NOTICE: NOT FOR OFFICIAL PUBLICATION.

UNDER ARIZONA RULE OF THE SUPREME COURT 111(c), THIS DECISION IS NOT PRECEDENTIAL

AND MAY BE CITED ONLY AS AUTHORIZED BY RULE.

IN THE

ARIZONA COURT OF APPEALS

DIVISION ONE

UNITED STATES OF AMERICA, Appellant,

v.

VERDE DITCH COMPANY; SALT RIVER PROJECT AGRICULTURAL 

IMPROVEMENT AND POWER DISTRICT and SALT RIVER VALLEY 

USERS’ ASSOCIATION; ARIZONA DEPARTMENT OF WATER 

RESOURCES; MONROE LANE NEIGHBORHOOD COALITION; 

YAVAPAI-APACHE NATION; ARIZONA STATE PARKS; PETER J. 

MOLLICK; BRADFORD C. GORDON; KAREN PHILLIPS; DON 

FERGUSON; LEROY MILLER, Appellees.

No. 1 CA-CV 15-0690

Appeal from the Superior Court in Yavapai County

No. P1300CV4772

The Honorable David L. Mackey, Judge

ORDER VACATED

COUNSEL

United States Department of Justice, Washington, DC

By John L. Smeltzer, F. Patrick Barry

Counsel for Appellant
2

L. Richard Mabery PC, Prescott

By L. Richard Mabery

Counsel for Appellee VDC

Salmon Lewis & Weldon PLC, Phoenix

By John B. Weldon, Jr., Mark A. McGinnis, R. Jeffery Heilman

Counsel for Appellees Salt River

Arizona Department of Water Resources, Phoenix

By Janet L. Miller, Nicole D. Klobas, Kenneth C. Slowinski

Counsel for Appellee Arizona Department of Water Resources

Montgomery & Interpreter PLC, Phoenix

By Robyn L. Interpreter, Susan B. Montgomery

Counsel for Appellee Yavapai-Apache Nation

Brown & Brown Law Offices PC, Eagar

By Douglas E. Brown, David Albert Brown

Counsel for Appellee Monroe Lane Neighborhood Coalition

Bradford C. Gordon, Camp Verde

Appellee

Peter J. Mollick, Phoenix

Appellee

MEMORANDUM DECISION

Judge Donn Kessler delivered the decision of the Court, in which Presiding 

Judge Peter B. Swann and Judge Kent E. Cattani joined.

K E S S L E R, Judge:

¶1 This case involves post-judgment proceedings filed in 

relation to a 1909 judgment establishing rules among Verde Ditch 

shareholders for the operation and maintenance of the Verde Ditch, an 

approximately eighteen-mile irrigation ditch diverting water from the 

Verde River. In the 1909 case of Hance v. Arnold,

1 an Arizona territorial court 

issued a judgment determining the proportionate interests of eleven 

 

1 Hance v. Arnold et al., P-1300-CV-4772 (Yavapai Sup. Ct. Jan. 1, 1907).
USA v. VERDE DITCH et al.

Decision of the Court

3

claimants in the Verde Ditch. This judgment (“1909 Decree”) provided that 

the Verde Ditch would be administered by the “Verde Ditch Company” 

(“VDC”) through court-appointed commissioners.

2

¶2 Upon a motion by the commissioners, the superior court 

entered an order authorizing VDC to enter a Memorandum of 

Understanding (“MOU”) that established a process for determining 

“Historic Water Use” (“HWU”) on lands served by the Verde Ditch and for 

“conform[ing]” the 1909 Decree to Arizona water law to limit diversions of 

Verde Ditch water to lands that have HWU. 

¶3 The United States3 appeals from that order, arguing the 

Yavapai Superior Court lacked jurisdiction to adjudicate the water rights of 

Verde Ditch users and erred in authorizing proceedings that will constitute 

such an adjudication. We conclude the Yavapai Superior Court lacks 

jurisdiction to approve such agreements among VDC, its members and/or 

the Salt River Project Agricultural Improvement and Power District and the 

Salt River Valley Water Users’ Association (collectively, “SRP”).

4 These 

types of agreements are beyond the scope of the 1909 Decree, fall within the 

exclusive jurisdiction of the Maricopa County Superior Court as part of the 

General Adjudication of All Rights to Use Water in the Gila River System 

and Source Gila River Adjudication (“Gila Adjudication”), and could affect 

the water rights of persons not involved in such negotiations. The approval 

of any such agreements, as part of an MOU or otherwise, must be done 

within the context of the Gila Adjudication. Accordingly, we vacate the 

order.

