Case Title: POLO RANCH COMPANY v. CITY OF CHEYENNE, BOARD OF PUBLIC UTILITIES

Citation: 

Docket Number: 01-92

State: wyoming

Court: Wyoming Supreme Court

Date: 2003-01-23T00:00:00Z

Document:
POLO RANCH COMPANY v. CITY OF CHEYENNE, BOARD OF PUBLIC UTILITIES2003 WY 1561 P.3d 1255Case Number: 01-92Decided: 01/23/2003
October Term, A.D. 2002

POLO 
RANCH COMPANY, and JOHN N.

MORRIS 
and NORMA B. MORRIS,

 

Appellants(Plaintiffs) 
,

 

v.

 

CITY 
OF CHEYENNE, BOARD OF PUBLIC

UTILITIES,

 

Appellee(Defendant) 
.

 

The 
Honorable Nicholas G. Kalokathis, Judge

 

Representing 
Appellants:

Henry 
F. Bailey, Jr. of Bailey, Stock and Harmon, P.C.; and Steven F. Freudenthal of 
Herschler, Freudenthal, Salzburg & Bonds, Cheyenne, WY.  Argument by Mr. 
Bailey.

 

Representing 
Appellee:

J. 
Kent Rutledge and James C. Kaste of Lathrop & Rutledge, P.C.; and Matthew H. 
Romsa of Romsa Law Office, P.C., Cheyenne, WY.  Argument by Mr. 
Rutledge.

 

Before 
HILL, C.J., and GOLDEN, LEHMAN,* and KITE, JJ., and ROGERS, 
D.J.

 

LEHMAN, J., delivered the opinion of the court.  HILL, C.J., filed a dissenting opinion.

 

*Chief Justice at time of oral argument.

 

LEHMAN, Justice.

 

[¶1]      This is an appeal from 
the partial entry of summary judgment by the district court ruling 1) that 
appellants Polo Ranch Company, John N. Morris, and Norma B. Morris  (col­lectively 
"PRC"), do not have any right to drill for subsurface water on the lands subject 
to a 1955 agreement ("Agreement") entered into between John H. Bell ("Bell"),1 predecessor to PRC, and appellee City of 
Cheyenne Board of Public Utilities ("City"); 2) that PRC is barred by the 
doctrine of res judicata from relitigating the 
meaning of the term "exclusive" as used within the Agreement; and 3) that 
the grant of exclusive drilling rights to the City within the Agreement did not 
violate public policy.   We affirm.  

 

 

ISSUES

 

[¶2]      PRC advances these 
issues:

 

I.  Whether the court erred by failing to rule 
that under the prior appropriation doctrine, the [City's] exclusive right to 
drill for groundwater within the agreement area between 1956-1958 does not 
preclude Polo or its successors in interest from later devel­oping 
groundwater subject to administration by the Wyoming State Engineer's office 
consistent with the [City's] prior adjudi­cated rights?

 

II.  Whether the court erred by failing to rule 
that since the [City] has established its senior appropriations as contemplated 
by the exclusive drilling provision of the 1955 agreement, sub­sequent 
groundwater use by plaintiffs and their successors in interest within the 
agreement area should not be charged against plaintiff Polo Ranch Company's 
annual entitlement under the 1955 agreement?

 

III.  Whether the court erred in ruling that the 
City's "exclusive" right was established in prior litigation even though that 
issue was not actually and necessarily litigated in the prior case?

 

City restates the issues as:

 

I.  Is Polo Ranch barred from re-litigating issues 
related to the extent, scope, and validity of the City's exclusive right to 
drill for underground water on lands covered by the 1955 Agree­ment?

 

II.  If not, is the City's exclusive right to 
drill for underground water on lands covered by the 1955 Agreement effective as 
against Polo Ranch and its successors in interest?

 

III.  If not, does the City's exclusive right to 
drill for under­ground water on lands covered by the 1955 Agreement violate 
public policy?

 

IV.  If not, does the City have, and must it 
resort to, an adminis­trative remedy?

 

V.  Did the trial court correctly determine that 
water produced and used by Polo Ranch's successors in interest, in violation of 
the City's exclusive drilling rights should be charged against Polo Ranch's 
annual free allocation of water? 

 

 

FACTS AND HISTORICAL BACKGROUND

 

[¶3]      On September 29, 1955, 
the Agreement was entered into between Bell and the City.2  The essence of the 
Agreement was to give the City the right to drill for subsurface water under the 
lands of what is now known as Polo Ranch and to use the water produced 
there­from, subject to delivery of a portion of the water to Bell.  The Agreement was 
properly recorded with the Laramie County Clerk and filed with the Wyoming State 
Engineer.  The 
Agreement was entered into for the benefit of the "executors, administrators, 
heirs and assigns of the parties," thereby obligating and binding PRC as Bell's 
successor in interest.  
The Agreement has not since been amended, and no other contracts have 
been entered into between PRC and the City that govern the pumping of water from 
under the lands described in the Agreement.  

