
Attorneys for Cross-Defendants/Cross-Complainants,
Chevron U.S.A. Inc., Aera Energy LLC,
And Cross-Defendant Ben Laverty III
SUPERIOR COURT OF THE STATE OF CALIFORNIA
COUNTY OF SANTA CLARA
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SANTA MARIA VALLEY WATER
CONSERVATION DISTRICT,
Plaintiff,
SANTA MARIA GROUNDWATER
LITIGATION
Lead Case No. CV 770214
(CONSOLIDATED FOR ALL PURPOSES)
15 v.
16
CITY OF SANTA MARIA, ET AL.,
17
Defendants.
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19
__________________________________
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21
22
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AND RELATED CROSS-ACTIONS AND
ACTIONS CONSOLIDATED FOR ALL
PURPOSES
24
[Consolidated With Case Numbers:
CV 784900; CV 785509; CV 785522;
CV 787150; CV 784921; CV 785511;
CV 785936; CV 787151; CV 784926;
CV 785515; CV 786791; CV 787152]
San Luis Obispo County Superior Court
Can Nos. 990738 and 990739
STIPULATING
LANDOWNERS/DISTRICT’S
OBJECTIONS TO PROPOSED
STATEMENT OF DECISION, PHASE IV
AND V.
[Rule of Court, Rule 232(d).]
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/ / /
/ / /
STIPULATING LANDOWNERS/DISTRICT’S OBJECTIONS TO PROPOSED STATEMENT OF DECISION
PHASE IV AND V.
1

1 INTRODUCTION
2
Plaintiff and Cross-Defendant Santa Maria Valley Water Conservation District and
3
Cross-Defendants/Cross-Complainants Chevron U.S.A., Inc. and Aera Energy LLC and Cross-
4
Defendant Ben Laverty III, Cross-Defendants/Cross-Complainants ConocoPhillips Company and
5
6
OSR Enterprises, Inc. et al., Cross-Defendant Arco Environmental Remediation LLC, Cross-
7 Defendants/Cross-Complainants Apio, et al., Cross-Defendants Rancho Maria, LLC, Rio Mesa
8
Land Company, LLC, and the 1994 William D. Massa Revocable Trust, Cross-Defendants
9
Bruce N. Gordon, Borel Bank & Trust Co., Bankers Trust Co. of California, James M.
10
Acquistapace, Tower Grove Vintners, Inc., and Cross-Defendants Flood Ranch Company, Union
11
12
Asphalt, Inc., West Bay Company, LLC, Whiterock Company, LLC, Cal-Westgate Ranch, LLC,
13 Cal-Cobblestone Creek, LLC, Harpstone Partnership, LP, Aviation Way, LLC, Old Rio Bravo,
14
LLC (hereinafter “Stipulating Landowners/District”) file this memorandum of points and
15 authorities pursuant to this Court’s November 27, 2006 order extending time for filing objections
16 to the Public Water Producers’ Proposed Statement of Decision, Phases IV and V (“Proposed
17
18
Statement”). Specifically, pursuant to California Rule of Court 232(d), and other legal
19 authorities cited herein, the Stipulating Landowners/District make a special appearance in the
20
Phase IV and V proceedings for the limited purpose of requesting the Court to revise the
21
Proposed Statement to conform the Proposed Statement with this Court’s prior orders, decisions
22 and the approved terms of the settlement stipulation, formally entitled “Stipulation (June 30,
23
24
2005 Version)” (“Settlement Stipulation”). The Stipulating Landowners/District request these
25 revisions so that the Court may accomplish its stated goal of incorporating the Settlement
26
Stipulation into one final judgment that also addresses the rights of the non-stipulating parties.
27
(See, Tentative Decision re Trial Phase V, dated November 7, 2006, p. 8.)
28
STIPULATING LANDOWNERS/DISTRICT’S OBJECTIONS TO PROPOSED STATEMENT OF DECISION
PHASE IV AND V.
2

1
2
I.
PRIOR ORDERS, DECISIONS AND THE SETTLEMENT STIPULATION
A. Phase III Trial and Partial Statement of Decision-
3
4 Prior to the Phase III trial, “[b]ecause of the emphasis the parties placed on the issue of
5 prescriptive rights, the court directed that the parties present evidence on the question of
6 whether the Basin has been in overdraft in a separate early phase of the trial.” (Phase III
7
Decision, pages 3-4.) All the Public Water Producers, the Stipulating Landowners, the District
8
9 and other landowners appeared and participated in the Phase III trial. The central issue at trial
10 was determination of the Public Water Producers’ claims of prescriptive rights. (Phase III
11 Decision, page 2-3.) Specifically, the Court characterized the parties as either “those seeking
12 prescriptive rights as Appropriators [or] parties opposing prescription as Landowners”
13 including plaintiff, Santa Maria Water Conservation District (“District”), as part of the
14
15
Landowner category. The Court having considered the evidence, arguments of counsel and
16 being fully advised then issued the “Partial Statement of Decision Re Trial Phase III,” dated
17 May 4, 2004 (“Phase III Decision”). That decision states in pertinent part, as follows:
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24
25
26
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1.
“. . . the Appropriators bear the burden of prove [sic] of all the elements of their prescriptive claims. The case law consistently places the burden of proof upon the proponent of an adverse possession claim. (citations omitted.) (Phase III
Decision, page 5.);
2.
“The court is not persuaded by clear and convincing evidence that the Basin historically was or is in overdraft. If the court were to apply a lesser standard of proof by a preponderance of the evidence, the decision would be the same.”
(Phase III Decision, page 12.)
3.
“The court therefore concludes based on all the evidence that the Basin is not, and has not been, in overdraft.
This conclusion disposes of the Appropriators’ prescriptive-right claims based on a condition of overdraft.
” (Phase III
Decision, pages 13-14.) (Emphasis added.)
4.
The court finds that these Appropriators did not establish by credible evidence, under any standard of proof, that sub-basins or sub-areas were in a condition of overdraft.” (Phase III Decision, page 14.)
STIPULATING LANDOWNERS/DISTRICT’S OBJECTIONS TO PROPOSED STATEMENT OF DECISION
PHASE IV AND V.
3

