1

Filed 5/22/13 Opinion on rehearing

Certified for Publication

IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA

THIRD APPELLATE DISTRICT

(Lassen)

----

JAY DOW,

Plaintiff and Appellant,

v.

LASSEN IRRIGATION COMPANY,

Defendant and Respondent.

C068550

(Super. Ct. No. 4573)

APPEAL from a judgment of the Superior Court of Lassen County, F. Donald 

Sokol, Judge. Reversed with directions.

Mennemeier, Glassman & Stroud and Margaret Carew Toledo and Stephen Lau; 

O‟Laughlin & Paris and William Paris for Plaintiff and Appellant.

Kronick, Moskovitz, Tiedemann & Girard and Scott A. Morris and William T. 

Chisum for Defendant and Respondent.

Kamala D. Harris, Attorney General, Kathleen A. Kenealy, Assistant Attorney 

General, Joseph Barbieri, Deputy Attorney General; Michael A.M. Laufer, Andrew H. 

Sawyer, and Marianna Aue, for State Water Resources Control Board as Amicus Curiae, 

upon request of the Court of Appeal.

This water rights case involves the interpretation of a decree in a stream 

adjudication and, more particularly, the interplay between the right to divert water to 

storage in a reservoir and the right to divert water for direct application to beneficial use. 
2

The specific issue here is whether the trial court correctly interpreted a 1940 

judgment and decree in an adjudication of the water rights on the Susan River stream 

system (the Susan River decree). We conclude the court did not correctly interpret the 

decree. As we will explain, the trial court erred in determining that paragraph 21 of the 

decree gives defendant Lassen Irrigation Company (the Irrigation Company) a right to 

divert water from the Susan River for direct application to beneficial use that is measured 

by the capacity of the Irrigation Company‟s three reservoirs (estimated at 31,500 acrefeet). Properly interpreted, the Susan River decree does give the Irrigation Company a 

right to divert water for direct application to beneficial use, but that right is provided in a 

different part of the decree and is measured in cubic feet per second (cfs), not acre-feet.1 

Paragraph 21 of the decree dictates when that right of direct diversion (and the Irrigation 

Company‟s right to store water) can be exercised, but it does not establish a right to direct 

diversion itself. Because the trial court erred in construing the decree, we will reverse the 

court‟s order and remand the case for the court to enter a new order consistent with this 

opinion.

 

1 For ease of reference, we will sometimes refer to diversion of water for direct 

application to beneficial use as simply direct diversion, which stands in contrast to 

diversion of water to storage, from where it is to be applied to beneficial use at a later 

date. (See Bazet v. Nugget Bar Placers, Inc. (1931) 211 Cal. 607, 618 [“Storage of water 

in a reservoir is not in itself a beneficial use. It is a mere means to the end of applying the 

water to such use”].)
3

FACTUAL AND PROCEDURAL BACKGROUND2

The Susan River System

The “Susan River has its source on the east slope of the Sierra Nevada . . . in the 

southwesterly portion of Lassen County . . . at an elevation of about 7,900 feet. Its 

channel follows a general easterly direction from Silver Lake through McCoy Flat 

Reservoir and through Susanville and on to Honey Lake to which it is tributary. . . .”

“Susan River has four important tributaries, namely, Piute Creek which comes in 

from the north at Susanville, Gold Run Creek and Lassen Creek which come in from the 

south between Susanville and Johnstonville, and Willow Creek which is tributary from 

the north above Standish.”3

 

2

In describing the Susan River system, the Irrigation Company‟s use of water from 

the river, and the litigation that led to the Susan River decree, we draw liberally from the 

“Report on Water Supply and Use of Water on Susan River and Tributaries Lassen 

County, California,” prepared by the former Division of Water Resources and dated 

February 20, 1936 (the hydrographic report), which, along with a stipulation for 

judgment, was “the only evidence offered or introduced at . . . trial” in the case that 

resulted in the Susan River decree. The Irrigation Company requested that we take 

judicial notice of certain portions of the hydrographic report as they “relate[] to and 

describe[] lands receiving water via direct diversion by [the Irrigation Company].” 

