Title: McTIERNAN v. SCOTT

State: wyoming

Issuer: Wyoming Supreme Court

Document:

McTIERNAN v. SCOTT2001 WY 8731 P.3d 749Case Number: 00-203Decided: 09/20/2001

APRIL TERM, A.D. 2001

 

                                                                                                            

 

JOHN 
McTIERNAN and DONNA DUBROW, 

Appellants(Respondents),

 

v.

 

SAM J. 
SCOTT and MONA J. SCOTT, 

Appellees(Petitioners).

 

Appeal 
from the District Court of Sheridan County

The 
Honorable John Brackley, Judge

 

Representing 
Appellant: 

Kim D. 
Cannon and Anthony T. Wendtland of Davis & Cannon, Sheridan, WY.  Argument by Mr. Cannon.  

 

Representing 
Appellees: 

Tom C. 
Toner of Yonkee & Toner, Sheridan, WY.  
Argument by Mr. Toner.

  

Before 
LEHMAN, C.J., and GOLDEN, HILL, KITE and VOIGT, 
JJ.

  
            
HILL, Justice.

[¶1]      John McTiernan 
and Donna Dubrow (collectively McTiernan) filed a petition with the Board of 
Control (Board) seeking an order that Sam and Mona Scott (the Scotts) had 
abandoned a portion of their water rights.  
On remand from our decision in Scott v. McTiernan, 974 P.2d 966 
(Wyo. 1999) (Scott I) for additional findings of fact, the Board 
concluded that the Scotts had abandoned 14.8 acres of the 28.8-acre Shallcross 
property and ordered the Scotts to file a petition for a change of the point of 
diversion and means of conveyance with the Board.  McTiernan appeals from a district court 
order finding the Board's decision unsupported by substantial evidence and, 
after a review of the record, concluding that the Scotts had abandoned 9.2 
acres.  McTiernan also challenges 
the district court's conclusion that the Board did not have the authority to 
order Scott to file a petition for a change in point of diversion and means of 
conveyance. We affirm and remand to the Board for further 
proceedings.

 

[¶2]      McTiernan offers 
two issues for review:

1.                  
Are the 
Board's Findings and Conclusions on the Shallcross lands sufficiently 
articulated and supported by substantial evidence?

 

2.                  
Does the 
Board of Control have the authority, in support of this decision, to require 
Scott, the owner of a portion of the lands under the #3 Priority, to clarify the 
point of diversion(s) and the means of conveyance under the #3 
Priority?

 

The 
Scotts agree there are two issues:

1.                  
Is the 
Board's conclusion that only 14.0 acres of the Shallcross property were 
irrigated in the five years immediately preceding the filing of the abandonment 
petition supported by substantial evidence and sufficiently detailed findings of 
fact?

 

2.                  
Was the 
Board of Control required to make findings of fact justifying its decision to 
require Scotts to file a petition for change of point of diversion and means of 
conveyance for their water right given that the points of diversion and means of 
conveyance of that water right were changed before 1965 when the McTiernan and 
Scott lands were owned by a common owner?

 

[¶3]      The Scotts and 
McTiernan are adjoining landowners whose properties were once owned in 
common.  Both parties hold water 
rights in Smith Creek to irrigate the respective properties.  The Scotts' water right is part of the 
John Ross Appropriation, which is a territorial water right with a priority date 
of May 1882 and is the number three priority on Smith Creek.  McTiernan holds the number four priority 
on Smith Creek.  Scott I, 974 P.2d  at 968-69.

 

[¶4]      In 1996, 
McTiernan filed a petition with the Board for a declaration of abandonment of 
the Scotts' John Ross Appropriation.  
The Scotts' appropriation irrigated two separate parcels of land: (1) 
Tracts 3 and 4 north of Smith Creek and (2) the Shallcross property. Id. 
In the current proceeding, our only concern is with the disposition of the 
Shallcross property.  After a 
contested case hearing on the petition held in the summer of 1997, the Board 
concluded that the Scotts had abandoned all but 14.1 acres of the 28.8 acres 
contained within the Shallcross property.  
The Scotts appealed the decision to the district 
court.