 

2 VDC is an unincorporated association comprised of the successors 

and assigns of the original parties to Hance v. Arnold and other users with 

rights arising after 1909.

3 The United States is a Verde Ditch shareholder because it acquired 

and owns on behalf of the Yavapai-Apache Nation a parcel of land served 

by the Verde Ditch in Camp Verde, Arizona.

4 The Association is a water users’ association formed as an Arizona 

territorial corporation. The District is an agricultural improvement district 

formed pursuant to Arizona Revised Statutes, Title 48, Chapter 17. SRP is a 

shareholder in the Verde Ditch and owns 23.57 shares in VDC. 
USA v. VERDE DITCH et al.

Decision of the Court

4

FACTUAL AND PROCEDURAL HISTORY

I. 1909 Decree of Hance v. Arnold

¶4 In 1873, the Old Verde Ditch was constructed to divert waters 

from the Verde River. The five builders of the Old Verde Ditch were each 

entitled to one-fifth of the waters from this ditch for irrigation and domestic 

purposes. In 1891, two of the residents who constructed the Old Verde 

Ditch, along with one additional resident, constructed the New Verde Ditch

with varying interests in the additional capacity. In 1907, the Hances, Verde 

Ditch property owners, filed a complaint in the Yavapai County Territorial 

Court alleging that the appropriators upstream of their property along the 

Verde Ditch were using water in excess of their entitled shares. 

¶5 In the 1909 Decree, the territorial court determined that some 

of the parties were “entitled to the use of the waters flowing through [the 

Verde Ditch]” in a fractional proportion. The 1909 Decree allotted any such 

rights based on a fractional share of VDC and the same share of water 

flowing through the Verde Ditch, but not on a specific volume of water to 

each user or any other water allocation. Specifically, the court held that 

these fractional shares in the Verde Ditch were “common co-ordinate 

right[s] equally enjoyed by the several parties, plaintiff and defendants, 

without reference to priority of appropriation or use.” (emphasis supplied). The 

1909 Decree provided that all of the parties “should contribute to the 

expense of the water commissioner including the repair and maintenance 

of the ditch . . . in proportion to their several interests.” 

¶6 In 1935, the superior court appointed a new commissioner 

who was “empowered to enforce the provisions of [the 1909 Decree] with 

reference to the payment of assessments for the maintenance and upkeep 

of the [Verde Ditch].” The commissioner was also authorized to distribute 

water under the proportionate shares established in the 1909 Decree. In 

1965, the court promulgated rules and regulations for the administration of 

the Verde Ditch.5

 

5 The current set of rules and regulations (“1989 Rules”) note that the 

1909 Decree promulgated broad directives “to govern the operation and 

maintenance of the Verde Ditch and to insure adequate funding to defray 

operational costs.” The 1989 Rules empower the commissioners to 

maintain, repair, and operate the Verde Ditch, as well as stop distribution 

of water to shareholders who are in violation of the 1989 Rules. 
USA v. VERDE DITCH et al.

Decision of the Court

5

¶7 Beyond approving rules and regulations for the 

administration of the Verde Ditch, the superior court has authorized VDC 

to take a variety of actions necessary to operate the Verde Ditch, including 

approving drainage modifications, fee schedules, and loans for repairs. The 

court also regularly approved annual assessments and appointed new VDC 

commissioners. However, the record does not reflect the court has allocated 

any rights to water. 

II. Memorandum of Understanding

¶8 In 2014, VDC petitioned the court for authorization to 

“negotiate and execute a Memorandum of Understanding with [SRP].” The 

application stated that the purpose of the MOU is to “establish a process 

and procedure to facilitate the exchange and confirmation of lands served 

by [VDC].” The MOU’s stated function is “to avoid the time and cost of 

extensive litigation regarding entitlement to Verde River water . . . 

[through] a comprehensive agreement on the delineation of lands served 

by the Verde Ditch that have [HWU].” The superior court granted the 

commissioners’ application subject to court approval of the MOU. 