Plaintiff Jay Dow did not oppose that request. We subsequently asked the Irrigation 

Company to provide us with a full copy of the hydrographic report, which it did. We 

take judicial notice of the hydrographic report as a court record (Evid. Code, § 452, 

subd. (d)(1)) to assist us in interpreting the resulting decree. (See L. A. Local etc. Bd. v. 

Stan’s Drive-Ins, Inc. (1955) 136 Cal.App.2d 89, 94 [“The rule with respect to orders and 

judgments is that the entire record may be examined to determine their scope and 

effect”].)

We also draw from the stipulation for judgment and the “Report of Referee” dated 

June 12, 1937, that followed the stipulation. 

3 A map depicting the Susan River and its major tributaries is included as an 

appendix to this opinion.
4

“Under normal conditions the flows of Lassen and Gold Run Creeks and of Susan 

River above Susanville are fairly well sustained from melting snows until early in June.” 

The Irrigation Company’s Use Of The River

The Irrigation Company provides water from the Susan River to irrigate a total of 

5,864.7 acres that lie south of the river to the southeast of Susanville.4 The Irrigation 

Company owns and operates three reservoirs: McCoy Flat Reservoir (Diversion 6), Hog 

Flat Reservoir (Diversion 7), and the Leavitt Lake Reservoir (Diversion 239).5 McCoy 

Flat Reservoir (which lies west of Susanville) “is situated on the main channel of Susan 

River and has a maximum capacity of about 13,000 acre feet.” The water stored in 

McCoy Flat Reservoir is “released during the summer to supplement the water stored in 

Hog Flat and Leavitt Reservoirs” (described hereafter). 

Hog Flat Reservoir (which lies east of McCoy Flat and west of Susanville) “is 

situated on Hog Flat Branch of Susan River and has a maximum capacity of about 

6[,]400 acre feet.” The water stored in Hog Flat Reservoir is “released during the 

summer to supplement the water stored in McCoy Flat and Leavitt Reservoirs.”6

Lake Leavitt (which lies east of Susanville) “is formed by an earth dam or levee 

about one and three-fourths miles in length which closes the open side of a natural basin.” 

The lake “has a normal capacity of about 12,100 acre-feet and is filled by the diversion of 

water from Susan River through the A and B Canal.” That canal (also known as the 

 

4 The acreage irrigated by the Irrigation Company is “depicted in cross-hatched 

green on Map Sheets 3 and 6” of the map sheets that were included with the report. 

Color copies of those map sheets appear in the record on appeal as exhibits 3 and 4 to the 

request for judicial notice filed by amicus curiae California State Water Resources 

Control Board. We grant the Board‟s unopposed request for judicial notice.

5 This latter reservoir is also referred to as Lake Leavitt.

6 Both McCoy Flat and Hog Flat Reservoirs lie at an elevation of about 5,500 feet. 
5

Adams and Batcheldor Ditch or A and B Ditch and identified as Diversion 41) runs 

“from the south side of Big Slough Channel of Susan River.” The canal “consists of an 

earth ditch five and one-fourth miles in length to where it empties into Leavitt 

Reservoir,” and “[a] number of laterals tap the main ditch along its course.”7 At the time 

of the investigation leading to the Susan River decree, “[t]he maximum capacity of the 

ditch was measured as 195.0 cubic feet per second and the normal diversion as about 

130.0 cubic feet per second.” 

A few shareholders of the Irrigation Company have land along the A and B Canal 

and receive some of their water directly from the canal. According to the report, that land 

amounts to 295.7 acres. The remaining 5,569 acres of land receiving water from the 

Irrigation Company are irrigated with water released from Lake Leavitt into an outlet 

canal that is about eight miles long. Thus, nearly 95 percent of the land irrigated by the 

Irrigation Company is served exclusively by water that passes through Lake Leavitt.

The Irrigation Company also owns the Colony Dam, which is located on the Susan 

River at the junction with Willow Creek. The dam is “used primarily for regulatory 

purposes to maintain a steady flow of 20 cubic feet per second of Susan River water 

passing the dam when diversion of natural flow from the river is being made into Leavitt 

Lake Reservoir.”8 At the time of the hydrographic report, water could also be diverted at 

the dam into the Colony Dam Ditch (Diversion 55), which was “used as a supplemental 

 

7 According to the hydrographic report, a total of 1,760.4 acres belonging to owners 

who were not part of the Irrigation Company were irrigated by direct diversion from the 

ditch. Pursuant to a previous stipulation between the Irrigation Company and the 

predecessors of the owners of those direct diversion rights, those direct diversion rights 

were limited to a maximum diversion of 16 cfs. 