 

[¶5]      In Scott 
I, we considered the Scotts' appeal of the Board's decision on certification 
from the district court.  We held 
that the Board's factual findings regarding the actual acreage irrigated on the 
Shallcross property were insufficient and, accordingly, we remanded the matter 
to the Board for proper fact-finding proceedings.  While our review of the Board's decision 
regarding the Shallcross property in Scott I was rather lengthy, it is 
necessary for us to quote that discussion in its entirety in order to properly 
set forth the context of the current dispute and to facilitate our review of the 
Board's decision on remand and the district court's subsequent 
reversal:

 

The 
Scotts maintain that the board's conclusion that only 14.1 acres of the 
Shallcross property were irrigated during the five years immediately preceding 
McTiernan's filing of the abandonment petition was not supported by substantial 
evidence or by sufficiently detailed findings of fact.  McTiernan argues that sufficient 
evidence and adequate findings of facts supported the board's 
determination.  We agree with the 
Scotts that the board's findings of fact concerning the Shallcross property were 
inadequate.

 

The 
Scotts claimed that they irrigated twenty-five acres of the Shallcross property 
in 1996.  McTiernan conceded that 
the Scotts had irrigated three acres of the Shallcross property.  The board addressed the Shallcross 
property in finding of fact number 23.  
That finding stated in pertinent part:

 

SW ¼ NE ¼ of Section 24, Township 57 
North, Range 87 West (Shallcross property):

   Bruce Barton, a McTiernan witness, 
testified at the public hearing that he observed irrigation in the SW¼ NE¼ of 
Section 24, Township 57 North, Range 87 West, shown as 3.0 acres in green on 
Exhibit No. 30 submitted as evidence at the public hearing.  Robert Mullinax, John Dahlke and Roy 
Powers testified at the public hearing that they observed the "big gun" 
operating on the Shallcross parcel in different locations which total an 
additional 11.1 acres of irrigation, shown on Exhibits X-3 and 44 submitted as 
evidence at the public hearing.

 

The 
board accordingly concluded that only 14.1 acres of the Shallcross property had 
been irrigated, and it ruled that the Scotts abandoned the remainder of the 
water right.

 

The 
board relied on the testimony of Robert Mullinax, John Dahlke, and Roy Powers, 
together with Exhibits X-3 and 44, to justify its determination that the Scotts 
had irrigated only 11.1 acres in addition to the three acres conceded by 
McTiernan.  Exhibits X-3 and 44 are 
maps which depict the Shallcross property.

 

Mullinax 
was an irrigation equipment contractor who visited the Scotts' property around 
August 15, 1996, to give them an estimate for installing an irrigation 
pipeline.  He testified that he saw 
a big gun sprinkler operating on the Shallcross property north of the Smith 
Creek subdivision access road.  He 
drew a circle on Exhibit X-3 to show the area where he saw the sprinkler 
operating.  Mullinax testified that 
he also saw irrigation pipe laid out on the west side of the big gun sprinkler. 
He stated that a big gun sprinkler waters a circular area with a 130-foot 
radius.  Mullinax hypothesized that 
the big gun sprinkler could, therefore, water approximately three-quarters of an 
acre on each set. [Footnote 3]

 

Dahlke, 
a hydrographer commissioner for the board, also testified at the hearing.  In July 1996, he observed a big gun 
sprinkler operating on the Shallcross property both north and south of the 
subdivision road.  Dahlke drew six 
circles on Exhibit 44 to show where he saw the sprinkler operating.  He went on to state that he observed "a 
minimum of seven or eight" acres of the Shallcross property being irrigated in 
1996.

 

Powers 
owned land which neighbored the Scotts' land, and he occasionally traveled on 
the subdivision road through the Shallcross property.  He testified that, in 1996, he saw the 
Scotts operating the big gun sprinkler on the Shallcross property south of the 
subdivision road.  Powers marked 
Exhibit 44 to show the location of the big gun sprinkler.

 

The 
appellees [McTiernan] argue that the board's conclusion that the Scotts 
irrigated 11.1 acres can be extrapolated from Mullinax's, Dahlke's, and Powers' 
testimony.  The board claims that it 
accepted Sam Scott's testimony that he made nine sets with the big gun sprinkler 
during the 1996 irrigation season.  
It then used Mullinax's testimony that the big gun sprinkler watered a 
circular area with a radius of 130 feet to calculate a total acreage of 10.98 
acres, [Footnote 4] or, as the board states, "approximately 11.1 
acres."

 

The 
board's argument is obviously an attempt to justify its decision in 
hindsight.  In its findings of fact, 
the board did not state that it relied on Sam Scott's testimony to support its 
conclusion that 11.1 acres had been irrigated.  Furthermore, if it had truly used this 
rationale to reach its conclusion, it would have determined that Scott had 
irrigated 10.98 or, if it had rounded the number up, 11.0 acres.  The board's calculation simply does not 
support its conclusion that the Scotts irrigated an additional 11.1 acres of the 
Shallcross property.

