A San Diego County firm has filed a lawsuit in Santa Barbara County Superior Court against the Santa Maria Valley Water Conservation District and three companies seeking more than $600,000 for emergency work at Twitchell Dam and Reservoir.

In addition to the SMVWCD, the War Eagle Consulting & Contracting Inc. lawsuit also named Barnett Southern Corp. and Mitigation Solutions LLC. Weeks after the initial filing, a first amended complaint added Western Sierra Resource Corporation as a defendant. 

The water conservation district oversees maintenance and operations of Twitchell Dam and Reservoir, which has a capacity of 224,300 acre-feet. Twitchell Dam was built by the U.S. Bureau of Reclamation between 1956 and 1958. 

Earlier this year, the district hired Mitigation Solutions, which subcontracted with Barnett Southern Corp., which in turn subcontracted with War Eagle for work at the site, according to the lawsuit.

The firm undertook emergency work at Twitchell totaling at least $623,083, but has not been paid. 

“Plaintiff performed emergency water pumping and related mitigation services on the project for the benefit of the district, with the district’s knowledge and consent,” according to the civil complaint filed by attorney Michael Battin from Navigato & Battin LLP.

“The district has not paid plaintiff for the services and materials so provided. As such, plaintiff is entitled to the reasonable value of the services and materials so provided, in an amount to be proven at trial but in no event less than $623,083.00.”

SMVWCD attorney Keith Lemieux of Aleshire & Winder LLP declined to comment on the lawsuit.

The three firms also named as defendants did not respond to a Noozhawk request for comment.

War Eagle’s lawsuit contended that a judge needs to determined if some provisions of the deal between it and Barnett Southern are void and unenforceable.

“In particular, and without limitation, Plaintiff desires a judicial determination as to whether the governing law, “pay-if-paid,” and indemnity provisions of the BSC-WECC Subcontract are void as violative of California law and public policy,” the civil complaint stated. “A judicial determination is necessary and appropriate at this time under the
circumstances.”

Earlier this year, one of two Santa Barbara County Grand Jury reports criticized the water district for hiring Mitigation Solutions to remove dirt and vegetation from the dam’s intake area and sediment from the reservoir to boost storage capacity.

MSL apparently approached the district, which did not seek bids because the firm claimed the contract would be a net zero cost to the district.

In a news release, MSL’s parent company, Western Sierra Resource Corp., claimed the contract had a value of $1.976 billionpayable over the seven- to 10-year term of the project, and that the firm has $190 million in financing, all unverified by the district, the Grand Jury said.

MSL claimed it would seek federal funding for the district work, and a January news release from the firm said the work at Twitchell had started.

The press release also is mentioned in the War Eagle lawsuit.

“WSR represented in a press release that it had ‘secured $40 million in equipment
financing and a $150 million Line of Credit for phased mobilization immediately available through institutional providers’ for the Twitchell Dam project. On information and belief, none of the alleged financing was used for or benefitted the Project, including paying Plaintiff,” the civil complaint said.

In early June at the board’s direction the water district’s attorneys notified MSL the firm had breached five sections of the contract, according to the district’s meeting minutes.

“Due to the current and ongoing breaches,” the attorneys wrote, the mitigation contract will end Sept 3, 2023.

An amendment and assignment agreement recently considered by the SMVWCD board claimed Mitigation Solutions and Barnett Southern had completed some work but were awaiting payment from the Federal Emergency Management Agency. 

According to the agreement, Barnett Southern “acknowledges and agrees that SMVWCD is only obligated to make payment in full for the work performed by BSC at the Project in an amount equal to what SMVWCD is reimbursed by FEMA.”

Since the summer, the district hired a consultant to help secure grants and handle other aspects including to provide compliance services, oversight of the restoration of the Twitchell Reservoir and Dam. 

The one-year contract sets a maximum liability at $4 million.

That consultant, Horne Inc. has charged more than $94,500, according to an Oct. 19 Twitchell Dam Project Update. 

The tally by Horne claimed the total costs incurred due to the two emergencies affecting Twitchell added up to nearly $31 million by mid-October with most of the costs occurring while MSL led the effort.