No. 81SA327Supreme Court of Colorado.
Decided June 7, 1982.
Appeal from the District Court Water Division No. 5, Honorable Gavin D. Litwiller, Judge.
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Gorsuch, Kirgis, Campbell, Walker and Grover, Leonard M. Campbell, Philip E. Riedesel, Janet N. Harris, Vickie J. Fowler, Charles F. Brannan for applicant-appellant.
Donald H. Hamburg, General Counsel, Colorado River Water Conservation District, Delany Balcomb, P.C., Kenneth Balcomb, Scott Balcomb, Pamela H. Prescott, for objector-appellee, Colorado River Water Conservation District.
Michael L. Walker, Hendry C. Teigen, Anne R. McGee, for objector-appellee, Denver Water Department.
En Banc.
JUSTICE ERICKSON delivered the opinion of the Court.
[1] This is an appeal from a decision of the District Court in and for Water Division No. 5 (water court) denying the applications of appellant, Rocky Mountain Power Co. (Rocky Mountain), for conditional water rights and water storage rights in Grand County and Summit County, Colorado. We affirm. [2] On July 6, 1970, Rocky Mountain filed four applications for conditional water rights and water storage rights pursuant to the Water Right Determination and Adjudication Act of 1969, sections 37-92-101 et seq., C.R.S. 1973 (Act). The applications proposed construction of a major water diversion project designed to transport large quantities of water from the tributaries of the upper portion of the Colorado River to the Colorado Big Thompson Project and the Moffat Tunnel, and then to ultimate users on the eastern slope of the front range in Colorado. Rocky Mountain’s applications sought conditional decrees to divert and store, in priority, water from the Blue River, the Williams Fork River, and Keyser Creek.[1] In addition, Rocky Mountain proposed a water exchange project which would enable it to divert water from the above sources out of priority when replaced by an equivalent amount from Rocky Mountain’s conditionally decreed water rights granted for use in connection with a hydroelectric project on Sweetwater Creek.[2] Under the exchange proposal, a certain amount of water to be appropriated under the applications would also be used to replace water used in the Sweetwater Hydroelectric Project which is lost during transportation. Other than those portions of water intended by Rocky Mountain to be used as replacement water in connection with the Sweetwater Hydroelectric Project, none of the water for which decrees were sought in this case was to be used on land or facilities owned or operated by Rocky Mountain.Page 386
[3] The applications set forth the following statement with respect to the proposed use of the water on the eastern slope: [4] “The waters will be used by cities, towns and other types of users in Northern Colorado, and return flows will be used on irrigated land in Northern Colorado. Initially, first use of some of the water will be for irrigation and will be so used until such time as the growing cities require the water for municipal use. The waters to be derived from the diversion will be used for the following purposes: municipal, industrial, agricultural and other beneficial purposes, including power generation, both by hydraulic and steam power production, and for cooling purposes.” [5] In each of the four applications, Rocky Mountain claimed an appropriation date of January 24, 1970, which marks the date that a survey on the project was commenced. The appellee, Colorado River Water Conservation District (District), opposed the applications on the grounds that there was no ascertainable proposed place of use of the waters to be diverted. Also opposing one or more of Rocky Mountain’s claims were the United States of America, the City and County of Denver, which alleged that the applications were not indicative of a serious intention to appropriate water, and the Central Colorado Water Conservancy District. [6] On May 11, 1972, the water court appointed a special master pursuant to C.R.C.P. 53.[3] A hearing before the master was held on February 13 and 14, 1973, at which time evidence in support of and in opposition to the applications was presented. The master concluded that, on January 24, 1970, Rocky Mountain possessed the requisite intent to appropriate the claimed water and demonstrated that intent by open, physical work on the land. Accordingly, in its report to the water court on December 11, 1978, the master recommended entry of a decree granting the applications of Rocky Mountain for conditional water rights and water storage rights with an appropriation date of January 24, 1970. [7] On December 15, 1978, the District filed a “Protest and Objection to the Report of the Master-Referee Concerning the Claims of the Rocky Mountain Power Company,” which objected to the master’s conclusion that Rocky Mountain had shown the requisite intent to appropriate the claimed water. Thereafter, on February 22, 1980, prior to any hearing or decision by the water court on the objection, the District filed a “Motion to Set Aside Master-Referee’s Report and to Enter Judgment Denying the Claims,” which again challenged the type and level of intent required by the master for a conditional water decree. In the motion to set aside, the District also pointed out that our decision in Colorado River Water Conservation District v. Vidler Tunnel Water Co., 197 Colo. 413, 594 P.2d 566 (1979) (Vidler), was controlling in this case and clarified the law relating to claims for conditional water decrees such as those advanced by Rocky Mountain. [8] At a hearing on April 18, 1980, the water court ruled that it would consider the motion to set aside as an amendment to or supplementation of the District’s previous objection.[4] Thereafter, relying on Vidler, the water court entered an order on AprilPage 387
25, 1980, denying the conditional water decrees sought by Rocky Mountain. By an order dated June 3, 1981, the water court denied Rocky Mountain’s motion for a new trial, and Rocky Mountain appealed. For the reasons expressed in this opinion, we affirm the decision of the water court.