 

[¶4]      On August 2, 1990, the 
City filed a complaint against PRC for recovery of pumping expenses owed by PRC 
under the Agreement.3  Numerous claims, counterclaims, and the 
asser­tion of affirmative defenses followed.  On September 4, 1992, the district court 
entered an order stating 1) that the Agreement was clear and unambiguous 
and that the City had the exclusive right to develop and use the Polo Ranch 
groundwater, and 2) that PRC was restricted from utilizing its share of the 
water on lands other than those described in the Agreement, and was prohibited 
from selling the water.  The City then filed an amended and 
supplemental complaint which requested that the district court issue a 
declaration that the City had the exclusive right to drill the subsurface water 
on the lands described in the Agreement.  Ultimately, all unresolved claims went to 
bench trial before the district court.

 

[¶5]      On June 18, 1996, the 
district court issued its findings of fact and conclusions of law that stated 
that the lands contained within the subdivision developed by Polo Ranch remained 
subject to the 1955 Agreement, as there had been no action by the City releasing 
these lands from the Agreement, and that the City retained the exclusive right 
to drill wells on that land in the future.  However, the court also provided that because 
the City took no action when it knew or should have known that the land would be 
used for residential purposes which would require wells, the City had waived any 
right to charge the existing residential produc­tion against PRC's 
allocation under the Agreement.  Later, the district court's judgment was 
entered which confirmed the district court's ruling. 

 

[¶6]      This judgment was then 
appealed to this court.  However, such appeal was limited in scope to 
the validity of the district court's rulings 1) that the City had complied 
under the Agreement concerning its duty to develop wells on the specified land; 
2) that the City could properly require PRC to pay for backflow prevention 
necessary to protect the City's water system; and 3) that the City could 
require PRC to disconnect its taps from the City's lake lines or enter into an 
agreement concerning such water usage.  No appeal was taken as to the City's exclusive 
right to develop and use the Polo Ranch ground­water, including PRC's 
assertion that the Agreement violated public policy.  See Polo Ranch Co. v. City of 
Cheyenne, 969 P.2d 132, 135-36 (Wyo. 1998).

 

[¶7]      The present litigation 
was commenced on October 7, 1997, when PRC filed its com­plaint seeking 
recovery of hay crop losses allegedly incurred in 1996 as a result of the City's 
refusal to provide irrigation water as required under the Agreement.  On January 8, 1998, 
the City filed a First Amended Answer and Counterclaim which, in part, requested 
a declaratory judgment concerning the extent and scope of the City's exclusive 
right to drill and use sub­surface water pursuant to the Agreement.  PRC filed its 
amended complaint on May 14, 1999, which added a claim for declaratory judgment 
concerning the extent and scope of the exclusive right to drill clause within 
the Agreement.  
The City then added additional claims, in part, requesting a declaratory 
judgment prohibiting PRC from drilling for under­ground water.  Subsequently, the 
parties filed cross motions for summary judgment, with the district court ruling 
PRC did not have any right to drill for subsurface water on 
the lands subject to the Agreement; PRC was barred by the doctrine of res judicata from relitigating the meaning of the term 
"exclusive" as used within the Agreement; and that the grant of exclusive 
drilling rights to the City within the Agreement did not violate public policy. 
 The district court then entered final judgment 
on less than all claims in this case pursuant to W.R.C.P. 54(b), and this appeal 
followed.  

 

 

STANDARD OF REVIEW

 

[¶8]      Our standard of review 
is well established.  
We recently reiterated this standard of review in Amoco Prod. Co. v. Board of County Comm'rs of County of 
Sweetwater, 2002 WY 154, ¶10, 55 P.3d 1246, ¶10 (Wyo. 2002) (quoting Bevan v. Fix, 2002 WY 43, ¶13, 42 P.3d 1013, ¶13 (Wyo. 
2002)):

 

Summary judgment is appropriate if the record, viewed in the 
light most favorable to the non-moving party, reveals that no genuine issues of 
material fact exist and the prevailing party is entitled to judgment as a matter 
of law.  Worley v. Wyoming Bottling Co., Inc., 1 P.3d 615, 620 
(Wyo. 2000); Terry v. Pioneer Press, Inc., 947 P.2d 273, 275 (Wyo. 1997); Davis v. Wyoming Medical Center, 
Inc., 934 P.2d 1246, 1250 (Wyo. 1997); W.R.C.P. 56(c).  A fact is material 
if it establishes or refutes an essential element of a claim or defense.  Tidwell v. HOM, Inc., 896 P.2d 1322, 1324 (Wyo. 
1995).  In 
evaluating summary judgment, we apply the same standards as the trial court, 
without affording any defer­ence to the trial court's decisions on issues of 
law.  Wilder v. Cody Country Chamber of Commerce, 868 P.2d 211, 216 (Wyo. 1994).