¶9 The superior court held a series of hearings on objections to 

the MOU, including an objection by the United States regarding 

jurisdiction. The superior court found it had jurisdiction to approve the 

MOU, as it considered the MOU a modification of the 1909 Decree. In 2015, 

the superior court entered an order (“August 26 Order”) authorizing VDC 

to enter into the MOU. Over the United States’ continuing objection, the 

superior court again found that it had “historic authority dating to before 

the adoption of the statutes and the general stream adjudication process.” 

According to the court, that authority empowered the superior court to 

“interpret, adjudicate and enforce water use on the Verde Ditch.” The 

superior court found, pursuant to Arizona Rule of Civil Procedure 54(b),

that the order completely “resolve[d] the issue with respect to authorization 

of [VDC] to enter into the [MOU].” 

¶10 The United States timely appealed. We have jurisdiction 

under Arizona Revised Statutes (“A.R.S.”) section 12-2101(A)(2) (2016).

6 See 

infra Section I.

 

6 We cite to the current version of statutes unless changes material to 

this version have occurred. 
USA v. VERDE DITCH et al.

Decision of the Court

6

DISCUSSION

I. Appellate Jurisdiction

¶11 Pursuant to A.R.S. § 12-2101(A)(2), we have jurisdiction over 

an appeal “[f]rom any special order made after final judgment.” “A postjudgment order is appealable when the order involves an issue distinct 

from the underlying judgment and immediately affect[s] a party’s rights.” 

Williams v. Williams, 228 Ariz. 160, 165, ¶ 20 (App. 2011) (citations omitted). 

An order completely disposing of a petition is appealable when the petition 

raises a new claim. Id. at 166, ¶ 23. This order is appealable notwithstanding 

the fact that the underlying case is still ongoing. Id. at ¶ 22 (citation omitted). 

“Failure to allow an appeal from such an order [completely resolving a 

petition] could compel all subsequent proceedings . . . to go forward under 

a cloud of uncertainty.” In re Estate of McGathy, 226 Ariz. 277, 280, ¶ 15 

(2010) (citation and quotation omitted).

¶12 VDC requested court authorization for the MOU and to begin 

negotiations with SRP to determine HWU of landowners on the Verde 

Ditch. This is an issue distinct from the purpose of the 1909 Decree, which 

determined each party’s share in the Verde Ditch and established court 

oversight of Verde Ditch administration. Because the court approved 

VDC’s petition and empowered it to move forward under the terms of the 

MOU, the original petition has been completely addressed. The order is 

appealable even though any final agreement with landowners through the 

MOU still requires court approval. The order granting VDC authorization 

to proceed completely resolves that issue and the appellate court need not 

wait for the MOU proceedings to be completed to rule on whether the 

superior court had authority to allow those proceedings. Finally, the United 

States’ rights are immediately affected by the order, as VDC is now able to 

enter agreements regarding Verde Ditch water rights.7

 

7 In its answering brief, VDC states it no longer has funding to 

implement the MOU but that it might enter into agreements with various 

members of VDC and SRP outside of the MOU. As VDC and SRP explained 

at oral argument, however, VDC remains interested in negotiating and 

entering into agreements with VDC members and with persons claiming 

rights to water in the Verde Ditch, severing and transferring water rights to 

or from third parties, and having the Yavapai County Superior Court 

approve such agreements. Thus, the question of the authority of the 

Yavapai Superior Court to authorize or approve such agreements remains
USA v. VERDE DITCH et al.

Decision of the Court

7

II. Issue and Standard of Review

¶13 The United States contends the Yavapai Superior Court did 

not have jurisdiction to approve the negotiation of water rights through the 

MOU because the Legislature placed the exclusive power to allocate water 

rights to the Gila River and all its tributaries in the Maricopa County 

Superior Court as part of the Gila Adjudication. SRP and VDC claim the 

MOU is not an adjudication of water rights, and that, even if it were, it is a 

valid exercise of the Yavapai Superior Court’s authority under the 1909 

Decree. As SRP and VDC explained at oral argument, the superior court 

and the parties desired to not only authorize VDC to enter into the MOU 

and to enter into HWU agreements with VDC shareholders and those 

claiming rights to the Verde Ditch, but also to approve severance and 

transfer of rights to water in the Verde Ditch, reconcile such shares after 

negotiation, resolve disputes among various persons claiming vested water 

rights to water in the Verde Ditch, and ultimately have the superior court 

approve any final agreements. All the parties agree that these rights could 

be resolved as part of the Gila Adjudication and that the parties to this 

proceeding have filed claims as part of the Gila Adjudication. The United 

States contends that such rights and allocations must be made as part of the 

Gila Adjudication while VDC and SRP contend they can also be decided by 

the Yavapai County Superior Court as part of its continuing jurisdiction 

over the running of VDC and the Verde Ditch arising from the 1909 Decree.

