Little Cottonwood Tanner Ditch Co. v. Sandy City

The Utah Supreme Court recently issued its opinion in the case of Little Cottonwood Tanner Ditch Co. v. Sandy City. The opinion addresses the important issue of when and under what circumstances a water decree can be modified by a court.

The facts of this case go back almost 140 years. In 1878, the several railroad companies entered into an agreement with five ditch companies to acquire water from Little Cottonwood Creek. Under the agreement, the railroads were given the right to use one-tenth of the water in the Creek in exchange for a payment of $25 per month. The railroads' interest in the agreement were later assigned to Salt Lake County Water Company (SLCWC). In 1902, a general adjudication of Little Cottonwood Creek was initiated in court. In 1910, the court issued its final decree adjudicating the water rights, which is commonly referred to as Little Cottonwood Morse Decree. As part of the Decree, the court terminated the 1878 agreement and replaced it with a provision that required SLCWC to pay $75 per month to the five ditch companies in exchange for the right to use one-tenth of the ditch companies' water from the Creek.

In later years, SLCWC's interest was conveyed to Sandy City and Sandy Irrigation Company (Sandy). Because the Decree did not include any provisions for the payment to increase based on inflation or increased water value, Sandy continued to pay $75 per month for the water for more than 100 years. In 2013, three of the ditch companies (Little Cottonwood Tanner Ditch Company, Richards Irrigation Company, and Walker Ditch Company) sought to increase the payment amount. These ditch companies filed a motion with the district court to modify the payment provision contained in the Decree. The district court concluded that it did not have the authority to re-open the Decree, and therefore denied the motion. The ditch companies then appealed the decision to the Utah Supreme Court.

The canal companies asserted that prior Utah Supreme Court decisions had created a common-law rule that permitted the Decree to be re-opened and the payment provision to be modified. The Court reviewed these prior decisions, beginning with Orderville Irrigation Co. v. Glendale Irrigation Co. This case acknowledged that a water decree is not "the usual type of judgment" and that a court "has continuing jurisdiction, when properly invoked, to see its provisions are being complied with" and when "there are uncertainties in the decree which give genuine dispute as to the rights of the parties concerning the use of such waters." The Court determined that these principles enunciated in Orderville are limited to asking a court to enforce a water decree, and do not include or permit a party to ask a court to modify or change any term of a water decree.

The Court also looked at the Salt Lake City v. Salt Lake City Water & Electric Power Co. case. In this case, the parties sought court action to resolve disputes that had arisen regarding how the parties paid of operation of pumps pursuant to a prior water decree. The decision noted that if "conditions requiring it have arisen that can be established by proper evidence, the lower court has ample power to modify the decree so as to reflect equity and justice under all circumstances to all the water users." The Court again distinguished this language and determined that it only applied to water infrastructure and not to water rights and water use.

After distinguishing these two cases, the Court then reviewed the language of the Decree and determined that the Decree language did not specifically provide for the district court's continuing jurisdiction over the Decree, such that the court could re-open the Decree and modify the payment provision. Accordingly, the Court concluded that the district court had properly dismissed the ditch companies' motion to amend the Decree. The Court did note, however, that there may be other procedural paths that the ditch companies could pursue to invoke the district court's jurisdiction, such as initiating a separate legal action for contract reformation.

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

Recording of Jordan Park Area Adjudication Meeting

If you were unable to attend the October 18, 2016 public meeting concerning the Proposed Determination in the Jordan Park Area, but would like to get more information about the proceedings, you can view a recording of the meeting by clicking here.

Washington Townhomes LLC v. Washington County Water Conservancy District

The Utah Supreme Court recently issued its decision in the case of Washington Townhomes LLC v. Washington County Water Conservancy District. The case started as a class action lawsuit by property owners and developers who paid impact fees to Washington County Water Conservancy District. These plaintiffs asserted that the impact fees violated the Utah Impact Fees Act and constituted a taking under the state and federal constitutions. The District defended its impact fees by asserting that the fees were based on a "level of service" standard imposed by the Utah Division of Drinking Water, and by asserting that its adoption of the level of service standard was a legislative judgment that should survive judicial scrutiny.