 

McTiernan 
takes a different approach to justify the board's conclusion. McTiernan argues 
that the 11.1-acre conclusion can be derived by using Mullinax's statement that 
each big gun set covers approximately three-quarters of an acre and taking that 
figure times twelve to fourteen sets.  
McTiernan does not explain the source of its twelve- to fourteen-set 
figure, and no such figure is readily discernable from Mullinax's, Dahlke's, or 
Powers' testimony.  We cannot, 
therefore, accept McTiernan's rationale to justify the board's 
finding.

 

The 
appellees [McTiernan] have not convinced us that the board's factual findings in 
this case are sufficient.  
Furthermore, "a litigant's brief or oral argument is no substitute for a 
proper agency decision."  
[Schulthess v. Carollo, 832 P.2d 552, 559 (Wyo. 1992)].  There may be a sufficient factual basis 
for the board's determination that the Scotts irrigated only 11.1 acres of the 
Shallcross property in addition to the three acres conceded by McTiernan; 
however, that factual basis was not included in the formal findings of 
fact.  We, therefore, remand this 
case with directions that the board make additional findings of fact concerning 
the Shallcross property.  
[Billings v. Wyoming State Board of Outfitters and Professional 
Guides, 837 P.2d 84, 86 (Wyo. 1992)].

 

Scott, 974 P.2d  at 971-973.  Included in our 
discussion of the Shallcross property in the Scott I opinion, and noted 
in the quote above, were two footnotes that are relevant to the current 
proceedings:

 

[Footnote 
3]  According to our calculations, a 
sprinkler which watered a circular area with a 130-foot radius would actually 
water 1.219 acres rather than three-quarters of an acre per set.  We reached this conclusion as follows: 
Area of a circle = pi (3.1416) multiplied by the radius squared. In this case, 
we have: 3.1416 times 130 feet squared = 3.1416 times 16,900 = 53,093 divided by 
the number of square feet in an acre (43,560) = 1.219 acres per 
set.

 

[Footnote 
4]  The irrigated area may be 
calculated as follows: Area of a circle = pi (3.1416) multiplied by the radius 
squared.  In this case, we have: 
3.1416 times 130 feet squared = 3.1416 times 16,900 = 53,093 divided by the 
number of square feet in an acre (43,560) = 1.219 acres per set times 9 sets = 
10.97 acres.  We assume that the 
difference between our calculation and the board's calculation is due to 
differences in rounding.

 

Scott, 974 P.2d  at 972 n.3 and n.4.

 

[¶6]      On remand, the 
Board reconsidered the evidence produced during the original hearing.  The Board made the following two new 
findings of fact on remand relevant to the Shallcross 
property:

 

THAT Sam 
Scott testified at the public hearing that he made nine (9) sets with the big 
gun sprinkler during the 1996 irrigation season.  Robert Mullinax testified at the public 
hearing that a big gun sprinkler waters a circular area with a 130-foot 
radius.

 

THAT 
State Board of Control calculates that a sprinkler which watered a circular area 
with a 130-foot radius at nine (9) different sets would actually water 11.0 
acres as shown on Exhibits X-3 and 44.  
Since McTiernan conceded that the Scotts had irrigated three (3) acres of 
the Shallcross property as shown in green on Exhibit No. 30, a total of 14.0 
acres were watered in the SW1/4NE1/4 of Section 24, Township 57 North, Range 87 
West (Shallcross property).

 

In 
effect, then, on remand the Board simply applied the calculation set out in 
footnotes three and four of Scott I.   The Board also ordered the Scotts 
to "file the necessary petition(s) with the State Board of Control for [a] 
change of point of diversion and means of conveyance and to identify the lands 
actually irrigated under the John Ross Appropriation[.]"  The Scotts subsequently appealed the 
Board's abandonment determination and order to file petitions for a change of 
point of diversion and means of conveyance.

 

[¶7]      The district 
court independently reviewed the evidence adduced at the contested case 
hearing.  The court divided the 
Shallcross property into various parcels: (1) the three-acre parcel McTiernan 
conceded was irrigated; (2) an 8.1-acre parcel south and west of the main 
subdivision road; (3) an 8.5-acre parcel; (4) 1.5-acres accounted by roads; and 
(5) a 3.6-acre and 4.1-acre parcel on the north side of the property.  All parties agree that the three-acre 
parcel was irrigated.