¶14 A specific superior court lacks subject matter jurisdiction to 

resolve a dispute if the Legislature has vested jurisdiction of such 

controversy in a different court. “The superior court shall have original 

jurisdiction of [c]ases and proceedings in which exclusive jurisdiction is not 

vested by law in another court.” Ariz. Const. art. VI, § 14(1); see A.R.S. § 45-

252(C) (2016) (“The general adjudication shall be brought and maintained 

in the superior court in the county in which the largest number of potential 

claimants resides.”); In re Rights to Use of Gila River, 171 Ariz. 230, 233 (1992) 

(describing consolidation of stream adjudications in the Maricopa County 

Superior Court). “Subject matter jurisdiction abates when another county 

has already assumed jurisdiction in the same matter.” Gabel v. Tatum, 146 

Ariz. 527, 529 (App. 1985) (citation omitted). Thus, the issue presented is 

one of subject matter jurisdiction, which is a question of law subject to de 

novo review. Ader v. Estate of Felger, 240 Ariz. 32, 43, ¶ 37 (App. 2016) 

 

ripe for consideration and review. As the fundamental issue is the ability of 

the court to authorize and approve agreements affecting rights to waters in 

the Verde River, the fact that VDC currently does not have resources to 

participate in the MOU process does not render this appeal moot. 
USA v. VERDE DITCH et al.

Decision of the Court

8

(citation omitted). We review de novo questions of statutory interpretation. 

City of Tucson v. Clear Channel Outdoor, Inc., 218 Ariz. 172, 178, ¶ 5 (App. 

2008) (citations omitted).

III. Arizona Water Law and the Gila River Adjudication

¶15 Prior to 1919, a person could acquire a surface water right 

simply by applying the water to a beneficial use and posting a notice of the 

appropriation at the point of diversion. Summary of Ariz. Water Law &

Mgmt., Ariz. Water Atlas, Vol. 1, App. C, 123 (2010),

http://www.azwater.gov/AzDWR/StatewidePlanning/WaterAtlas/doc

uments/appendix_c.pdf. In 1919, the Legislature adopted the Arizona 

surface water code (“Water Code”). Id. The Water Code requires that a 

person apply for and obtain a permit from the state to appropriate surface 

water. Id.; see 1919 Ariz. Sess. Laws, ch. 164, § 5; Stuart v. Norviel, 26 Ariz. 

493, 498-501 (1924) (describing statute). Today, applicants obtain that

permit from the Arizona Department of Water Resources (“ADWR”). 

Mission & Goals, Ariz. Dep’t of Water Res.,

http://www.azwater.gov/AzDWR/PublicInformationOfficer/MissionA

ndGoals.htm (last visited Apr. 4, 2017).

¶16 In 1979, the Legislature amended the Water Code to provide 

for general stream adjudications. See A.R.S. §§ 45-251 et seq. Under the

Water Code’s stream adjudication chapter, all persons served with notice 

must file a “statement of claimant” presenting the particulars of any 

claimed water right, including the amount of water and location of irrigated 

lands. A.R.S. § 45-254(A), (C) (2016). Following the filing of such statements, 

ADWR must investigate the claims and prepare a technical report for the 

court to consider, along with any evidence presented by claimants or 

objectors, in a final adjudication. A.R.S. § 45-256 (2016). ADWR also must 

publish a preliminary technical report for review by claimants, A.R.S. § 45-

256(H), at which point claimants may amend their claims, A.R.S. § 45-

254(E)(1).

¶17 Arizona’s general adjudication statute authorizes 

determination of “the nature, extent and relative priority of the water rights 

of all persons in the river system and source.” A.R.S. § 45-252(A). Any water 

users whose rights “have not been previously adjudicated under this 

article” are eligible to petition to have their rights determined by the court. 

Id. “The general adjudication shall be brought and maintained in the 

superior court in the county in which the largest number of potential 

claimants resides.” A.R.S. § 45-252(C). The Gila Adjudication was thus 

initiated in Maricopa County, where the vast majority of claimants reside. 
USA v. VERDE DITCH et al.

