The Utah Court of Appeal recently issued its decision in the case of Salt Lake City Corporation v. Haik. This case is a continuation of a long-standing water dispute between Salt Lake City and Mark Haik. (To read about prior cases in this dispute, click here, here, and here.)
Mark Haik and Pearl Raty are two of six owners of a portion of a water right from Little Cottonwood Creek that was decreed in the 1910 Morse Decree. In 1934, the then-owners of the water right entered into an agreement with Salt Lake City under which the City was granted use of most of the water right during the non-irrigation season. In 1950, a portion of the water right (represented by Water Right No. 57-7800) was moved from the Creek to a well through a change application that was certificated. In 2000, the then-owner of WR 57-7800 filed a change application to return the water back to the Creek. After this change application was approved, WR 57-7800 was conveyed to the six owners, who each filed a change application to move the water to be used for cabins at Albion Basin in Little Cottonwood Canyon. Two of the change applications were approved, but Haik's and Raty's change applications remained unapproved.
This lawsuit was initiated by the City as a judicial review of the two approved change applications, but the City also brought claims challenging the nature and validity of Haik's and Raty's water rights. Haty brought counterclaims against the City, asserting that the City was obligated to serve water to her property in Little Cottonwood Canyon. During the proceedings, the City acquired the rights associated with the two approved change applications, thereby leaving only the claims and counterclaims involving Haik and Raty. Ultimately, the district court concluded that Haik's and Raty's water rights had been forfeited due to nonuse and that the City did not have obligations to serve water to Ray's parcel. Accordingly, the district court issued a judgment in favor of the City. Haik and Raty appealed to the Utah Court of Appeals and argued that the district court had made several errors.
First, Haik and Raty asserted that the City lacked standing to bring its claims. The Court disagreed and determined that the City met the "traditional test" for standing because both parties had rights to draw water from the same source (Little Cottonwood Creek), and therefore was impacted by Haik and Raty's rights to divert and use water from the Creek.
Second, Haik and Raty asserted that the district court lacked subject matter jurisdiction because the City had not exhausted its administrative remedies. Haik and Raty argued that the City could not bring an action against them until the Division of Water Rights issued decision on their pending change applications. The Court noted that the City was not appealing a decision of the Division relative to the change applications; rather, the City was bringing a claim asserting forfeiture of the underlying water right -- which is a determination that can only be made by a court, and not by the Division. Thus, the Court determined that the district court had subject matter jurisdiction over the case.
Third, Haik and Raty argued that the district court had incorrectly determined that their water rights had been forfeited due to nonuse of more than seven years. Haik and Raty had presented evidence that their water had been diverted and used by successors to the original water right, but the Court held that this evidence was insufficient and did not meet the statutory requirements for beneficial use because Haik and Raty did not have agreements in place for other people to use the water. The City, on the other hand, had presented clear evidence that Haik and Ray had not made any beneficial use of the water since 2003. The Court also determined that the district court had applied the correct legal analysis for total forfeiture and that the City's forfeiture claims were not barred by the applicable statute of limitations. Thus, the Court affirmed the total forfeiture of Haik's and Raty's water rights.
Fourth, Raty asserted that the district court had incorrectly determined that the City did not have an obligation to serve water to Raty's parcel in Little Cottonwood Canyon. Raty asserted that the City had obligations to serve water to her property based on Article XI, Section 6 of the Utah Constitution, which provides that municipalities must preserve, maintain, and operate its water resources to serve its inhabitants. But the Court determined that Raty was not an inhabitant of the City because here property is located outside of the City's municipal boundaries. Raty also asserted that the City had denied her due process. But the Court determined that Raty did not have a protectable property interest, but rather had nothing more than a unilateral expectation of water service. Raty also asserted an equal protection claim under Article I, Section 24 of the Utah Constitution. The Court, however, determined that the City's decision to not serve her property was a proper exercise of its permissive right to serve water to people outside of its boundaries. Finally, Raty asserted that the City should be regulated by the Utah Public Service Commission. The Court disagreed, and noted that the Utah Constitution prohibits the Commission from regulating municipalities.
Based on these determinations, the Utah Court of Appeals affirmed the district court's decision on all points. The result is that Haik's and Raty's water rights are forfeited in their entirety, and the City is not obligated to provide water service to Raty's parcel in the Albion Basin.
To read the full text of the opinion, click here.
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