8 The basis for the Irrigation Company providing 20 cfs in flow at this point in the 

river will become apparent later.
6

direct diversion supply to the water stored in the Leavitt Reservoir.” It appears, however, 

that the Irrigation Company no longer uses this point of diversion at this time. 

The Background Of The Susan River Decree

Before the litigation that led directly to the Susan River decree, there was a history 

of “[t]rouble” involving “the use of water and ditches diverting [water] from Susan 

River.” In 1893, a judgment was entered in a case involving water from the Susan River 

entitled J.D. Byers et al. v. Chas. K. Hartson, B. H. Leavitt, C. C. Hutchinson, et al.

(Super. Ct. Lassen County, 1893, No. 280). Defendants Leavitt and Hutchinson were the 

predecessors in interest to the Irrigation Company. The judgment in the Byers case gave 

Leavitt and Hutchinson, “as against the plaintiffs” in that case, “the right to divert the 

water of Susan River from the channel thereof for storage in their Lake Leavitt Reservoir, 

and in other reservoirs.” In particular, this storage right applied to “all water flowing [in 

the river] between the first day of March and the first day of July in each and every year 

in excess of 1000 inches of water measured under a four inch pressure, at a point 

immediately above the mouth of Willow Creek and in excess of 250 inches of water so 

measured at said point at all other times of each year.” The judgment specified that “[b]y 

1000 inches of water measured under a four inch pressure is meant 20 cubic feet of water 

per second.” Thus, between March 1 and July 1, the predecessors of the Irrigation 

Company could divert to storage as long as they maintained a flow of 20 cfs in the river 

immediately above Willow Creek, and at all other times they could divert to storage as 

long as they maintained a flow of 5 cfs at that point.

From 1893 forward, “various groups of water right owners [were] involved in a 

number of cases of water right litigation on Willow Creek, Gold Run Creek, Lassen 

Creek, Upper Susan River, and on Piute Creek. The narrow scope of the issues involved 

rendered unsatisfactory results from the various cases, because as conditions changed 

different combinations of issues arose which threatened expensive and continued 

litigation. In view of this situation, more than ninety per cent of the water right owners 
7

entered into an agreement during the summer of 1934 to seek an adjudication of each 

right in respect to all other rights in the Susan River stream system under the court 

reference procedure of [former] Section 24 of the Water Commission Act.

“Following the above mentioned agreement, the case of J.J. Fleming etal. [sic] v. 

J. R. Bennett, etal. [sic], was instituted in the Superior Court of California, in and for the 

County of Lassen, on July 24, 1934. . . . The case was referred by said court to the 

[former] Division of Water Resources on August 21, 1934, under the provision of 

[former] section 24 of the Water Commission Act for investigation and report as referee.

“A survey and map of the diversions and irrigated lands in the Susan River stream 

system and an investigation of record facts were made by the referee between August 25, 

1934 and March 15, 1935. A conference of the water users and their representatives was 

held at Susanville on March 18, 1935 to acquaint them with the data that had been 

collected by the Division. A program of future action for expeditio[u]s conduct of the 

investigation of [the] referee was discussed with the water users at the conference.

“In order to expedite an investigation by the referee of the use of water on Susan 

River and its tributaries, a tentative schedule for the distribution of waters during the 

1935 season was recommended to the water users. The plan of distribution . . . was 

agreed upon by all of the water users except the owners of the Ridenour, Satica, and 

Jenkins ranches . . . . The schedule of allotments was based upon an assumed duty of one 

cubic foot per second to eighty acres of irrigated land and the plan of distribution was to 

be operative during the 1935 season only.[9] The agreement contained a provision that 

the legal rights of the various parties should in no way be prejudiced by such distribution 

of water. It was further agreed that the conference with the Division should be continued 

 

9 “The term „duty of water‟ has been defined to mean the quantity of water 

necessary to properly irrigate a given tract of land.” (Witherill v. Brehm (1925) 74 

Cal.App. 286, 300.) 
8

until a date to be later fixed by the Division, said date to be subsequent to the end of the 

1935 season, when the results of the distribution under the agreement would be available. 

