October 22, 2017

Colorado Supreme Court: Decree Determining Water Right Only Allows Diversion at Downriver Pump

The Colorado Supreme Court issued its opinion in Select Energy Services, LLC v. K-LOW, LLC on Monday, May 15, 2017.

Water Law—Change of Water Right—Rules of Water Decree Interpretation—Nature and Extent of Right Acquired.

This appeal from the water court in Water Division No. 1 concerns the nature and extent of a water right following a recent change to its diversion point. The right initially diverted water at a headgate on the South Platte River, but pursuant yo the recently enacted simple change statute, C.R.S. § 37-92-305(3.5), its owner changed that diversion point to a pump farther downstream. Interpreting the decree recognizing the change, the water court concluded it did not include a right to divert water from a ditch historically used to convey the water right. On appeal, the supreme court reached the same conclusion. Because, by its plain language, the decree defining the water right allows its holder to divert water only at the pump downriver from the disputed ditch, and that language is not susceptible to any other reasonable interpretation, the court concluded that the decree does not include a right to divert water from that ditch. The court therefore affirmed the water court’s judgment.

Summary provided courtesy of The Colorado Lawyer.

Colorado Supreme Court: Storage of Water Right Prior to Use Was Not Lawful

The Colorado Supreme Court issued its opinion in Grand Valley Water Users Association v. Busk-Ivanhoe, Inc. on Monday, December 5, 2016.

Change of Water Right Application—Historic Consumptive Use Analysis—Transmountain Diversion.

This appeal from the water court in Water Division 2 concerns certain rulings relevant to the historic consumptive use quantification of transmountain water rights that are the subject of a change application. The Supreme Court held that the water court erred when it concluded that storage of the water rights on the eastern slope prior to use for their decreed purpose was lawful. The Court concluded that the right to store water in the basin of import prior to use is not an automatic incident of transmountain water rights, but rather, must be reflected, or at least implied, in the decree. Here, the decree is silent with respect to storage of the water on the eastern slope prior to use for supplemental irrigation and, on the facts of this case, the record does not support the water court’s finding of an implied right in the decree for such storage. To the extent that unlawful storage of the water on the eastern slope expanded the decreed rights, such amounts cannot be included in the quantification of those rights.

Because storage of the subject water rights in the basin of import prior to use was unlawful, the water court erred in including the volumes of exported water paid as rental fees for storage on the eastern slope in its historic consumptive use quantification of the water rights.

Finally, the water court erred in concluding that it was required to exclude the 22 years of undecreed municipal use of the subject water rights from the representative study period. In this case, the undecreed use did not represent expanded use of the decreed right for which an appropriator may not receive credit but rather, 22 years of non-use of the decreed rights. Because unjustified non-use of a decreed right should be considered when quantifying historic consumptive use for purposes of a change application, the water court must determine whether the years of non-use of the rights for their decreed purpose were unjustified. If so, the water court should consider including the years of unjustified non-use in the representative study period as “zero-use” years for purposes of its historic consumptive use analysis.

The Court reversed the water court’s rulings and remanded the case for further proceedings consistent with this opinion.

Summary provided courtesy of The Colorado Lawyer.

Colorado Court of Appeals: Reversal Based on Firm and Definite Conviction that Mistake Had Been Made

The Colorado Court of Appeals issued its opinion in Indian Mountain Corp. v. Indian Mountain Metropolitan District on Thursday, August 11, 2016.

In 1970, Indian Mountain Corporation’s (IMC’s) predecessor in interest purchased land and water rights in Park County with the intent of creating an upscale subdivision within a community of amenities. After residential construction had begun in the Indian Mountain subdivision, SB 72-35 passed, requiring the subdivision to obtain a water-court-approved augmentation plan. The plan required homeowners to drill a well at their own expense, but for many years, IMC maintained and operated the plan at its own expense.

In 1972, the developer spearheaded the creation of the Indian Mountain Parks & Recreation District, which was converted into the Indian Mountain Metropolitan District (IMMD) in 2012 in order to be able to legally purchase and provide water services. IMMD negotiated to purchase the plan from IMC, but was not successful. In 2013, owners of a neighboring ranch approached IMC’s director about purchasing the reservoir, and eventually purchased all of the assets of IMC, including the water plan. IMC’s new owner charged IMMD for its water usage, but IMMD did not pay the invoices.