Decision of the Court

9

Joseph M. Feller, The Adjudication that Ate Arizona Water Law, 49 Ariz. L. 

Rev. 405, 407-08 (2007). 

¶18 Conforming with the statutory purpose of a comprehensive 

adjudication of surface water rights, the historical and statutory notes to the 

Water Code explain that “[u]nless otherwise specifically provided, this act 

applies to . . . [a]ll rights to appropriable water initiated or perfected on or 

before the effective date of this act.” 1995 Ariz. Sess. Laws, ch. 9, § 24 (1st 

Reg. Sess.). Additionally, the Water Code states that

[n]othing in this chapter shall impair vested rights to the use 

of water, affect relative priorities to the use of water 

determined by a judgment or decree of a court, or impair the 

right to acquire property by the exercise of the right of 

eminent domain when conferred by law. . . . [However,] the 

rights shall be adjudicated as provided in this chapter.

A.R.S. § 45-171 (2016). The chapter includes the general adjudication 

statutes. See A.R.S. §§ 45-251 et seq. 

¶19 The Gila Adjudication was first filed by SRP in 1974 as an 

administrative adjudication of the Upper Salt River. See In re Rights to Use 

of Gila River, 171 Ariz. at 232. The case was consolidated with other 

proceedings on the Gila River system and became the overall judicial 

adjudication of the Gila River system and source after the Water Code was 

modified to include the general adjudication statutes in 1979. See id.; A.R.S. 

§ 45-252. The Gila Adjudication includes the Salt, Gila, San Pedro, and 

Verde River watersheds, which include most of southeastern and central 

Arizona. Summary of Ariz. Water Law & Mgmt., at 123. SRP, VDC, the 

Yavapai-Apache Nation, the United States, and other individuals and 

organizations have filed various statements of claimant in the Gila 

Adjudication wherein they claim the right to receive water from the Verde 

River through the Verde Ditch. It is undisputed that the water flowing 

through the Verde Ditch is part of the Gila Adjudication.

IV. Exclusive Jurisdiction of the Gila Adjudication Court

¶20 The parties dispute whether the order authorizing the MOU 

and related negotiations and possible agreements to HWU allocation 

outside the MOU is subject to the exclusive jurisdiction of the Gila 

Adjudication in Maricopa County. We have held that disputes over water 

rights in areas encompassed within the Gila River system and source may 

not be litigated outside the Gila Adjudication in the Maricopa County 

Superior Court. Gabel, 146 Ariz. at 529. Under the reasoning and holding in 
USA v. VERDE DITCH et al.

Decision of the Court

10

Gabel, the Yavapai Superior Court lacks jurisdiction to issue the order 

permitting allocation of water rights to the Verde River through the Verde 

Ditch.

¶21 In Gabel, property owners brought a declaratory judgment 

action in Gila County Superior Court for a declaration of rights with respect 

to a ditch and waters diverted through that ditch from Tonto Creek to lands 

owned by dozens of property holders. Id. at 528. The complaint, brought 

pursuant to A.R.S. §§ 12-1831 et seq., the Uniform Declaratory Judgments 

Act, sought a legal declaration of rights in regards to the ditch and waters 

of Tonto Creek. Id. We held the Gila County Superior Court did not have 

jurisdiction of the case because of A.R.S. § 45-252, which provides for a 

general water rights adjudication when the nature, extent, and priority of 

water rights are involved. Id. at 529. The court observed that while the Gila 

Adjudication was not the same action as the case at issue, it was “inclusive 

of all issues raised in appellants’ complaint.” Id. Finally, the court found 

that dubbing the ditch action a declaratory judgment was semantics, not 

the public policy of the state favoring single proceedings for water rights.8

Id.

¶22 SRP contends that because Gabel did not involve an existing 

judgment determining the right to use waters from the ditch entered prior 

to the Gila Adjudication, it is not applicable. Rather, SRP argues the Yavapai 

Superior Court has retained jurisdiction to enforce and modify the 1909 

Decree. 

