Case Title: Toltec Watershed Imp. Dist. v. Associated Enterprises, Inc., Through Johnston

Citation: 

Docket Number: 

State: wyoming

Court: Wyoming Supreme Court

Date: 1992-04-15T00:00:00Z

Document:
Toltec Watershed Imp. Dist. v. Associated Enterprises, Inc., Through Johnston1992 WY 41829 P.2d 819Case Number: 91-170Decided: 04/15/1992Supreme Court of Wyoming
TOLTEC WATERSHED 
IMPROVEMENT DISTRICT, 

Appellant 
(Appellant/Contestee),

v.

ASSOCIATED ENTERPRISES, 
INC., acting through its President, Mr. Eldon JOHNSTON, Appellee 
(Appellee/Petitioner), 

Wyoming State Board of 
Control, 

Appellee.

Appeal from Tenth 
Circuit, the Supreme Court, Thomas, J.

Fred W. Phifer, 
Wheatland, for appellant.

Wm. R. Jones, 
Wheatland, for appellee Associated Enterprises, 
Inc.

Joseph B. Meyer, 
Atty. Gen., Mary B. Guthrie, Dennis C. Cook, Sr. Asst. Attys. Gen., and 
Frederick E. Chemay, Asst. Atty. Gen., for appellee Wyoming State Bd. of 
Control.

Before 
URBIGKIT, C.J., and THOMAS, CARDINE, MACY and GOLDEN, 
JJ.

MACY, 
Justice.

[¶1]      Pursuant to Wyo. 
Stat. § 41-3-107 (Supp. 1991), the Wyoming State Board of Control granted 
Appellee Associated Enterprises, Inc.'s petition to transfer its water rights 
from lands submerged by Appellant Toltec Watershed Improvement District's 
reservoir. Toltec petitioned the district court for review, claiming that 
Associated Enterprises could not transfer the water rights for lack of 
ownership. The district court affirmed the Board of Control's 
decision.

[¶2]      We 
affirm.

[¶3]      Toltec raises the 
following issues on appeal:

      1. Did the Order 
of Award dated May 21, 1982, pass title to the water rights appurtenant to the 
land which Appellants condemned?

     2. Do water rights 
that are abandoned revert back to the previous owner?

[¶4]      Associated 
Enterprises owned land in Albany County, Wyoming, which Toltec condemned in 1981 
for use as a reservoir. When completed, the reservoir inundated land previously 
irrigated by Associated Enterprises, prompting Associated Enterprises to seek a 
transfer of its water to lands west of the reservoir. To transfer its water, 
Associated Enterprises petitioned the Board of Control, pursuant to § 
41-3-107,1 for amended certificates of 
appropriation for the affected appropriations and to grant a change in the point 
of diversion and means of conveyance.

[¶5]      The Board of 
Control referred the petition to the Superintendent of Water Division Number I, 
who held a public hearing on September 19, 1990. On the basis of that hearing, 
the Board of Control found that Associated Enterprises complied with all the 
requirements of § 41-3-107 and granted the petition. Toltec appealed the Board 
of Control's decision to the district court. In a summary affirmance, the 
district court found that the Board of Control's decision was supported by 
substantial evidence. Toltec now appeals from the district court's 
affirmance.

[¶6]      Pursuant to § 
41-3-107, the owner of water rights submerged by a reservoir may change the 
point of diversion and means of conveyance in order to irrigate lands outside 
the reservoir basin. The statute contains several requirements, but, as a 
threshold matter, the petitioner must own the water rights to be transferred. 
Toltec maintains that Associated Enterprises cannot transfer the water rights 
because Toltec acquired them when it condemned Associated Enterprises' land. The 
Board of Control disagreed with Toltec's position, finding that Toltec 
"condemned and purchased [Associated Enterprises'] lands to be inundated by 
Toltec Reservoir, but the water rights of [Associated Enterprises] were not 
purchased in that action." Because Toltec did not purchase the water rights, the 
Board of Control concluded that Associated Enterprises retained ownership of the 
rights.