 

We also recognized in Bevan v. 
Fix, at ¶26 (citing In re HC, 983 P.2d 1205, 1209 
(Wyo. 1999) and Ahearn v. Anderson-Bishop 
Partnership, 946 P.2d 417, 422 (Wyo. 1997)), we 
may uphold the grant of summary judgment upon any proper legal ground finding 
support in the record.  

 

 

DISCUSSION

 

 

[¶9]      PRC argues the 
district court erred in holding that it was barred by the principles of res 
judicata from obtaining a declaratory judgment from the district court as to the 
meaning of the word "exclusive" as used within the Agreement and from asserting 
that the exclusive rights of the City granted under the Agreement are 
unenforceable because they violate public policy.  In essence, PRC asserts that these issues were 
not actually and necessarily litigated in the previous action commenced between 
PRC and the City, and the issues decided in the prior adjudication are not 
identical to the issues presented in this matter. 

 

[¶10]   In particular, PRC maintains that the 
previous litigation between the parties presented a host of issues but the 
primary issues were the scope of lands covered by the Agreement and whether or 
not water usage in the Quarter Circle 5 subdivision should be "credited" to 
PRC's annual entitlement.  Thereby, PRC contends they should not now be 
precluded from litigating the specific issue of the meaning of the word 
"exclusive" as used within the Agreement and from asserting that the exclusive 
rights of the City granted under the Agree­ment are unenforceable because 
they violate public policy.

 

[¶11]   The City asserts that a careful analysis 
of the previ­ous litigation and this litigation demonstrates that the 
specific meaning of the word "exclusive" as used in the Agreement was vigorously 
litigated and determined in the City's favor in the previous litigation.  Similarly, the City 
contends that in the previous litigation PRC raised but failed to actively 
pursue their asserted defense that the Agreement violated public policy.  Hence, in summary, 
the City maintains that PRC's challenge in this matter is nothing more than a 
rephrasing of issues that have already been decided.

 

[¶12]   In Amoco Prod. 
Co. v. Board of County Comm'rs of County of Sweetwater, at ¶12, we 
stated:

 

            
In Eklund v. PRI Environmental, Inc., 2001 WY 
55, ¶¶15-20, 25 P.3d 511, ¶¶15-20 (Wyo. 2001), we extensively recognized that 
res judicata and collateral estoppel are related but distinct concepts.  

 

Res judicata bars the relitigation of previously litigated 
claims or causes of action.  Slavens v. Board of County Commissioners, 854 P.2d 683, 
686 (Wyo. 1993).  
Four factors are examined to determine whether the doctrine of res 
judicata applies:  
(1) identity in parties;  (2) identity in subject matter;  (3) the issues are 
the same and relate to the subject matter;  and (4) the capacities of the persons are 
identical in reference to both the subject matter and the issues between them. 
Id. Collateral estop­pel bars relitigation of 
previously litigated issues and involves an analysis of four similar 
factors:  (1) 
whether the issue decided in the prior adjudication was identical with the issue 
presented in the present action; (2) whether the prior adjudication resulted in 
a judgment on the merits; (3) whether the party against whom collateral estoppel 
is asserted was a party or in privity with a party to the prior adjudication; 
and (4) whether the party against whom collateral estoppel is asserted had a 
full and fair opportunity to litigate the issue in the prior proceeding.  Id.

 

. . .

 

. . . In CLS v. CLJ, 
693 P.2d 774 (Wyo. 1985), the appellant failed to appear at trial, and his suit 
to establish paternity was dismissed with prejudice pursuant to W.R.C.P. 
41(b).  A second 
suit raising the same claim was subsequently filed.  We held that the 
appellant was barred by the doctrine of res judicata from bringing the same 
claim because an involuntary dismissal under Rule 41(b) operated as an 
adjudication of the merits.  693 P.2d  at 777.

 

            
In Day v. Davidson, 951 P.2d 378 (Wyo. 1997), 
Day had filed an action based on vicarious liability against Pamida, Inc. based 
on the negligent acts of one of its employees.  Day accepted an offer of judgment from Pamida 
and then subsequently filed an action against the employee based on the 
negligent act underlying the vicarious liability claim.  We held that Day 
could not bring a subsequent action against the employee based on the fact that, 
as a vicarious liability situation, the employee was entitled to be credited 
with the amount of the judgment entered against his employer leaving Day with 
nothing to recover from the employee.  951 P.2d  at 383.   While not 
directly implicating the doctrine of res judicata, Day, like CLS, concerned the 
same claim brought by the 
same plaintiff.