¶23 We disagree with SRP and VDC. The 1909 Decree was limited 

to a determination of the original shareholders’ fractional interest in the 

Verde Ditch and concomitantly, their fractional interest in water in the 

Verde Ditch at any one time without regard to any quantifiable amount of 

water. Indeed, the 1909 Decree expressly states that it is not acting to 

allocate or appropriate any water rights. See supra, ¶ 5. In contrast, the MOU 

or the proposed negotiation of agreements as to Ditch water would 

 

8 Additionally, we stated that “[w]hile ditch ‘maintenance and 

management’ could theoretically be separated from the water rights issue, 

and thus litigated in a separate action, as a practical matter maintenance 

duties follow water rights. The larger action, already underway, can 

efficiently and fairly decide the problem of duties correlative with rights.” 

Gabel, 146 Ariz. at 529. However, the court held it did not intend to 

“foreclose the adjudication in Gila County of traditional property disputes, 

e.g. trespass or easement rights.” Id.
USA v. VERDE DITCH et al.

Decision of the Court

11

determine rights based on historic water usage, place of appropriation, and 

date of usage. This is far beyond the terms of the 1909 Decree.

¶24 As such, SRP’s reliance on St. Johns Irrigation & Ditch Co. v. 

Arizona Water Commission, 127 Ariz. 350 (App. 1980), is misplaced. St. Johns

held that ADWR did not have authority to issue new water permits when 

the water at issue had been fully appropriated by court decree, citing A.R.S. 

§§ 45-143(A), 45-171, and 45-231(B). Id. at 352-53. However, A.R.S. § 45-

231(B), which the court found to be “particularly significant in that it 

required [ADWR] to ‘accept the determination’ of rights to the use of water 

as determined by ‘judgment or decree of a court,’” was repealed in 1979 and 

replaced by the general adjudication statute, A.R.S. § 45-252. Id. at 352; 1979

Ariz. Sess. Laws, ch. 139, § 38, eff. Apr. 24, 1979.

¶25 Gabel is the relevant precedent, as the stream adjudication 

statute indicates that “the purpose of the adjudications is to quantify, 

prioritize, and document by decree existing priority rights to appropriable 

and federally reserved water.” San Carlos Apache Tribe v. Superior Court ex 

rel. County of Maricopa, 193 Ariz. 195, 205, ¶ 15 (1999). The Gila Adjudication 

is inclusive of the HWU addressed by the MOU. See Gabel, 146 Ariz. at 529. 

In contrast, St. Johns applies to ADWR and its ability to authorize new 

permits when the water source is fully appropriated. “The director [of 

ADWR] has general control and supervision of surface water, its 

appropriation and distribution, . . . except distribution of water reserved to 

special officers appointed by courts under existing judgments or decrees.” 

A.R.S. § 45-103(B) (2016) (emphasis added). The statute limits court 

appointed officers, such as VDC, to the distribution of water, while ADWR 

has the authority to issue new permits when water is available for 

appropriation.

¶26 The 1909 Decree gave VDC the authority to manage and 

maintain the Verde Ditch and to distribute the waters pursuant to a 

percentage interest in the Verde Ditch, not based on any HWU or 

quantifiable amount of water flowing through the ditch. That right to 

administer the Verde Ditch is protected against the authority of ADWR to 

administer it. However, the 1909 Decree did not retain jurisdiction in the 

Yavapai Superior Court to adjudicate water rights. Even if it had, that 

authority would have ended with the general adjudication statutes and the 

Gila Adjudication.

¶27 The general adjudication statute authorizes determination of 

“the nature, extent and relative priority of the water rights of all persons in 

the river system and source.” A.R.S. § 45-252(A). Any water users whose 
USA v. VERDE DITCH et al.

Decision of the Court

12

rights “have not been previously adjudicated under this article” are eligible 

to petition to have their rights determined by the court. Id. (emphasis 

added). In other words, only those water users who have had their water 

rights determined in a general adjudication are unable to bring further

claims, and those whose rights were determined by other courts may still 

litigate their claims. Furthermore, water users must litigate their rights in a 

general adjudication, as the act applies to “[a]ll rights to appropriable water 

initiated or perfected on or before the effective date of this act.” 1995 Ariz. 

Sess. Laws, ch. 9, § 24 (1st Reg. Sess.) (historical and statutory notes).

Additionally, although the Water Code protects vested rights, it also states 

that those “rights shall be adjudicated as provided in this chapter.” A.R.S. 

§ 45-171. It is clear that the Legislature intended for general adjudications 

to be the single determiners of water rights. 