[¶7]      The scope of our 
review of the Board of Control's decision is governed by Wyo. Stat. § 16-3-114 
(1990) and W.R.A.P. 12.09. When considering the district court's review of an 
agency's action, "we are not bound to accept any of the conclusions reached in 
the district court, but we are obligated to review the appeal as if it came 
directly to this court from the agency." Mountain Fuel Supply Company v. Public 
Service Commission of Wyoming, 662 P.2d 878, 882 (Wyo. 
1983).

[¶8]      If the whole 
record establishes that substantial evidence exists to support the Board of 
Control's findings of fact, then this Court must accept those findings. City of 
Cheyenne Policemen Pension Board v. Perreault, 727 P.2d 702, 704 (Wyo. 1986). We 
have previously defined substantial evidence as being "`such relevant evidence 
as a reasonable mind might accept as adequate to support a conclusion; it may be 
less than the weight of the evidence but cannot be contrary to the overwhelming 
weight of the evidence.'" Vandehei Developers v. Public Service Commission of 
Wyoming, 790 P.2d 1282, 1287 (Wyo. 1990) (quoting Wyoming Insurance Department 
v. Avemco Insurance Company, 726 P.2d 507, 509 (Wyo. 1986)). Once substantial 
evidence has been found to exist, the possibility of reaching two inconsistent 
conclusions from the evidence presented does not preclude a finding that the 
Board of Control's decision was supported by substantial evidence. Id.; 
Burlington Northern Railroad Company v. Public Service Commission of Wyoming, 
698 P.2d 1135, 1139 (Wyo. 1985).

[¶9]      Applying the 
foregoing standard of review, we examine the record to determine whether 
substantial evidence existed to support the Board of Control's findings. The 
record in this case is unique because almost all the evidence introduced was a 
recitation of pleadings and orders from prior litigations between the parties. 
These prior pleadings and various orders support the Board of Control's finding 
that Toltec did not purchase Associated Enterprises' water rights. Among the 
evidence was Toltec's complaint for condemnation, which did not seek 
condemnation of Associated Enterprises' water rights. Other evidence included 
the judge's order awarding compensation, an order granting compensation and 
appointing appraisers to assess compensation, and an order describing the land, 
none of which made any reference to water rights.

[¶10]   Additional support for the Board of 
Control's finding is the position taken by Toltec in a previous litigation with 
Associated Enterprises. When Associated Enterprises appealed the condemnation 
award to this Court in 1982, Toltec argued that the "land was condemned as 
irrigated land and compensation was awarded on that basis, but that [Associated 
Enterprises] still own[ed] the water rights." Associated Enterprises, Inc. v. 
Toltec Watershed Improvement District, 656 P.2d 1144, 1146 (Wyo. 
1983).

[¶11]   The pleadings, orders, and Toltec's 
previous arguments are all relevant evidence which a reasonable mind might 
accept as being adequate to support the finding that Toltec did not purchase the 
water rights as part of its condemnation action. Therefore, we hold that 
substantial evidence existed to support the Board of Control's 
finding.

[¶12]   Although substantial evidence 
existed to support the Board of Control's finding that Toltec did not purchase 
the water rights, we must still address Toltec's contention that the water 
rights were automatically conveyed as part of the condemnation. Toltec first 
refers us to the almost-century-old rule in Wyoming that water rights 
appurtenant to land pass with the conveyance of the land, even though the 
conveyance makes no mention of the water rights. Frank v. Hicks, 4 Wyo. 502, 35 P. 475 (1894). See also Big Goose and Beaver Ditch Company v. Wallop, 382 P.2d 388, 393 (Wyo. 1963). Toltec then claims that, since Associated Enterprises 
failed to detach or transfer its water rights as allowed by § 41-3-107(c),2 the rights were conveyed according 
to the general rule of Frank.

