No. 00SC372Supreme Court of Colorado.
November 19, 2001
Court of Appeals No. 98CA1025, JUDGMENT AFFIRMED IN PART, REVERSED IN PART, AND CASE REMANDED WITH DIRECTIONS
JUSTICE KOURLIS delivered the Opinion of the Court.
Hale Hackstaff Tymkovich Erkenbrack, LLP, Timothy M. Tymkovich, Richard A. Westfall, John R. Paddock, Jr. Denver, Colorado, Patrick, Miller Kropf, PC Kevin L. Patrick, Scott C. Miller, Aspen, Colorado, Attorneys for Petitioner
Gregory J. Cucarola, Sterling, Colorado, Attorney for Respondent
EN BANC
[1] I.[2] In this case we address the unilateral alteration of irrigation ditches. St. Jude’s Company (hereinafter Ranch) owns 240 acres of agricultural land near Basalt, Colorado. Roaring Fork Club, L.P., (hereinafter Club) acquired the neighboring, upgradient property adjoining Ranch’s in 1995. Previously, the owner of Club’s land had used it for agricultural purposes; however, Club developed the property for recreational use by building a private fishing and golf club. [3] Club and Ranch share an interest in three irrigation ditches that traverse Club’s property and serve both properties. Seeking to alter the ditch course in order to accommodate its golf and fishing development, Club attempted to contract with Ranch either to purchase portions of Ranch’s easement or to formalize a ditch maintenance arrangement. However, the parties were unable to reach such an agreement. Nevertheless, Club moved forward with construction in and around the ditches. [4] In 1997 Ranch initiated a trespass action against Club seeking a mandatory and permanent injunction requiring Club to restore the ditches to their original location and course and to remove those improvements that prevented Ranch from maintaining the ditches. The case proceeded before the trial court, acting in equity. [5] Following three days of trial, the court found that Club had excavated within Ranch’s rights-of-way, graded and destroyed ditch banks and portions of ditches, realigned ditch channels, diverted ditch water flows, piped portions of ditches, constructed cabins and golf course greens within the easements, and temporarily piped wastewater into one of the ditches. [6] As a result, the trial court concluded that Club had committed trespass on Ranch’s easements. The court also stated that because Ranch sought an equitable remedy, the court was required to balance the equities between the parties in fashioning an appropriate remedy. Weighing the equities, the court found that Club never denied Ranch access to the ditches or denied it the opportunity to maintain the ditches; that Ranch had not suffered any diminution in the quantity of water delivered through the system; and that Ranch had not suffered any increased cost in maintenance of the ditches because of the development. The court also found that Ranch’s traditional disposition of spoilage and maintenance of the ditches would be inconsistent with Club’s use of its property for recreational purposes. Finally, the court found that requiring Club to restore the ditches to their condition prior to trespass would be extremely costly and would substantially interfere with Club’s current and ongoing use of its property. [7] The trial court concluded that Ranch was entitled to injunctive relief in one of two forms. The court held that Club must either remove all of the developments that reasonably interfered with entry, access, and maintenance of the ditches and restore the original ditches as prayed for by Ranch (the “restoration” option), or Club could assume all responsibility for, and expense of, operation and maintenance of the ditches on its property, and would be permanently obligated to deliver, upon demand, water to Ranch in the amount and quality, and at the time consistent with, Ranch’s adjudicated rights (the “maintenance and delivery” option). The trial court clarified in a post-trial order that the right to choose between the alternative remedies imposed by the injunction belonged to Club. Club exercised the maintenance and delivery option, and Ranch appealed the trial court’s disposition of the case. [8] On appeal, a majority of the court of appeals reversed, in part, the injunction formulated by the trial court, holding that the maintenance and delivery option did not comply with Colorado law. St. Jude’s Co. v.Roaring Fork Club, L.P., 15 P.3d 281, 285 (Colo.App. 1999). Further, the court of appeals held the trial court order unjustifiably rewarded Club, a bad faith actor, for deliberate and conscious trespass. Id. [9] We granted certiorari to determine two issues. The first issue is whether the court of appeals properly applied Valley Development Co. v.Weeks, 147 Colo. 591, 364 P.2d 730 (1961), and Brown v. Bradbury, 110 Colo. 537, 135 P.2d 1013 (1943), to preempt the trial court’s exercise of its equitable discretion; and the second is whether the court of appeals erred by requiring the trial court to award injunctive relief. [10] We now hold that the owner of property burdened by a ditch easement (hereinafter “burdened estate”) may not move or alter that easement unless that owner has the consent of the owner of the easement (hereinafter “benefitted estate”); OR unless that owner first obtains a declaratory determination from a court that the proposed changes will not significantly lessen the utility of the easement, increase the burdens on the owner of the easement, or frustrate the purpose for which the easement was created. We further clarify that the right to inspect, operate, and maintain a ditch easement is a right that cannot be abrogated by alteration or change to the ditch. Therefore, we affirm that portion of the court of appeals’ judgment upholding the trial court finding of trespass upon Club’s unilateral alteration of the easement. However, we remand this case for further proceedings in light of our interpretation of Colorado case law as set forth in this opinion.