¶28 Although both SRP and VDC argue that the MOU is only a 

process document and not a determination of rights, the function of the 

MOU is to adjudicate water rights in the Verde Ditch. The MOU’s stated 

purpose is “to avoid the time and cost of extensive litigation regarding 

entitlement to Verde River water . . . [through] a comprehensive agreement 

on the delineation of lands served by the Verde Ditch that have [HWU].” 

The MOU defines HWU as 

use of the waters of the Verde River System through the Verde 

Ditch that was (a) commenced on a particular parcel prior to 

June 12, 1919 or (b) commenced after June 12, 1919 pursuant 

to a certificate of water right issued by ADWR or other state 

agency of similar jurisdiction prior to January 1, 2014 or 

pursuant to a severance and transfer of a pre-1919 right 

approved under applicable law. 

These are water rights. The MOU proceedings are designed to determine 

which lands along the Verde Ditch have HWU and to limit the delivery of 

Verde Ditch water to those lands. Although the MOU claims the final 

agreement “shall not be deemed an adjudication of the water rights for any 

particular parcel of land that would otherwise be determined in the [Gila] 

Adjudication,” a determination of water rights claims affecting water 

delivery for a subset of users is an adjudication of water rights regardless 

of any disclaimer in the MOU.

¶29 Similarly, SRP argues that the only effect of the MOU is to 

guarantee that SRP will not contest the agreed upon water rights in the Gila 

Adjudication. SRP’s contention that the MOU merely allows private 

agreements between Verde Ditch shareholders and SRP cannot stand. On 
USA v. VERDE DITCH et al.

Decision of the Court

13

this issue we are persuaded by the Arizona Supreme Court’s reasoning 

when it found A.R.S. § 45-257(C) (1999) unconstitutional. That statute 

provided that 

[c]laimants [in the Gila Adjudication] may enter into 

agreements regarding the attributes, satisfaction or 

enforcement of their water rights in relation to each other. An 

agreement shall be binding only among the parties to that 

agreement. On request of all parties to the agreement, an 

agreement shall be incorporated by reference into the final 

judgment or decree without modification. Any modification 

to an agreement is valid only if agreed to by all parties to the 

agreement and is binding only among the parties to that 

agreement.

A.R.S. § 45-257(C). In striking down that portion of the general stream 

adjudication statute as unconstitutional, the supreme court noted that

[s]ection 45-257(C) provides that settlement agreements made 

by claimants must be decreed by the court. The statute does 

not give the court authority to review the agreement. In an 

inter sese proceeding such as this adjudication, a court cannot 

be required to incorporate an agreement that may affect the 

availability of water for other claimants or interfere with 

senior rights. Because of the scarcity of water, this may be the 

result even though the statute states that the “agreement shall 

be binding only among [its] parties.”

San Carlos Apache Tribe, 193 Ariz. at 213, ¶ 43 (citation omitted).

¶30 Similarly, we reject SRP’s and VDU’s contention that the 

MOU purports to bind only VDC (and its members) and SRP in regards to 

HWU and not any other parties to the Gila Adjudication. Given the 

statutory evidentiary presumption in favor of prior decrees, see infra ¶¶ 32-

33, and the fact that the MOU and any later agreements must be approved 

by the Yavapai Superior Court, we find that allowing the MOU to proceed 

would implicate the same issues the Arizona Supreme Court identified in 

A.R.S. § 45-257(C). Moreover, as both SRP and VDC acknowledged at oral 

argument, as part of this negotiation and agreement process, parties might 

be severing and transferring water rights that would affect not only the 

parties to this action but other downstream users. This is a far cry from the 

1909 Decree which only determined the various interests of the original 
USA v. VERDE DITCH et al.

Decision of the Court

14

VDC shareholders in whatever water was in the Verde Ditch without 

regard to quantities of water. 

