Court Opinion

ID: 8208506
Source: CourtListenerOpinion
Date Created: 2022-09-22 19:02:03.362409+00
Date Added: 2024-06-11T16:41:32.904419
License: Public Domain

Filed 9/22/22 North Kern Water Storage Dist. v. City of Bakersfield CA2/6

   NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS
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has not been certified for publication or ordered published for purposes of rule 8.1115.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

                         SECOND APPELLATE DISTRICT

                                         DIVISION SIX

 NORTH KERN WATER                                                2d Civ. No. B312766
 STORAGE DISTRICT,                                             (Super. Ct. No. 56-2011-
                                                               00408712-CU-CO-VTA)
      Plaintiff and Respondent,                                   (Ventura County)

 v.

 CITY OF BAKERSFIELD,

      Defendant and Appellant.

      In 1976, appellant City of Bakersfield (City) and
respondent North Kern Water Storage District (North Kern)
signed a long-term agreement in which City agreed to sell its
surplus water to North Kern. City tried to terminate the
agreement when the 35-year “Basic Term” ended in 2011. North
Kern sued to enforce its right to continue buying water under the
agreement’s indefinite “Extension Term.” The superior court
found the agreement remained in effect despite City’s intent to
terminate it. This court affirmed the judgment in 2016.
      The parties returned to court in 2020 when City declined to
sell water to North Kern. North Kern moved to hold City in
contempt of the 2014 judgment. At the ensuing hearing the trial
court found City was not in contempt but granted North Kern’s
companion motions seeking equitable and monetary relief. The
court imposed a constructive trust on water stored in Lake
Isabella and ordered City to compensate North Kern for costs
incurred to pump its own groundwater when City refused to sell.
City appealed.
      We affirm, concluding the court properly imposed these
remedies pursuant to its retained jurisdiction to enforce the
agreement and 2014 judgment. (Code. Civ. Proc. § 187.)
         FACTUAL AND PROCEDURAL BACKGROUND
                          The Agreement
      City acquired annual rights to more than 125,000 acre-feet
of Kern River water in the mid-1970s. This exceeded City’s needs
at the time. In 1976, North Kern agreed to purchase a portion of
the surplus water pursuant to a long-term supply contract (the
Agreement). The Agreement was divided into two terms. The
35-year Basic Term required City to supply, and North Kern to
buy, 20,000 acre-feet of water annually between 1976 and 2011.
The Extension Term began in 2012. It did not specify an ending
date. City remained obligated to deliver water to North Kern but
could “modify or terminate” the amount “subject to the City’s
shown need to and project to divert the 20,000 acre-feet per year
to use the water on City-owned property or within its boundaries
after having used all other water the City had available.” The
Agreement required City to provide storage figures, runoff
forecasts, and anticipated delivery schedules to North Kern at
specified times each year.

                                2
                        North Kern I Litigation
       City sought to terminate the Agreement when the Basic
Term expired in 2011. It argued the provision allowing it to
“modify or terminate” North Kern’s supply during the Extension
Term meant it could end the Agreement at will. North Kern filed
this action for declaratory and injunctive relief in response. At
the ensuing bench trial, the court found City could not
unilaterally terminate the entire Agreement. It could, however,
modify or terminate the amount sold during the year upon a
showing of its own need for the water. This was memorialized in
a statement of decision and incorporated into a judgment (the
2014 judgment). The court enjoined City from taking any action
inconsistent with the Agreement or the statement of decision,
and retained jurisdiction “for the purpose of a party returning . . .
to obtain relief from violations of [the] Judgment.” We affirmed
the 2014 judgment.1
                       North Kern II Litigation
       The parties returned to court in 2020. North Kern accused
City of violating the 2014 judgment by refusing to sell Extension
Term water or to provide storage figures and delivery schedules.
City responded that it could barely meet its residents’ needs
because of dry weather conditions. It argued North Kern’s
requests for information went beyond what the Agreement
required City to provide. North Kern sought relief by filing three
motions: (1) to enforce the 2014 judgment; (2) for monetary
relief; and (3) for an order to show cause re: contempt. The
claims of each were consolidated for trial.

      1North Kern Water Storage Dist. v. City of Bakersfield (Apr.
21, 2016, B260065) [nonpub. opn.] (North Kern I).