II.
[11] Ditches are important to Colorado. They permit a landscape, economy, and history in which fertile valleys prosper. Without them, properties adjacent to or distant from watercourses wither. Colorado is not a riparian state in which only those lands adjacent to the streams and rivers have rights to waters. Rather, as early as the tenure of the territorial legislature, our lawmakers recognized that our arid climate required the creation of a right to appropriate and convey water across the land of another so that lands not immediately proximate to water could be used and developed. Colorado Territorial Laws 67 § 2 (1861)reprinted in Gregory J. Hobbs, Colorado Water Law: An HistoricalOverview, 1 U. Denv. Water L. Rev. 1, 31 (1997) (“That when any person, . . . [whose] farm or land, used by him for agricultural purposes, is too far removed from said stream . . ., [that person] shall be entitled to a right of way through the farms or tracts of land which lie between him and said stream. . . .”). By the time of passage of our constitution, that right was embodied in Article XVI, § 7, which provides, “All persons and corporations shall have the right-of-way across public, private and corporate lands for the construction of ditches, canals and flumes for the purpose of conveying water for domestic purposes, for the irrigation of agricultural lands and for mining and manufacturing purposes, and for drainage, upon payment of just compensation.” The statute that the first legislative assembly enacted in 1861 has now become section 37-86-102, to wit: “Any person owning a water right or conditional water right shall be entitled to a right-of-way through the lands which lie between the point of diversion and point of use or proposed use for the purpose of transporting water for beneficial use in accordance with said water right or conditional water right.” §37-86-102, 10 C.R.S. (2001).
to -120, 10 C.R.S. (2001).[1] Many of those statutes permit and even require the benefitted estate owner to have direct access to the entire length of the ditch. Therefore, we approach the issues before us in this case with due regard for the importance of ditches and ditch rights under the law.
III.
[15] The first question we must answer is whether Club had the right to move the ditch that served both its property and Ranch’s property, because the answer to that question then shapes any inquiry about appropriate remedy.
A.
[16] Although there are clearly some distinctions, we begin by reviewing the law as it relates to road and other easements. The majority rule in the United States prohibits burdened estate owners from unilaterally relocating easements. Note, The Right of Owners of Servient Estates toRelocate Easements Unilaterally, 109 Harv. L. Rev. 1693, 1693 (1996) (“In the majority of jurisdictions in the United States, neither the owner of the dominant estate nor the owner of the servient estate may unilaterally relocate an easement once it has been fixed.”); see also 28A C.J.S.Easements § 157 (1996) (“As a general rule, in the absence of contrary statutes, the location of an easement when once established cannot be changed by either party without the other’s consent.”). The traditional rule emerged out of the notion of reciprocity; since the benefitted estate owner could not unilaterally move the easement, neither could the burdened estate owner. See Restatement (Third) Of Property (Servitudes) § 4.8 cmt. f (2000).