 

            
The application of res judicata to those situations where a plaintiff 
attempts to bring the same claim in a subsequent action against the same or 
different defendants has a logical basis:  It encourages resolution of the plaintiff's 
claims in a single action, and it forces parties to abide by their agreements. 
. . . 

 

. . .

 

Issue preclusion does not attach unless it is clearly shown 
that the parties intended that the issue be foreclosed in other litigation.

 

(Quoting 18 Charles Alan Wright, Arthur R. Miller & 
Edward H. Cooper, Federal Practice and Procedure:  Jurisdiction § 4443, at 382-85 
(1981).)

 

[¶13]   In the previous litigation, the City 
filed a complaint against PRC for recovery of pump­ing expenses allegedly 
owed by PRC under the Agreement.  Many claims and counter­claims followed 
including a request by PRC for a declaration of the specific time period 
referred to in the Agreement during which the City had the exclusive right to 
drill for and produce water pursuant to the Agreement.  PRC also asserted as 
an affirmative defense that the Agreement was in violation of public policy and 
was therefore void or voidable.  

 

[¶14]   On September 4, 1992, the district court 
entered an order in the previous litigation.  That order stated in applicable part:

 

2.  As to the following, the Agreement is clear 
and unambiguous and the Court interprets the Agreement as follows:

 

a.  The lands to which Polo Ranch's water use is 
limited and on which the City has an exclusive right to develop the ground water 
are those specifically described in the Agreement.

 

b.  The term of the exclusive right of the City to 
develop and use the Polo Ranch ground water has not expired and such right 
exists for the duration of the Agreement, which is supported by consideration and is not invalid for 
indefi­niteness of term.

 

.

 

f.  Polo Ranch is restricted from utilizing its 
share of the water on lands other than those described in the Agree­ment, 
and is prohibited from selling the water.  

 

(Emphasis added.)  

 

[¶15]   The City filed an amended and 
supplemental complaint in the previous litigation which requested that the 
district court issue a declaratory judgment declaring that the City had the 
exclusive right to drill the subsurface water on the lands described in the 
Agreement.  On 
June 18, 1996, after a bench trial was held, the district court issued its 
findings of fact and conclusions of law in the previous litigation.  This document 
stated, in applicable part:

 

45.  The lands contained within the subdivision 
developed by the Polo Ranch remain subject to the 1955 Agreement, as there has 
been no action by the City releasing these lands from the Agreement.  But the City took no 
action when it knew or should have known that the land would be used for 
residential purposes which would require wells.  While it retains the exclusive right to drill wells on the 
land in the future, it has waived any right to charge the existing 
residential production against Polo's allo­cation under the Agreement.  

 

(Emphasis added.)  Later, the district court's judgment was 
entered in the previous litigation which similarly declared:

 

6.  On the Seventh Claim for Relief in Plaintiff's 
Amended and Supplemental Complaint, Judgment is granted to the City of Cheyenne, 
Cheyenne Board of Public Utilities, declaring and adjudging that the City 
retains for the future the exclusive right to drill for subsurface waters on all 
lands subject to the 1955 Agreement, including the lands subject to the 1955 
Agreement that are contained within the subdivision developed by the Polo Ranch 
Company.  
However, the Court declares and adjudges that the City has waived its 
right to object to the pumping of existing residential wells within the 
aforementioned subdivision, and it is not entitled to charge production from 
those existing residential wells against Polo Ranch Company's share of water 
under the 1955 Agreement.  

 

(Emphasis added.)  This judgment was then appealed to this 
court.  However, 
no appeal was taken as to the City's exclusive right to develop and use the Polo 
Ranch groundwater, including PRC's assertion that the Agreement violated public 
policy.  Again 
see Polo Ranch Co. v. City of 
Cheyenne, 969 P.2d  at 135-36.

 

[¶16]   Application of the four factors 
identified above regarding the doctrine of res judicata demonstrate that PRC is 
estopped in this case from again litigating the specific issue of the meaning of 
the word "exclusive" as used within the Agreement and from asserting that the 
exclusive rights of the City granted under the Agreement are unenforceable 
because they violate public policy.  Obviously, both PRC and the City were the 
parties involved in the previous litigation.  In addition, their capacities as parties are 
identical in the previous litiga­tion and this case.  Moreover, the 
district court in the previous litigation explicitly ruled on a number of 
occasions that, pursuant to the Agreement, the City possessed the exclusive 
right to drill and use the water located on the Polo Ranch property.  Indeed, the district 
court in the previous litigation not only clearly expressed that the City had 
the exclusive right to drill and use the water that existed upon the subject 
property under the Agreement, but went further to specify the exact location of 
the real property that these rights could be exercised upon, the time duration 
of such rights, that PRC was restricted from utilizing its share of the water on 
lands other than those described in the Agreement, and that PRC was prohibited 
from selling the water.  The district court was patently clear, 
detailed, and specific in its ruling with respect to the exclusivity of the 
City's rights under the Agreement and the limitations to which PRC must abide 
under the Agreement.

