Allen Family Trust v. Holt

The Utah Court of Appeals recently issued its opinion in the case of Allen Family Trust v. Holt. This case focuses on an easement for a water pipeline, as well as forfeiture of water rights.

In the late 1800s, Ammon Allen settled in the Ogden Valley and constructed ditches to carry water from a creek and springs to his property. He later deeded the property to his son, Abner Allen. In the 1948 Ogden River Decree, Abner was awarded water rights in the Creek and springs. A ditch carried the water from the sources, across State-owned land, and to Abner's property. In the 1960s, Abner's sons formed a ranching company, which acquired the land and water rights. The ranching company also entered into a lease with the State for the abutting property that the ditch crossed. In the 1970s, the sons dissolved the ranching company. The deeds led to confusion, but it was ultimately determined that one son acquired 70% of the water rights (which was later conveyed to his son, David Allen) and another son acquired 30% of the water rights (which was later conveyed to his children Jarl, Jenna, and Lesly). A few years later, David constructed a system of pipes to convey his water from the sources to the property. The pipe system generally followed the location of the original ditch system.

In the 1990s, the State sold its property to a third party, who later sold the land to Millennia Partners North LLC ("MPN) in 2008. Shortly thereafter, disputes arose between David and MPN regarding David's access to MPN's property to maintain the pipe system. MPN sent threatening letters to David, erected fences around the property, and even dug up and cut the pipes. This led to a first lawsuit, which was resolved in David's favor. In 2011, Jarl, Jenna, and Lesly conveyed their land and 30% interest in the water rights to MPN.

In 2012, David initiated a second lawsuit, asserting (1) that David had an easement across MPN's property to convey water through the pipe system; (2) that MPN had unlawfully interfered with David's water rights; and (3) that MPN had forfeited its water rights due to nonuse. Following a trial, the district court concluded that David did have an easement across MPN's property and that MPN had unlawfully interfered with the easement. But the district court also ruled that MPN had not forfeited its water rights because nonuse had not been proven by clear and convincing evidence. The district court ordered MPN to pay David's attorney fees. MPN appealed the ruling, and David cross-appealed.

The Court of Appeals first examined if David did have an easement for the pipe system. The district court had determined that an easement existed under the 1866 Mining Act, which required a finding that Ammon Allen had constructed the ditch system before 1896, which is the year that Utah became a state. The Court of Appeals determined that sufficient evidence had been presented to the district court to support the conclusion that the ditch system had been constructed prior to 1896. Thus, the Court of Appeals upheld the determination that David had an easement.

The Court of Appeals also upheld the determination that MPN had interfered with the easement. As noted by the Court, "it is hard to imagine a more clear-cut case of interference with a water right than a party threatening to shut off access to the water, fencing off the right of way, and sawing through a pipe conveying the water to its rightful recipients."

The Court of Appeals then examined whether MPN had forfeited its water rights due to nonuse. The Court began its analysis by noting that it is unsettled law in Utah whether the "clear and convincing" or the "preponderance" standard of proof apply in a water forfeiture action. The Court, unfortunately, did not answer this question, as it determined that the evidence in this case was sufficient to meet both burdens of proof. The Court noted that there was plenty of evidence that MPN's water rights had not been placed to beneficial use between 1994 and 2011. MPN did not dispute this evidence, but rather asserted that David had used MPN's water rights pursuant to a 1977 agreement between Abner Allen's two sons. The Court rejected this argument on several grounds, including the fact that the district court had never determined that such an agreement existed. Thus, the Court reversed the district court and ruled that MPN's water rights have been forfeited due to nonuse.

Finally, the Court of Appeals upheld the district court's order that MPN pay attorney fees. The Court of Appeals also awarded MPN to pay attorney fees for the appeal.

To read the full opinion, click here.