B.
[18] Colorado’s first case on point is Cherrichigno v. Dickinson, 63 Colo. 443, 167 P. 1178 (1917), which follows the majority rule in holding that a property owner has “no right for his own convenience or profit to change the location of a ditch, or to do anything which will interfere with the vested rights of” a benefitted estate therein, without consent of the benefitted estate. Id. at 445, 167 P. at 1178.
(1943), in which the plaintiffs owned a ditch easement that bisected defendant Bradbury’s estate. The ditch ran near Bradbury’s home and “Mrs. Bradbury was fearful that their small son might fall into it and be drowned.” Id. at 538, 135 P.2d at 1013. Mr. Bradbury unilaterally substituted a new ditch away from the house, which ran along a road right of way that Brown also owned on Bradbury’s estate. The new ditch conveyed water to Brown’s property “in the same or increased quantity as before.”Id. Brown sought an injunction to restore the old ditch, asserting irreparable injury. The trial court, however, found that damages were “insignificant and immeasurable.” Id. at 539, 135 P.2d at 1013. The trial court allowed the ditch to remain in its new location but ordered Bradbury to eliminate certain curves in the new ditch and shifted to him the burden of repairing, maintaining, and keeping the ditch “in such condition as to insure the delivery of the same amount of water.” Id. at 538, 135 P.2d at 1013. [20] On appeal, this court found no abuse of discretion in the trial court’s order and cited Stuart v. County Commissioners, 25 Colo. App. 568, 580, 139 P. 577, 581 (1914), for the proposition that a defendant cannot destroy a ditch easement “without providing for plaintiff other adequate and satisfactory means for receiving his water from said carrier so that his lands could be advantageously irrigated as prior to said change.” Brown, 110 Colo. at 538, 135 P.2d at 1014. [21] Several years later, relying on the Stuart and Brown holdings, Valley Development Co. (Valley) substituted an underground pipe for a ditch easement to convey water across their property to defendant Weeks.Valley Dev. Co. v. Weeks, 147 Colo. 591, 593, 364 P.2d 730, 731 (1961). Valley subdivided its land and then built and sold homes to good faith purchasers. Weeks sought an injunction requiring Valley to restore the ditch to its former location and also sought damages “both general and exemplary.” Id. The trial court held generally for Weeks, but then found that “it was impossible to restore the ditch to its former course by mandatory injunction because innocent persons had purchased houses.”Id. The court granted unspecified “other equitable relief” and monetary damages, excluding exemplary damages. [22] In reviewing Weeks on appeal, we observed that Valley had “misconstrued” the true meaning and intent of Brown. Id. at 594, 364 P.2d at 732. Correcting the misunderstanding, we explained that theBrown court “merely held that on the record presented there it would not disturb an equitable judgment.” Id. at 595, 364 P.2d at 732. We then reiterated Colorado’s settled easement rules as set forth in Cherrichignov. Dickinson: “[A]n owner of a servient tenement has `no right for his own convenience or profit to change the location of a ditch, or to do anything which will interfere with the vested rights of’ a dominant tenement therein, without the consent of that party.” Id. (quotingCherrichigno v. Dickinson, 63 Colo. 443, 445, 167 P. 1178, 1178 (1917)). [23] Still, we upheld the trial court’s refusal to order the ditch restored. We found that Cherrichigno controls “except where a trial court has, under its equitable powers in cases involving easements, determined the conditions under which such easement may be altered where other equities have arisen. In cases of the latter type, the Brown doctrine is applicable.” Id. (emphasis added). Finally, we stated that “once the interference and alteration had been accomplished, the trial court had the equitable power to determine what should be done about it.” Id. at 596, 364 P.2d at 732. [24] Accordingly, we find ourselves at the onset of the 21st century with competing land uses in Colorado proliferating and somewhat unclear common-law precedent as to the interlocking rights of estates benefitting from easements and those estates burdened by them. On the one hand,Cherrichigno states unequivocally that a burdened estate owner may not move a ditch easement without the consent of the benefitted estate owner. Cherrichigno, 63 Colo. at 445, 167 P. at 1178. On the other hand,Stuart indicates it can be done if the burdened owner provides an adequate substitute. Stuart, 25 Colo. App. 580, 139 P. at 581. Similarly, both Brown and Weeks stand for the proposition that a ditch easement need not be restored to its original course and condition when equity dictates otherwise.