 

[¶17]   Even though PRC attempts to argue 
otherwise, no viable argument exists that the sub­ject matter, namely the 
exclusive nature of the City's rights under the Agreement, is not the same in 
the previous litigation and in this action.  While the main issue in the previous 
litiga­tion centered around the scope of the lands covered by the Agreement 
and whether or not water usage in the Quarter Circle 5 subdivision should be 
"credited" to PRC's annual entitlement, the fact still remains that the City 
requested that the district court issue a declaration that the City had the 
exclusive right to drill the subsurface water on the lands described in the 
Agreement.  
Furthermore, PRC also asserted the argument in its answer to the City's 
complaint by presenting the affirmative defense that the Agreement violated 
public policy and was there­fore void or voidable.  

 

[¶18]   Finally, PRC complains that it was not 
afforded the opportunity to sufficiently present and argue in the previous 
litigation the exclusiveness of the City's rights under the Agree­ment and 
that the Agreement was void or voidable because its terms violated public 
policy.  As 
noted above, these very issues were clearly placed before the district court for 
determina­tion by the City and PRC in the previous litigation.  PRC arguably could 
have raised such issues when it appealed the ruling of the district court in the 
previous litigation but failed to do so.  Accordingly, we hold that PRC had every 
opportunity to fully and fairly litigate these issues in the previous litigation 
as these issues were actually and necessarily before the dis­trict court in 
that action.  
Likewise, application of the doctrine of collateral estoppel or issue 
preclusion bars PRC from relitigating the exclusive nature of the City's rights 
pursuant to the Agreement and the related violation of public policy argument 
made by PRC.  As 
stated pre­viously, these issues were specifically decided in the previous 
adjudication and are identical to those issues now asserted by PRC.  PRC and the City 
were also both parties in the previ­ous litigation with PRC having a full 
and fair opportunity to litigate the involved issues in that proceeding.  

 

[¶19]   The district court clearly issued a 
ruling on the merits concerning these issues in the previous litigation.  In Cross v. Berg Lumber Co., 7 P.3d 922, 930 (Wyo. 2000) 
(citing Erhart v. Flint Engineering & Const., 939 P.2d 718, 724 (Wyo. 1997) and Hatten Realty Co. v. 
Baylies, 42 Wyo. 69, 290 P. 561, 566 (1930)), we declared that judicial 
estoppel requires that "where a man is successful in the position taken in the 
first proceeding, then that posi­tion rises to the dignity of 
conclusiveness."  
In this instance, the City was clearly successful in the previous 
litigation regarding the issue of its exclusive right to develop and use the 
water on Polo Ranch as provided under the Agreement.  This prior 
determination warrants the conclusive disposition of this matter.

 

[¶20]   Finally, although such theory was not 
relied upon by the district court in making its decision in this action, this 
court recognized in Amoco Prod. Co. v. Board of County 
Comm'rs of County of Sweetwater, ¶17 (citing Cross v. 
Berg Lumber Co., 7 P.3d  at 930 and Allen v. 
Allen, 550 P.2d 1137, 1142 (Wyo. 1976)), that judicial estoppel is sometimes 
referred to as a doctrine which estops a party to play fast and loose with the 
courts or to trifle with judicial proceedings.  It is an expression of the maxim that one 
cannot blow hot and cold in the same breath.  A party will simply not be allowed to maintain 
inconsistent posi­tions in judicial proceedings.  

 

[¶21]   In the previous litigation, PRC 
requested through counterclaim a declaration of the specific time period 
referred to in the Agreement during which the City had the exclusive right to 
drill for and produce water pursuant to the Agreement.  In essence, through 
this counterclaim, PRC admitted that the City had the exclusive right to drill 
for and produce water under the terms of the Agreement.  Therefore, by virtue 
of such prior judicial admis­sion, PRC cannot be allowed to now contend that 
the interpretation of the word "exclusive" as used within the Agreement needs to 
be further clarified by the district court in the instant case.

 

[¶22]   In a last ditch effort, PRC further 
argues that this court has previously indicated that it will limitedly apply the 
doctrines of res judicata, collateral estoppel, and judicial estoppel.  In the case of Robertson v. TWP, Inc., 656 P.2d 547, 553 (Wyo. 1983) 
(citations omitted) this court stated:

 

            
An examination of the cases in which this court has consid­ered the 
application of the doctrine of res judicata as that rule is precisely defined 
and its corollary collateral or judicial estoppel leads to the conclusion that 
the policy in Wyoming has been to apply those propositions rather narrowly.    While 
those concepts will be invoked when appropriate to avoid repetitious suits 
involving the same cause of action, and the relitigation of matters actually 
litigated and determined in the first proceeding, to the end that the concept of 
finality is honored in litigation in the State of Wyoming, still they are not to 
be applied in a highly technical manner which would in a context such as this 
prevent litigants from presenting their claims against others for 
determi­nation on their merits.