The district court agreed with the District, and concluded that the level of service that was adopted by the District and that was based on DDW standards was "legal and reasonable as a matter of law." Accordingly, the court granted partial summary judgment in favor of the District. Additionally, pursuant to a stipulation of the plaintiffs and the District, the court certified that the case could be immediately appealed under Rule 54(b) of the Utah Rules of Civil Procedure. The case was then appealed to the Utah Supreme Court.

The Supreme Court did not get to the substantive question of whether the impact fees were properly based on the DDW standards. Rather, the Supreme Court dismissed the appeal on jurisdictional grounds. The Supreme Court determined that although the district court's ruling made an important determination in the case context, the ruling did not qualify for appeal certification under Rule 54(b) because the ruling did not finally dispose of any claim and did not finally adjudicate the interests of a party to the case.

The Supreme Court further considered whether to exercise its discretion to treat the appeal as a petition for interlocutory appeal under Rule 5 of the Utah Rules of Appellate Procedure. The Supreme Court noted the precedent that an interlocutory appeal is appropriate "to adjudicate principles of law or procedure in advance as a necessary foundation upon which the trial may proceed." Although the Supreme Court noted that the level of service question was an important issue in the case, the Supreme Court declined to accept the appeal because it determined that the district court's ruling was unclear and had unanswered factual and legal questions. For example, the Supreme Court felt that there was an unanswered question as to whether the District was legally required to build infrastructure and facilities in accordance with the DDW level of service standards. Accordingly, the Supreme Court declined to accept the appeal, dismissed the appeal, and sent the case back to the district court for further proceedings.

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

Public Meeting Concerning the Proposed Determination in the Jordan Park Area

The Utah Division of Water Rights has set a public meeting to discuss the general adjudication of water rights in the Jordan Park area in Salt Lake County East Division of the Utah Lake / Jordan River Drainage (Area 57, Book 7). The Jordan Park area is generally from 300 West on the east to the Jordan River on the west, and from 2700 South on the south to South Temple on the north (see map below). The following information is from the public meeting notice:

What: Public Meeting
Who: Water Users within the Jordan Park area
When: October 18, 2016, 6:00 to 7:00 pm
Where: Department of Natural Resources, Room 1040, 1594 W. North Temple, Salt Lake City
Purpose: In accordance with Chapter 73-4, Utah Code Annotated, and the Third Judicial District Court (Civil No. 360057298), the State Engineer is authorized and ordered to conduct a general determination of the rights to the use of all water, both surface and underground, within the drainage area of the Jordan Park Subdivision, Salt Lake County East Division, of the Utah Lake and Jordan River drainage in Salt Lake County. Efforts are currently underway and over the next few months, representatives of the Division of Water Rights will be working in the Jordan Park area to survey existing water rights and investigate water user's claims. Representatives from the Division of Water Rights will be available during this time to discuss the adjudication process, review water rights within the area, and answer questions. If individuals cannot attend, but have questions regarding the adjudication process or water rights within the Jordan Park area, please contact Blake Bingham at (801)538-7345.
Agenda:
1.  Introduction (Blake Bingham, P.E. - Adjudication Program Manager)
2.  Adjudication Process Presentation
3.  Public Comments and Questions

For more information on the meeting, click here.
Update: To view a recording of the meeting, click here.

HEAL Utah v. Kane County Water Conservancy District

The Utah Court of Appeals recently issued its decision in the case of HEAL Utah v. Kane County Water Conservancy District. The primary issue in the case was whether the State Engineer had properly approved change applications for water use at a proposed nuclear power plant.

In 2009, two change applications were filed by Kane County Water Conservancy District and San Juan County Water Conservancy Districts (collectively, "the Districts") to move significant amounts of water upstream for use at a proposed nuclear power plant near Green River in Emery County. The Districts and Blue Castle Holdings, Inc., the developer of the power plant, had entered into water lease agreements that were contingent upon approvals of the change applications to move the water. After the change applications were published, the Division of Water Rights received nearly 80 protests. The Division held a hearing on the change applications in January 2010. In 2012, the Division issued two separate orders approving the change applications. HEAL Utah, a nonprofit organization that advocates for clean air and clean energy, appealed Division's approvals to the district court. The district court held a trial in the case, and ruled that the change applications met the statutory criteria and were therefore properly approved. HEAL Utah then appealed the district court's decision to the Utah Court of Appeals.