1 Thus, the result of the Phase III trial was that the Public Water Producers failed to prove
2 their claims of prescriptive rights to water of the Basin based on the alleged long-term overdraft
3 as against any of the Stipulating Landowners/District.
4
5
B. Order Approving Settlement Stipulation-
6
Following the Phase III trial, this Court supervised extensive settlement negotiations,
7 which resulted in the Settlement Stipulation. The Court then issued, on August 3, 2005, an
8
9 order approving the Settlement Stipulation and scheduling further phases of trial. As part of
10 that order, the Court directed that “any party that executes the Settlement Stipulation need not
11 appear or participate in the Phase 4 trial” or subsequent phases. (August 3, 2005 Order, page
12
2.) (Emphasis added.) Thereafter, the only parties appearing and participating in the Phase IV
13 and V trials were the Public Water Producers and a group of landowner parties which did not
14
15 execute the Settlement Stipulation, referred to as Land Owner Group and Wineman Group
16 (“Non-Stipulating Landowners”).
17
With regard to the Settlement Stipulation, the Court stated that “[a]fter consideration of
18
19 the arguments for and against approval of the Stipulation, the Court exercised its inherent
20 authority to approve the Settlement Stipulation [citation omitted], and the Court hereby orders
21 that it is valid and enforceable among all stipulating parties .” (August Order, page 1.)
22
(Emphasis added.) In conclusion, the Court held,
23
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25
26
27
“The Court finds that the Settlement Stipulation was negotiated in good faith, that its terms are reasonable, that it provides certainty to the parties, that it is a physical solution that protects the water resource and the rights and interests of the parties, that it provides flexibility for changing conditions, that it provides for judicial supervision through continuing jurisdiction of the Court, that it logically divides the basin into three separate management subareas that will resolve current and future water issues in each subarea, that it establishes an effective political solution to the actual and potential
28
STIPULATING LANDOWNERS/DISTRICT’S OBJECTIONS TO PROPOSED STATEMENT OF DECISION
PHASE IV AND V.
4

1
2
3
4
5 problems of this groundwater basin, and that it constitutes a reasonable compromise of disputed claims and defenses.” (Id., pages 1-2.)
C. Settlement Stipulation
Express terms in the Settlement Stipulation are germane to this Court’s consideration of
6 the Proposed Statement of Decision. Specifically, in the Declaration of Rights portion of the
7
Settlement Stipulation, which was agreed to be “a component of this physical solution”, 1
the
8 stipulating parties agreed that,
9
10
11
12
13
“Except as expressly modified by the settlement agreement . . . [Exhibit E], all Overlying
Owners that are also Stipulating Parties have a prior and paramount Overlying Right, whether or not exercised.
” (Settlement Stipulation, page 7, Para. III (A).) (Emphasis added.)
“As to the Stipulating Parties, no Party has proved prescriptive rights to any Native
Groundwater.
Future use by the Stipulating Parties will not be adverse and will not ripen into a prescriptive right as between the Stipulating Parties.” (Id., (B).) (Emphasis added.) 14
15
16
Additionally, the stipulating parties agreed as to claims of loss of rights that,
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19
20
21
“Nothing in this Stipulation shall be interpreted to require or encourage any Stipulating
Party to use more water in any Year than is actually required. As between the Stipulating
Parties, failure to use all of the water to which a Stipulating Party is entitled hereunder shall not, no matter how long continued, be deemed or constitute an abandonment or forfeiture of such Stipulating Party’s rights, in whole or part
.” (Id., page 33, X (F).)
(Emphasis added.)
As recognized by the Court when it held the Settlement Stipulation to be “valid and
22 enforceable among all stipulating parties” (August Order, page 1), the parties expressly agreed
23 that the Settlement Stipulation was “binding upon and [shall] inure to the benefit of each
24
Stipulating Party” (Id., X (H), page 34.) Further, each and every party that signed the
25
Settlement Stipulation agreed that it is “enjoined and restrained from exercising the rights and
26
27
28
1 See, Settlement Stipulation, page 8, Para. IV (A).
STIPULATING LANDOWNERS/DISTRICT’S OBJECTIONS TO PROPOSED STATEMENT OF DECISION
PHASE IV AND V.
5