 

Nevertheless, even upon review of our opinion in Robertson, we are convinced that this matter is one 
where the doctrines of res judicata, collateral estoppel, and judicial estoppel 
should be applied.  
In the interests of finality and judicial economy, when asserted claims 
and issues have actually been previously litigated and determined on the merits 
in a prior matter, these doctrine are properly applied.  Such is the case 
here.4

 

Injunctive ReliefCharges Against PRC's Annual Free 
Entitlement

 

[¶23]   The last issue that we address on appeal 
is PRC's contention that the district court essentially abused its discretion 
when it ruled that PRC does not have any right to drill for subsurface water on the 
lands subject to the Agreement and, as a result, the amount of water taken from 
residential wells drilled on lands within Quarter Circle Five after April 18, 
1995, be charged against the annual free water allocation from the City to PRC 
called for under the Agreement.  PRC asserts a very brief argument on appeal 
and argues that the district court erred because it created contract terms out 
of whole cloth and resorted to adding additional terms to the Agreement which do 
not appear anywhere within the four corners of that Agreement.  The City, in an 
equally brief argument, contends that the district court's ruling is in the 
nature of affirmative injunctive relief, well within the district court's 
exercise of broad equitable powers.  In addition, the City maintains that the 
district court's ruling simply acknowledges that the Agreement is binding upon 
PRC's successors in interest.

 

[¶24]   In East Broadway 
Associates, Ltd. v. Dowell, 2002 WY 106, ¶¶17 and 18, 49 P.3d 1004, ¶¶17 and 
18 (Wyo. 2002), citing, in part, our opinion rendered with respect to the 
previous litigation, we stated:

 

The primary purpose in interpreting or construing a 
con­tract is to determine the intent and understanding of the parties, and 
our initial inquiry centers on whether the language of the contract is clear and 
unambiguous.  Reed v. Miles Land and Livestock Co., 2001 WY 16, ¶10, 
18 P.3d 1161, ¶10 (Wyo. 2001).  The interpretation and construction of a 
contract are done by the court as a matter of law.  Id. Where an agreement is in writing and the language is 
clear and unambiguous, the parties' intent is to be secured from the four 
corners of the contract. Cliff & Co., Ltd. v. 
Anderson, 777 P.2d 595, 598 (Wyo. 1989).  We consider the contract as a whole, taking 
into consideration the relationship between the various parts. Id. "We turn to extrinsic evidence and rules of contract 
construction only when the contract language is ambigu­ous and its meaning 
is doubtful or uncertain." Wolter v. Equitable Resources 
Energy Company, Western Region, 979 P.2d 948, 951 (Wyo. 1999).  Whether or not a con­tract is 
ambiguous is a question of law for the court.  Corpening v. Corpening, 2001 WY 18, ¶8, 19 P.3d 514, ¶8 
(Wyo. 2001). 

 

(Emphasis added.)  Collins v. Finnell, 
2001 WY 74, ¶15, 29 P.3d 93, ¶15 (Wyo. 2001). This court has also 
enunciated:

 

Common sense and good faith are leading precepts of contract 
construction, and the interpretation and con­struction of contracts is a 
matter of law for the courts.  Reed [v. Miles Land and Livestock Co., 2001 WY 16], ¶10 [18 P.3d 1161, ¶10 (Wyo. 2001)].  We have also recognized that the language of a 
contract is to be con­strued within the context in which it was written, and 
the court may look to the surrounding circumstances, the subject matter, and the 
purpose of the contract to ascer­tain the intent of the parties at the time 
the agreement was made.  Polo Ranch Company v. 
City of Cheyenne, 969 P.2d 132, 136 (Wyo. 1998).

 

Williams Gas Processing-Wamsutter Co. v. Union Pacific 
Resources Co., 2001 WY 57, ¶12, 25 P.3d 1064, ¶12 (Wyo. 2001).

 

Finally, this court has stated that in the absence of any 
ambiguity, the contract will be enforced according to its terms because no 
construction is appropriate.  Boley v. Greenough, 
2001 WY 47, ¶10, 22 P.3d 854, ¶10 (Wyo. 2001) (citing Amoco Prod. Co. v. EM Nominee Partnership Co., 2 P.3d 534, 539-40 (Wyo. 2000) and Burbank v. Wyodak Resources 
Dev. Corp., 11 P.3d 943, 946-47 (Wyo. 2000)).