Water master service was furnished as an incident of the investigation from March 23 to 

October 17, 1935.” The 1935 agreement was based in part on the fact that it “appear[ed] 

from the data collected by [the] Division that it m[ight] be possible to work out an 

allocation of the waters of [the Susan River] stream system . . . that w[ould] be acceptable 

to all of [the] parties [to the suit] and afford the basis for a consent judgment in [the] 

proceedings.” 

The tentative allocation set forth in the 1935 agreement consisted primarily of 

water rights set forth in four schedules, each one of which was “[s]ubject to all of the 

foregoing rights and provisions” in the agreement.10 (Schedule 1 addressed rights on 

Willow Creek and its tributaries. Schedule 2 addressed rights on Hills Creek, Gold Run 

Creek, Lassen Creek, and Piute Creek. Schedule 3 addressed rights on the Susan River 

and Willow Creek. As particularly pertinent here, the paragraph of the agreement 

describing the water rights available under Schedule 3 (paragraph 20) contained the 

following language with respect to the Irrigation Company: “provided further, that the 

Lassen Irrigation Company shall be entitled to divert under their right hereinafter 

provided from the flow of Susan River in excess of 20 cubic feet per second measured 

above the confluence of said river with Willow Creek during the period from March 1st 

to July 1st, and from the flow of said river in excess of 5 cubic feet per second measured 

at said point at all other times.” Thus, the rights on the Susan River provided in Schedule 

 

10 Superior to these four schedules were various water rights on certain small 

tributaries, most of which allowed the specified users to divert the entire flow of those 

tributaries. Those particular water rights are not directly pertinent in the present action, 

and therefore we will not detail them further, except as they are described in the decree. 

We will refer to these rights as “special class” rights to distinguish them from the 

“interrelated” rights provided for in the schedules.
9

3 were subject to the Irrigation Company‟s right to divert, which was provided for later in 

the agreement. Although the 1935 agreement did not provide any detail on the origin of 

the minimum flow aspect of this provision, it appears the minimum flow requirements to 

which the Irrigation Company was subject in the 1935 agreement came from the 1893 

judgment in the Byers case (discussed above).

Schedule 4 of the 1935 agreement addressed additional rights on the Susan River 

beyond those in Schedule 3. The Irrigation Company appeared as the first user listed in 

Schedule 4, with a right to 72.50 cfs under the first of three priority classes in Schedule 4. 

The 72.50 cfs figure appears to have been derived by dividing the total acreage attributed 

to the Irrigation Company in the 1935 agreement (5,803.0) by the assumed duty of one 

cfs to 80 acres of irrigated land and rounding off to the nearest tenth. The paragraph of 

the agreement describing the water rights available under Schedule 4 (paragraph 21) 

specified that the “diversion of all allotments set forth in said Schedule 4 shall be limited 

to the amounts directly applied to beneficial use with the exception of the allotments to 

Lassen Irrigation Company, and to Clarence E. Dakin, et al., which may be diverted to 

storage.” 

The next paragraph of the 1935 agreement (paragraph 22) then specified as 

follows:

“Subject to the foregoing rights and provisions, Lassen Irrigation Company shall 

be entitled to impound the natural flow of Susan River and its tributaries in the McCoy 

Flat, Hog Flat, and Lake Leavitt Reservoirs . . . in an amount equal to the present 

combined capacity of said reservoirs, or approximately [¶] 39,290 acre feet per annum, 

[¶] said water to be used for domestic and stock watering purposes and for supplemental 

irrigation of the lands of the stockholders of said company . . . .” 

In February 1936, following the trial distribution under the 1935 agreement, the 

Division completed the hydrographic report. This report was “comprehensive. It 

consist[ed] of 195 pages of findings and conclusions and as many or more pages of 
10

schedules, tables and plates. It deal[t] with and recommend[ed] findings with respect to 

259 claimed rights of water users in the Susan River watershed.” (Fleming v. Bennett

(1941) 18 Cal.2d 518, 525.)

As the Division explained to the court in June 1937 in its “Report of Referee,” 

following the Division‟s production of its comprehensive hydrographic report, “[a]nother 

conference of the parties to the action and their representatives was called by the Division 

of Water Resources on March 31, 1936, at Susanville. A stipulation for judgment 

containing a plan of settlement of all of the water rights in the Susan River stream system 

was presented by said Division at the conference. The stipulation was based upon the 

1935 schedule of trial distribution with such modifications as appeared necessary from 

the additional information gathered in 1935.” 

