Brasher v. Christensen

The Utah Court of Appeals recently issued its decision in the case of Brasher v. Christensen. A central issue in the case was whether a Water Use Authorization constituted a contract for the lease of irrigation water shares.

Christensen owns a farm in Emery County and has shares of stock in Huntington-Cleveland Irrigation Company ("HCIC"). Brasher owns and leases farmland in Emery County, and also owns shares of stock in HCIC. But Brasher needed additional shares in order to irrigate all of his land. In 2012, Brasher leased 215 Class A shares from Christensen. Brasher asked to lease the water on an indefinite basis, but Christensen declined. Both parties signed a Water Use Authorization ("WUA") form provided by HCIC. On the WUA, Brasher checked the box that indicated that the lease would continue"until further notice." HCIC contacted Christensen regarding the WUA, and Christensen instructed HCIC that the lease was for 2012 only. In 2013, Brasher contacted Christensen about leasing shares again. Christensen originally declined, until Brasher indicated an interest in purchasing Christensen's farm. The parties met and negotiated two documents: an Offer to Purchase Real Estate and a new WUA. Christensen took the Offer with her so that she could review it. Brasher took the WUA and filed it with HCIC -- although the district court later determined that Brasher had added terms to the WUA after Christensen had signed it and without Christensen's knowledge. Ultimately, Christensen decided not to accept the Offer to purchase her farm. Christensen also notified HCIC to stop providing water under her shares to Brasher. Brasher sued for damages for crop loss and for losses associated with his cattle operation due to not having water.

After a trial was conducted, the district court dismissed Brasher's complaint. The district court concluded that the WUA was not an enforceable contract and that there was not a meeting of the minds between the parties to form a contract for lease of the water shares. Brasher appealed to the Court of Appeals.

The Court first reviewed whether the WUA was an enforceable contract for the lease of shares. The Court noted that the essential elements of an enforceable contract are (1) offer and acceptance, (2) consideration, and (3) competent parties. The Court determined that these elements were not met because the WUA form did not require offer, acceptance, or consideration. Rather, the WUA was simply a form used to instruct a third party (HCIC) to deliver water to one of a parties for a period of time. The WUA form was "devoid of language establishing a contractual relationship." Indeed, the Court noted that the WUA form expressly conditions its enforceability upon a separate agreement between the parties. Accordingly, the Court upheld the determination that the WUA was not a enforceable lease contract.

The Court then reviewed whether there was a meeting of the minds between Brasher and Christensen that would support an oral contract for lease of the water shares. The Court determined that there was no meeting of the minds because Christensen had told Brasher that she needed to discuss the Offer and WUA with her family and attorney before anything was final and because Christensen had intended that the Offer and WUA were contingent upon each other.

Based on these determinations, the Court of Appeals upheld the dismissal of Brasher's complaint against Christensen.

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