1 obligations provided through this Stipulation in a manner inconsistent with the express
2 provisions of the Stipulation.” (Id., VIII (A), page 29.)
3
4
5
II.
Revisions to The Proposed Statement of Decision Are Required To Make It
Consistent With The Settlement Stipulation
The Stipulating Landowners appreciate that the Proposed Statement acknowledges that,
6
7 because the Court ordered that the Stipulating Landowners/District were not required to
8 participate in or appear at the Phase IV and V trials, “the court may not make any orders or
9 render any judgment reducing rights of any other overlying land owner parties in the Basin.”
10
(Proposed Statement, page 4.) Likewise, the Stipulating Landowners/District agree with the
11
Proposed Statement that “the majority of the property owners who produce water in the Basin
12 have entered into a stipulation to settle their interests in the case, and have stipulated with the
13
14
Public Water Producers regarding both their respective claimed rights and a purported physical
15 solution to preserve the hydrologic health of the Basin aquifer.” (Proposed Statement, page 5.)
16
Finally, the Stipulating Landowners/District agree with the Proposed Statement that the Court
17
“enter a single judgment incorporating the settlement stipulation.” (Proposed Statement, page 9.)
18
However, in order to accurately reflect the Settlement Stipulation’s resolution of the disputes
19
20 among the Stipulating Landowners/District and the Public Water Producers, and thus ensure that
21 the final judgment in this case accurately reflects that Stipulation, the Court should make certain
22 revisions to the Proposed Statement before adopting a statement of decision concerning the
23 issues discussed in the Proposed Statement.
24
The Stipulating Landowners/District thus file objections to the Proposed Statement
25
26 pursuant to Rule of Court, 232(d) on two grounds.
27 First, the Proposed Statement should be revised to specifically acknowledge that,
28 pursuant to the Court’s August Order, the Stipulating Landowners/District were not required to
STIPULATING LANDOWNERS/DISTRICT’S OBJECTIONS TO PROPOSED STATEMENT OF DECISION
PHASE IV AND V.
6

1 appear or participate in either the Phase IV and V trials and thus their rights are not affected by
2 the Phase IV and V trials and decision of this Court. (August Order, page 1; see also Spector v.
3
Superior Court of San Mateo (1961) 55 Cal. 2d. 839, 843-844.) Therefore, the Stipulating
4
Landowners/District recommend three amendments to the Proposed Statement. The Proposed
5
6
Statement should be revised, at page 1, to add a new footnote 1 stating,
7
8
9
10
“On August 3, 2005 this court ordered that ‘any party that executes the Settlement
Stipulation need not appear or participate in the Phase 4 trial.’ Thereafter, the only parties appearing and participating in the Phase IV and V trials were Public Water
Producers and the Land Owners as defined in this statement of decision.”
2
Further, the Proposed Statement’s discussion of the Non-Stipulating Land Owners’
11 claims of quiet title (Proposed Statement, p. 2), should be revised by substituting the term “Land
12
Owner” in place of “overlying landowners” to make clear that only the Non-Stipulating
13
Landowners’ rights are being referenced and not the rights of the Stipulating Landowners or the
14
15
District.
16 Finally, the Proposed Statement should be clarified to state that the evidence establishing
17
Public Water Producers’ prescriptive right claims only occurred in Phase IV and V and not Phase
18
III and that this evidence was not presented by or with regard to all parties. Therefore, the
19
Proposed Statement should be revised, at page two, to state, “[t]he evidence in Phase IV and V
20
21 establishes that overall pumping by all parties (overlying owners as well as appropriators)
22 continued without reduction during the periods of severe drought, resulting in a serious depletion
23 of water in the aquifer.” Similarly, on page four of the Proposed Statement, the phrase “at this
24 time” be stricken from line 18.
25
26
27
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2 The Stipulating Landowners/District’s proposed edits to the Proposed Statement are reflected in Exhibit A filed herewith.
STIPULATING LANDOWNERS/DISTRICT’S OBJECTIONS TO PROPOSED STATEMENT OF DECISION
PHASE IV AND V.
7

1 The Stipulating Landowners/District’s second ground for objecting to the Proposed
2
Statement is that certain passages in it must be clarified to reflect the fact that, under the
3
Settlement Stipulation, no party has acquired any prescriptive rights as against the Stipulating
4
Landowners/District. For example, the Proposed Statement’s footnote three, on page four, could
5
6 be read erroneously to imply that the Public Water Producers established prescriptive rights
7 against the Stipulating Landowners/District and have merely agreed not to exercise them. (See,
8
Proposed Statement, page 4, footnote 3.) As discussed above (pp. 4-5), however, in the
9
Settlement Stipulation, the Stipulating Landowners/District and the Public Water Producers
10 agreed that, “as to the Stipulating Parties, no party has proved prescriptive rights to any Native
11
12
Groundwater.” (Settlement Stipulation, p. 7.) Similarly, in the Settlement Stipulation, the
13 Stipulating Landowners/District and the Public Water Producers agreed that, excepts as among
14 the “Northern Parties,” “all Overlying Owners that are also Stipulating Parties have a prior and
15 paramount Overlying Right, whether or not exercised.” (Settlement Stipulation, p. 7.)
16
The terms of the Settlement Stipulation are valid and enforceable obligations as between
17
18 the Public Water Producers and the Stipulating Landowners/District. (August Order, page 1;
19 Citizens For Open Access to Sand and Tide, Inc. v. Seadrift Association, et. al. (1998) 60
20
Cal.App.4
th 1053, 1065; Goodstein v. Bank of San Pedro (1994) 27 Cal.App. 4 th 899, 905-906;
21
Los Angeles County v. Law Bldg. Corp. (1967) 254 Cal.App. 2d 848, 853.) In order to
22 accurately reflect the Settlement Stipulation, and thus lay the necessary groundwork for
23
24 incorporating the Settlement Stipulation in the Court’s final judgment, the Stipulating
25 Landowners/District therefore request that certain revisions be made to the Proposed Statement.
26
The Stipulating Landowners/District request that the section of the Proposed Statement
27 addressing the Public Water Producers’ prescriptive rights claims (Proposed Statement, pp. 2-3),
28
STIPULATING LANDOWNERS/DISTRICT’S OBJECTIONS TO PROPOSED STATEMENT OF DECISION
PHASE IV AND V.
8