Paragraphs 14 through 36 of the stipulation for judgment dealt with the special 

class rights that are not at issue in this proceeding. Paragraphs 37 through 40 dealt with 

the four schedules of interrelated rights, now numbered three through six.11 Schedule 3 

addressed rights on Willow Creek and on the Susan River below Willow Creek. Like 

Schedule 2 in the 1935 agreement, Schedule 4 in the stipulation addressed rights on Hills 

Creek, Gold Run Creek, Lassen Creek, and Piute Creek. Like Schedule 3 in the 1935 

agreement, Schedule 5 in the stipulation addressed rights on the Susan River and lower 

Willow Creek. The paragraph of the stipulation describing the water rights available 

under Schedule 5 (paragraph 39) contained the same language regarding the Irrigation 

Company‟s right to divert that was previously contained in the paragraph governing 

Schedule 3 in the 1935 agreement. In other words, the stipulation recognized the 

Irrigation Company‟s entitlement “to divert under their right hereinafter provided from 

 

11 Schedule 1 of the stipulation consisted of a description of the areas irrigated from 

the Susan River system and Schedule 2 consisted of a list of the various points of 

diversion.
11

the flow of Susan River in excess of 20 cubic feet per second measured above the 

confluence of said river with Willow Creek during the period from March 1st to July 1st, 

and from the flow of said river in excess of 5 cubic feet per second measured at said point 

at all other times.” 

Like Schedule 4 in the 1935 agreement, Schedule 6 in the stipulation addressed 

additional rights on the Susan River. Again, the Irrigation Company appeared as the first 

user listed in this schedule. Now, however, the Irrigation Company‟s right to divert 

under the schedule was limited to 36.65 cfs. (Indeed, the amounts of all the rights in 

Schedule 6 of the stipulation were reduced from the corresponding amounts in Schedule 

4 of the 1935 agreement.) Paragraph 40 of the stipulation continued to provide that all 

diversions under what was now Schedule 6 were limited to amounts directly applied to 

beneficial use with the exception of the allotments to the Irrigation Company and several 

other users, which could be diverted to storage. 

Like paragraph 22 of the 1935 agreement, paragraph 41 of the stipulation 

recognized the Irrigation Company‟s right to impound water in its three reservoirs, 

although the total capacity of those reservoirs was now estimated at 31,500 acre-feet. 

Because the stipulation for judgment provided for allocation of the waters of the 

Susan River system year-round, and not simply during the irrigation season as the 1935 

agreement had done, the stipulation contained a new paragraph (paragraph 12) governing 

seasons of use, to which each of the paragraphs discussing Schedules 3 through 6 

expressly referred.12 Paragraph 12 provided in relevant part as follows:

“[T]he season of diversion of water for general irrigation purposes under the rights 

hereinafter set forth in Schedules 3, 4, 5, and 6, shall be for continuous usage during the 

 

12 Specifically, each paragraph provided that the parties enumerated in the schedule 

were entitled to the right to use water in the system “during the seasons hereinbefore 

defined in paragraph 12.” 
12

period from March 1 to October 31, . . . and during said period all rights set forth in said 

schedules shall be superior to the storage rights hereinafter provided in paragraphs 22, 23, 

24, 36, 41, 42, and 43 . . . except further that diversion shall be made from the natural 

flow of Susan River by Lassen Irrigation Company between March 1 and July 1 of each 

and every year only from the flow of said river in excess of 20 cubic feet per second 

measured immediately above the confluence of said river with Willow Creek, and at all 

other times only from the flow of said river in excess of 5 cubic feet per second measured 

at said point.” 

As the Division further explained to the court in the “Report of Referee,” “[t]he 

parties to the proceedings desired to continue trial distribution of the waters of the Susan 

River stream system under the plan contained in the stipulation for judgment during 1936 

until the commencement of the haying season to afford a further demonstration of the 

operation thereof. Circulation of the stipulation for judgment was commenced on July 

15, 1936 among the various parties to the action for their approval. Said stipulation for 

judgment [was] subscribed by 170 parties to the proceedings.” 

