Thursday, December 29, 2011

Berman v. Yarbrough

The Utah Supreme Court recently issued its opinion in Berman v. Yarbrough. Mr. Berman owns water rights in both Utah and Wyoming that he uses on property in Uinta County, Wyoming. In the early 2000s, Wyoming water officials determined that part of Mr. Berman’s Utah water rights were not properly documented according to Wyoming procedure, and therefore began delivering only a portion of Mr. Berman’s Utah water rights.

Mr. Berman filed suit in Utah district court, seeking (1) to have his Utah water rights quantified and (2) to have the court require the Wyoming water officials to deliver the water he is entitled to under his Utah water rights. The court issued an order that quantified Mr. Berman’s Utah water rights, but did not order the Wyoming water officials to take any action with respect to the Utah water rights.

A few years later, Wyoming water officials again refused to deliver all of Mr. Berman’s Utah water rights. Mr. Berman filed a Motion to Enforce with the Utah district court, in which Mr. Berman asked the court to force the Wyoming water officials to deliver the water he was entitled to under the court’s prior order. The court denied the Motion to Enforce, holding that it did not have jurisdiction to tell Wyoming water officials how to interpret the order. Mr. Berman appealed the court’s decision to the Utah Supreme Court.

The Supreme Court began its analysis by noting that Motions to Enforce are appropriate only when a party fails to comply with his or her legal obligations under a court order or a binding settlement agreement. The Supreme Court also noted that the court order must contain an unequivocal mandate in order for a Motion to Enforce to be appropriate. In this case, the Utah court’s order quantifying Mr. Berman’s Utah water rights did not contain any mandate for Wyoming water officials, let alone an unequivocal mandate. Accordingly, the Utah Supreme Court determined that the Motion to Enforce was procedurally improper, and therefore properly denied.

To read the full opinion, click here.

Thursday, December 22, 2011

Liston v. Liston

The Utah Court of Appeals recently issued its decision in Liston v. Liston. Although primarily a divorce case, a portion of the opinion addresses an issue of water law.

In the case, the husband and wife went through divorce proceedings. One of their assets was a home. The couple also had four shares of stock in Holliday Water Company. As part of a mediation agreement, the wife agreed to quitclaim her interest in the home to the husband for $10,000. The husband later asserted that the four shares were appurtenant to the home, and therefore belonged to him pursuant to the mediation agreement and the quitclaim deed from the wife. The trial court disagreed, and held that only one share was necessary to supply water for the home, and that this share therefore went to the husband along with the home. The trial court further held that the other three shares were not appurtenant to the home, and therefore the husband and wife were each entitled to half of the value of the shares, which was determined to be $5,000 per share.

In the appeal, the husband asserted that the trial court was incorrect in its conclusions regarding the three shares. The Court of Appeals, however, affirmed the trial court's holding. The Court of Appeals noted that Utah Code section 73-1-11(4) provides that shares of stock in a mutual water company are not deemed appurtenant to land. Accordingly, the Court of Appeals concluded that the three shares could not have passed with the home when the wife quitclaimed her interest in the home to the husband. Thus, the wife was entitled to $7,500, representing half of the value of the three shares.

As an interesting note, the Court of Appeals included a footnote in its opinion that points out that the parties in the case had confused water shares and water rights. The Court of Appeals made it a point to clarify the difference between a water share and a water right.

Wednesday, November 30, 2011

What Is a Pending Adjudication Claim?

According to the Utah Division of Water Rights, a Pending Adjudication Claim "is a water user claim submitted to the Division as part of a general adjudication, with no other basis for the claim in [the Division's] records, and without the benefit of being published in a proposed determination and affirmed by the district court."

The most common Pending Adjudication Claim is demonstrated by the following example (based on a real matter that I worked on):
Farmer Jones owns 20 acres of land that he irrigates with water from a small creek, just like his family has done since the 1890s. Although Farmer Jones has a valid water right based on diligence (i.e., pre-1903 water use), no diligence claim has ever been filed to put the water right on record. In the early 1970s, the Utah Division of Water Rights initiates a general adjudication in the area. Farmer Jones fills out and submits a Water Users Claim, under which he seeks to establish the 1890 right to divert water from the creek for the irrigation of 20 acres. Unfortunately, however, the general adjudication process is never completed, and no proposed determination or decree is ever published.

The Division of Water Rights would classify Farmer Jones' claimed water right as a Pending Adjudication Claim. Note that it is a "claimed" water right, as the Division does not recognize it as a fully-established water right. The Division of Water Rights will not allow Farmer Jones to take certain actions on his water right (like file a Change Application) until the water right is fully established, which requires that either (1) Farmer Jones files a diligence claim, or (2) a proposed determination or decree is published in the general adjudication. The likelihood of #2 occurring is very low, since it has been 40 years since the general adjudication began. Thus, Farmer Jones would need to file a diligence claim to establish the water right.

Water rights that are classified as Pending Adjudication Claims will also have a large warning on the water rights database that states "Please be aware that the claim under this Water Right has NOT been established in accordance with statute and its validity is in question. Therefore, CAUTION is advised when relying upon this record." For this reason, it may be difficult to sell a Pending Adjudication Claim unless the water right has been established by the filing of a diligence claim.

Tuesday, October 4, 2011

Utah Stream Access Coalition - Motion for Summary Judgment

A quick update on the Provo River stream access lawsuit between Utah Stream Access Coalition and ATC Realty Sixteen Inc.