I.
[9] As a preliminary matter, we reject Rocky Mountain’s contention that the water court erred in considering the District’s motion to set aside as an amendment to or supplementation of the District’s previous objection filed on December 15, 1978. Rocky Mountain argues that since the motion to set aside was, in effect, a written objection to the master’s report, it should have been dismissed as it was not timely filed under the provisions of C.R.C.P. 53(e)(2) and 6(b). We do not agree.
II.
[12] A conditional water right is the “right to perfect a water right with a certain priority upon the completion with reasonable diligence of the appropriation upon which such water right is to be based.” Section 37-92-103(6), C.R.S. 1973. The purpose of a conditional water decree has always been to allow an ultimate appropriation of water to relate back to the time of the “first step” toward that appropriation. See section 37-92-305(1), C.R.S. 1973; Colorado River Water Conservation District v. Vidler Tunnel Water Co., 197 Colo. 413, 594 P.2d 566 (1979); Four Counties Water Users Association v. Colorado River Water Conservation District, 159 Colo. 499, 414 P.2d 469 (1966).
and an overt manifestation of that intent through physical acts sufficient to constitute notice to third parties. See, e.g., Colorado River Water Conservation District v. Vidler Tunnel Water Co., supra; Bunger v. Uncompahgre Valley Water Users Association, 192 Colo. 159, 557 P.2d 389 (1976); Central Colorado Water Conservancy District v. Denver, 189 Colo. 272, 539 P.2d 1270 (1975); Four Counties Water Users Association v. Colorado River Water Conservation District, supra; Fruitland Irrigation Co. v. Kruemling, 62 Colo. 160, 162 P. 161 (1916). To determine whether an appropriation has been initiated, the facts of each case must be considered on an ad hoc basis in light of the circumstances and facts before the water court. Harvey Land and Cattle Co. v. Southeastern Colorado Water Conservancy District, 631 P.2d 1111
(Colo. 1981); Colorado River Water Conservation District v. Vidler Tunnel Water Co., supra; Central
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Colorado Water Conservancy District v. Denver, supra; Elk-Rifle Water Co. v. Templeton, 173 Colo. 438, 484 P.2d 1211 (1971). A guiding principle in applying the two elements of the “first step” is whether the applicant seeks to “invoke the benefit of remote contingencies to unduly extend the doctrine of relation [back],” Fruitland Irrigation Co. v. Kruemling, supra, and the burden of proving these elements is upon the applicant for the conditional water right. Section 37-92-304(3), C.R.S. 1973.
[14] The District does not contest the master’s finding that Rocky Mountain satisfied the second prong of the “first step” requirement on January 24, 1970, when field survey work on both the Blue River and Keyser Creek was commenced. Indeed, that element was not a basis for the water court’s decree and is not now at issue here. The District urges, however, that Rocky Mountain failed to show the first prong of the “first step” requirement, or the requisite intent to appropriate and, therefore, the water court properly denied the conditional decree. In its order, the water court made the following findings of fact: [15] “There is no evidence that the applicant intends to use any quantified portion of the water it seeks to divert on land it owns or leases or in facilities it owns or operates. [16] “Except for an undefined amount, the applicant intends to sell all of the water it seeks to divert to the ultimate users. [17] “The applicant has entered into discussions with several prospective ultimate purchasers and users of the water the applicant seeks to divert. [18] “The applicant has no firm contractual commitment from any of the prospective purchasers and users of the water its seeks to divert.” [19] Relying on our decision in Vidler, the water court concluded that since there was no evidence that Rocky Mountain itself intended to put to a beneficial use any quantified amount of water, or that Rocky Mountain had obtained any contractual commitments from any prospective beneficial users of the water, the applications must be denied. [20] Rocky Mountain contends that there was no requirement for it to demonstrate the need for water with certainty at the time of its application for a conditional decree and that, on January 24, 1970, it therefore possessed the requisite intent to appropriate. In its view, at the hearing before the master in February 1973 and when the master filed his report in December 1978, i.e., prior to Vidler, it was not required that an appropriation be for a specified amount of water or for a definite purpose in order to obtain a conditional decree. We disagree. Far from overruling prior case law, our decision in Vidler expressly relied upon prior holdings of this Court to support the conclusion that a claimant of a conditional water right must substantiate a need for the claimed water by