May 19, 2019

Colorado Supreme Court: City of Englewood v. Burlington Ditch, Reservoir and Land Co.

on June 21, 2010.

No-Call Agreements—Subordination Agreements—Presumption of Injury—Proof of Injury.

In 1999, Farmers Reservoir and Irrigation Company (FRICO); Burlington Ditch, Reservoir and Land Company; and Henrylyn Irrigation District (collectively, the Companies) entered into a settlement agreement (agreement) with the City and County of Denver, acting by and through its Board of Water Commissioners (Denver), to resolve various water rights issues. Among other things, the agreement provided that the Companies would not place a call on their 1885 Oasis storage right, which is the most senior storage right on the South Platte River and consists of reservoir priorities Nos. 1 and 2 for filling Barr and Oasis Reservoirs. The City of Englewood challenged this agreement before the water court, Division 1, in an action to resolve applications by the Companies and others for changes in water rights, alternate points of diversion, an appropriative right of exchange, a new junior water right, and a plan for augmentation.

In a pretrial order, the water court found that: (1) the agreement was a valid no-call agreement; (2) the agreement did not constitute a change of water right or subordination agreement; (3) Englewood did not have a right to maintenance of stream conditions created by the placement of a call; (4) there is no legally cognizable claim of injury from a no-call agreement unless it violates public policy; and (5) Englewood’s claims are not entitled to a presumption of injury, and Englewood has the burden of proof of injury. After a two-day trial, the water court further ruled that Englewood failed to present evidence that the agreement violated either public policy or the one-fill rule. Englewood appealed these determinations by the water court and further argued that the water court erred in its rulings regarding proof of injury.

The Supreme Court affirmed the judgment of the water court and held that the agreement is a valid no-call agreement. Additionally, the Court rejected Englewood’s claims that the water court erred by not allowing it to rely on a presumption of injury, by prohibiting the introduction of certain evidence of injury at trial, by ignoring other evidence of injury in its ruling, and by determining that a stipulation at trial protected junior appropriators from injury.

Summary and full case available here.

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