 

[¶25]   Moreover, in Kincheloe v. Milatzo, 678 P.2d 855, 861 (Wyo. 1984) this 
court recog­nized that:

 

Preliminarily, it is to be remembered that, when courts are 
called upon to employ their injunctive authority, they must utilize this power 
with great caution.  
We have said:

 

"The extraordinary remedy of an injunction is a far-reaching 
force and must not be indulged in under hastily contrived conditions.  It is a delicate 
judicial power and a court must proceed with caution and deliberation before 
exercising the remedy." Simpson v. Petroleum, Inc., 
Wyo., 548 P.2d 1, 3 (1976).

 

            
Injunctions are extraordinary remedies and are not granted as of 
right.  In 
granting an injunction, the court exercises broad, equitable jurisdiction.  Brown v. J.C. Penney Co., D.C.Wyo., 54 F. Supp. 488 
(1943).  This 
discretion is, however, not unfettered, but "must be exercised reasonably and in 
har­mony with well established principles," 43 C.J.S. Injunctions § 14, p. 
772.  Where 
injunctive relief is sought, it is the trial court that grants or denies it, 
based upon the facts--not the appellate court, 43 C.J.S. Injunctions § 14, pp. 
769, 773.  Crosby v. Watson, 144 Colo. 216, 355 P.2d 958 (1960); Hansen v. Galiger, 123 Mont. 101, 208 P.2d 1049 
(1949).

 

[¶26]   In Weiss v. 
Pedersen, 933 P.2d 495, 498-99 (Wyo. 1997) (quoting Gregory v. Sanders, 635 P.2d 795, 801 (Wyo. 1981)), we 
further recognized:

 

            
Although actions for injunctive relief are authorized by statute, Wyo. 
Stat. §§ 1-28-101 to -111 (1988 & Supp. 1996), they are, by nature, requests 
for equitable relief which are not granted as a matter of right but are within 
the lower court's equitable discretion.  Rialto Theatre, Inc. v. 
Commonwealth Theatres, Inc., 714 P.2d 328, 332 (Wyo. 1986).  Injunctions are 
issued when the harm is irreparable and no adequate remedy at law exists.  Id.; Gregory v. Sanders, 635 P.2d 795, 801 (Wyo. 1981).  Injunctive relief is appropriate when an award 
of money damages cannot provide adequate compensation.  Rialto Theatre, Inc., 714 P.2d  at 332.   An injury is 
irreparable "where it is of a "peculiar nature, so that compensation in money 
cannot atone for it." Gause v. Perkins, 56 N.C. 177 
(1857).' Frink v. North Carolina Board of 
Transportation, 27 N.C.App. 207, 218 S.E.2d 713, 714 (1975)."  Gregory, 635 P.2d  at 801.

 

            
"The traditional office of injunction has been to protect property 
rights."  42 
Am.Jur.2d Injunctions § 69 at 814 (1969).  

 

"Jurisdiction to prevent threatened disturbance of the 
peaceful use and enjoyment of real property is inherent in a court of equity, 
and injunction is a proper and ordi­nary remedy for the protection of owners 
in the enjoyment of their rights in real estate. . . ."  (Footnotes 
omitted.)   
42 Am.Jur.2d Injunctions, § 71, p. 815 (1969).

 

[¶27]   In this case, the district court 
specifically found:

 

1.  In the prior litigation between the parties, 
which is found at Doc. 124, No. 343, Doc. 138, No. 363, and Doc. 138, No. 492, 
the City of Cheyenne and its Board of Public Utilities filed an Amended and 
Supplemental Complaint on April 18, 1995, in which it sought, in its Seventh 
Claim for Relief, a declaratory judgment that the City has the exclusive right 
to drill for subsur­face water on the lands described in the 1955 
Agreement.  In 
its Findings of Fact and Conclusions of Law following the trial in those 
combined cases, this Court specifically concluded, in its Conclusions of Law at 
paragraph 45, that the City has the exclu­sive right to drill for subsurface 
water on all lands subject to the 1955 Agreement, with the limited exception set 
forth therein.  
That finding was a judicial determination by this Court that the City's 
"exclusive right to drill" in the 1955 Agreement means what the City says it 
means, i.e., that the Polo Ranch Company does not have any right to drill for 
subsurface water on the lands subject to the 1955 Agreement, any such rights 
having been given up by the Bells in the 1955 Agreement.  As a result, the 
Plaintiffs in this litigation are precluded by the doctrine of res judicata from re-litigating this issue, and the City 
and its Board of Public Utilities are entitled to summary judgment as 
requested. . . . The City is also entitled to injunctive relief 
to preserve its exclusive drilling rights on the lands subject to the 1955 
Agreement, as requested . . . .  Water produced from wells drilled by 
Plaintiffs or their successors in interest on lands sub­ject to the 1955 
Agreement should be counted as water provided to the Polo Ranch Company pursuant 
to paragraph 6 of the 1955 Agreement, except to the extent this Court determined 
that the City waived the right to charge existing residential wells, as set 
forth in paragraph 45 of this Court's Conclusions of Law men­tioned above. 