First, there have been a few changes in the parties to the lawsuit. The State of Utah has agreed to intervene and defend against the Coalition's constitutional challenges to House Bill 141 passed by the Utah Legislature in 2010. In exchange, the Coalition has agreed to dismiss the Utah Division of Wildlife Resources, the Utah Division of Parks and Recreation, and Sheriff Todd Bonner as defendants.

Second, the Coalition has filed a Motion for Summary Judgment (in essence, a motion for the court to rule in the Coalition's favor without going through a trial). In the Motion, the Coalition argues that HB 141:

  • "Violates the public's constitutional right to use Utah's natural waters for all recreational activities that use the water and to touch the privately-owned beds of such water in ways incidental to those uses."

  • "Violates Article XX, Sect. 1 of the Utah Constitution" (public lands held in trust for the people)

  • "Violates Article V of the Utah Constitution" (distribution of powers between the three branches of government)

  • "Violates the public trust doctrine" (the principle that public resources should be managed by the government for the benefit of the people)

  • I have a copy of the Motion for Summary Judgment, and I would be happy to email a copy to anyone who is interested. Click here for my email address.

    Wednesday, August 10, 2011

    Montana v. Wyoming

    The following article was published in the Water & The Law newsletter, which our firm publishes on a quarterly basis. If you would like to receive an email version of the newsletter, please click here to join our mailing list.
    It is somewhat rare that the U.S. Supreme Court delves into the world of western water law, but it recently did so in a case between the states of Montana and Wyoming. This case is not an appeal of any decision by a lower court, because when one state sues another, the case goes directly to the U.S. Supreme Court for determination. The central issue in the case is whether Wyoming violated the Yellowstone River Compact because Wyoming water users had converted from flood irrigation to sprinkle irrigation, which increased the consumption of water in Wyoming beyond historic (pre-1950) levels.

    Wyoming, Montana, and North Dakota entered into the Yellowstone River Compact in 1951, and Congress then ratified the Compact. The Compact provided that beneficial users of water on the Yellowstone River system with priority dates before January 1, 1950 "shall continue to be enjoyed in accordance with . . . the doctrine of appropriation." Montana claimed, among other claims, that more efficient irrigation practices were consuming more water on the Wyoming (upstream) side, which left less water for the pre-1950 Montana water rights. Montana based its claims first on general principles of the prior appropriation doctrine, and second on the Compact's definition of "beneficial use."

    The Court concluded that, although "the law of return flows is an unclear area of the appropriation doctrine," the general rule allows a water user to increase his irrigation efficiency even if that harms downstream users. First, the injury that a change in water use cannot injure other water users does not apply to changes in crop type or irrigation method, but applies to changes in points of diversion, or place or purpose of use. Second, most western states allow an appropriator to recapture and reuse water on the same acreage as long as it remains on the property and within the water user's control. Thus, the general rule already allows increased consumption through recapture.

    The Court also rejected Montana's second claim that the compact itself strictly limited Wyoming to a maximum amount of depletion. The Court indicated that other compacts like the Colorado River Compact expressly limit depletion amounts, but the Yellowstone River Compact does not. Therefore, the Court concluded that the Compact's definition of beneficial use simple acknowledged a preference for consumptive uses rather than nonconsumptive uses.

    Ultimately, this case is not binding on any state court, including Utah courts. The Supreme Court specifically acknowledged that state courts control the doctrine of prior appropriation. Nevertheless, the discussion found in the case is instructive of general principles of western water law.

    (Click here to read the full text of the Supreme Court's Opinion)

    Tuesday, July 5, 2011

    Water Rights Addendum

    Beginning July 1 of this year, a person submitting a deed to a county recorder's office may also submit an attached "Water Rights Addendum" (also commonly referred to as a "Deed Rider"). These Water Rights Addenda were originally approved by House Bill 314, passed by the Utah legislature in 2010, which added Section 57-3-109 to the Utah Code.

    There are two different forms. The Water Rights Addendum to Land Deeds allows the seller of real estate to specify what water rights (if any) are being conveyed with the land. The Water Rights Addendum to Water Deeds allows the seller of a water right to include additional specification about the water right (or portion of water right) conveyed.

    The Water Rights Addenda will be an invaluable tool in clarifying water rights conveyed as part of a real estate transaction. Oftentimes in real estate transactions, there is little or no thought given to the water rights conveyed. Many of the water rights disputes I deal with could have been prevented if the buyer and seller had thought about and specified the water rights conveyed (or not conveyed). The Addenda will go a long way in reducing disputes associated with appurtenance and unclear ownership of water rights--if the Addenda are used correctly.

    Even though the Addenda are not required, any buyer or seller of land or water rights will want to use the Addenda, and all real estate agents, title agents, and others involved in real estate transactions should understand and utilize the Addenda. If you are buying or selling land or water rights, it would be wise for you to insist on a Water Rights Addendum being included with the deed.

    As a note, an additional bonus of the Addenda is that they can save you the cost of a Report of Conveyance. Under the statute, each county recorder is to forward recorded Addenda to the Division of Water Rights' title department. If the water right owner on the Division's records is the same person as the grantee in the Addendum, the Division will update title without having to file a Report of Conveyance.

    Tuesday, June 28, 2011

    Salt Lake City v. Big Ditch Irrigation Company

    Today, the Utah Supreme Court issued its opinion in the case of Salt Lake City v. Big Ditch Irrigation Company. The case centers on a 1905 water exchange agreement (“the Agreement”) between Salt Lake City (“the City”) and Big Ditch Irrigation Company (“Big Ditch”). The Agreement states that Big Ditch “grants, bargains and sells” its right to water from Big Cottonwood Creek, and in return, the City would “perpetually and continuously deliver” water suitable for irrigation to the head of Big Ditch’s canal. Big Ditch and the City have operated under the Agreement for over 100 years. However, the amount of water Big Ditch has received from the City has declined over the years, as residential and commercial development in Big Ditch’s historic service area has reduced the number of irrigated acres.