The Court began its opinion with a discussion of the change application process, the Colorado River Compact, and the procedural background of the case. The Court also laid out the standards of review, including that a change application is to be approved if "there is reason to believe" that (1) there is unappropriated water in the source, (2) the proposed use will not impair other water rights or interfere with the more beneficial use of water, (3) the proposed plan is physically and economically feasible and would not be detrimental to the public welfare, and (4) the applicant has the financial ability to complete the project. The Court then analyzed each of these factors based on the facts presented in this case.

First, the Court determined that there was reason to believe that there was unappropriated water in the Green River, despite the fact that Utah's allocation of the Colorado River system is "oversubscribed." The Court noted that although there are approved Utah filings--including the Districts' filings--that exceed Utah's 1.4 million acre-feet of allocated water, Utah is currently only using about 1 million acre-feet. The Court also concluded that it was proper for the Division to rely on water released from Flaming Gorge Reservoir in determining the availability of water in the Green River.

Next, the Court determined that there was reason to believe that the proposed changes would not unreasonably affect public welfare or the natural stream environment. HEAL Utah asserted that approval of the change applications would undermine the fish recovery programs on the Green River and would negatively impact the agricultural economy that depends on the Green River. The Court, however, determined that HEAL Utah had "failed to meet its burden of persuasion" on these issues.

Finally, the Court determined that there was reason to believe that the proposed changes were feasible and not speculative. The Court noted that although the power plant project is anticipated to cost between $15 and $20 billion dollars, Blue Castle had shown a financial ability to complete the project, including the $17.5 million already raised and spent on the project thus far. The Court also noted that "considerable evidence" had been presented to the district court that supported a conclusion that the project was feasible based on its location and the economic considerations associated with producing power for a growing Utah population. The Court clarified that the project was not speculative because Blue Castle has proposed a site for the plant, invested money to develop the plant, offered a detailed description for the proposed use of the water, and entered into contracts to develop the project (as distinguished from the Western Water case from 2008, in which an application was found to be speculative because the applicant had no lands, facilities, customers, or contracts to support its plan).

Based on these determinations, the Court affirmed that the change applications had been properly approved.

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

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.

Clearwater Farms LLC v. Giles

The Utah Court of Appeal recently issued a decision in the case of Clearwater Farms LLC v. Giles. The case involves a dispute between two neighboring landowners regarding alleged interference with an irrigation water system. (The case also involves a dispute between the landowners regarding an easement for a road, which is not discussed herein.)

In 1996, the Gileses purchased a piece of farmland next to the Spanish Fork River. About two years later, Morley purchased a piece of farmland north of and adjacent to the Gileses' property. A year later, the Gileses divided their property into two parcels and constructed a home on each parcel. A ditch crossed the Gileses' property and conveyed irrigation water to the Morley property. Due to increased difficulty conveying water through the ditch, the Gileses allowed Morley to construct an electric pump and pump house on the Gileses' property, which was attached to a 6-inch pipeline that was buried in the location of the old ditch. Morley used this water system until approximately 2003, when he installed a diesel pump and new pump house on his own property. The 6-inch pipeline on the Gileses' property was no longer used, but remained in place.

Clearwater purchased the Morley property in 2010 with the intent of building homes on the property. In 2011, Clearwater sought to remove the 6-inch pipe on the Gileses' property and replace it with a 42-inch pipe, but the Gileses opposed the larger pipe, including calling the sheriff and posting no trespassing signs on the old pump house. In 2012, the parties were able to reach an agreement to allow an easement across the Gileses' property for utilities and water pipelines. But Clearwater filed suit claiming damages for being unable to irrigate during the 2011 season. The district court concluded that Clearwater was not entitled to damages for lost crop revenue because the Gileses had not obstructed Clearwater's water rights. Clearwater appealed this decision to the Court of Appeals.

Clearwater asserted claims under two statutes: Utah Code sections 73-1-15 and 73-1-7. The Court first reviewed Clearwater's claims under section 73-1-15, which provides that "it shall be unlawful for any person to place or maintain in place any obstruction, or change of the water flow by fence or otherwise, along or across or in such canal or watercourse." The Court concluded that the statute's language requires a physical barrier or obstruction to be placed in the ditch or water system that is in contact with the water and actually changes the water's flow. The court therefore determined that the Gileses actions of refusing to cooperate, calling the sheriff, and posting no trespassing signs did not amount to "obstructions" under the statute; rather, they were "more like the mere assertion of a contrary legal position." The court also noted that Clearwater had a relatively speedy way to resolve the issue through a motion for a temporary restraining order, which Clearwater failed to pursue.