1 be revised to state:
2
3
4
5
6
7
8
9
10
“Provided, however, these prescriptive rights are also subject to the stipulation between the Public Water Producers and stipulating landowners. [ footnote 3, text follows ] In pertinent part, the stipulation requires that: (a) ‘As to the Stipulating Parties, no Party has proved prescriptive rights to any Native Groundwater. Future use by the Stipulating
Parties will not be adverse and will not ripen into a prescriptive right as between the
Stipulating Parties.’ (Stipulation III(B)); (b) ‘Except as expressly modified by the settlement agreement . . . [Exhibit E], all Overlying Owners that are also Stipulating
Parties have a prior and paramount Overlying Right, whether or not yet exercised.’
(Stipulation, III(A)); and (c) ‘As between the Stipulating Parties, failure to use all of the water to which a Stipulating Party is entitled hereunder shall not, no matter how long continued, be deemed to constitute an abandonment or forfeiture of such Stipulating
Party’s rights, in whole or part.’ (Stipulation X(F).)” (See, Exhibit “A”, pages 3.)
Similarly, the Stipulating Landowners/District request that the Proposed Statement be revised to
11 clarify that all prescriptive rights of the Public Water Producers are “subject to the stipulation.”
12
(See, Exhibit “A”, pages 2, 5, 9.) Such revisions will avoid disputes regarding the content of the
13 final judgment in this action.
14
15
Finally, to accurately reflect the Settlement Stipulation, the Proposed Statement’s
16 discussion of determinations that may occur in the event of water shortages in the Basin needs to
17 be clarified. In that regard, the Stipulating Landowners/District request that the Proposed
18
Statement (p. 4, ll. 25-28) be revised to provide:
19
20
21
22
“Under those circumstances a court would be required to recognize and enforce take into consideration the declaration of rights agreed upon between the parties to the stipulation,
L and O wners’ rights, prescriptive rights, imported water rights, rights to salvaged water, and the right to return flows.” (See, Exhibit “A”, page 4.)
CONCLUSION
23
For all the foregoing reasons and authorities stated herein, the Stipulating
24
25
Landowners/District respectfully request that the Court order that the Proposed Statement be
26 revised to conform with this Court’s prior orders, decisions and terms of the Settlement
27 Stipulation all as provided in Exhibit “A” attached hereto.
28
STIPULATING LANDOWNERS/DISTRICT’S OBJECTIONS TO PROPOSED STATEMENT OF DECISION
PHASE IV AND V.
9

1 Respectfully submitted,
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By _______/s/______________________
KEVIN O’BRIEN
Downey Brand LLP
Attorneys for Plaintiff, Cross-Defendant,
Santa Maria Valley Water Conservation District
By _________/s/______________________
SCOTT K. KUNEY
The Law Offices of Young Wooldridge LLP
Attorneys for Cross-Defendants/Cross-Complainants,
Chevron U.S.A. Inc., Aera Energy LLC,
and Cross-defendant Ben Laverty III
By ___________/s/__________________
CRAIG A. PARTON
Price Postel & Parma LLP
Attorneys for Cross-Defendants/Cross-Complainants ConocoPhillips Company,
Successor by Merger to the Interests of Conoco Inc., Tosco Corporation and Phillips
Petroleum Company, OSR Enterprises, Inc., OSR Ranch Limited Partnership, Owen T.
Rice & Sons, NRG Enterprises, TH Limited Partnership and JLSA, LP.
By ____________/s/_____________
BOB H. JOYCE
LeBeau-Thelen LLP
Attorneys for Cross-Defendants, ARCO Environmental Remediation LLC
21
22
23
24
By _________/s/___________________
WAYNE K. LEMIEUX
LEMIEUX & O'NEILL
Attorneys for Cross-Defendants/Cross-Complainants, Apio, et al.
25
26
27
28
By ______/s/______________________
RYAN S. BEZERRA
Bartkiewicz, Kronick & Shanahan
Attorneys for Cross-Defendants Rancho Maria, LLC, Rio Mesa Land Company, LLC, and the 1994 William D. Massa Revocable Trust
STIPULATING LANDOWNERS/DISTRICT’S OBJECTIONS TO PROPOSED STATEMENT OF DECISION
PHASE IV AND V.
10

25
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By __________/s/____________________
STEVEN J. ADAMSKI
Adamski & Moroski
Attorneys for Cross-Defendants, Bruce N. Gordon, Borel Bank & Trust co., Bankers
Trust Co. of California, James M. Acquistapace, Tower Grove Vintners, Inc.
By ___________/s/___________________
PETER L. CANDY
Hollister & Brace
Attorneys for Cross-Defendants, Flood Ranch Company, Union Asphalt, Inc., West
Bay Company, LLC, Whiterock Company, LLC, Cal-Westgate Ranch, LLC, Cal-
Cobblestone Creek, LLC, Harpstone Partnership, LP, Aviation Way, LLC, Old Rio
Bravo, LLC
12
13
14
15
16
STIPULATING LANDOWNERS/DISTRICT’S OBJECTIONS TO PROPOSED STATEMENT OF DECISION
PHASE IV AND V.
11