    In 2006, Big Ditch and some of its shareholders filed change applications to modify their use of the exchange water received from the City. The City protested, asserting that Big Ditch and its shareholders did not own the water rights, and were therefore not entitled to file change applications. The City then filed suit against Big Ditch and the shareholders, asserting that (1) under the Agreement, the City holds title to the Big Cottonwood Creek water rights and the exchanged water; (2) that Big Ditch and its shareholders do not have a right to file a change application on the exchanged water; (3) that the City is not in breach of its delivery obligations under the Agreement; and (4) that Big Ditch and its shareholders have the contractual right to receive only the amount of water necessary to satisfy the irrigation needs of Big Ditch shareholders whose lands are served by the Big Ditch system. Big Ditch and the shareholders filed counterclaims against the City, asserting among other things that the City was in violation of the Utah Antitrust Act.

    In a series of decisions, the district court ruled in favor of the City. Specifically, the district court (1) denied the individual shareholders’ motion to dismiss the City’s claims against them; (2) held that the City holds title to all of the water under the Agreement; (3) held that Big Ditch did not have the right to file change applications on the exchanged water; (4) held that Big Ditch was barred from demanding the full amount of water to which it was entitled under the Agreement; and (5) dismissed the counterclaim against the City for violation of the Utah Antitrust Act.

    The district court’s rulings were appealed to the Utah Supreme Court (“the Court”). The Court reviewed each of the five issues outlined above, ultimately concluding that the district court was correct on some issues, but erred on other issues. The Court’s conclusions on each of the five issues are discussed below.

    First, the Court held that the district court erred when it denied the individual shareholders’ motion to dismiss the City’s claims against them. The Court noted that the district court had used the wrong legal standard when reviewing the motion to dismiss. Additionally, the Court noted that the shareholders’ rights were derivative of the corporation (Big Ditch), and that the corporation—and not the individual shareholders—were parties to the Agreement. Accordingly, the Court held the individual shareholder had no privity of contract with or duty to the City. Thus, the Court ruled that the individual shareholders were not properly named as defendants and that the district court should have dismissed all of the City’s claims against the individual shareholders.

    Second, the Court affirmed the district court’s ruling that the City holds title to the water under the Agreement. The Court noted that under the Agreement, Big Ditch “grants, bargains and sells” its right to Big Cottonwood Creek water to the City. The Court noted that this was conveyance language that passed title of the water rights from Big Ditch to the City. On the other hand, the City agreed to “perpetually and continuously deliver” water to Big Ditch. The Court noted that this was not conveyance language, and therefore did not transfer title to the exchanged water from the City to Big Ditch. In sum, Big Ditch conveyed its water right to the City in exchange for a contractual commitment by the City to deliver water to Big Ditch. Thus, the Agreement vested in the City title to all of the water rights at issue.

    Third, the Court held that the district court erred in its conclusion that because Big Ditch had failed to take the full amount of water to which it was entitled under the Agreement in prior years, Big Ditch was estopped from now demanding the full amount of water. The Court concluded that the legal doctrine of equitable estoppel did not apply because there was no inconsistency in Big Ditch’s conduct of taking less than its entitled amount of water in prior years and then later demanding the full amount of water to which it was contractually entitled. Thus, the Court held that the Agreement as originally drafted remains in force, meaning that Big Ditch may take the full amount of water to which it is entitled and that its use of the water is not limited to irrigation use or to use in Big Ditch’s historic service area.

    Fourth, the Court held that the district court erred in its conclusion that because Big Ditch was not the appropriator or owner of the exchanged water, Big Ditch was not entitled to file a change application on the water. The Court distinguished prior cases that focused on ownership of the water right, and noted that “one with an entitlement to use water may file a change application,” as long as their right to use the water is not “subsumed to other competing interests.” The Court concluded that because Big Ditch is contractually entitled to receive the exchanged water from the City in perpetuity, Big Ditch is a “person entitled to the use of water” under Utah Code section 73-3-3, and therefore entitled to file change applications on the exchanged water.

    Finally, the Court held that the district court properly dismissed the counterclaim against the City for violation of the Utah Antitrust Act. The Court noted that the Act exempts “the activities of a municipality to the extent authorized or directed by state law.” Because municipalities are expressly permitted to acquire water rights and operate water systems, the Court concluded that the City was exempt from the Antitrust Act.

    As a final note, although the Court held that Big Ditch may file change applications based on the exchanged water, the Court specifically stated that it was offering no opinion on whether or not the change applications should be approved by the State Engineer. Each change application will still have to go through the administrative process and be reviewed under the applicable standards. It will be interesting to see how these change applications proceed through the change application process and if they will ultimately be approved.

    To read the full opinion, click here.

    Sunday, June 19, 2011

    Jensen v. Jones

    This week, the Utah Supreme Court issued its opinion in the case of Jensen v. Jones (formerly known as Hamblin v. Olds and Hamblin v. Clayton). The question answered by the Court was whether the State Engineer can declare forfeiture of a water right as the basis for denying a change application.