 

[¶8]      The district 
court noted the following testimony regarding the 8.1-acre 
parcel:

 

·        
Sam 
Scott drew a line in green on the 8.1-acre parcel on Exhibit X-3 representing a 
pipeline serving a big gun sprinkler.  
The line runs from the center of the southern boundary of the property 
extending in a curved fashion through the west end and passing easterly through 
a culvert on the subdivision road into the west end of the 8.5-acre 
parcel.

 

·        
Sam 
Scott testified that it took three or four and possibly five sets from the big 
gun sprinkler to get the west side of the parcel and back through the culvert 
down a line west and south of the subdivision road. In four days of irrigating 
between May 15 and May 19, Scott recorded at least ten and maybe twenty 
sets.

 

·        
John 
Dahlke, the area hydrographer, testified he witnessed big gun sprinklers 
operating on the 8.1-acre parcel in 1996.  
He observed, at a minimum, three sets to the south of the subdivision 
road.  Dahlke drew circles on 
Exhibit 44 indicating where he observed the guns operating.  The area observed by Dahlke would equal 
a minimum of 3.657 acres irrigated, not including overlap.

 

·        
Roy 
Powers, a neighbor of the Scotts, drew a large circle on Exhibit 44 just west of 
the sets Dahlke observed indicating where he saw the big gun sprinkler running 
in 1996.  The circle takes in most 
of the property west of the subdivision road as it curves north.  The circle drawn by Powers comports with 
Scotts' testimony. Powers estimated the irrigated acreage he observed was 
between five and seven acres.

 

·        
Sam 
Scotts' father-in-law, Harold Neu, testified he irrigated the entire 8.1-acre 
parcel beginning in July 1996 making at least two sets per day.  Mona Scott testified she helped Neu 
irrigate the entire parcel.

 

In 
regard to the 8.5-acre parcel, the district court cited the following 
testimony:

·        
Robert 
Mullinax drew a red line running east and west parallel to a fence line on 
Exhibit X-3 indicating where he observed big gun irrigation pipeline.  Mullinax drew a circle at the east end 
of the 8.5-acre where he observed the big gun sprinkler 
operating.

 

·        
Dahlke 
drew three circles in the 8.5-acre parcel along the pipeline drawn by Mullinax 
on Exhibit X-3.  Both Mullinax and 
Dahlke observed three or four sets along the pipeline 
route.

 

·        
Sam 
Scott testified that he watered the 8.5-acre parcel in May of 1996 and August 
1996.  Scott did not testify to any 
specific number of sets although his testimony indicated extensive efforts to 
water the entire parcel.

 

·        
Harold 
Neu indicated that he made two or three sets while assisting Scott during the 
May 1996 irrigation.  Mona Scott 
testified she made one or two sets during the same time period.  Neu further testified that in August 
1996, he irrigated the entire 8.5-acre parcel south of the fence with the big 
gun sprinklers.

 

The 
court noted that there was no evidence in the record to show that the 1.5 acres 
of road or the 3.6 and 4.1-acre parcels on the north side of the Shallcross 
property were irrigated.  Based on 
the foregoing evidence, the district court concluded there was not substantial 
evidence to support the Board's conclusion that 14.8 acres of the Shallcross 
property had been abandoned.  The 
court held that 9.2 acres (1.5 acres plus 3.6 acres plus 4.1 acres) had been 
abandoned.

 

[¶9]      Finally, the 
district court remanded the Board's order requiring Scott to file a petition to 
change his point of diversion and means conveyance for the John Ross 
Appropriation.  The court found that 
there were no basic findings of fact to support this order.  The Board was informed that if it merely 
meant for Scott to identify the points of diversion and means of conveyance 
without a formal petition it should have said so, but that it had no authority 
to require a petition to change them absent evidentiary 
support.

 

[¶10]   This matter is now before us on 
appeal by McTiernan from the district court's decision.

 

[¶11]   Our review of Board of Control 
decisions is guided by the standards set forth in Wyo. Stat. Ann. § 16-3-114(c) 
(LexisNexis 2001):

 

   (c)  To the extent 
necessary to make a decision and when presented, the reviewing court shall 
decide all relevant questions of law, interpret constitutional and statutory 
provisions, and determine the meaning or applicability of the terms of an agency 
action.  In making the following 
determinations, the court shall review the whole record or those parts of it 
cited by a party and due account shall be taken of the rule of prejudicial 
error.  The reviewing court 
shall:

(i)                 
Compel 
agency action unlawfully withheld or unreasonably delayed; 
and

(ii)               
Hold 
unlawful and set aside agency action, findings and conclusions found to 
be:

(A)       
Arbitrary, 
capricious, an abuse of discretion or otherwise not in accordance with 
law;

(B)       
Contrary 
to constitutional right, power, privilege or immunity;

(C)      
In 
excess of statutory jurisdiction, authority or limitations or lacking statutory 
right;

(D)      
Without 
observance of procedure required by law; or

(E)       
Unsupported 
by substantial evidence in a case reviewed on the record of an agency hearing 
provided by statute.