SUPERIOR COURT OF THE STATE OF CALIFORNIA
COUNTY OF SANTA CLARA
SANTA MARIA VALLEY WATER
CONSERVATION DISTRICT,
Plaintiff, v.
CITY OF SANTA MARIA, ET AL,
SANTA MARIA GROUNDWATER
LITIGATION
Lead Case No. CV 770214
Judge: HON. JACK KOMAR
(CONSOLIDATED FOR ALL PURPOSES)
Defendant.
[Consolidated With Case Numbers: CV
784900; CV 785509; CV 785522; CV
787150; CV 784921; CV 785511; CV
785936; CV 787151; CV 784926; CV
785515; CV 786791; CV 787152]
____________________________________
San Luis Obispo County Superior Court Case
Nos. 990738 and 990739
AND RELATED ACTIONS.
[PROPOSED] STATEMENT OF DECISION RE
PHASE V
STATEMENT OF DECISION RE PHASE V TRIAL
EXHIBIT “A”

1 Following the presentation of testimony from witnesses and the admission of exhibits in Phase V of
2 this matter, the parties submitted written arguments. The matter having been submitted, the court now renders
3 its statement of decision.
4
The issues for decision include whether the Land Owner Group ("LOG") parties and Wineman Group
5 parties (collectively "Land Owners") 1 are entitled to any relief on their Quiet Title actions, what rights the
6
Public Water Producers 2 may have as a result of the court's finding of prescription, whether the rights of the
7
Land Owners are reduced as a result of any prescriptive rights and whether any Land Owner exercised "self-
8 help," whether the court should make orders in equity by way of a physical solution and declaratory relief as
9 requested by the Public Water Producers, and whether the court should enter a single judgment or a separate
10 judgment on the stipulation of the settling parties.
11
QUIET TITLE
12
The Land Owners dismissed at trial all of their causes of action except their quiet title causes of action,
13 which seek to quiet title to the alleged "superior priority" of their water rights. Although the quiet title remedy
14 may be appropriate to establish water rights in some cases, it is not an appropriate remedy in this case for
15 several reasons. First, the Land Owners failed to sue the other overlying landowners in the basin, who have
16 adverse claims to and interests in the groundwater basin., (CCP § 762.060(b).) Second, the Land Owners failed
17 to present any evidence as to their individual reasonable and beneficial use of groundwater underlying their
18 land. Third, in Phase 4, the Court decided that the Public Water Producers had established prescriptive rights to
19
7,000 acre feet of water per year. Fourth, title to most of the Land Owners' real property was stipulated by the
20
Public Water Producers, and no evidence of any "adverse claims" to title to their real property was presented.
21
(See CCP § 760.020(a).) Fifth, the Public Water Producers are entitled to declaratory relief, as discussed below,
22 and that is a more appropriate remedy for adjudication of water rights. Accordingly, judgment will be entered in
23
24
25
26
27
28
1 On August 3, 2005 this court ordered that “any party that executes the Settlement Stipulation need not appear or participate in the Phase 4 trial.” Thereafter, the only parties appearing and participating in the Phase IV and V trials were Public Water Producers and the Land Owners as defined in this statement of decision. This statement is based on the evidence and arguments from Phase V, as well as prior rulings and the evidence admitted in
Phase IV, which were ruled to be admissible in subsequent phases.
2 The Public Water Producers are the City of Santa Maria, Golden State Water Company, Rural Water Company, the City of
Guadalupe, the "Northern Cities" (the Cities of Arroyo Grande, Pismo Beach, Grover Beach, and Oceano Community
Services District) and the Nipomo Community Services District.
STATEMENT OF DECISION RE PHASE V TRIAL
EXHIBIT “A”

1 favor of the Public Water Producers on the Land Owners' quiet title causes of action. In the Phase IV trial, the
2 court concluded that certain Public Water Producers had pumped water in specified amounts during periods of
3 overdraft and that such pumping was open, notorious and hostile to the rights of overlying landowners. The
4 court quantified the combined prescriptive rights so found as 7000 acre feet a year. The prescriptive rights must
5 be measured against whatever quantified rights Land Owners overlying owners have. Thus, while the evidence
6 presented is sufficient to establish legal title to the property, there was no self-help or other evidence that would
7 permit the court to quiet title to, or quantify, the Land Owners overlying water rights in light of the claim of
8 prescription.
9
PRESCRIPTION
10
The City of Santa Maria has established a prescriptive right to 5100 acre feet a year and the Golden State
11
Water Company has established a prescriptive right to 1900 acre feet a year. Those rights are usufructuary and
12 are also correlative to the same extent that an overlying owner's rights are correlative. The Public Water
13
Producers that established prescriptive rights are entitled, subject to the stipulation, to those specific quantities of
14 water in the Basin, the same as any overlying landowner, so long as there is a surplus of water in the aquifer.
15
They also have a priority over other appropriators in those circumstances, just as an overlying owner has a
16 priority when there is no surplus. In times of shortage, the holders of prescriptive rights have, subject to the
17 stipulation, priority over the rights of any overlying owners to the extent those overlying owners failed to exercise
18
"self-help" during the applicable prescriptive periods.
19
The Public Water Producers ask the court to allocate the prescriptive rights obtained by the City of
20
Santa Maria and the Golden State Water Company against only the Land Owner parties. But the evidence
21 establishes that the water appropriated by the Public Water Producers was not water to which only the Land
22
Owner parties have rights. All rights within the Basin may be affected by the acquisition of prescriptive
23 rights by a party who appropriates. The evidence in Phase IV and V establishes that overall pumping by all
24 parties (overlying owners as well as appropriators) continued without reduction during the periods of severe
25 drought, resulting in serious depletion of water in the aquifer. Prescriptive rights obtained during that period
26 therefore must be charged against the aquifer as a whole and all overlying owners to one extent or the other
27 and not just against the Land Owners. Provided, however, these prescriptive rights are also subject to the
28
STATEMENT OF DECISION RE PHASE V TRIAL
EXHIBIT “A”