                                  3
       A central issue was City’s decision to use 40,000 acre-feet of
Kern River water in the first half of 2020 to recharge
groundwater via the Kern River channel and the “2800 Acre”
groundwater recharge facility located west of City.2 City insisted
this constituted a “need to divert” that took priority over
deliveries to North Kern under the Agreement and the 2014
judgment. The trial court found that recharging groundwater
was not a “need to divert” that excused City’s obligation to deliver
water. It also found City possessed the information sought by
North Kern and should have provided it. The court placed a
portion of the water stored in Lake Isabella into constructive
trust and awarded North Kern the costs of pumping groundwater
to meet its needs ($624,000).3 It found City not guilty of
contempt but granted the motion to enforce and the motion for
monetary relief. City appeals the latter two rulings.
                           DISCUSSION
                      A. Enforcing the Judgment
       City contends the trial court exceeded its authority by
awarding monetary relief to North Kern and imposing a
constructive trust. It insists contempt was the only procedure
available to the court to address City’s alleged violations of the
Agreement. We disagree.

      2 This included: (1) 27,527 acre-feet City allowed to flow
into the typically dry Kern River channel; and (2) 13,241 acre-feet
diverted into 2800 Acres.

      3 The court calculated this figure by subtracting the cost of
North Kern purchasing 20,000 acre-feet of water from City in
2020 under the Agreement ($2,180,000, or $109 per acre-foot)
from the costs incurred to pump groundwater to meet its
irrigation needs ($2,804,000).

                                 4
         Title 9 of the Code of Civil Procedure4 identifies five
categories of judgments.5 City correctly places the 2014 judgment
into the fifth category, i.e., those “requiring performance of an act
. . . or requiring forbearance from performing an act.” (§ 681.010,
subd. (e).) This category of judgment is subject to section
717.010, which states: “A judgment not otherwise enforceable
pursuant to this title may be enforced by personally serving a
certified copy of the judgment on the person required to obey it
and invoking the power of the court to punish for contempt.”
(Italics added.) We do not interpret this permissive language as
restricting the court from exercising the enforcement powers
conferred upon it by the parties.
         This dispute concerns an ongoing contract of indefinite
duration. (See North Kern I, supra, B260065, quoting Zee
Medical Distributor Assn., Inc. v. Zee Medical, Inc. (2000) 80
Cal.App.4th 1, 7 [“‘a contract may, by its express terms, provide
for a term of duration of indefinite length and without specific
limitation, tied not to the calendar but to the conduct of the
contracting parties’”].) The Agreement expressly allows for “a
court of competent jurisdiction” to craft “a reasonable and
equitable solution” when the parties cannot resolve disputes over

      Unlabeled statutory references are to the Code of Civil
      4

Procedure.

      5   The five types of judgment listed in section 681.010 are:
(1) money judgments (section 695.010 et seq.); (2) judgments for
possession of personal property (section 714.010 et seq.);
(3) judgments for possession of real property (section 715.010 et
seq.); (4) judgments for sale of real or personal property (section
716.010 et seq.); and (5) judgments “requiring performance of an
act . . . or requiring forbearance from performing an act” (section
717.010 et seq.).

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matters the Agreement left to future determination. (Agreement,
§ 12.2, subd. (e).) The 2014 judgment was the trial court’s
“reasonable and equitable solution” to the parties’ initial dispute.
The final paragraph confirms the court “retains jurisdiction for
the purpose of a party returning to this Court to obtain relief
from violations of this Judgment.” Nowhere does the Agreement
limit how the court can remedy future violations, or require one
or both of the parties to file an original action each time they find
themselves at odds during their annual Extension Term
discussions. (See Dawson v. East Side Union High School Dist.
(1994) 28 Cal.App.4th 998, 1045 [“In the exercise of its retained
jurisdiction the trial court could (among other things) properly
consider new evidence directly pertinent to the ongoing rights of
the parties”].)
      Awarding pumping costs compensated North Kern for
performing the contract in City’s stead. (See Kassir v. Zahabi
(2008) 164 Cal.App.4th 1352, 1357 [“It is well established that
the court has the power to award compensation incidental to a
decree for specific performance, such as rents, when necessary ‘to
relate the performance back to the date set in the contract’”];
Oceanside Cmty. Ass’n v. Oceanside Land Co. (1983) 147
Cal.App.3d 166, 177 [court of equity “may create new remedies to
deal with novel factual situations. . . . [It] is not strictly limited to
the particular relief requested in the prayer of the complaint”].)
We again conclude “the trial court properly adjudicated . . . the
parties’ rights and obligations under the Agreement’s Extension
Term” when it employed the dual remedies of constructive trust
and monetary relief. (North Kern I, supra, B260065, citing
§ 1060.)