As the Division observed, the Irrigation Company subscribed an identical copy of 

the stipulation, but with certain reservations. Those reservations were stated in pertinent 

part as follows: 

“Executed by the Lassen Irrigation Company upon the express condition that the 

exception contained in paragraph 12, commencing line 1, page six, shall be construed to 

give Lassen Irrigation Company the right to divert, or store up to the present capacity of 

its reservoirs, estimated at 31,500 acre-feet, from the natural flow of Susan River between 

March 1st and July 1st of each year when the flow of Susan River is in excess of 20 cubic 

feet per second, measured immediately above the confluence of said river with Willow 

Creek, and at all other times when the flow of said river is in excess of five cubic feet per 

second measured at said point, irrespective of and notwithstanding the allotments granted 

to users in Schedules 3, 5, and 6 . . . .” 
13

In the conclusions of law contained in the “Report of Referee,” the Division 

incorporated virtually verbatim the Irrigation Company‟s reservations to paragraph 12 of 

the stipulation for judgment, writing in pertinent part as follows:

“The intent of paragraph[] . . . 12 . . . of the stipulation for judgment as intended 

by the various signatory parties is more clearly set forth by use of the following language 

and said paragraph[] . . . 12 . . . should be construed as though written as follows:

“[¶] . . . [¶]

“12 [T]he season of diversion of water for general irrigation purposes under the 

rights hereinafter set forth in Schedules 3, 4, 5, and 6, shall be for continuous usage 

during the period from March 1 to October 31, . . . and during said period all rights set 

forth in said schedules shall be superior to the storage rights hereinafter provided in 

paragraphs 22, 23, 24, 36, 41, 42, and 43 . . . except further, that Lassen Irrigation 

Company shall be entitled to divert, or store up to the present capacity of its reservoirs, 

estimated at 31,500 acre-feet, from the natural flow of Susan River between March 1 and 

July 1 of each year when the flow of Susan River is in excess of 20 cubic feet per second, 

measured immediately above the confluence of said river with Willow Creek, and at all 

other times when the flow of said river is in excess of 5 cubic feet per second measured at 

said point, irrespective of and notwithstanding the allotments granted to users in 

Schedules 3 and 6 and to users of third priority class in Schedule 5.” 

“On April 18, 1940, the court rendered its final decree based in the main on the 

report filed by the referee.” (Fleming v. Bennett, supra, 18 Cal.2d at p. 520.) Thereafter, 

in August 1941, the Supreme Court affirmed the decree. (Id. at p. 530.)

The Susan River Decree

The major provisions of the Susan River decree, on which the resolution of this 

case turns, are as follows: Paragraph 7 of the decree explains that the water rights 

involved fall into four classifications. The first set of rights, addressed in paragraphs 22 

through 40 of the decree, are of “independent character and absolute priority” because 
14

under those rights “the respective parties take all of the flow of various springs and small 

tributaries and have for more than five years prior to the commencement of this action 

long continued to do so.” The decree describes these rights as “special class” water rights 

and characterizes them as “independent of each other” and as “superior in priority and in 

right to all other rights in the Susan River stream system.” 

The decree describes the other three sets of water rights as “interrelated” water 

rights. The first set of interrelated rights are “[t]hose which derive their water supply 

from Willow Creek” and the Susan River below Willow Creek. Those rights, which are 

“divisible into two priority classes,” are addressed in paragraph 45 and in Schedule 3 of 

the decree.13 

The second set of interrelated rights are “[t]hose upon Gold Run Creek, Lassen 

Creek, Piute Creek and their tributaries, which are three separate units.” Those rights, 

which are divided into priority classes within each unit, are addressed in paragraphs 41, 

42, 43, and 46 and in Schedule 4 of the decree. 

The third set of interrelated rights are “[t]hose upon Susan River and upon its 

tributaries above Piute Creek.” Those rights, which are divided into eight priority 

classes, are addressed in paragraphs 44 and 47 to 52 and in Schedules 5 and 6 of the 

decree. 