The Court next reviewed Clearwater's claims under section 73-1-7, which provides a water user with a right to enlarge another person's existing ditch or canal to carry additional water. Clearwater asserted that this statute evidenced a public policy favoring the ability of a party to increase the size of a ditch or pipeline. The court noted that in 2011, the statute had been substantially amended, which included a clarification that the statute only applied to ditches and canals, but not pipelines. But the pre-2011 statute was at issue, and the Court therefore had to determine if the pre-2011 language of the statute extended to and included pipelines. The Court concluded that it did not, because the plain meaning of the term "ditch" does not encompass an enclosed pipe. The Court also again noted that the Gileses' actions did not impede Clearwater from exercising the rights that Clearwater asserted it had.

Based on these determinations, the Court affirmed the decision of the district court in favor of the Gileses.

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

Special Master Appointed

In a prior blog post, it was noted that the Utah Division of Water Rights had requested that the Third District Court appoint a Special Master to assist in resolving objections in the Utah Lake/Jordan River general adjudication. The process of selecting a Special Master has been ongoing for several months. Today, Judge Laura Scott issued an order appointing a Special Master. Rick L. Knuth was selected to serve as the Special Master.

The Special Master's duties, as provided by the order, include:
1--Actively manage objections, including scheduling, notifying the parties, holding status and settlement conferences, and holding hearings.
2--Encourage the parties to settle matters in dispute.
3--Designate subcases within the general adjudication case.
4--Identify the parties affected by a proposed settlement, provide notice to the affected parties, and hear objections to a proposed settlement.
5--Take evidence, oversee discovery, rule on procedural motions, and rule on substantive motions with a report and recommendation to the court.
6--Prepare a final report and recommendation for each subcase containing findings of fact and conclusions of law.

For more information about the Special Master selection process, click here.

Public Meeting Concerning the Proposed Determination in the West Mill Creek Area

The Utah Division of Water Rights has set a public meeting to discuss the general adjudication of water rights in the West Mill Creek area in Salt Lake County East Division of the Utah Lake / Jordan River Drainage (Area 57, Book 6). The West Mill Creek area is from Main Street on the east to the Jordan River on the west, and from approximately 2700 South on the north to approximately 4100 South on the south. The following information is from the public meeting notice:

What: Public Meeting
Who: Water Users within the West Mill Creek area
When: July 12, 2016, 6:00 to 7:00 pm
Where: Department of Natural Resources, Room 1050, 1594 W. North Temple, Salt Lake City
Purpose: In accordance with Chapter 73-4, Utah Code Annotated, and the Third Judicial District Court (Civil No. 360057298), the State Engineer is authorized and ordered to conduct a general determination of the rights to the use of all water, both surface and underground, within the drainage area of the West Mill Creek Subdivision, Salt Lake County East Division, of the Utah Lake and Jordan River drainage in Salt Lake County. Efforts are currently underway and over the next few months, representatives of the Division of Water Rights will be working in the West Mill Creek area to survey existing water rights and investigate water user's claims. Representatives from the Division of Water Rights will be available during this time to discuss the adjudication process, review water rights within the area, and answer questions. If individuals cannot attend, but have questions regarding the adjudication process or water rights within the West Mill Creek area, please contact Blake Bingham at (801)538-7345.
Agenda:
1.  Introduction (Blake Bingham, P.E. - Adjudication Program Manager)
2.  Adjudication Process Presentation
3.  Public Comments & Questions

For more information on the meeting, click here.

Public Meeting Regarding Water Rights from Farm Creek

The Utah Division of Water Rights has scheduled a meeting to discuss the water rights from Farm Creek, near Hanna and Tabiona in Duchesne County. The meeting will be held from 8:30 am to 10:30 am on Thursday, June 30, 2016 at the Division of Water Rights' office in Vernal (318 North Vernal Avenue). All water users who have rights in Farm Creek are encouraged to attend.

For more information about the meeting, click here.