showing, at the least, a contractual or an agency relationship with those who are to put the water to a beneficial use. In Vidler, we reaffirmed our longstanding view that conditional decrees will not be granted to those who cannot show more than a speculative or conjectural future beneficial use: [21] “Our constitution guarantees a right to appropriate, not a right to speculate. The right to appropriate is for use, not merely for profit. As we read our constitution and statutes, they give no one the right to preempt the development potential of water for the anticipated future use of others not in privity of contract, or in any agency relationship, with the developer regarding that use. To recognize conditional decrees grounded on no interest beyond a desire to obtain water for sale would — as a practical matter — discourage those who have need and use for the water from developing it. Moreover, such a rule would encourage those with vast monetary resources to monopolize, for personal profit rather than for beneficial use, whatever unappropriated water remains. Twenty-five years ago this Court emphatically rejected the `claim that mere speculators, not intending themselves to appropriate and carry water to a beneficial use or representingPage 389
others so intending, can by survey, plat, and token construction compel subsequent bona fide appropriators to pay them tribute by purchasing their claims in order to acquire a right guaranteed them by our Constitution.’ Denver v. Northern Colorado Water Dist., 130 Colo. 375, 408, 276 P.2d 992, 1009 (1954).” (Emphasis in original.) 197 Colo. at 417, 594 P.2d at 568-69.
[22] See also Southeastern Colorado Water Conservancy District v. Huston, 197 Colo. 365, 593 P.2d 1347 (1979); Bunger v. Uncompahgre Valley Water Users Association, supra. Since our decision in Denver v. Northern Colorado Water Conservancy District, supra, we have continually upheld the principle that conditional water rights will not be granted where the applicant merely speculates that unknown third parties will use the claimed water, in the future, for beneficial purposes.[6] [23] Vidler is also consistent with the provisions in the Act which require that an application for a conditional water right contain a statement of “the use or proposed use of the water,” section 37-92-302(2), C.R.S. 1973, and that, in order to qualify as a beneficial use, water must be used for “the purpose for which the appropriation is lawfully made.” Section 37-92-103(4), C.R.S. 1973. See also note 5, supra. Cf. Four Counties Water Users Association v. Colorado River Water Conservation District, 159 Colo. 499, 414 P.2d 469 (1966); Metropolitan Suburban Water Users Association v. Colorado River Water Conservation District, 148 Colo. 173, 365 P.2d 273 (1961); Taussig v. Moffat Tunnel Co., 106 Colo. 384, 106 P.2d 363 (1940) (Four Counties, Metropolitan Suburban, and Taussig all involve interpretations of the statutory law as it existed prior to the enactment of the Water Right Determination and Adjudication Act of 1969). It is therefore clear that the rule of intent applied i Vidler was not a reversal of our prior decisions but rather an affirmation of previous case law and a recognition of the requirements of the Act.[7]Accordingly, Rocky Mountain’s contention that Vidler is inapplicable to this case is erroneous.
III.
[24] As in Vidler, the evidence presented by Rocky Mountain regarding future needs and uses of the water by municipalities on the eastern slope falls short of what is necessary to indicate an intent to appropriate. There is no evidence in the record that Rocky Mountain intended to use any quantified portion of the claimed water on land it owns or leases or in facilities it owns or operates.[8] Further it is undisputed that
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Rocky Mountain did not enter into any contractual commitments with any municipality to use any of the claimed water. Accordingly, the ultimate users of the claimed water are not clearly specified and Rocky Mountain’s applications are, in effect, open-ended with respect to the beneficial uses to which the claimed water may be put in the future. Even if Rocky Mountain had entered into serious negotiations with any municipality regarding the prospective use of the claimed water, such activity would still not rise to the level of a definite commitment for use required to prove the necessary intent. See Colorado River Water Conservation District v. Vidler Tunnel Water Co., supra. Under the facts of this case, there was no evidence presented that Rocky Mountain represented anyone intending to put the claimed water to a beneficial use. In the absence of any contractual or agency relationships justifying Rocky Mountain’s claims to represent the “ultimate users on the eastern slope,” we hold that the trial court was correct in denying Rocky Mountain’s applications for conditional water rights.
[25] Accordingly, the judgment of the water court is affirmed.