B&C Prevails in 4 Week Trial Over Multi-Million Dispute
Judge Rules that Moulton Niguel Water District Legally Obligated to Pay its Bills
Laguna Beach, Calif. (February 27, 2019)– In a preliminary decision issued after a month-long trial, Judge Randall S. Stamen ruled today that Moulton Niguel Water District is required to pay its bills for a wastewater treatment facility that it is obligated to fund. Moulton Niguel illegally stopped paying its invoices for capital improvements at the facility in July 2016, and its past-due amount owed now stands at more than $2 million.
In his preliminary decision today, Judge Stamen concluded:
“MNWD is legally obligated to pay its proportional share of all costs, including capital costs and, items necessary to maintain and operate the Coastal Treatment Plant until February 19, 2030…”
The ruling marks a decisive victory for the City of Laguna Beach, South Coast Water District, Emerald Bay Service District and the South Orange County Wastewater Authority (Plaintiffs).. The Plaintiffs were forced to litigate once Moulton Niguel’s delinquency began to threaten the safe operations of the facility and public health at local beaches.
“Today’s decision is a clear win for our residents, the environment, ocean water quality and the sanctity of contracts between partners,” said Michael Dunbar, General Manager of Emerald Bay Service District. “We’re absolutely pleased with the judge’s preliminary decision. A contract is a contract and MNWD must now pay its bills.”
Moulton Niguel attempted to argue that it could unilaterally refuse to pay the obligations outlined by the agreement on an annual basis. The Laguna Niguel-based district also attempted to argue that its obligations ended in 2026, not 2030. Judge Stamen categorically rejected both claims by MNWD.
A Potential Catalyst to a Conclusion
According to the Plaintiffs, the resounding clarity provided by Judge Stamen’s preliminary decision can now serve as a catalyst to a conclusion to this years-long pursuit of justice and fairness.
“This ruling sets the parameters of Moulton Niguel’s potential divestment from the Coastal Treatment Plant,” continued Dunbar. “If Moulton Niguel wants out of its contract early, it must come to the table in good faith. We will not accept any offer that threatens the integrity of the plant or places Moulton Niguel’s financial responsibilities on the backs of our taxpayers. But we remain open to fair and equitable proposals that make sense for both sides.”
Background
In the late 1990s, MNWD requested and was granted a contract to acquire 29 percent of the Coastal Treatment Plant’s wastewater capacity. The contract requires MNWD to fund all plant repairs and maintenance at the same percentage. MNWD adhered to its contract for 17 years without expressing concern. In 2016, it abruptly stopped paying its contractual obligations. It now owes over $2 million for critical repairs and maintenance. After a year of attempting to negotiate, the Plaintiffs were forced to file litigation in 2017 to compel MNWD pay its bills. The trial was held in Riverside Superior Court.
Brown & Charbonneau, LLP (“B&C”) is an Irvine, CA based law firm that handles complex business litigation, civil litigation and complex family law matters. B&C is located at 420 Exchange, Suite 270, Irvine, CA 92602 714.505.3000. For questions about our firm’s services, please call or email Krystal Lee at klee@bc-llp.com.