IV.
[25] We observe that the development of the common law on point appears to serve two purposes: first, that ditch easements are a property right that the burdened estate owner may not alter absent consent of the benefitted owner; and second, that there may be some circumstances in which such alteration would work no harm to the benefitted owner and would greatly serve the burdened owner. Our resolution of this case honors both of those precepts. Accordingly, we first affirm both the trial court and court of appeals finding that Roaring Fork (Club) trespassed upon St. Jude’s (Ranch’s) easement by unilaterally altering it. For that trespass, Ranch may well be entitled to damages. Bobrick v.Taylor, 171 Colo. 375, 379-80, 467 P.2d 822, 824 (1970) (affixing award for trespass at cost of restoration); see also Engler v. Hatch, 472 P.2d 680, 683 (Colo.App. 1970) (not selected for publication) (finding the cost of restoration is a proper award even though restoration not ordered). Other trespass cases award actual and even punitive damages where appropriate. Proper v. Greager, 827 P.2d 591, 597
(Colo.App. 1992) (“[I]f necessary to grant an injured party complete relief for past interference with his easement, the court may also award monetary damages”); Campbell v. Kelsall, 717 P.2d 1019, 1019-20
(Colo.App. 1986) (awarding benefitted owner actual and punitive damages in trespass where burdened owner unilaterally destroyed a ditch easement). However, the trial court may also find that such trespass does not warrant exemplary damages and that monetary damages are either incalculable or unproven. In such cases, nominal damages are appropriate. See CJI-Civ.4th 18:3.
V.
[27] In other areas of property law, the law in Colorado has begun to recognize that the competing uses between two interested owners should be accommodated, if possible, and that inflexible notions of dominant and servient estates do little to advance that accommodation. In Lazy DogRanch v. Telluray Ranch Co., 923 P.2d 313 (Colo.App. 1996) (hereinafterLazy Dog I), cert. denied, Lazy Dog Ranch v. Telluray Ranch Co., No. 96SC252, 1996 Colo. LEXIS 374 (Colo. Sept. 3, 1996), the court of appeals upheld a trial court’s imposition of a “compromise” between competing landowners subject to an easement. Id. at 317-18. There, both the plaintiff and the defendant shared a road that ran along a common property line. The plaintiff planned to subdivide his property for residential development; the defendant operated a cattle ranch. Over the plaintiff’s objections, the defendant sought to gate the shared road at both ends. As a solution, the trial court ordered the plaintiff to install cattle guards, while also ordering that if the defendant needed to move the cattle guards at a later date, the defendant would bear those costs. Id. at 316; see also Schold v. Sawyer, 944 P.2d 683, 685 (Colo.App. 1997) (holding the burdened estate’s erection of cattle guards permissible when they do not unreasonably interfere with the right of way).
Unless expressly denied by the terms of an easement, . . .
the owner of the servient estate is entitled to make reasonable changes in the location or dimensions of an easement, at the servient owner’s expense, to permit normal use or development of the servient estate, but only if the changes do not
significantly lessen the utility of the easement,
[31] Restatement (Third) of Property (Servitudes) § 4.8(3) (2000). Accordingly, under the Restatement, a burdened estate owner may unilaterally move an easement (unless it is specified in deeds or otherwise to have a location certain), subject both to a reasonableness test and to the constraints delimited in the rule.increase the burdens on the owner of the easement in its use and enjoyment, or
frustrate the purpose for which the easement was created.
A.