IMC filed an action in district court, seeking a declaratory injunction that it is the legal owner of the water rights and the plan and IMMD has no right, title, or interest in them. IMMD filed an answer and counterclaim, seeking a declaratory injunction that the Indian Mountain lot owners owned the plan and water rights as beneficiaries of a constructive trust. The district court issued an order in favor of IMMD. IMC filed a post-judgment motion requesting a hearing on the amount of reasonable fees it could charge IMMD for ongoing operation of the plan, which the district court denied.

On appeal, the court of appeals ruled the district court erred in finding that the water rights and augmentation plan were held in a constructive trust. The court based its reversal on a “firm and definite conviction that a mistake ha[d] been made.” Because three experts testified that the lot prices included the cost of the plan, but all advanced different theories that were directly refuted by the documentary evidence in the record, the court found reversal necessary. The court of appeals found that the district court clearly erred in finding that the lot prices included the cost of the plan, and the unjust enrichment analysis failed at the first prong.

The judgment of the district court was reversed.

Colorado Supreme Court: Water Authority Can Use Junior Priority First but Must Live with Its Decision

The Colorado Supreme Court issued its opinion in Concerning the Application for Water Rights of the Upper Eagle Regional Water Authority in the Eagle River in Eagle County, Colorado: Upper Eagle Regional Water Authority v. Wolfe on Tuesday, May 31, 2016.

Actual Use of Water and Application to Beneficial Use—Nature and Extent of Rights Acquired.

The Upper Eagle Regional Water Authority filed an application to make absolute 0.47 cubic feet per second of its Eagle River Diversion Point No. 2 conditional water right. The State and Division Engineers opposed the application, asserting that the Upper Eagle Regional Water Authority could not make its Eagle River Diversion Point No. 2 water right absolute when it owned another, more senior conditional water right, decreed for the same claimed beneficial uses at the same location and for diversion at the same point. The Supreme Court held that where there is no evidence of waste, hoarding, or other mischief, and no injury to the rights of other water users, the owner of a portfolio of water rights is entitled to select which of its different, in-priority conditional water rights it wishes to first divert and make absolute.

Summary provided courtesy of The Colorado Lawyer.

Colorado Supreme Court: Historical Consumptive Use Analysis Deficient so No Error in Denying Water Right Application

The Colorado Supreme Court issued its opinion in Boulder County v. Boulder & Weld County Mutual Ditch Co. on Monday, March 21, 2016.

Change of Water Right and Augmentation Plan Application—Historical Consumptive Use Analysis—Applicant’s Burden of Proof.

In this decision, the Supreme Court affirmed the water court’s judgment dismissing Boulder County’s application for underground water rights, approval of a plan for augmentation, a change of water rights, and an appropriative right of substitution and  exchange. The components of the County’s application were interdependent, such that  the fate of the application as a whole turned on the fate of the requested change of water  rights. The water court denied the change request based on its determination that the  County failed to carry its burden of proving historical consumptive use of the water right it sought to change. The Supreme Court concluded that this determination was supported by the record and therefore upheld it.

Summary and full case available here, courtesy of The Colorado Lawyer.

Colorado Supreme Court: Storm Runoff Correctly Classified as Designated Ground Water

The Colorado Supreme Court issued its opinion in In the Matter of Water Rights as Applied for by Meridian Service Metropolitan District: Meridian Service Metropolitan District v. Ground Water Commission on Monday, November 16, 2015.

Subject Matter Jurisdiction—Designated Ground Water—Claim Preclusion.

Meridian Service Metropolitan District (Meridian) principally asked the Supreme Court to decide whether storm runoff may be classified as “designated ground water” subject to administration and adjudication by the Colorado Ground Water Commission (Commission), or whether such water is in or tributary to a natural stream, vesting jurisdiction in the local water court pursuant to the Water Right Determination and Administration Act of 1969, CRS §§ 37-92-101 to -602. Meridian also made claim preclusion and public policy arguments and asserted that the Colorado Groundwater Management Act, CRS §§ 37-90-101 to -143, is unconstitutional. The Court concluded that because this case presented a question as to whether the water at issue met the statutory definition of “designated ground water,” the Commission had jurisdiction to make the initial determination of the issue presented. The Court further held that the Commission, and the district court on de novo review, correctly found that a portion of the water at issue met the statutory definition of “designated ground water” and was therefore subject to administration by the Commission. The Court concluded that Meridian’s remaining arguments were not supported by the record or applicable law. The district court’s order was affirmed.