 

The 
issue presented to us concerns the existence of substantial evidence1 in the record in support of the 
Board's decision.  We have described 
substantial evidence as:

 

Substantial 
evidence is defined by this court as "relevant evidence which a reasonable mind 
might accept in support of the conclusions of the agency."  The substantial evidence standard also 
requires that there be more than a scintilla of evidence.  It is not required that the proof attain 
such a degree of certainty as to support only one conclusion to the exclusion of 
all others.  Once the measure of 
evidence has surpassed the scintilla threshold, the possibility of drawing two 
inconsistent conclusions from the entire record does not mean that the 
conclusion drawn by the administrative agency is not supported by substantial 
evidence.  Even where this court, 
after reviewing the record, arrives at a different conclusion, the court cannot 
substitute its judgment for that of the agency's as long as the agency's 
conclusion is supported by substantial evidence.

 

Joe 
Johnson Company v. Wyoming State Board of Control, 857 P.2d 312, 314-15 (Wyo. 1993) (quoting Department of Employment, Labor 
Standards Division v. Roberts Construction Company, 841 P.2d 854, 857 (Wyo. 
1992)).  "For evidence to be 
sufficient to allow a reasonable mind' to accept an agency's conclusion, there 
must appear in the record evidence which allows either a definitive conclusion 
or a reasonable extrapolation based on the surrounding circumstances." GID v. 
Wyoming State Board of Control, 926 P.2d 943, 951 (Wyo. 
1996).

 

[¶12]   Preliminarily, we must address the 
effect of our remand in Scott I.  
McTiernan contends that our remand was a limited one since our concern at 
that time was about the form of the Board's findings, not the factual 
basis.  McTiernan argues that the 
remand did not call for additional hearings or findings of fact.  McTiernan points to the two footnotes 
cited in our discussion in Scott I as instructions to the Board on "how a 
proper finding  satisfactory to the Court in this case  should be set forth by 
the agency."  In effect, McTiernan 
argues that all this Court expected on remand from the Board was "supplemental 
findings consistent with sound mathematics."  According to McTiernan, this is what the 
Board did on remand when it made additional findings that Scott had made nine 
irrigation sets with the big gun and then used the calculations set forth in 
footnotes three and four of Scott I to arrive at a total of 14.0 acres 
irrigated.

 

[¶13]   It is apparent that both McTiernan 
and the Board have misconstrued our order in Scott I.  If our intention was the simple 
application of the mathematical calculation set forth in the footnotes to our 
opinion in Scott I, then we could have conserved judicial and 
administrative resources by making the calculations and associated findings 
ourselves and ordered the entry of the appropriate judgment on remand.  Instead, our decision specifically 
stated:

 

There 
may be a sufficient factual basis for the board's determination 
that the Scotts irrigated only 11.1 acres of the Shallcross property in addition 
to the three acres conceded by McTiernan; however, that factual basis was not 
included in the formal findings of fact.  
We, therefore, remand this case with directions that the board make 
additional findings of fact concerning the Shallcross 
property.

 

Scott 
I, 974 P.2d  at 973 (emphasis added).  
McTiernan is correct in the assertion that we did not mandate any 
additional hearings.  However, our 
remand was predicated on the assumption that support for the Board's finding 
that only 14.1 acres of the Shallcross property had been irrigated already 
existed in the record, and that the Board had simply failed to make the 
appropriate citations to that record.  
Accordingly, our remand was with directions to the Board to make those 
additional findings of fact as required by the Wyoming Administrative Procedure 
Act.2

 

[¶14]   Instead of making additional 
findings of fact, as ordered by this Court, the Board simply adopted our 
footnotes as a basis for supporting its original decision.  Even a cursory review of our decision 
highlights the impropriety of the Board's action on remand.  We made two observations in the course 
of our opinion in Scott I in support of our conclusion that the Board's 
decision was not supported by substantial evidence.  First, we noted that the Board did not 
include Scott's testimony regarding how many sets he had done on the Shallcross 
property.  Instead, the Board relied 
on that testimony after the fact during the appeal before this Court.  Second, we noted in the two footnotes 
that the Board's conclusion that 11.1 acres had been irrigated was not 
consistent with the facts.  
Specifically, we noted that if one assumed the nine sets accepted by the 
Board, and did the proper calculation using the area watered by a big gun, then 
one ended up with a different number of acres irrigated than that cited by the 
Board.  The footnotes and the 
accompanying text were not a finding of fact by this Court that we remanded for 
adoption by the Board.  They were 
examples of why the Board's decision was not supported by substantial evidence; 
it was not a directive for the Board to adopt specific findings.  On remand, the Board should have made 
findings based on the record as to the acreage within the Shallcross property 
that was or was not irrigated by the Scotts.  We now turn to the specific question of 
whether the Board's decision on remand is supported by substantial evidence in 
the record.

