Stern v. Metropolitan Water District of Salt Lake & Sandy

A few months ago, the Utah Supreme Court issued its ruling in Stern v. Metropolitan Water District of Salt Lake & Sandy.  This case relates to the Point of the Mountain Aqueduct ("Aqueduct") that was constructed by Metropolitan Water District of Salt Lake & Sandy ("Metropolitan Water"), specifically to the portion of the Aqueduct that was constructed in the old easement for the Draper Canal.

The Draper Canal ("Canal") was constructed in the early 1900s by Utah Lake Irrigation Company ("ULIC"). Rights to construct the Canal across private property were obtained from property owners by voluntary transfer (i.e., deed) or by condemnation judgments. Some of the deeds and judgments referenced that the easement would be used for "canal purposes only." Shortly after its construction, the Canal was conveyed to Draper Irrigation Company. For decades, Draper Irrigation used the Canal to convey irrigation water to its shareholders.  Over the years, the canal was also used by Salt Lake County and then Draper City for storm water purposes. In the 1990s, Draper Irrigation Company piped much of its water distribution system and ceased using the portion of the Canal at issue in this case. In 2001, Draper Irrigation Company conveyed the Canal to Draper City so that it could be used for storm water purposes as well as a public trail. Soon afterward, Metropolitan Water negotiated with Draper City to construct the Aqueduct in the Canal easement. The Aqueduct was buried, but some cement structures rose above ground. The Aqueduct transports culinary water to Salt Lake City and others in the Salt Lake Valley.

Four landowners whose property borders the Aqueduct brought suit, alleging that the construction of the Aqueduct exceeded the scope of the Canal easement. The landowners also alleged that the Canal easement had been abandoned. The district court ruled in favor of Metropolitan Water, and the landowners appealed to the Utah Supreme Court.

The Court first examined the portion of the Canal that had been acquired by a stipulated judgment of condemnation. The landowners asserted that the only property interest that ULIC could have obtained through condemnation was an easement interest, and not fee simple ownership. The Court concluded, however, that because it was a stipulated judgment of condemnation, and not a contested judgment, there was no reason why ULIC could not have obtained fee simple ownership of the property. Thus, the Court concluded that Draper City owned the land, and could allow the Aqueduct to be constructed on it.

The Court then examined another portion of the Canal that had been acquired by deed. The landowners asserted that these deeds from their predecessors-in-interest to ULIC conveyed only an easement right and not fee simple ownership. The Court disagreed, and held that the deeds did pass fee simple ownership because the deeds used the phrase "conveys and warrants," which demonstrates intent to pass ownership and not just grant an easement. The Court did hold, however, that the language in the deed limiting use to "canal purposes only" was a covenant that ran with the land.

The Court then had to determine the scope of the "canal purposes only" limitation and determine whether it prohibited an enclosed and buried pipeline to convey culinary water. The Court first determined that "canal purposes" could include conveyance of culinary water. This determination was based largely on the fact that in the early 1900s, canals were used to convey water used for domestic and culinary purposes.  The Court then determined that an open canal could be enclosed. This determination was based largely on prior Utah cases that allow ditch and canal owners to improve their methods of conveyance, provided that the improvements are reasonable and do not materially alter the burden on the land.  Finally, the Court determined that district court had failed to apply the standard regarding reasonableness and material alteration of the burden.  Accordingly, the Court remanded the case to the district court for additional proceedings on the issues of whether Metropolitan Water's improvements related to the Aqueduct were performed reasonably and whether the improvements materially altered the burden on the land.

In a final note, the Court upheld the district court's conclusion that Draper Irrigation had not abandoned the Canal easement. The Court specifically noted that even when Draper Irrigation had ceased using the Canal to convey irrigation water, the Canal was still being used to convey storm water.

To read the full opinion, click here.