Summary and full case available here, courtesy of The Colorado Lawyer.

Colorado Supreme Court: Challenges to Water Plan Failed to Allege or Establish Injury

The Colorado Supreme Court issued its opinion in Concerning the Office of the State Engineer’s Approval of the Plan of Water Management for the Special Improvement District No. 1 of the Rio Grande Water Conservation District: San Antonio, Los Pinos and Conejos River Acequia Preservation Association v. Special Improvement District No. 1 of the Rio Grande Water Conservation District on Monday, June 29, 2015.

Water Management Plans—Groundwater Management Plans—Retained Jurisdiction of Water Management Plans.

Objectors invoked the water court’s retained jurisdiction under CRS § 37-92-501(4)(c) over a plan of water management to raise challenges to an annual replacement plan developed pursuant to that plan of water management. The Supreme Court held: (1) the water court correctly rejected challenges raising issues decided by the water court in a prior decree and approved by this Court in San Antonio, Los Pinos, and Conejos River Acequia Preservation Association v. Special Improvement District No. 1, 270 P.3d 927, 931–32 (Colo. 2011); (2) an annual replacement plan need not be stayed pending resolution of objections; (3) the annual replacement plan’s identification of Closed Basin Project water was a suitable and adequate source of replacement water; and (4) the annual replacement plan’s treatment of augmentation plan wells did not violate the plan of water management, and its failure to include a separate list of augmentation plan wells did not render the annual replacement plan invalid. The Court affirmed the water court’s pretrial orders and its judgment and decree upholding the annual replacement plan.

Summary and full case available here, courtesy of The Colorado Lawyer.

Colorado Supreme Court: Fees and Costs Appropriately Imposed Against Non-Party for Frivolous Defenses

The Colorado Supreme Court issued its opinion in Concerning the Application for Water Rights for Cherokee Metropolitan District in El Paso County: Upper Black Squirrel Creek Ground Water Management District v. Cherokee Metropolitan District on Monday, June 22, 2015.

Ground Water Rights—Parties Rights Under a Stipulation.

Upper Black Squirrel Creek Ground Water Management District (UBS) appealed from an order of the water court interpreting an earlier stipulated decree, to which UBS and Cherokee Metropolitan District (Cherokee) were parties, concerning Cherokee’s rights to ground water in the Upper Black Squirrel Basin and, particularly, Cherokee’s right to export water for use outside the basin. UBS sought a declaration that a provision of the stipulation requiring Cherokee to deliver wastewater returns back into the basin for recharge of the aquifer barred Cherokee and Meridian (another metropolitan district with which Cherokee had entered into an intergovernmental agreement) from claiming credit for these wastewater returns as replacement water, for purposes of acquiring the right to additional pumping from Cherokee’s wells in the basin. The water court ruled instead that nothing in the stipulation, and particularly not its use of the word “recharge,” implied abandonment or forfeiture of any right Cherokee might otherwise have to claim future credits with the Ground Water Commission.

Although the water court found that Meridian, as a nonparty, was not bound by the stipulation, it assessed costs and attorney fees against Meridian for pursuing frivolous defenses. Meridian cross-appealed the water court’s order imposing costs and attorney fees.

Because the water court properly interpreted the stipulation, and because it did not abuse its discretion in ordering costs and fees, its orders as to which error has been assigned on appeal and cross-appeal respectively were affirmed.

Summary and full case available here, courtesy of The Colorado Lawyer.

Colorado Supreme Court: Water Court’s Conditional Decree of Non-Consumptive Hydropower Right Affirmed

The Colorado Supreme Court issued its opinion in Concerning the Application for Water Rights of Tidd: Frees v. Tidd on Monday, June 1, 2015.

Ditch Easement—Dominant and Servient Interests—Alterations to a Ditch—Conditional Water Right for Non-Consumptive Hydropower Use—Declaratory Judgment and Conditional Water Right Decree With Conditions to Protect Against Injury to Ditch and Water Right Interests—Water Right Determination and Administration Act of 1969.