    The underlying facts of the case are that Ms. Hamblin owned a water right from Spring Creek, a tributary to the Provo River. Ms. Hamblin filed a change application, seeking to move the water right to wells in Highland City. The State Engineer rejected the change application based on his determination that the water right had not been used for over 20 years. Ms. Hamblin filed a petition for judicial review with the district court. The district court upheld the State Engineer's rejection of the change application, concluding that the water right had been automatically lost to forfeiture long before the change application was filed. The district court also held that recent changes to Utah's forfeiture statute--which require court action before a water right is adjudicated forfeited--did not apply retroactively.

    The district court's decision was then appealed to the Utah Supreme Court. Ms. Hamblin argued (1) that the State Engineer lacks the authority in the context of a change application to determine that a forfeiture has occurred; and (2) that the water right was not forfeited because there has been no judicial determination of forfeiture. On the other side, the State Engineer argued that the water right had been forfeited automatically many years ago due to nonuse and that the amendments to Utah's forfeiture statute were not retroactive. The Court ultimately agreed with Ms. Hamblin's argument that the State Engineer cannot consider non-adjudicated forfeiture when reviewing a change application, and therefore did not answer the question of whether the amendments to the forfeiture statute apply retroactively.

    The Court noted that the State Engineer is an executive officer tasked with administering and supervising the appropriation of water in the state, and that he acts in an administrative capacity only and has no authority to adjudicate water rights. The Court also noted that in the context of evaluating a change application, the State Engineer is limited to applying the criteria contained in Utah Code section 73-3-8, which do not include forfeiture. Further, the Court noted that in previous cases, the State Engineer had conceded that a forfeiture determination was beyond the State Engineer's authority in approving or rejecting a change application. In sum, the Court concluded that the State Engineer exceeded his authority by rejecting Ms. Hamblin's change application on a determination of forfeiture, and therefore reversed the district court's affirmance of the State Engineer's rejection.

    It is important to note that the Supreme Court did not determine whether Ms. Hamblin's water right has or has not been forfeited, as it was beyond the scope of the appeal.

    To read the full text of the Supreme Court's opinion, click here.

    Wednesday, June 1, 2011

    Rules to Remember When Purchasing Water Rights

    Below is an article that I recently wrote for Western AgCredit's FenceLines magazine. A PDF copy of the full magazine can be seen by clicking here.

    As an attorney whose practice focuses primarily on Utah water law, I often receive phone calls and questions about water rights. The most common questions I receive are about title to water rights: How is a water right properly conveyed? How do I know if the water right I am buying is valid? Is there paperwork I need to fill out with the Utah Division of Water Rights? The purpose of this article is to provide five general rules to remember when purchasing a water right (or land that includes a water right) in Utah.

    1. Research Title to the Water Right
    Before purchasing a water right, you should research the true ownership of the water right. In other words, does the seller really have title to the water right that they are trying to sell you? A printout from the Division of Water Rights’ database or a copy of the deed the seller received from a prior owner are not sufficient to establish ownership. Title research must be done in the records at the county recorder’s office and at the Division of Water Rights. If proper title research is not done, you run the risk of paying the seller for something that he/she does not own.

    2. Consider Purchasing Water Right Title Insurance
    When purchasing land, people almost always buy title insurance. However, people don’t generally think of buying title insurance for water rights. Water right title insurance is now available in Utah, and may be an option to consider if you are spending a lot of money to purchase water rights and/or want some assurance regarding the title to the water rights.

    3. Research the Status of the Water Right
    You should research the water right’s status and history. In other words, is the water right a valid, recognized water right that will allow you to use it in the manner represented to you? There are a lot of potential issues that a water right may have that can only be discovered by a thorough review of the documentation, maps, decrees, etc. on file with the Division of Water Rights.

    4. Have the Water Right Conveyed by DeedThe proper way to convey a water right is by deed. As a buyer, you should request that the deed be a warranty deed rather than a quit-claim deed. If you are purchasing land and the water right, both can be conveyed in the same deed, but the deed should clearly state the water right that is being transferred. I prefer to use language such as: “Together with Water Right No. 33-1452, as identified of record with the Utah Division of Water Rights, including all change applications and other applications pertaining thereto.” You may also use the Water Rights Deed Addendum form, which is available on the Division of Water Rights’ website. The deed must be recorded with the County Recorder’s Office in the county where the water is diverted and the county where the water is used (which are generally the same).

    5. File a Report of ConveyanceAfter the deed has been conveyed, you need to update the title with the Utah Division of Water Rights by filing a Report of Conveyance. The Division maintains a database of all water rights and associated information, which includes the name(s) of the owner(s) of each water right. Any notices or correspondence that affect a water right will be sent to the owner of record on the Division’s database. The Division does not, however, actively monitor any transfers of water rights; rather, the Division relies on each water right owner to file a Report of Conveyance to notify the Division when ownership transfers.

    Water rights are a valuable asset and a vital resource in most farming operations. Unfortunately, however, people purchasing water rights oftentimes do not spend the time necessary to research and evaluate the water rights prior to the purchase. Following the five steps outlined in this article can go a long way in ensuring that you get what you pay for in your next water rights

    Saturday, May 28, 2011

    Utah Stream Access Coalition v. Park

    The Utah Stream Access Coalition has filed a second lawsuit seeking access to rivers and streams for recreation. The first lawsuit centered on the Provo River, and was a constitutional challenge to the 2010 stream access law passed by the Utah Legislature. This second lawsuit centers on the Weber River, and was filed in Summit County.

    The complaint alleges that the Weber River was navigable when Utah became a state and, therefore, that the bed of the Weber River belongs to the State and not to the landowners adjoining the river. The complaint further alleges that the defendants, who are adjoining landowners, have wrongfully posted 'No Trespassing' signs, erected barbed wire fences across the river, and otherwise attempted to prevent members of the public from accessing the bed of the river. The Coalition is asking the court for a judgment declaring that the bed of the Weber River belongs to the State and for an injunction prohibiting the defendants from denying the public access to the river bed.

