June 25, 2019

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.

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