[32] The Restatement approach allows a burdened property owner such as Club to move or alter a ditch easement in order to maximize the use of its own property — PROVIDED that such alteration does not damage the benefitted estate owner. Such an approach is most consistent with Colorado law, including the line of authority directly related to ditch easements, and represents the better approach to resolve the competing equities.
(Md. 1922), Maryland’s highest court stated: “A mandatory injunction will of course be denied where damages will constitute an adequate remedy; where the obstruction does not constitute a material interference with the rights of the owner of the easement; or where the damages sustained are merely nominal.” Id. (citations omitted). The court continued:
[35] Id. (citations omitted). Idaho has decreed by statute that burdened estate owners may unilaterally alter an irrigation easement. Abbott v.Nampa Sch. Dist. No. 131, 808 P.2d 1289, 1294 (Idaho 1991) (“In Idaho easements for irrigation laterals are also subject to the servient estate owner’s right to move the lateral at his own expense. Idaho Code §42-1207 allows such a change when it does not impede the flow of water or injure any person using the lateral ditch.”).[2] [36] Furthermore, we note that the policy arguments in support of the traditional rule that a burdened owner may never move or alter a ditch easement may no longer apply. It appears that the traditional rule originated from a general precept that prohibited burdened owners fromobstructing easements. Over time, the rule extended to other areas, including unilateral alterations. Note: Balancing the Equities: IsMissouri Adopting a Progressive Rule for Relocation of Easements?, 61 Mo. L. Rev. 1039, 1042-45 (1996) (hereinafter Balancing the Equities). [37] According to the Arizona Supreme Court, “The reason for [the traditional] rule is that treating the location as variable would incite litigation and depreciate the value and discourage the improvement of the land upon which the easement is charged.” Stamatis v. Johnson, 224 P.2d 201, 203 (Ariz. 1950), modified, 231 P.2d 956 (Ariz. 1951). In fact, in both Weeks and Brown, the burdened owner’s estate was arguablymore valuable after the easement alterations, while the benefitted estate remained unchanged — a seminal assumption. [38] The Supreme Judicial Court of Maine rejected the unilateral modification of an easement that kept the same ingress and egress points because it “confer[s] an economic windfall on the servient owner, who presumably purchased the land at a price which reflected restraints existing on the property.” Davis v. Bruk, 411 A.2d 660, 665 (Me. 1980). That statement could just as easily provide support for, rather than opposition to, the Restatement rule. The point is that each property owner ought to be able to make the fullest use of his or her property allowed by law, subject only to the requirement that he or she not damage other vested rights holders. The Restatement rule simply maximizes overall benefit by helping one party without hurting the other. Lifting only the locational constraints, while the easement itself remains constant, facilitates that utility. In any case, the “windfall” will be tempered by the burdened estate owner incurring the expense of moving the easement and ensuring it conforms to the rule’s strictures. [39] The old rule creates a “bilateral monopoly” in that neither owner can transact with anyone else. Note, supra, at 1701. While the Restatement rule “imposes upon the easement holder the burden and risk of bringing suit against an unreasonable relocation,” it “far surpasses in utility and fairness the traditional rule that left the servient land owner remediless against an unreasonable easement holder.” Balancing theEquities, supra, at 1060. The Restatement rule operates to redistribute the (one-sided) burden the traditional rule places on the estate burdened by the easement. Under either rule, the courts will determine controversies in which the benefitted owner claims that the burdened owner has proceeded unreasonably. [40] Therefore, based upon the direction implicit and explicit in our case law and the practical realities of competing property uses, we accept section three of the Restatement (Third) of Property as the correct statement of controlling legal principle for purposes of analyzing a ditch easement relocation or alteration.The Court should consider the relative expense and inconvenience which it would occasion to the parties; in other words, “the balance of injury”; and should refuse to grant the injunction wherever it would operate inequitably and oppressively. While there is some authority to the contrary, the better view is that a mandatory injunction will be denied and plaintiff left to his remedy at law, where the expense of [restoration] is greatly disproportionate to the benefit to be derived by the owner of the easement, and where in addition thereto a merely technical right has been violated resulting in no actual damage; where the removal would bring no actual advantage to the owner of the easement.