1 stipulation between the Public Water Producers and stipulating landowners.
3
2
SELF-HELP
3
The Land Owner parties ask the court to find that they exercised self-help during the applicable
4 prescriptive periods, and that the Public Water Producers have therefore not acquired any prescriptive rights.
5
Specifically, the Land Owner parties argue that the exercise of self-help negates one or more of the elements of
6 prescription. The doctrine of "self-help" is a concept that has been used by the courts to describe the relationship
7 between overlying land owners and appropriators in circumstances where an appropriator has obtained
8 prescriptive rights at the same time that an overlying owner has continued to pump but has not sought legal action
9 to enjoin the appropriator. Whether it is appropriately called self-help or not, there is a legal consequence to the
10 continuous pumping from the aquifer during times of overdraft by both the appropriator and the overlying land
11 owner.
12
The party asserting prescription must prove the elements of prescription. The land owner mitigates the
13 effect of prescription by so called "self-help" but does not negate prescription entirely. Perhaps traditional
14 common law principles best describe it. See analogously Smith v. New Hampshire (1906) 4 Cal.App. 8, where a
15 party obtained a prescriptive easement in a ditch to carry water across the land of another but the fee owner also
16 used the easement during the period. of prescription to transport water. As a consequence, the prescriptive
17 easement was nonexclusive. The analogy is far from perfect but is somewhat useful as authority for the
18 proposition that the exercise of self-help mitigates but does not prevent the adverse party from obtaining
19 prescriptive rights.
20
In the ground water context, even though the overlying owner continues to pump concurrently with the
21 appropriator, because there is no surplus in times of overdraft, the appropriator is taking water to which the
22 overlying owner has a prior right. It would seem that using the Smith v. New Hampshire reasoning, the land
23 owner cannot prevent prescription but may mitigate the loss of rights by continuing to pump. Thus, the court
24
25
26
27
28
3 The Public Water Producers have agreed not to exercise prescriptive rights against the stipulating landowners.
In pertinent part, the stipulation requires that: (a) “As to the Stipulating Parties, no Party has proved prescriptive rights to any Native
Groundwater. Future use by the Stipulating Parties will not be adverse and will not ripen into a prescriptive right as between the
Stipulating Parties.” (Stipulation III(B)); (b) “Except as expressly modified by the settlement agreement . . . [Exhibit E], all
Overlying Owners that are also Stipulating Parties have a prior and paramount Overlying Right, whether or not yet exercised.”
(Stipulation, III(A)); and (c) “As between the Stipulating Parties, failure to use all of the water to which a Stipulating Party is entitled hereunder shall not, no matter how long continued, be deemed to constitute an abandonment or forfeiture of such Stipulating Party’s rights, in whole or part.” (Stipulation X(F).)
STATEMENT OF DECISION RE PHASE V TRIAL
EXHIBIT “A”

1 rejects the Land Owners' claim that the exercise of self-help defeats the acquisition of prescriptive rights.
2 The burden is on an overlying landowner to prove that the landowner exercised self-help during the
3 applicable prescriptive periods. In order to prove self-help, an overlying landowner must present evidence of
4 quantities of water pumped from and reasonably and beneficially used on the overlying parcel during the
5 prescriptive periods. To the extent a landowner makes this showing, the landowner retains a quantified right to
6 the amount of water actually pumped and loses any "amounts not pumped" during the prescriptive periods. (Hi-
7 Desert County Water District v. Blue Skies Country Club (1994) 23 Cal.App. 4 th 1723, 1732.) In times of
8 shortage, the overlying landowner is limited to the quantified self-help right, which is of equal priority to the
9 prescriptive right.
10 As stated above, the Land Owner parties did not present evidence as to the reasonable and beneficial use
11 of water on their land, either now or during the applicable prescriptive periods. The Land Owner parties
12 presented only generalized evidence regarding overall pumping in the Basin. Thus, the Land Owner parties did
13 not meet the burden of proving that they, or any one of their members, exercised self-help during the applicable
14 prescriptive periods. The court therefore cannot grant the Land Owner parties, or any of their members, a
15 quantified self-help right.
16 The only overlying landowner parties adverse to the Public Water Producers in the fourth and fifth
17 phases of the trial are the Land Owner parties and therefore the court may not make any orders or render any judgment reducing the rights of any other overlying land owner parties in the Basin. at this time. Further,
18 without a quantification of the water rights of the Land Owner parties, as well as the other overlying owners'
19 rights, the court at this time cannot determine the effect that prescription has on any landowner party.
20
In the event of water shortages in the Basin, it would be necessary for the court to quantify all
21 usufructuary rights and equitably allocate pumping rights of each right holder over whom the court has
22 jurisdiction. Under those circumstances a court would be required to recognize and enforce take into
23 consideration the declaration of rights agreed upon between the parties to the stipulation, Land Owners' rights,
24 prescriptive rights, imported water rights, rights to salvaged water, and the right to return flows.
25
26
PHYSICAL SOLUTION
27
The stipulating parties have agreed and requested that the court retain equitable jurisdiction over the
28 parties in this matter. There is a reasonable certainty that the Basin will suffer water shortages in the future
STATEMENT OF DECISION RE PHASE V TRIAL
EXHIBIT “A”