 

[¶15]   In its review of the Board's 
decision on remand, the district court concluded that the Board's determination 
that the Scotts had irrigated 14.0 acres of the Shallcross property was 
unsupported by substantial evidence.  
The district court, after reviewing the record, then concluded that 
substantial evidence supported a conclusion that the Scotts had only failed to 
irrigate 9.2 acres of the Shallcross property.  McTiernan challenges the district 
court's conclusion on two grounds.  
First, McTiernan argues that the district court engaged in an independent 
exercise in fact finding that invaded the Board's function as the exclusive 
authority to make factual conclusions.  
Second, McTiernan contends that the Board's finding that Scott irrigated 
only 14.0 acres was supported by substantial evidence.  McTiernan points to Sam Scott's 
testimony that he made nine sets with the big gun sprinkler on the Shallcross 
property.  He also notes that 
independent witnesses, along with the various exhibits presented during the 
hearing, corroborated Scott's testimony.

 

[¶16]   Our own review of the record leads 
us to conclude that the district court's decision was correct.  We defer to the Board's specialized 
knowledge and expertise regarding the use or nonuse of water and the 
technicalities involved in irrigation.  
Joe Johnson Company, 857 P.2d  at 314.  However, we will disturb an agency's 
decision when it is clearly contrary to the overwhelming weight of the evidence 
on the record.  Id. (quoting 
Vandehei Development v. Public Service Commission of Wyoming, 790 P.2d 1282, 1287 (Wyo. 1990)).  The 
district court and this Court are charged with reviewing an agency's decision 
for substantial evidence.  Wyo. 
Stat. Ann. § 16-3-114(c)(ii)(E) (LexisNexis 2001).  That duty requires a review of the 
entire record to determine if there is relevant evidence that a reasonable mind 
might accept in support of the agency's decision.  Joe Johnson Company, 857 P.2d  at 
314-15.  Occasionally, the process 
of review will necessarily require the reviewing court to engage in an 
assessment of the facts adduced during the administrative hearing.  That assessment does not usually involve 
a reweighing or reconsideration of the basic facts found by the agency.  However, as a by-product of that 
process, the reviewing court may arrive at an ultimate conclusion derived from 
those basic facts that is different from the agency's.3  A court will reach a different 
conclusion based on the evidence only in those situations where the agency's 
conclusion is clearly contrary to the weight of the 
evidence.

 

[¶17]   In GID, we were confronted 
with the question of whether the Board's decision ordering the abandonment of 
Goshen Irrigation District's supplemental water right to 34 c.f.s. rather than 
25 c.f.s. was supported by substantial evidence.  926 P.2d  at 951. In support of its 
decision, the Board relied on the fact that GID had tested a new pump and the 
capacity of the pump was 34 c.f.s.  
We concluded that the Board's decision was not supported by substantial 
evidence because the record disclosed that the hydrographer who testified about 
the pump test stated: he did not consider himself an expert on pumps; his 
original estimate of the flow through the pump exceeded the pump's designed 
capacity; and, he admitted his estimate of the flow rate was "speculation." 
Id.  We reversed the Board's 
decision and remanded with instructions for the Board to reduce GID's 
supplemental water right to 25 c.f.s.  
Id. at 951-52.  In 
GID, we did not disturb the Board's basic factual findings  that the 
pump had been tested and it had a capacity of 34 c.f.s.  however, after a 
review of the entire record, we concluded that the evidence produced at the 
contested case hearing did not support the Board's ultimate conclusion.  The same scenario unfolded before the 
district court in this case.

 

[¶18]   On remand, the Board found that Sam 
Scott had made nine sets with the big gun sprinkler on the Shallcross property 
during the 1996 irrigation season.  
The Board also found that nine sets with a 130-foot radius sprinkler 
would water 11.0 acres.  Combined 
with the three irrigated acres conceded by McTiernan, the Board concluded that 
14.0 acres out of the 28.8 acres constituting the Shallcross property had been 
irrigated with the remainder abandoned.  
The district court did not disagree with these basic factual 
findings.  However, after a review 
of the record, the district court concluded that the evidence in the record did 
not support the Board's ultimate conclusion.  After our own review of the record, we 
agree with the district court.