    Thursday, May 19, 2011

    Haik v. Sandy City

    The Utah Supreme Court recently issued its opinion in the case of Haik v. Sandy City. The case centered on a title dispute to a water right. As the court noted in the first line of the opinion, the case illustrates the importance of promptly recording a deed for a water right.

    In 1977, Saunders-Sweeney Inc. and Sandy City entered into an "Agreement of Sale," under which Saunders-Sweeney agreed to sell a water right to the City. The City recorded the Agreement of Sale with the Salt Lake County Recorder. Shortly thereafter, the City received a quitclaim deed for the water right from Saunders-Sweeney, but the City did not record the deed.

    In 1978, Saunders-Sweeney conveyed the property to which the water right was appurtenant to Judith Saunders. Several years later, the property was conveyed to Lynn Biddulph. In 1999, Saunders-Sweeney also quitclaimed the water right to Ms. Biddulph. Shortly thereafter, Ms. Biddulph filed a change application on the water right. The City protested the change application, but did not claim ownership of the water right. In 2003, Ms. Biddulph conveyed the water right to LWC LLC. Later that same year, LWC LLC conveyed the water right to Kevin Tolton, who then conveyed the water right to the Haik parties. All of the deeds in this chain of title were properly recorded with the Salt Lake County Recorder.

    In 2004, the Haik parties filed a change application. In preparing a protest of the change application, the City conducted research and discovered the unrecorded deed from 1977. The deed was finally recorded in April 2004. The City then sought to update title with the Division of Water Rights, but the City's request was denied.

    The Haik parties filed an action to quiet title to the water right. The district court ruled that the Haik parties were the legal owners of the water right. The City filed an appeal with the Utah Supreme Court.

    The Supreme Court began its analysis by noting that Utah is a race-notice jurisdiction, meaning that a subsequent purchaser for value prevails over a previous purchaser if the subsequent purchaser (1) takes title in good faith and (2) records before the previous purchaser. There was no question that the Haik parties recorded their deed before the City, so Court's analysis focused on whether the Haik parties took title in good faith, i.e., whether the Haik parties had actual or constructive notice of the City's prior, unrecorded interest.

    The City contended that the 1977 Agreement of Sale imparted constructive record notice of a conveyance of the water right to the City. The Haik parties, on the other hand, argued that the Agreement of Sale did not provide record notice because it was impossible to know whether the sale was actually finalized and whether a deed was delivered to the City.

    In the end, the Court sided with the Haik parties. The Court concluded that the Agreement of Sale did not subvert the Haik parties' claim of having purchased the water right in good faith because (1) the Haik parties reasonably believed they had a clear chain of title to the water right; (2) the City failed to record its deed for nearly 27 years after receiving the deed; (3) the Haik parties' predecessors-in-interest had maintained the water right and filed a change application on the water right in 1999; and (4) the City failed to contest ownership when it protested the 1999 change application. Thus, the Supreme Court upheld the district court's judgment that the Haik parties are the legal owners of the water right.

    To read the full text of the opinion, click here.

    Friday, May 6, 2011

    If I Install a More Efficient Irrigation System, Can I Irrigate More Acreage?

    The question is often asked: If I put in a more efficient irrigation system, can I increase my irrigated acreage (or sell the "saved" water)? Unfortunately, the answer is generally no. The reason why is somewhat complex, but I've summarized in the following explanation and example.

    In Utah, beneficial use is the basis, measure, and limit of a water right. The water right has several characteristics, including diversion and depletion limits.

    For this example, assume that your water right permits you to irrigate 10 acres and that the the irrigation duty in your area is 4 acre-feet per acre. The water right, in terms of acre-feet, would be 40 acre-feet. The duty, however, is based on flood irrigation, which is not very efficient. The general rule for flood irrigation is that 50% of the water is depleted (i.e., used) and the other 50% returns to the natural system (as runoff, tailwater, or seepage into the underground aquifer). Assuming you flood irrigate, you would likely divert all 40 acre-feet in order to irrigate the 10 acres, but you would only be depleting 20 acre-feet (with the other 20 acre-feet being returned to the natural system). These are the limits of use for your water right: a diversion limit of 40 acre-feet and a depletion limit of 20 acre-feet.

    Now assume you install a very efficient sprinkler system. Because the system is so much more efficient than flood irrigating, you only have to divert 22 acre-feet to irrigate the same 10 acres. It would appear that you "saved" 18 acre-feet, which you could use to irrigate 8 more acres. However, doing so would increase the depletion. When you were flood irrigating, you depleted 20 acre-feet; however, with the new system and expanded acreage, you would be depleting 36 acre-feet.

    It is for this reason the Utah State Engineer will not allow “spreading” of water based on more efficient systems. The State Engineer believes that the increased depletion would be an enlargement of your water right and would adversely affect other water users. (Additionally, because your water right is limited to the irrigation of 10 acres, expanding the irrigated acreage to 18 acres would enlarge your water right.)

    The current State Engineer, Kent Jones, has talked about this topic several times recently. It seems to be one of his primary concerns. If you go to this web address and click on "Presentation - Kent Jones," you can see a PowerPoint slideshow from one of his recent presentations. Slides 13-20 specifically address this issue.

    Monday, May 2, 2011

    What Are Hydrographic Survey Maps?