B.
[41] We must now reconcile the notion that interference with a ditch easement without consent constitutes trespass, with the Restatement doctrine. Clearly, the best course is for the burdened owner and the benefitted owner to agree to alterations that would accommodate both parties’ use of their respective properties to the fullest extent possible. Barring such an agreement, we do not support the self-help remedy that Club exercised here. When a dispute arises between two property owners, the court is the appropriate forum for the resolution of that dispute and — in order to avoid an adverse ruling of trespass or restoration — the burdened owner should obtain a court declaration before commencing alterations. If a burdened owner seeks to move or alter a ditch easement and the benefitted owner refuses to consent, then the burdened owner may seek a declaratory determination from a court that the alteration does not damage the benefitted owner(s) in accordance with the Restatement test. Declaratory judgments are a familiar mechanism in easement disputes. Parties employ them to determine the existence, scope, and location of easements. See e.g., Bijou Irrigation Dist. v.Empire Club, 804 P.2d 175 (Colo. 1991); Riddell v. Ewell, 929 P.2d 30
(Colo.App. 1996). Similarly, in a declaratory judgment proceeding concerning a proposed easement alteration, a judge would apply the Restatement rule to determine whether the planned changes pass the three-prong test.[3]
Ditches are linear delivery systems that function as a part of a whole.
VI.
[43] Finally, we return to the proceedings in this case, to date and on remand. Again, we note that the trial court found Club had committed trespass, and we agree. Nonconsensual, unilateral alterations jeopardize valuable vested property rights both in the easement and in the water rights exercised by means of the ditch. Club had neither the consent of Ranch nor the permission of the court to make the alterations to the ditch. For that trespass, the trial court is entitled to fashion a remedy at law or in equity. Here, the trial court could shift maintenance burdens and responsibilities as a part of equitable relief, see Brown, 110 Colo. at 538, 135 P.2d at 1013, but subject to the right of Ranch to enter and maintain the substitute facility and also to charge the cost to Club, should Club fail in its court-ordered maintenance obligation. However, we further recognize that by this opinion we have identified a remedy that was not previously clear in the law: namely, the right of the burdened owner to go to court and seek a declaration that proposed alterations will not damage the benefitted owner. If Club had sought that remedy, rather than engaging in self-help, it might have won the right to alter the ditch easement upon the court finding that the changes comported with the Restatement rule.
VII.
[46] Accordingly, we answer the first question on certiorari by holding that the owner of property burdened by a ditch easement has no right to move or alter the easement without consent of the benefitted owner unless he first obtains a declaration of a court that such alterations will cause no damage to the benefitted owner. Such a determination should be made with reference to the Restatement doctrine, as consistent withBrown and Weeks. Accordingly, the judgment of the court of appeals is affirmed in part and reversed in part. We remand this case first to determine whether Club’s alteration of the easement was reasonable and otherwise satisfied the criteria of Restatement (Third) of Property (Servitudes) § 4.8(3) (2000); namely, that the change does not significantly lessen the utility of the easement, increase the burdens on the owner of the easement, or frustrate the purpose for which the easement was created. If the alteration does not meet this test, the court must order restoration. Further, Ranch is entitled to an order allowing it to inspect, maintain, operate, and repair the ditch easement and water structure, irrespective of the allocation of costs and burdens of maintenance that might form part of equitable relief.
Where any lateral ditch or buried irrigation conduit has heretofore been, or may hereafter be, constructed across or beneath the lands of another, the person or persons owning or controlling said land shall have the right at their own expense to change said lateral ditch or buried irrigation conduit to any other part of said land, but such change must be made in such a manner as not to impede the flow of the water therein, or to otherwise injure any person or persons using or interested in such lateral ditch or buried irrigation conduit. Any increased operation and maintenance shall be the responsibility of the landowner who makes the change.
A landowner shall also have the right to bury the ditch of another in pipe on the landowner’s property. . . .