1 and that the court will be required to act in the future to preserve the rights of the various parties to this
2 litigation in the event that Twitchell is not renovated and restored. Even if Twitchell is restored, there is a
3 possibility that such shortages may occur.
4 Future water shortages may require the court to evaluate pumping rights and to quantify the reasonable
5 and beneficial uses of water which each party seeks to pump. The majority of the property owners who produce
6 water in the Basin have entered into a stipulation to settle their interests in the case, and have stipulated with the
7 Public Water Producers regarding both their respective claimed rights and a purported physical solution to
8 preserve the hydrologic health of the Basin aquifer. The stipulation, inter alia, provides for monitoring of water
9 use. That data will be available to the court in the event of a severe water shortage affecting the entire Basin if
10 the court is called upon to act. The Land Owner parties are not parties to the stipulation and have not agreed to
11 participate in water monitoring.
12 Commencing 90 days after judgment is entered, the Land Owners must monitor their water production
13 through the use of flow meters, maintain records thereof, and file the data with the court at the end of each year
14 beginning in 2007. This data is needed due to the substantial likelihood of future water shortage, and so that the
15 court can ascertain the reasonable and beneficial use of water rights of all parties and the effect of prescription
16 (subject to the stipulation) on all overlying land owner water producers, if and when necessary. Further, this
17 information will permit the parties to make optimal use of the Basin's water resources consistent with the
18 dictates of Article X, Section 2 of the California Constitution. All parties, including all non-stipulating parties,
19 must participate in the applicable Management Area Monitoring Program, described in the settlement
20 stipulation.
21
The court concludes that a physical solution is necessary and appropriate to provide for future
22 exigencies and that the water management plan provided for in the stipulation is necessary and appropriate and
23 will provide an efficacious solution to the Basin's current and future problems. Further, the water management
24 plan contained in the stipulation, including the Management Area Monitoring Program, does not impair or
25
26 otherwise adversely affect the rights of the Land Owners. The court previously approved the water management plan and the Settlement Stipulation by Order dated August 3, 2005. The court will incorporate them in its final
27 judgment and require compliance by all settling parties with them.
28
TWITCHELL ALLOCATION
STATEMENT OF DECISION RE PHASE V TRIAL
EXHIBIT “A”

1 The stipulating parties have also agreed as between themselves to equitably divide the supplemental water
2 salvaged by Twitchell that results in augmented recharge to the aquifer. The augmented recharge to the Basin
3 from Twitchell to which the stipulating parties have agreed is 32,000 acre feet a year (hereafter, "Twitchell
4 Yield"). The stipulating parties have agreed to allocate 80 percent of that augmented recharge to the Public Water
5 Producers who will pay for the ongoing maintenance and rehabilitation of the Twitchell Project and 20 percent to
6 other parties to the stipulation whose lands are located within the boundaries of the Santa Maria Valley Water
7 Conservation District ("District"). The parties can so agree and be bound to the agreement in the future. Those
8 who are not parties to the stipulation, specifically the Land Owner parties, however, are not bound by it and are
9 not entitled to its benefits and are not required to assume its burdens. In the event of a drought and consequent
10 water shortages, the stipulating parties will have a basis to ask the court to enforce the settlement among
11 themselves if need be and to allocate salvaged Twitchell water in accordance with the stipulation.
12 In its Phase IV Proposed Statement of Decision, the court held that neither the Land Owners nor any
13 other parties have a contractual right to any water produced by Twitchell except as the District may be
14 authorized to enter into such agreements for the future operation of the project. (Proposed Phase IV
15 Statement of Decision, p. 20) Thus, enforcement of the Twitchell allocation prescribed by the stipulation
16 does not affect any contractual rights of the non-stipulating parties. Further, enforcement of the
17 stipulation's Twitchell allocation, as between the stipulating parties, does not adversely affect the rights to
18 native ground water of any non-stipulating parties. The correlative rights of non-stipulating parties to
19 native ground water will remain unaffected by the stipulation, subject only to the court's findings of the
20 legal consequence of those prescriptive rights held by some Public Water Producers and the court's
21 equitable jurisdiction.
22 The Land Owner parties contend that the District cannot enter into such a contract (the stipulation)
23 because the District lacks authority to allocate Twitchell Water to the parties who will pay for it in the future.
24 They also argue that even if the District has the authority to do so, it would have to comply with the California
25 Environmental Quality Act ("CEQA") before doing so. The stipulation allocates water rights only among those
26 parties who are party to it. The objecting, non-stipulating parties are not parties to it.
27 The stipulation does not deprive any non-stipulating party of water, does not modify the on-going
28 operation of the Twitchell reservoir and dam, and merely provides a funding mechanism for the future operation
STATEMENT OF DECISION RE PHASE V TRIAL
EXHIBIT “A”