    As part of the General Adjudication process, the Utah Division of Water Rights prepares hydrographic survey maps. These maps show all of the water use in a particular area, including the location and acreage of all irrigated land and the location of all streams, wells, springs, and other water sources.

    Hydrographic survey maps can be very useful when researching how water was used in the past and when trying to determine appurtenancy and title issues for Reports of Water Right Conveyance.

    Most of the hydrographic survey maps are available online by clicking here.

    Wednesday, April 27, 2011

    Utah Stream Access Coalition - Amended Complaint

    Last November, the Utah Stream Access Coalition filed a lawsuit in Wasatch County district court challenging the 2010 stream access law passed by the Utah Legislature (aka, the "Recreational Use of Public Water on Private Property Act," House Bill 141, or H.B. 141). Last week, the Utah Stream Access Coalition filed a First Amended Complaint. While some of the information has been changed and reorganized, the general arguments and claims for relief remain the same. Of note, however, is that some of the named defendants have changed. Victory Ranch L.C. and Silver Creek - Robert Larsen Investors LLC have been removed as defendants, and have been replaced by ATC Realty Sixteen Inc. The Utah Division of Parks and Recreation has also been added as an additional defendant.

    I have a copy of the First Amended Complaint, and I would be happy to email a copy to anyone who is interested. Click here for my email address.

    To read an update on this case, click here.

    Friday, April 15, 2011

    Can Owners of Ditches, Canals, and Pipelines Be Liable for Damage?

    Utah Code section 73-1-8 law imposes an affirmative duty on “[t]he owner of any ditch, canal, flume or other watercourse [to] maintain it to prevent waste of water or damage to the property of others.” An easement holder violates this statutory mandate only if he is found to be negligent by failing to follow the standard of care and damage results to the property of another. The law establishes that this standard of care is determined by the reasonable care taken by a person who is “of some experience and skill in the management of water, who would have an awareness of the various hazards in the failure to properly control them and would therefore exercise the degree of foresight and precaution which people of such experience and skill would observe to avoid injury or damage to others and their property.” This statutory duty and standard of care have been applied to pipelines, such that owners of pipelines used to convey water are required to exercise reasonable care in the construction and maintenance of the pipeline. A pipeline owner can be found negligent if the pipeline is not properly constructed or maintained, causing the pipeline to leak and cause damage to another’s property.

    In sum, the owner of a ditch, canal, or pipeline can be held liable for flooding or other damage to property if the owner is negligent in constructing or maintaining the ditch, canal, or pipeline.

    Thursday, April 7, 2011

    Does an Easement for a Ditch Include the Right to Maintain the Ditch?

    In Utah, like most parts of the arid West, water oftentimes has to be conveyed a long distance between the source and the place of use. Accordingly, there are a lot of ditches, canals, and pipelines that cross one person's private property in order to convey water to another private party. The person using the ditch, canal, or pipeline generally has an easement, either by prescription or by an express grant of easement. Whether prescriptive or express, the easement includes the right to maintain the ditch, canal, or pipeline.

    Utah case law establishes that the easement holder has the right to enter upon the land of the other party in order to maintain, clean, and/or repair the ditch, canal, or pipeline--provided that the easement holder does not cause any unnecessary damage or create additional burdens on the land. Additionally, the easement holder has the right to improve the method of carrying the water; i.e., the easement holder generally has the right to convert an unlined ditch into a lined ditch, or convert an open canal to a pipeline.

    The property owner cannot limit the easement holder's access to the easement for maintenance and repairs. For example, the property owner should not "fence out" the easement holder with locked gates, unless the property owner provides the easement holder with keys for the locks.

    The underlying property owner also does not have the right to interfere with the easement holder's use of the easement. For example, the property owner cannot change the course of the ditch or canal without the easement holder's consent. The property owner also cannot construct facilities on or in the easement that would restrict the easement holder's access to or use of the easement.

    Monday, March 28, 2011

    Draft Environmental Impact Statement for Logan & Northern Canal

    The USDA Natural Resources Conservation Service (NRCS) recently issued its draft Environmental Impact Statement (EIS) for the Logan and Northern canal reconstruction project. NRCS has identified the "Purple Alternative" as its preferred alternative. This alternative proposes to move the point of diversion to the Logan, Hyde Park, and Smithfield canal point of diversion (below Second Dam) and put the combined flows into a box culvert until the Lundstrom Park / 1500 North area, at which point a pipeline will carry 40 cfs down to the old Logan and Northern canal.

    A summary of the draft EIS is available by clicking here.

    A full copy of the draft EIS, along with other documents and information related to the reconstrucion project, is available by clicking here.

    The public is invited to make comments on the draft EIS. NRCS will host a public open house on Thursday, March 31, 2011 at BATC (1000 West 1400 North, Logan) from 5:30 to 7:30 pm. Those attending the meeting can provide written or oral comments. Comments can also be emailed or mailed to NRCS. Comments must be received by May 2, 2011 to be considered in the final Environmental Impact Statement. For more information about submitting comments, click here.

    Saturday, March 26, 2011

    Lowry v. G&L Enterprises

    The Utah Court of Appeals recently issued its opinion in Lowry v. G&L Enterprises, LLC. The case was between the Carol L. Lowry Irrevocable Trust and Fred Lowry (collectively, "Lowry") and G&L Enterprises LLC, Guy Palmer, and Lynda Palmer (collectively, "G&L").