 

[¶19]   The Board was correct in noting 
that Sam Scott completed nine sets with the big gun sprinkler on the Shallcross 
property during the 1996 irrigation season.  As the Scotts point out, however, the 
nine sets with the big gun sprinkler were done in May of 1996.  For some inexplicable reason, the Board 
ignored all of the evidence of irrigation activity on the Shallcross property 
during July and August of 1996 done prior to McTiernan's filing of the 
abandonment petition.4  That testimony was the basis of the 
district court's decision and is cited above in our statement of the facts.  That testimony indicated extensive 
irrigation efforts by the Scotts in July and August.  Independent witnesses, including John 
Dahlke, Robert Mullinax, and Roy Powers, whose testimony regarding the May 
irrigation activities was relied upon by the Board in reaching its original 
decision, corroborated the Scotts' testimony.  Nevertheless, the Board utterly failed 
to address this evidence.  The Board 
may have concluded that this testimony was not credible and unpersuasive.  If that was the Board's conclusion, 
however, it was incumbent upon it to articulate its reasoning in the order.  Wyo. Stat. Ann. § 16-3-110; Billings 
v. Wyoming State Board of Outfitters, 837 P.2d 84, 86 (Wyo. 1992).  Ignoring relevant evidence adduced at a 
contested case proceeding constitutes an arbitrary and capricious action.  

 

[¶20]   McTiernan has not directed us to 
any evidence in the record that would undermine or contradict the evidence cited 
by the district court, and we did not find any in the course of our review of 
the record.  Accordingly, the 
district court's conclusion that the Scotts irrigated 19.6 acres of the 
Shallcross property during the 1996 irrigation season is 
affirmed.

 

[¶21]   In his second issue, McTiernan 
challenges the district court's decision remanding the Board's order to the 
Scotts to "file the necessary petition(s) with the State Board of Control for 
[a] change of point of diversion and means of conveyance and to identify the 
lands actually irrigated under the John Ross Appropriation."  The district court remanded the issue to 
the Board.  The court concluded that 
"[w]ithout basic findings of fact regarding when and who made changes in 
diversions and means of conveyance, Scott would not know how to respond to the 
Board's order."  The court ordered 
the Board on remand to make findings of fact regarding which changes in point of 
diversion and means of conveyance require a petition from Scott.  The district court did note that if the 
Board simply meant for Scott to identify his point of diversion and means of 
conveyance without formal petition, it had the power to require that 
action.

 

[¶22]   On appeal, McTiernan notes that the 
John Ross Appropriation was a blanket appropriation covering 125 acres so that a 
definitive description of the lands remaining under the appropriation is 
necessary.  He also points out that 
since the original water right was issued, the landscape surrounding Smith Creek 
had changed significantly to the extent that the original diversion point and 
irrigation canals no longer exist.  
Under these circumstances, McTiernan argues that the Board had the 
authority to make the order.

 

[¶23]   Historically, the Board has been 
granted broad powers to effectuate the statutory and constitutional mandates for 
the regulation of water in this state:

 

When 
questions arise involving the power and authority of the State Engineer and the 
Board of Control it is vital to remember that both the Board and the State 
Engineer are created by the state constitution and not by the result of any 
legislative enactment.  Their 
general powers are derived from the constitution and not from the legislature, 
§§ 2 and 5 of Article 8, Wyoming Constitution.  It is further noted that, 
constitutionally, the Board of Control has supervision of the water, its 
"appropriation, distribution and diversion" within this state under such 
regulations as may be set by the legislature and that the State Engineer by 
virtue of § 5, Art. 8, has general supervision of the waters of this state and 
the officers who administer the same.  
This distinguishes the Board of Control and its operations from some 
other administrative agencies.

 

. . . 
.

 

. . . If 
this court were to hold that the powers of the Board of Control are strictly 
limited to those as prescribed or set out specifically by the legislature, we 
would deny them the authority and the right of supervision of the waters of this 
state, their appropriation, distribution and diversion and thus defeat a clearly 
stated constitutional objective.  
The Board must, in order to insure proper administration and use of our 
water be said to possess such powers as will insure the maximum beneficial use 
of all water, without regard to its source.