The Supreme Court upheld the water court’s judgment entering a conditional water right decree for a non-consumptive hydropower use water right with a 2010 priority for 0.41 cfs diverted from Garner Creek through the headgate of Garner Creek Ditch No. 1 in Saguache County, Water Division No. 3. Charles and Barbara Tidd properly obtained a judicial declaration of no material injury to ditch and water right interests owned by the Frees in connection with a ditch easement located on the Tidds’ property. The Court upheld the water court’s finding that water is available for the non-consumptive conditional appropriation under the terms of the Water Right Determination and Administration Act of 1969, and the conditions included in the water court’s judgment and decree were sufficient to protect against injury to senior adjudicated water rights and the Frees’ ditch rights.

Summary and full case available here, courtesy of The Colorado Lawyer.

Colorado Supreme Court: Statutory Deadline for Water Right Abandonment List Non-Jurisdictional

The Colorado Supreme Court issued its opinion in Concerning the Protest of Tom McKenna and McKenna Ranch to the Revised Abandonment List of Water Rights in Water Division No. 2: McKenna v. Witte on Monday, April 6, 2015.

Water Court’s Jurisdiction—Abandonment.

This case was a direct appeal from a water court judgment that decreed three of the appellants’ water rights abandoned. The appellants challenged the water court’s jurisdiction to enter the judgment, based on the Division Engineer’s six-day delay in preparing the decennial abandonment list, as required by CRS § 37-92-401(1)(a), and asserted that there was insufficient evidence to support a judgment of abandonment.

The Supreme Court held that the deadline to prepare the abandonment list under CRS § 37-92-401(1)(a) is directional and is not a jurisdictional mandate. Thus, the Division Engineer’s failure to prepare the abandonment list by the statutory deadline did not divest the water court of jurisdiction over the case. Further, the Court declined to overturn the water court’s determination of abandonment because the record supports the conclusion that the appellants intended to permanently discontinue their use of the three water rights. The judgment was affirmed.

Summary and full case available here, courtesy of The Colorado Lawyer.

Colorado Supreme Court: Burden Shifted to Water Right Holder to Prove Excuse for Non-Diversion of Water Right

The Colorado Supreme Court issued its opinion in Wolfe, P.E. v. Jim Hutton Educational Foundation on Monday, March 16, 2015.

Presumption of Abandonment—Nonuse of Decreed Diversion Point—CRS § 37-92-402(11).

The Supreme Court held that when the State and Water Division Engineers prove that the water-right holder has not used the decreed point of diversion for ten years or more, the Engineers trigger the rebuttable presumption of abandonment under CRS § 37-92-402(11). Once triggered, the burden shifts to the water-right holder to demonstrate a lack of intent to abandon. Because the water court erroneously believed that proof of nonuse at the decreed point of diversion was insufficient to raise the presumption, it failed to require evidence excusing such nonuse to rebut the presumption. The Court therefore reversed the water court’s judgment and remanded the case for reconsideration of whether the Jim Hutton Educational Foundation met its burden of rebutting the presumption of abandonment.

Summary and full case available here, courtesy of The Colorado Lawyer.

Colorado Supreme Court: Issue Preclusion Does Not Bar Inquiry Into Post-Decree Historical Consumptive Use of Water Right

The Colorado Supreme Court issued its opinion in Concerning the Application for Water Rights of Sedalia Water and Sanitation District in Douglas County: Wolfe v. Sedalia Water and Sanitation District on Monday, February 9, 2015.

Historical Beneficial Consumptive Use Calculation—Change of Water Right and Augmentation Plan Decree—Claim and Issue Preclusion—Prolonged Unjustified Period of Nonuse.

The Supreme Court examined whether, in a successive change of the Stephan Sump No.1/Ball Ditch water right, its historical use based on average annual historical use in Case No. 83CW364 should be re-quantified to take into account twenty-four years of nonuse. The Court affirmed the water court’s determination that issue preclusion applies here to bar the State and Division Engineers from contesting the amount of historical beneficial consumptive use allocated to the Stephan Sump No.1/Ball Ditch water right for the 1872 to 1986 period. It reversed the water court’s ruling applying issue preclusion to the post-decree period following entry of the 1986 decree. The Court directed that, on remand from this decision in finalizing its decree, the water court should take any evidence and legal argument offered by the parties on the issue of the alleged period of post-1986 nonuse. If the water court finds there has been prolonged unjustified nonuse of the water right between entry of the prior change decree and the pending decree application, it may conclude that this constitutes a changed circumstance calling for the selection of a revised representative period of time for calculating the annual average annual consumptive use amount available for Sedalia Water and Sanitation District’s change of water right and augmentation decree.

Summary and full case available here, courtesy of The Colorado Lawyer.