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                    B. Double Jeopardy Challenge
       City contends double jeopardy barred the trial court from
granting North Kern’s motion to enforce the judgment and
motion for monetary relief after acquitting City of contempt.
(U.S. Const., 5th Amend.; Cal. Const., art. I, § 15.) City also
challenges these rulings as violating its due process rights.
(Ibid.) We review these issues de novo as arising from
undisputed facts. (See People v. Davis (2011) 202 Cal.App.4th
429, 438 [“when the facts are uncontradicted and different
inferences cannot be drawn, the question of former jeopardy is
one of law for the court to decide”].)
       “Although a contempt may arise, as here, in the context of a
civil action, a contempt proceeding is punitive and separate from
the cause out of which it arises.” (Cedars-Sinai Imaging Medical
Group v. Superior Court (2000) 83 Cal.App.4th 1281, 1287, citing
Kroneberger v. Superior Court (1961) 196 Cal.App.2d 206, 210.)
The contempt proceeding was adjudicated concurrently with the
two motions but remained a separate offense against the court,
not against North Kern. (Lloyd v. Superior Court (1982) 133
Cal.App.3d 896, 899-900, citing Raskin v. Superior Court (1934)
138 Cal.App. 668, 669-670 [“A court has the inherent power to
make sure judicial proceedings are conducted in a manner
consistent with the orderly administration of justice and to
punish those who show disrespect or disrupt the proceedings”].)
Double jeopardy did not bar the court from deciding the factually
related yet separate issues raised in the companion motions.
                      C. Due Process Challenge
       City next contends the trial court failed to give “timely and
proper notice” of the procedures it used to adjudicate North
Kern’s request for monetary relief. The record belies this
contention. North Kern’s three motions first came to hearing on

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September 11, 2020. The court issued tentative rulings on all
three. After argument, the court acknowledged the due process
implications of North Kern’s motions: “Again, I’ll just come full
circle and say that, unquestionably, North Kern is entitled to a
hearing on the OSC [re: contempt] issue. And so no matter what
we do, we’re going to be stuck doing a hearing. When I say
‘stuck,’ I don’t mean that I don’t want to do one. It just doesn’t
make a lot of sense to the Court to try to summarily resolve the
other issues when they’re inextricably connected with the
contempt matter. And I think that due process mandates a
hearing for all three matters.” (Italics added.)
       The evidentiary hearing took place over six days in October
and November of 2020. The parties briefed evidentiary issues in
December and stipulated to a closing argument schedule. The
court accepted a final round of briefing, heard closing arguments,
and issued its proposed statement of decision. The parties were
given an opportunity to comment and object before the court
adopted the statement of decision in May of 2021. They received
ample notice of the relief requested and how the court intended to
adjudicate the factual and legal issues presented. Each party
introduced volumes of evidence and filed lengthy objections to its
opponent’s evidence. The court provided due process to both
parties and, more broadly, crafted remedies well within its
retained equitable jurisdiction. (See Hutcherson v. Alexander
(1968) 264 Cal.App.2d 126, 134 [“a court of equity may, under
certain circumstances, retain jurisdiction over the parties to the
action in order to make certain that its orders and injunctions are
obeyed”].)
                         D. Double Recovery
       City argues the trial court gave North Kern “an improper
double recovery” by imposing a constructive trust and awarding

