GM’s May 8 letter to EVMWD Board of Directors

BY

Editor’s Note: This letter was provided to The Friday Flyer at the request of CLPOA President David Eilers and General Manager Christopher Mitchell.

 “Board of Directors:

“This letter is in response to your counsel, Best Best & Krieger LLP’s April 29, 2015 letter to Canyon Lake property Owners Association (‘CLPOA’), wherein you returned CLPOA’s payment under the Railroad Canyon Reservoir Lease Agreement (‘Lake Lease’). There are three issues from that letter which merit discussion.

“First, Elsinore Valley Municipal Water District (‘EVMWD’) improperly rejected CLPOA’s Lake Lease payment. CLPOA tendered a check to EVMWD for $344, 301.92 pursuant to the Lake Lease and EVMWD’s invoice BI 2266. CLPOA was, and is, in no way attempting to effectuate an ‘accord and satisfaction’ by tendering such payment to EVMWD.

“EVMWD cannot simply reject CLPOA’s Lake Lease payments when they are tendered to EVMWD, on the basis of CLPOA’s disagreement with EMVWD as to whether the payment schedule remains constitutional following the passage of Prop. 26.

“CLPOA is again tendering payment to EVMWD pursuant to that invoice, which is attached hereto along with payment.

“Second, EVMWD claims CLPOA would still be in default of the Lake Lease even if EVMWD accepted CLPOA’s aforementioned Lake Lease payment. You claim CLPOA must, in addition to paying the $344,302.92 Lake Lease payment, pay $132,157.62 to refund EVMWD’s ‘expenses incurred in enforcing the provisions of the Lease.’

“Quite frankly, your claim that EVMWD incurred costs of $132,157.62 to enforce the provisions of the Lake Lease is shocking, non-credible, and completely unsupported by any documentation whatsoever.

“EVMWD’s invoice BI 2266 called for payment in the amount of $344,302.92 to be paid by CLPOA to EVMWD by 3/15/15. CLPOA made payment to EVMWD pursuant to invoice BI 2266 in the exact amount called for on April 13, 2015, less than one month past invoice BI 2266’s stated due date. How EVMWD incurred $132,157.62 in expenses to enforce the Lake Lease under such circumstances is simply inconceivable, even in light of EVWD’s Cross-Complaint against CLPOA where only one cause of action addressed CLPOA’s alleged breach of the Lake Lease.

“Further, you do not even attempt to justify such amount. You just state that $132,157.62 is the amount owed, as if your word is an unquestionable mandate dictating what CLPOA must do. This approach is largely, if not solely, why CLPOA and EVMWD have not been able, thus far, to agree on a 5th Amendment to the Lake Lease that is fair to both parties.

“It is obvious your attorney simply concocted a number sufficiently high to dissuade CLPOA from actually paying EVMWD for claimed expenses incurred in enforcing the Lake Lease so you have purported justification to continue to improperly reject CLPOA’s payments, protract this conflict further, all to your attorney’s own pecuniary benefit.

“Please accept CLPOA’s $344,302.92 Lake Lease payment in satisfaction of EVMWD’s invoice BI 2255, and provide CLPOA with the actual costs and expenses EVMWD incurred as a result of CLPOA’s delay in tendering its Lake Lease payment pursuant to EVMWD’s invoice BI 2266, with invoices and documentation to support that number, for CLPOA’s review and evaluation. Upon receipt of that documentation and explanation as to why it was ‘incurred’ to enforce the lease, we will consider your demand. Until that time, your additional invoiced amount is rejected as unsubstantiated by both the lease and the law.

“Lastly, as CLPOA and EVMWD are both represented by counsel, I find it highly unethical for your attorney, John Brown of Best Best & Krieger LLP, as EVMWD’s counsel, to communicate with CLPOA directly, as Mr. Brown did in his April 29, 2015 letter to CLPOA’s Board. Mr. Brown’s lecture is unprofessional and unethical. I trust that he will refrain from speaking to CLPOA directly as we are represented by counsel – counsel he is well aware of, I might add. Please direct your attorney to communicate only with CLPOA’s counsel, Silldorf & Levine, LLP on all matters regarding the Lake Lease. However, the POA Board has offered an open invitation to meet with the EVMWD Board to continue our dialog on the Lake Lease.

“Again, let me be clear, the enclosed payment is to pay Invoice BI 2266 and the exact amount that was demanded in Mr. Brown’s letter dated March 15, 2015. CLPOA disputes that it is owed, but CLPOA will let the Court decide who is right and who is wrong. Please do not make up ‘conditions’ to your acceptance of this tender as it is not an attempt at ‘accord & satisfaction’ as suggested in Mr. Brown’s letter. It is merely a payment under protest. No different than if a water bill is received and paid in protest.”

Sincerely,

Christopher Mitchell, CPA, CCAM

General Manager

Canyon Lake Property Owners Association