1 and maintenance of the Twitchell project. As such, the District's approval of the settlement stipulation is not a
2
"project" subject to CEQA. Further, any such claim is barred by the statute of limitations. (Pub. Res. Code §
3
21167(a); 14 C.C.R. § 15352.)
4 Further, in its Proposed Phase IV Statement of Decision; the court held that so long as the District uses
5 the water for the general purposes prescribed by its contract with the Santa Barbara County Water Agency, and
6 properly exercises its statutory powers in that regard for the public good within the District, it may regulate and
7 allocate the Twitchell Water consistent with its contract and under the terms of the License. (Proposed Phase IV
8 Statement of Decision, p. 20.). Thus, the District does have the right to provide by contract (the settlement
9 stipulation) for the ongoing maintenance and operation of the Twitchell project, and in doing so, to carry out its
10 contractual duties arising out of the contract between the U.S. Department of the Interior (Bureau of
11 Reclamation) and the Santa Barbara County Water Agency and, in turn, the contract between the Santa Barbara
12 County Water Agency and the District.
13 The District is a water conservation district organized under Water Code section 74000, et seq. This enabling
14 act authorizes the District to "make contracts and do all acts necessary for the full exercise of its powers" (Wat.
15
Code § 74501), including the maintenance, operation and repair of the project (Wat. Code § 74523) and the
16 acquisition or disposal of water conserved by operation of the project (Wat. Code § 74592). It further provides
17 that the District "may sell, deliver, distribute, or otherwise dispose of any water that may be stored or
18 appropriated, owned, or controlled by the district." (Wat. Code § 74526.)
19 The District's contractual duties include the maintenance and operation of the dam and reservoir for flood
20 control purposes and the enhancement of annual recharge of the aquifer for the benefit of landowners within the
21 District. The District has the power to enter into contracts to carry out those functions. The stipulation is a
22 contract that is designed to provide for restoration and maintenance of the storage capacity of the reservoir and
23 thereby ensure an adequate water supply for the entire valley. That is a legitimate purpose and it benefits all
24 parties here, even the Land Owner parties. The District has assigned no operational authority for the project; the
25 stipulation expressly provides that the project "will continue to be governed by and subject to the terms and
26 conditions of the December 1955 agreement between the District and the Agency and nothing in this Stipulation
27 is intended to modify the rights or obligations provided in that agreement." (Settlement Stipulation, at V.D.6.)
28 The overwhelming majority of the Basin's water producers have entered into the stipulation. The only parties who
STATEMENT OF DECISION RE PHASE V TRIAL
EXHIBIT “A”

1 object are the Land Owner parties.
2 The District has, consistent with its authorizing authority, committed to allocating the Twitchell Yield to
3 those who will fund the improvements and remediation of the project necessary to maintain the project's yield.
4 The District's contractual agreement to permit certain parties to pay for the on-going operation and management
5 of the project, including any necessary improvements to the project — a project that will continue to benefit the
6 entire valley and all valley parties — and to compensate those parties for their financial commitments, is entirely
7 consistent with the District's statutory authorities.
8 The stipulation's allocation of Twitchell Yield is also consistent with the water rights license for the
9 project. State Water Resources Control Board License No. 10416 authorizes the Bureau of Reclamation to
10 appropriate water flowing in the Cuyama River for irrigation, domestic, salinity control, municipal, industrial and
11 recreational uses. The stipulation allocates the project water for municipal, domestic, and irrigation uses,
12 consistent with the license. The stipulation provides for necessary improvements to the project to permit the
13
14 continuation of the benefits of the project for all District lands and equitably allocates the Twitchell Yield in times of shortage based on the parties' respective contributions to the continuing operation and maintenance of the project.
15
(Settlement Stipulation, V.A.4.b.ii., V.D.3.c.)
16 The Basin continues to be in jeopardy of overdraft in times of drought. Pumping has increased with
17 increases in population and irrigation. The Twitchell dam has ongoing and increasingly serious accumulation of
18 silt in the reservoir. The build up of silt in the reservoir reduces the capacity of the reservoir to store water
19 necessary to recharge the aquifer. To date the dam has lost substantial capacity to store water as a consequence
20 of silt accumulation.' Increasing the capacity of the dam is a long range endeavor. If a lengthy period of drought
21 occurs before the dam capacity has been restored, pumping at current levels from the aquifer will be reasonably
22 certain to result in an overdraft. The agreement between the stipulating parties offers some hope for the future of
23 the Basin but it is not a guaranty even under the best of circumstances. Even after the dam was completed, there
24 was an overdraft in the Basin for the years 1959 to 1967, in addition to extensive pre-Twitchell periods of
25 overdraft in the historic past. The area has experienced extreme variations in precipitation and run off from the
26 surrounding watershed, and drought years have historically been lengthy and severe. The evidence before the
27 Court is that similar patterns may be expected to recur in the future.
28
STATEMENT OF DECISION RE PHASE V TRIAL
EXHIBIT “A”

1 CONCLUSION
2 Thus, this is a matter in equity and the Court will therefore retain jurisdiction to carry out and enforce
3 its judgment as necessary, to implement the stipulation and physical solution, and to protect the interests of all
4 parties, the stipulating parties, the Land Owner parties, the Public Water Producers and the public generally.
5 The Court intends to enter a single judgment incorporating the settlement stipulation. All parties
6 (stipulating and non-stipulating) shall participate in, and be bound by, the Management Area Monitoring
7 Program described in the settlement stipulation.
8 The prescriptive rights of the Public Water Producers shall, subject to the stipulation, be part of the
9 judgment.
10 The Court will enter judgment for the cross-defendant Public Water Producers on the cross-
11 complaints by LOG and Wineman parties for quiet title.
12 The Court will find title to parcels of real property in the LOG and Wineman parties as part of the
13 Declaratory Relief requested by the Public Water Producers but will deny quiet title to water rights for the
14 reasons discussed above.
15 In the Northern Cities Area, the rights of the Northern Cities vis-à-vis the other settling parties .are
16 governed by the Settlement Stipulation, which the Court adopts as the physical solution among the settling
17 parties. With respect to the non-settling Land Owners, a declaratory judgment will be entered in favor of the
18 Northern Cities stating that: (a) the Northern Cities have a prior right to 7,300 acre feet of water per year in the
19 Northern Cities Area; and (b) the non-settling Land Owners have no overlying, appropriative, or other right to
20 use any water supplies in the Northern Cities Area.
21 Judgments may also be entered against all defaulting and non-appearing parties.
22
23
24
25
26
Dated: November _______ , 2006
27
28
By:
Hon. Jack Komar
Judge of the Superior Court
STATEMENT OF DECISION RE PHASE V TRIAL
EXHIBIT “A”