¶31 The 1909 Decree did not determine the rights of Verde Ditch 

shareholders to Verde River water as against other Verde River 

appropriators. Rather, the 1909 Decree assumed the existence of such rights 

and, upon stipulation of the Verde Ditch shareholders, declared rules for 

the allocation of water between the shareholders based on their 

proportionate interests in the ditch. The jurisdiction exercised by the 

Yavapai Superior Court since the 1909 Decree and after the promulgation 

of the general adjudication statutes in 1979 have nearly entirely dealt with 

maintenance of the Verde Ditch and “traditional property disputes.” Gabel, 

146 Ariz. at 529; see supra ¶¶ 6-7 and n.5.

¶32 The argument that the 1909 Decree gave the Yavapai Superior 

Court prior exclusive jurisdiction because it predates the Gila Adjudication 

must fail. The Water Code treats prior decrees9 primarily as evidence rather 

than as binding decrees. Although there is a statutory evidentiary 

presumption in favor of a prior decree, the rights in that decree must still 

be adjudicated in a general adjudication. “The court shall accept 

information in an applicable prior decree as prescribed by § 45-257, 

subsection B, paragraph 1.” A.R.S. § 45-261(A)(1) (2016). Section 45-257 

states the court shall

[d]etermine the extent and priority date of and adjudicate any 

interest in or right to use the water of the river system and 

source, provided that when rights to the use of water or dates 

of appropriation have previously been determined in a prior 

decree of a court, the court shall accept the determination of 

such rights and dates of appropriation as found in the prior 

decree unless such rights have been abandoned. 

A.R.S. § 45-257(B)(1) (2016); cf. United States v. Superior Court In & For 

Maricopa Cty., 144 Ariz. 265, 278 (1985) (citations omitted) (finding A.R.S. § 

45-257(B)(1) valid as an exercise of the legislative power to enact 

supplementary provisions to the rules of evidence). Thus, while the 1909 

 

9 A “prior decree” is “any judgment or decree entered by a court of 

competent jurisdiction that applies to the water right claim or use that is 

subject to adjudication.” A.R.S. § 45-251(5).
USA v. VERDE DITCH et al.

Decision of the Court

15

Decree and the HWU data collected by SRP and VDC might be used as 

evidence of water rights, it may only be used in the Gila Adjudication.10

¶33 Furthermore, because the final agreement under the MOU 

requires court approval, it would be considered a prior decree. The Gila 

Adjudication court would therefore be required to grant the agreement the 

evidentiary presumption in favor of prior decrees. Consequently, even 

though the MOU states any agreement is only binding between the parties, 

it will affect the Gila Adjudication. This is an untenable result.

CONCLUSION

¶34 For the reasons stated above, the Yavapai Superior Court 

lacks subject matter jurisdiction to authorize the MOU proceedings or the 

negotiation and approval of types of agreements contemplated by that 

 

10 SRP cites In re Gen. Adjudication of All Rights to Use Water In Gila River 

Sys. & Source, 212 Ariz. 64 (2006) (Globe Equity) to support the proposition 

that the Yavapai County Superior Court has continuing jurisdiction under 

the 1909 Decree. In Globe Equity, the Arizona Supreme Court found that 

water claims by a tribe in the Gila Adjudication were precluded by a 1935

decree issued by the United States District Court adjudicating the tribe’s

rights. Id. at 66, ¶ 1. The court held, on grounds of claim preclusion, that 

summary judgment in the Gila Adjudication had correctly been granted 

against the tribe. Id. at 69, ¶ 14. Globe Equity is distinguishable on several 

grounds. First, the 1935 decree expressly granted the parties water rights 

and specified dates of priority, amounts of water, and points of diversion. 

Id. at 67, ¶ 6. In contrast, the 1909 Decree grants only shares in the Verde 

Ditch and a percentage of the waters therein, with no reference to priority 

of appropriation or point of diversion. SRP and VDC cannot rely 

successfully on Globe Equity to expand the authorization and jurisdiction of 

the Yavapai County Superior Court to include adjudications and 

appropriations of water when Hance did not involve such water allocations. 

Second, Globe Equity does not hold that the claims should have been 

brought in the District Court under its continuing jurisdiction; rather it 

holds that summary judgment was properly granted in the Gila 

Adjudication because of the preclusive effect of the prior decree which 

actually involved appropriation of water rights before the general stream 

adjudication statutes were passed. SRP and VDC may submit the 1909 

Decree as evidence of purported water rights, but only in the Gila 

Adjudication, not in the Yavapai Superior Court to have that court expand 

its jurisdiction to affect the Gila Adjudication.
USA v. VERDE DITCH et al.

Decision of the Court

16

court, SRP, and VDC. Supra, ¶ 13. We therefore vacate the August 26

Order.

11

 

11 Given this holding, we need not discuss the other arguments raised 

by the United States seeking vacation of the August 26 Order.