Western Water Co. v. Yuba County Water Agency CA3

Filed 9/16/16 Western Water Co. v. Yuba County Water Agency CA3 NOT TO BE PUBLISHED

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 This opinion has not been certified for publication or ordered published for purposes of rule 8.1115.

IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA THIRD APPELLATE DISTRICT (Sacramento) ----

WESTERN WATER COMPANY,

Plaintiff and Appellant, C072058

v. (Super. Ct. No. 34201000070834CUBCGDS) YUBA COUNTY WATER AGENCY,

Defendant and Respondent.

In 1991, the predecessor of Western Water Company entered into an agreement with Yuba County Water Agency (the Agency) granting an easement for the use and transportation of water in an area called the Goldfields.1 Western Water Company

1 Western Aggregates LLC was a third party to the agreement and was joined in this litigation, but it took no position on the disputed issues at trial and it is not a party in this

1

(Western Water) subsequently filed suit alleging the Agency breached the agreement by taking subsurface water without paying for it, resulting in more than $100 million in damages. The trial court heard extensive evidence, determined the agreement was ambiguous, ultimately found no breach of the agreement, and entered judgment in favor of the Agency. The trial court subsequently entered a supplemental judgment ordering Western Water to pay the Agency’s attorney’s fees. Western Water now contends (1) section 9 of the agreement unambiguously granted the Agency a right to surface water, but the excess water at issue was subsurface water the Agency had no right to take without payment; (2) trial evidence proved the Agency breached the covenant of good faith and fair dealing by concealing and misrepresenting what it knew about the subsurface water flow; and (3) the supplemental judgment awarding attorney’s fees should not have included $112,777.40 to a law firm the trial court had disqualified. We conclude (1) the agreement does not require the Agency to pay groundwater prices for the excess water flowing naturally below the surface; (2) the Agency had no obligation to reveal everything it might have known about the quantity of the subsurface flow; and (3) the law firm at issue billed only for activities permitted by trial court order, and the trial court did not abuse its discretion in awarding attorney’s fees. We will affirm the judgment.