                                8
monetary relief. It describes these remedies as mutually
exclusive. (See, e.g., St. James Armenian Church of Los Angeles
v. Kurkjian (1975) 47 Cal.App.3d 547, 553 [“where the
constructive trustee has dissipated the fund or property that
would constitute the res of the constructive trust that theory will
not do equity and it is proper in such a situation to award,
instead, a judgment for money damages”].) This misconstrues
the decision. The court first enjoins City from “diverting or using
any water subject to constructive trust until the City first makes
an accounting to North Kern and the Court confirming its
compliance with this Order.” It then directs City to “deliver
payment to North Kern of $624,000.00 as the remaining
accounting balance of the additional costs of pumping.” (Italics
added.) The constructive trust remains in place only until City
satisfies its monetary obligation to North Kern. This creates no
windfall.
     E. Substantial Evidence for Imposing Constructive Trust
       “A constructive trust is an equitable remedy to compel the
transfer of property by one who is not justly entitled to it to one
who is.” (Habitat Trust for Wildlife, Inc. v. City of Rancho
Cucamonga (2009) 175 Cal.App.4th 1306, 1332.) “A constructive
trust may only be imposed when three conditions are met: the
existence of a res, the plaintiff’s right to the res, and the
defendant’s acquisition of the res by some wrongful act.” (Ibid.)
City contends North Kern failed to introduce evidence proving
these three conditions were met.
       City argues the trial court erred by imposing a constructive
trust without substantial evidence that City possessed an
identifiable or existing res at the time of trial. (See Corely v.
Hennessy (1943) 58 Cal.App.2d 883, 885 [“a trust will not be
created by judicial decree when there is no property upon which

                                 9
the trust can be impressed”].) As discussed above, the court
paired the remedies of constructive trust and monetary relief to
compensate North Kern for water it should have received from
City. The parties introduced affidavits, exhibits, and testimony
about the amount of water City possessed and controlled
throughout 2020. Whether City physically possessed or
controlled the entirety of the res at the time of trial is not
dispositive where, as here, the court found City had already
dissipated the res by releasing it from Lake Isabella and allowing
it to flow into the Kern River channel and 2800 Acres recharge
facility. (See, e.g., St. James Armenian Church of Los Angeles v.
Kurkjian, supra, 47 Cal.App.3d at p. 553 [“There is no difference
between the situation where a person who would be subject to
being declared a constructive trustee, has dissipated the res and
the situation where a person who, without having the res in his
possession, causes it to be diverted to a third person”].)
        North Kern need not have introduced evidence of its right
to water currently stored or banked by City. Trial was held in
October and November of 2020; the parties submitted their
closing briefs in Spring of 2021. North Kern had long since been
forced to find alternative water sources. The court properly
identified Lake Isabella as the situs of the constructive trust
because the lake once held the property dissipated by City in
violation of the Agreement, akin to a bank account from which
City commingled and withdrew funds. (See Mitchell v. Dunn
(1930) 211 Cal. 129, 133 [“where a trustee commingles trust and
personal funds, and then withdraws part of the fund, it will be
presumed that the withdrawals were from the personal funds of
the trustee, and that the balance constitutes the trust funds”].)
        We are not persuaded by City’s argument that North Kern
failed to prove the third condition of constructive trust, i.e., that

                                 10
City wrongfully acquired its water supply. North Kern did not
contend, and need not have proven, City obtained the water held
in Lake Isabella by illegal or wrongful means. It was enough
City wrongfully detained property it once possessed legally. (See
Civ. Code, 2223 [“One who wrongfully detains a thing is an
involuntary trustee thereof, for the benefit of the owner”]; Taylor
v. Polackwich (1983) 145 Cal.App.3d 1014, 1022 [“a constructive
trust may be imposed in practically any case where there is a
wrongful acquisition or detention of property to which another is
entitled”].) The dispute centered on how City handled its supply
or, more specifically, its decision to turn surface water (in Lake
Isabella) into groundwater (via 2800 Acres and the Kern River
channel) instead of selling it to North Kern. Both sides
introduced evidence in support of their positions; the trial court
found North Kern’s more persuasive. Substantial evidence
supported the ruling.
                            DISPOSITION
       Judgment is affirmed. North Kern shall recover its costs
on appeal.
       NOT TO BE PUBLISHED.

                                     PERREN, J.*
We concur:

      GILBERT, P.J.                  YEGAN, J.

      * Retired Associate Justice of the Court of Appeal, Second
Appellate District, assigned by the Chief Justice pursuant to
article VI, section 6 of the California Constitution.

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                    Kevin G. DeNoce, Judge
               Superior Court County of Ventura
                ______________________________

      Duane Morris, Colin L. Pearce and Jolie-Anne S. Ansley;
Bakersfield City Attorney’s Office and Virginia A. Gennaro, for
Defendant and Appellant.
      Young Wooldridge, Scott K. Kuney and Brett A. Stroud;
Price, Postal & Parma and Timothy E. Metzinger, for Plaintiff
and Respondent.

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