[¶13]   We disagree. The cases cited by 
Toltec discuss water rights passing by conveyance of the land. A 
conveyance and an involuntary condemnation are significantly different. 
Although in a different context, we previously noted this distinction in State 
ex rel. State Highway Commission v. Meeker, 75 Wyo. 210, 294 P.2d 603 (1956). In 
Meeker, we said that the transfer of title by eminent domain was not a 
conveyance within the meaning of the recording statutes but that it was a 
"transfer of title in invitum, that is to say, against the consent of the 
owner." Id. at 217, 294 P.2d  at 605. This distinction is further discussed in 3 
JULIUS L. SACKMAN AND PATRICK J. ROHAN, NICHOLS' ON THE LAW OF EMINENT DOMAIN § 
9.2. at 9-9 (Rev.3d ed. 1985):

[T]he proceeding in 
eminent domain, which involves the element of compulsion, is in marked contrast 
to the effect of a voluntary conveyance between individuals. In the latter case, 
whenever it becomes necessary to construe the instrument of conveyance for the 
purpose of determining the extent thereof the rule is that the grantee will be 
allowed the greatest interest possible. In eminent domain, however, that 
construction must be adopted in the event of uncertainty, indefiniteness or 
ambiguity as leaves the owner with the greatest possible 
estate.

This distinction 
is applicable to the uncertain facts of the present case, where Toltec claims to 
have acquired the water rights through condemnation yet failed to purchase them. 
Accordingly, we hold that Associated Enterprises' water rights did not 
automatically transfer upon condemnation of its land.

[¶14]   In its second issue, Toltec asks, 
"Do water rights that are abandoned revert back to the previous owner?" 
According to Toltec, this issue is answered by § 41-3-107(a)(iii), which 
states:

     (iii) Such change of 
water rights [shall] be made within five (5) years from the date that 
construction of the reservoir dam has been completed. If such change is not 
applied for by the owner or his successors in interest within the five (5) year 
period such water rights shall become automatically abandoned and the water 
shall be distributed in order of priority on the stream. Such automatic 
abandonment shall apply only to lands inundated at and below the high water line 
of reservoirs. The board of control shall enter an order abandoning the water 
rights upon a determination that an abandonment has 
occurred[.]

Apparently, 
Toltec contends that the water rights were automatically abandoned and that they 
should be distributed in order of priority on the stream, not returned to 
Associated Enterprises.

[¶15]   This argument has little merit. 
While the statute calls for automatic abandonment when a change is not applied 
for within five years, the last sentence of § 41-3-107(a)(iii) requires the 
Board of Control to determine that the water rights have been abandoned. The 
Board of Control made no such determination. Instead of determining that the 
water rights were abandoned, the Board of Control's finding of facts included 
the completely contrary finding that Associated Enterprises filed its petition 
within the authorized five-year period.

[¶16]   Affirmed.

FOOTNOTES

1 Section 
41-3-107 provides in pertinent part:

     (a) The state board of 
control may, upon the written petition of the owners of an adjudicated water 
right, or water rights appurtenant to lands submerged by the construction of 
reservoirs in the state of Wyoming, issue amended certificates of appropriation 
of water and change the point of diversion and means of conveyance for such 
adjudicated appropriations of water for the irrigation of other lands in the 
state of Wyoming outside of the reservoir basin in lieu of the submerged lands, 
without loss of priority; provided:

     (i) The appropriation 
shall be from the same source of supply;

     (ii) The irrigated 
acreage shall include not only new land within the state of Wyoming having no 
original direct flow water right but also lands within the same drainage area 
having water rights from another source and which have a need for supplemental 
water, but in no event shall such right and use so changed exceed in amount of 
water that of the rights which are being changed;

     (iii) Such change of 
water rights be made within five (5) years from the date that construction of 
the reservoir dam has been completed. If such change is not applied for by the 
owner or his successors in interest within the five (5) year period such water 
rights shall become automatically abandoned and the water shall be distributed 
in order of priority on the stream. Such automatic abandonment shall apply only 
to lands inundated at and below the high water line of reservoirs. The board of 
control shall enter an order abandoning the water rights upon a determination 
that an abandonment has occurred;

     (iv) The change can be 
made only on condition that it does not injuriously affect the rights of other 
Wyoming appropriators.

     . . 
.

     (c) The owners of 
lands coming under the provisions of this section may sell or convey lands 
submerged or to be submerged by any such reservoir with provisions in the deed 
or other conveyance that the water rights appurtenant thereto may be detached 
and transferred as provided herein.

2 See supra 
note 1 for the text of § 41-3-107(c).