    Lowry and G&L own adjacent parcels of property near Manti in Sanpete County. A spring known as Crystal Springs is located on State property east of G&L's property. The water from Crystal Springs forms a natural stream that flows west across G&L's property to Lowry's property. Lowry has a right to use six-sevenths of the flow from the Springs, and G&L has the right to use the other one-seventh. A dispute arose when Lowry sought to replace the Crystal Springs stream on G&L's property with a pipeline. G&L opposed Lowry's efforts. Lowry filed suit, seeking to establish a prescriptive easement for a road crossing G&L's property.

    Although Lowry only asked for a prescriptive easement across the road, which the district court granted, the district court also determined that Lowry was entitled to a prescriptive easement in the stream bed across G&L's property. The district court relied on Utah Code section 57-13a-102, which provides that a prescriptive easement for water conveyance may be established by continuous, open, and adverse use for twenty years. G&L sought review of the district court's decision from the Utah Court of Appeals.

    The Court of Appeals identified the relevant issue as whether section 57-13a-102 applies to a natural stream. The Court of Appeals looked to section 57-13a-101's definition of a "water conveyance," which is "a canal, ditch, pipeline, or other means of conveying water." Based on this definition, the Court of Appeals determined that section 57-13a-102 applies only to artificially created watercourses, and not natural streams like Crystal Springs stream. Thus, the Court of Appeals ultimately concluded that the district court had erred in granting Lowry a prescriptive easement in Crystal Springs stream across G&L's property.

    To read the full case, click here.

    Thursday, March 10, 2011

    2011 Legislature: More Water Bills Passed by Utah Legislature

    Here are more water bills that have passed both the House and the Senate:

    HB 247: Water Development Amendments
    HB 428: Water Issues Task Force (click here to read the amended bill)
    SB 103: Joint Use of a Canal or Ditch (click here to read the amended substituted bill)
    SCR 3: Concurrent Resolution Supporting Continued Federal Funding of the Central Utah Project (click here to read the amended concurrent resolution). Governor Herbert has declined to sign SCR 3.

    Monday, February 14, 2011

    2011 Legislature: Water Bills Passed by Utah Legislature

    Several water bills have already passed both the House and the Senate and are awaiting the governor's signature. These bills include:

    HB 39: Water Rights Amendments
    SB 10: Local District Amendments
    SB 20: Management of Water Rights Amendments
    SB 25: Share Certificates in Water Companies (click here to read amended bill)
    SB 26: Water Law Modifications
    SB 102: Temporary Water Shortage Emergency - Military Facilities (click here to read the amended bill)

    Friday, February 4, 2011

    2011 Legislature: Substituted Bill About Joint Use of Ditches

    Senator Dennis Stowell has introduced a substituted bill for Senate Bill 108 (S.B. 108) regarding joint use of ditches and canals.

    Like the original bill, the substituted bill requires a person seeking to jointly use a ditch or canal to enter into a contract with the ditch or canal owner prior to using or enlarging the ditch or canal. The substituted bill adds that unless the contract provides otherwise, the person using the ditch or canal: (1) does not acquire voting rights in the entity that owns the ditch or canal (i.e., ditch company, canal company, or irrigation company); (2) cannot add water that reduces the water quality in the ditch or canal; (3) cannot add water that exceeds the capacity of the ditch or canal; (4) must pay an equitable proportion of construction or upgrade costs incurred by the ditch or canal owner within the past five years; (5) is proportionally responsible for liability arising out of operation or maintenance of the ditch or canal; and (6) is solely responsible for any liability caused solely by the person. The substituted bill also clarifies that the statute only applies to ditches and canals (i.e., does not apply to pipelines).

    To read the full text of Substituted SB 108, click here.

    For an update on this bill, click here.

    Thursday, January 27, 2011

    2011 Legislature: Repeal of Phosphorus Limit

    Representative Stephen Sandstrom has introduced House Bill 246 (H.B. 246) entitled "Repeal of Phosphorus Limit in Dishwashing Detergent." The bill seeks to repeal Utah Code section 19-5-24, which was enacted by the Utah Legislature in 2008. Section 19-5-24 prohibits the sale of household dishwashing detergents that contain 0.5% or more phosphorus by weight. The purpose of the law is to keep phosphorus out of Utah's waterways because it causes algae blooms. Recently, however, people have been complaining that the new detergents with lower levels of phosphorus are not getting their dishes clean. These complaints may be the impetus for this bill.

    To read HB 246, click here.

    Tuesday, January 25, 2011

    2011 Legislature: Water Rights Amendments

    Representative Jack Draxler has introduced House Bill 39 (H.B. 39), which is entitled "Water Rights Amendments." The bill makes some technical changes to Utah Code section 73-3-18. The bill deletes an incorrect reference to "forfeited" applications and corrects a cross-reference to Utah Code section 73-3-12. The bill also makes wording changes regarding (1) the State Engineer's authority to lapse applications and (2) assigning uncertificated applications to appropriate.

    To read the full text of the bill, click here.

    (For an update on this bill, click here.)

    Monday, January 24, 2011

    2011 Legislature: Lost Share Certificates

    The following article was written by David Hartvigsen, a partner at Smith Hartvigsen, PLLC, for the Water & The Law newsletter that our firm publishes on a quarterly basis. If you would like to receive an email version of the newsletter, please click here to join our mailing list.

    Senate Bill 25 (S.B. 25): Share Certificates in Water Companies
    Certificates representing shares of stock in water companies often become lost, destroyed, stolen, or can't be located for any number of reasons. This most typically happens when property and interests in water shares are passed from one generation to another upon the death of the parent or grandparent. Most water companies use share certificates as the sole documentary evidence of ownership of the shares. Therefore, when certificates are lost, a serious problem develops concerning who is the rightful owner of the shares. About the only solution available in the past to water companies was to require the person claiming ownership to provide a bond that could be used to reimburse the company for potential liability under future claims by others purporting to be the true owners and alleging that the company has given their shares to someone else. The problem has become worse over time because the value of water stock, and therefore the cost of such bonds, has skyrocketed and bond companies are no longer willing to issue bonds that protect more than a few years into the future.

