Editor’s note: This is Part 13 of a series of posts in which Denver-area real estate attorney Frederick Skillern provides summaries of case law pertinent to real estate practitioners (click here for previous posts). These updates originally appeared as materials for the 32nd Annual Real Estate Symposium in July 2014.
Shigo, LLC v. Hocker
Colorado Court of Appeals, February 27, 2014
2014 COA 16
Execution upon water rights; homestead; water rights appurtenant to land.
A creditor obtains a judgment against Hocker for $4.4 million, and seeks to levy and execute upon Hocker’s shares in the Highland Ditch Company. Hocker owns an undivided 50 percent interest in two and three-quarter shares of Highland stock. The Highland shares represent Hocker’s right to use water that runs through a mutually owned ditch, a branch of which leads to a pond on the 35-acre farm that Hocker owns with her husband. Hocker files a claim under the homestead exemption, asserting that the shares, which represent water rights appurtenant to her farm, could not be levied. The court denies Hocker’s claim of exemption, and Hocker appeals.
The district court found that the homestead exemption “does not apply to water stock certificates.” The appeals court holds that the homestead exemption for a “farm” includes not just the farm’s soil, but also the water rights appurtenant to the land.
Shares of stock in a mutual ditch company represent water rights. However, because the record is not clear as to whether the water rights represented by the Highland shares are necessary to the use and enjoyment of the farm, the case was reversed and remanded to the trial court for further findings on that issue.