 

John 
Meier & Son v. Horse Creek Conservation District, 603 P.2d 1283, 1288 (Wyo. 1979).  As we 
have noted, however, the Board's ability to exercise its broad authority is 
constrained by the requirement that its decisions are supported by findings of 
basic facts upon which its ultimate findings of fact and conclusions are 
based.  Scott I, 974 P.2d  at 
969.

 

[¶24]   The problem with the Board's order, 
as the district court recognized, is that it gives no guidance to the 
Scotts.  The common owner of the 
Scott and McTiernan properties made many changes in the point of diversion and 
in the means of conveyance prior to the 1965 legislation that required petitions 
to the Board to make those changes.  
Naturally, the question then becomes to which point of diversion or means 
of conveyance is the Board referring?  
Without findings of fact to support this order, the Scotts are left to 
speculate on exactly what the Board is referring to in its order.  The Board has the authority to define or 
quantify water rights when the original adjudication documents do not clearly 
set forth the scope of the water rights.  
Scott I, 974 P.2d  at 974 (citing Zezas Ranch, Inc. v. Board of 
Control, 714 P.2d 759, 762-64 (Wyo. 1986)).  However, the Board required Scott to 
file a petition to change the point of diversion and means of 
conveyance -- not merely an identification or quantification of the Scotts' 
water rights.  The Board would 
clearly have the authority to require the Scotts to identify the lands under the 
John Ross Appropriation and the point(s) of diversion and means of conveyance 
associated with that water right.  If that action was the intention of the 
Board when it made its order, then it may certainly modify its order to reflect 
that intent.  On the other hand, if 
the Board intended to require a formal petition from the Scotts to change the 
point of diversion and means of conveyance, then it will have to support its 
order with the necessary findings of fact.

 

[¶25]   The Board's decision that the 
Scotts had abandoned 14.8 acres of the 28.8-acre Shallcross property was not 
supported by substantial evidence.  
We concur with the reasoning of the district court in finding that the 
Scotts abandoned 9.2 acres of the subject property.  Accordingly, the district court's 
decision is affirmed, and we remand with instructions for the Board to increase 
the Scotts' water rights under the John Ross Appropriation to 19.6 acres of the 
Shallcross property.

 

[¶26]   The Board does not have the 
authority to order the Scotts to file a petition to change their point of 
diversion and means of conveyance absent appropriate findings of fact and 
conclusions.  We remand this issue 
to the Board for proceedings consistent with this opinion.

 

[¶27]   The district court's decision is 
affirmed.

FOOTNOTES

  1In several cases 
we have stated that adjudicated water rights will not be set aside unless 
justified by clear and convincing evidence.  See Scott I, 974 P.2d  at 
970; and Wheatland Irrigation District v. Pioneer Canal Company, 464 P.2d 533, 537 (Wyo. 1970). Neither case explicitly lays out how that standard is to 
be applied to an agency decision.  
In fact, Scott I analyzed the Board's decision exclusively within 
the context of the substantial evidence standard.  Since we can resolve this case under the 
statutorily established substantial evidence standard, we will not discuss at 
this time the apparently inherent contradiction between a substantial evidence 
and a clear and convincing standard of review.

  
2See Wyo. 
Stat. Ann. § 16-3-110 (LexisNexis 2001) which provides, in relevant 
part:

 

A final decision or order adverse to a 
party in a contested case shall be in writing or dictated into the record.  The final decision shall include 
findings of fact and conclusions of law separately stated.  Findings of fact if set forth in 
statutory language, shall be accompanied by a concise and explicit statement of 
the underlying facts supporting the findings.

3

"Basic facts are the historical and 
narrative events elicited from the evidence presented at trial, admitted by 
stipulation, or not denied, where required, in responsive pleadings.  Inferred factual conclusions are drawn 
from basic facts and are permitted only when, and to the extent that, logic and 
human experience indicate a probability that certain consequences can and do 
follow from the basic facts.  No 
legal precept is implicated in drawing permissible factual inferences.  But an inferred fact must be 
distinguished from a concept described in a term of art as an ultimate 
fact.'  So conceived, an ultimate 
fact is a mixture of fact and legal precept[.]"

 

RT Communications v. State Board of 
Equalization, 11 P.3d 915, 920 (Wyo. 
2000) (quoting Union Pacific Railroad Company v. Wyoming State Board of 
Equalization, 802 P.2d 856, 860 (Wyo. 1990) and Universal Minerals, Inc. 
v. C.A. Hughes & Company, 669 F.2d 98, 102 (3rd Cir. 1981)).

  4McTiernan filed 
the petition on August 29, 1996.  
Scott I, 974 P.2d  at 968.