    This bill, sponsored by Sen. Ralph Okerlund, addresses this problem by setting up a new "safe harbor" for water companies and shareholders to use. It provides for published notice to the public and for direct notice to those known to have a possible interest in the shares covered by a lost certificate, such as those who have paid assessments on those shares within the last five years. In general, if no objections are filed with the company within a 60-day period, the company may issue a replacement certificate and both the company and the holder of the new certificate are protected against future claims of ownership of those shares. If an objection is received, the company can either evaluate the claims and take action as it deems appropriate or tell the parties to go have a court settle the dispute. There are more specific requirements and procedures that must be followed, but this is the basic concept. The bill is supported by Water Coalition, the Water Task Force, and the Interim Natural Resources Committee.

    A full copy of the bill is available by clicking here.

    (For an update on this bill, click here.)

    Thursday, January 20, 2011

    2011 Legislature: Joint Use of Ditches

    Senator Dennis Stowell has introduced Senate Bill 108 (S.B. 108), which is entitled "Joint Use of Water Infrastructure." The bill modifies Utah Code section 73-1-7, which allows a person to enlarge and/or convey water through an existing canal or ditch owned by another person or company if the person pays for any damage and pays an equitable proportion of the maintenance costs.

    The bill makes some minor modifications to the language of the statute, including requiring the person to pay a proportional share of the maintenance and operation costs of the ditch or canal. More importantly, the bill requires the person seeking to enlarge and/or use the ditch or canal to enter into a contract with the ditch or canal owner before the enlargement and/or use can commence. The contract should set forth the terms of use, including the payment terms. The bill requires the person seeking to use the ditch or canal and the ditch or canal owner to negotiate the contract in good faith.

    To read the full text of the bill, click here.

    (Update: This bill has been replaced by a substitute bill. To read more, click here.)

    Wednesday, January 19, 2011

    Policy Change Regarding Municipal Use Water Rights

    The Utah Division of Water Rights recently adopted a new policy regarding who is entitled to have municipal use water rights. The text of the State Engineer's policy change is included below:

    It has been the policy of the Division to approve municipal use only for public entities or entities which are contractually obligated with public entities for public water supply service. Applications in the name of other parties with the concurrence of a public entity to whom the water right is to be conveyed have been approved with the condition the application must be conveyed to the public entity and perfected in their name. Current practice is to approve change applications for public entities to municipal use from other uses with a condition which limits the approval to a specific acre foot diversion and depletion quantity related to the historic use and a requirement the public water supplier maintain records of actual diversion and use sufficient to demonstrate depletions associated with use under the application do not exceed the specified depletion limitation.

    Effective immediately, the entities which qualify for municipal use on application approval are to be expanded from public entities to "Public Water Suppliers" as defined in 73-1-4(1)(b) UCA. Please note this expands the universe of qualifying entities to include private water companies regulated by the PSC and community water systems (normally non-profit corporations) serving at least 100 connections or 200 year round residents which are controlled by the residents they serve. This change in policy will allow these entities to submit applications to cover the universe of uses under the umbrella of municipal use expected in a metropolitan setting without the overhead of change applications for each particular use type, the flexibility of accounting for their uses in terms of diversion and depletion, and submit proof on that basis for uses in their service area. With this new found flexibility these entities must also accept the responsibility to maintain records of diversion and use to demonstrate their compliance with the limitations of their applications and are expected to submit data to the water use program consistent with other public entities which are now reporting.

    Monday, January 17, 2011

    Historic Property Effect Evaluations

    Under Utah Code section 9-8-404, a state agency is not supposed to approve any undertaking without taking into account the undertaking’s possible effects on historic property and providing the state historic preservation officer with a written evaluation of any effect the undertaking may have on the historic property. In order to implement this statute, the Utah Division of Water Rights now requires applicants to fill out a Historic Property Effect Evaluation (“HPEE”). A completed HPEE must be submitted with all applications to appropriate, change applications, exchange applications, well rush letters, well replacements, non-production well authorizations, geothermal well applications, dam applications, and stream gage installations.

    The HPEE form asks the applicant to (1) describe the physical effects to the land will occur to the land surface under the proposed project; (2) describe any historic properties that could be affected by the proposed project; (3) describe any historic property survey that has been conducted at or near the site of the proposed project; and (4) state whether there is a federal or state connection to the proposed project that would require a historic property evaluation. The HPEE form is to be completed by the applicant, but is to be signed by a representative of the Division of Water Rights.

    The HPEE form is available by clicking here.

    [Update: As of November 2012, HPEEs are no longer required for water right applications.]

    Wednesday, January 5, 2011

    2011 Legislature: Temporary Water Shortage Emergency

    Senator Ralph Okerlund has introduced Senate Bill 102 (S.B. 102), which is entitled "Temporary Water Shortage Emergency - Military Facilities." The bill makes one change to Utah Code section 73-3-21.1. The bill adds military facilities to the list of those who have a preferential right to use water for drinking, sanitation, and fire suppression purposes during a temporary water shortage emergency.

    To read the full text of the bill, click here.

    To read about the 2010 bill that enacted section 73-3-21.1, click here.

    (For an update on this bill, click here.)