 

Thereafter, the district court ordered, adjudged and 
decreed:

 

(3)  The 1955 Agreement grants to the City the 
exclusive right to drill for water under the lands covered by the 1955 
Agree­ment, that this exclusive right applies to all aquifers beneath the 
lands, and that Polo Ranch [Company] and any successor in interest is precluded 
from drilling for water beneath those lands, without regard to the depth of the 
well or whether the produc­tion of water from the well interferes with the 
City's production of water from under the lands covered by the 1955 
Agreement.

 

(4)  Polo Ranch [Company] and John and Norma 
Morris are permanently enjoined from drilling underground water wells on the 
land covered by the 1955 Agreement, and further, from rep­resenting to 
subsequent purchasers that  such purchasers may drill for and use 
underground water on land subject to the 1955 Agreement.

 

. . .

 

(6)  Water produced from wells drilled after April 
18, 1995, by Polo Ranch Company or its successors in interest, on lands subject 
to the 1955 Agreement, shall be counted as water pro­vided to the Polo Ranch 
Company under paragraph 6 of the 1955 Agreement. 

 

[¶28]   As we stated previously, we agree that 
the district court's ruling in the previous litigation with respect to the 
exclusivity of the City's drilling and usage rights under the Agreement are res 
judicata.  In 
making this determination, the district court obviously felt that the Agreement 
was unambiguous with respect to this issue, and we are not now in a position to 
challenge that determination.  Likewise, we cannot, at this time, question 
that court's decision with respect to the alleged affirmative defense made by 
PRC that the terms of the Agreement violated public policy.

 

[¶29]   Moreover, upon our review, we fail to 
see that the district court in this case abused its discretion in granting the 
injunctive relief that it chose.  Under the circumstances that exist, 
irreparable harm would continue in the future if sufficiently tailored 
injunctive relief was not imposed upon PRC and no adequate remedy at law existed 
with respect to PRC's past viola­tion of the City's previously clearly 
expressed exclusivity to drill and use the water under the Agreement.  Therefore, we hold 
that the district court's imposed injunctive relief in this case to be 
reasonably exercised in good faith, with common sense, and in harmony with the 
well-established principles expressed in past Wyoming case law authority.  Indeed, we note that 
if some injunctive relief was not imposed by the district court in this matter, 
as requested by the City, PRC would be simply able to continue unfettered into 
the future to violate the exclusive rights granted to the City under the 
Agreement without any risk of appropriate consequences. 

 

 

CONCLUSION

 

[¶30]   We affirm the 
action of the district court in granting partial summary judgment in favor of 
the City and against PRC in this action.  We conclude that no material question of fact 
exists with respect to those issues addressed and that the City was properly 
entitled to partial summary judgment as a matter of law.  
  

HILL, Chief Justice, dissenting.

 

[¶31]   On rare occasions, we will find a 
contract void because it violates public policy:

 

We will not invalidate 
a contract entered into freely by competent parties on the basis of public 
policy unless that policy is well settled, unambiguous and not in conflict with 
another public policy equally or more compelling.

 

Sinclair Oil Corporation v. Columbia Casualty 
Company, 682 P.2d 975, 979 (Wyo. 1984); see 
also Combs v. Sherry-Combs, 865 P.2d 50, 54 (Wyo. 
1993); and Hamburg v. Hansen, 683 P.2d 662, 662-63 
(Wyo. 1984).  
The public policy concern implicated here is the development of the 
State's underground water resources.  As demonstrated by the events of this past 
summer, it is difficult to imagine a more important public policy issue in 
Wyoming than the continued viability of its water resources.  Accordingly, I do 
not believe this issue should have been decided on a summary judgment 
motion.  If the Agreement violates public policy, then it is void 
or, at a minimum, voidable, and the doctrines of collateral estoppel, res 
judicata, and judicial estoppel should not be a barrier to effectuating that 
policy.  Since 
this matter was determined by summary judgment, the record is not developed 
sufficiently for a determination of whether the Agreement violates a public 
policy of this state.  
Therefore, I would remand the matter for proceedings to address the 
specific public policy questions raised by Polo Ranch.

 

 

FOOTNOTES

1The Agreement was also executed by Bell's wife, Ella Marie 
Bell, who was "joined to release any interest she may have in the subject 
premises for the purposes of this agreement." 

2This recitation of facts is based upon the record before us, 
as well as this court's previous opinion in Polo Ranch 
Co. v. City of Cheyenne, 969 P.2d 132 (Wyo. 1998) involving the same parties 
as are involved in the instant matter.  

3This action will be hereinafter referred to as the "previous 
litigation."

4Given this court's conclusion on this issue, it is 
unnecessary for us to address the issues raised by PRC concerning the terms of 
the Agreement being in violation of public policy as that issue is now 
moot.