The Irrigation Company’s Rights Under The Decree

The Irrigation Company has a first priority class right under Schedule 6 of the 

decree. That schedule gives the Irrigation Company the right to divert 36.65 cfs at 

 

13 As with the stipulation for judgment, Schedule 1 of the decree consists of a 

description of the areas irrigated from the Susan River and its tributaries, and Schedule 2 

of the decree consists of a list of the various points of diversion from the river and its 

tributaries. 
15

Diversions 6, 7, 41, 55, and 239 to supply the company‟s 5,864.7 acres. Regarding that 

Schedule 6 right, paragraph 48 of the decree provides in relevant part as follows:

“Subject to all of the foregoing rights and provisions, the various parties 

hereinafter enumerated in Schedule 6 are entitled to rights in and to the use of the natural 

flow of Susan River and its tributaries during the seasons hereinbefore defined in 

paragraph 21, for domestic, stock-watering and irrigation purposes upon their respective 

lands as shown on said Division of Water Resources Map, and as hereinafter described 

under their respective names in Schedule 1, in accordance with the acreages to be 

supplied, priorities and quantities of water allotted, and through the diversions as set forth 

in said Schedule 6; . . . provided however, that diversion of all allotments set forth in said 

Schedule 6 shall be limited to the amounts directly applied to beneficial use with the 

exception of the allotments to Lassen Irrigation Company [and certain others] which may 

be diverted to storage.”14 

Among other things, paragraph 49 of the decree explains that “[a]ll rights in first 

priority class hereinafter set forth in said Schedule 6 are subject and inferior to all rights 

set forth in said Schedules 3, 4 and 5, but are superior in priority and in right to all other 

rights set forth in said Schedule 6.” 

In addition to its right to divert under Schedule 6, the Irrigation Company has a 

right to store water under paragraph 50 of the decree, as follows:

“Subject to the foregoing rights and provisions, Lassen Irrigation Company is 

entitled to impound the natural flow of Susan River and its tributaries in the McCoy Flat, 

 

14 Paragraph 48 also specifies that “diversion of the continuous flow equivalents of 

allotments provided in Schedule 6 may be made at twice the rates set forth in said 

Schedule 6 for one-half of the time during any 90-day period whenever water is available 

therefor.” In referring to the Irrigation Company‟s right to divert 36.65 cfs under 

Schedule 6, we necessarily intend to include the concomitant right to divert at twice that 

rate for half the time in any 90-day period when water is available to divert at the higher 

rate.
16

Hog Flat, and Lake Leavitt Reservoirs at points designated respectively on Division of 

Water Resources Map as Diversions 6, 7 and 239 as hereinafter described in Schedule 2, 

in an amount equal to the present combined capacity of said reservoirs, or approximately 

31,500 acre-feet per annum, during the season hereinbefore stated in paragraph 21, or as 

much of said amount of water as is impounded in said reservoirs . . . and thereafter 

withdrawn from said reservoirs during the period from January 1 to December 31 of each 

year and applied to beneficial use for domestic and stock-watering purposes and for the 

irrigation of the lands of the stockholders of said company as hereinafter described under 

the name of said company in Schedule 1.” 

Paragraph 21 of the decree, which is referenced in both paragraph 48 and 

paragraph 50 (and all of the other paragraphs in the decree granting water rights), and 

which lies at the heart of the dispute in this case, provides as follows:

“All diversion for domestic, stock-watering, municipal and industrial purposes 

under the rights hereinafter provided and for irrigation purposes under the rights of 

„special class‟ hereinafter set forth in paragraphs 22 to 40, inclusive, shall be for 

continuous usage without regard to season; the season of diversion of water for general 

irrigation purposes under the rights hereinafter set forth in Schedules 3, 4, 5 and 6, shall 

be for continuous usage during the period from March 1, to October 31, both dates 

inclusive, of each and every year and during said period all rights set forth in said 

schedules shall be superior to the storage rights hereinafter provided in paragraphs 41, 42, 

43, 44, 50, 51 and 52; except that no water shall be diverted through Diversions 106 to 

114, inclusive, (said diversions being located as hereinafter described in Schedule 2) 

between June 20 and August 1 of each and every year; except further, that Lassen 

Irrigation Company shall be entitled to divert, or store up to the present capacity of its 

reservoirs, estimated at 31,500 acre-feet, from the natural flow of Susan River between 

March 1 and July 1 of each year when the flow of said Susan River is in excess of 20 

cubic feet per second, measured immediately above the confluence of said river with 
17

Willow Creek, and at all other times when the flow of said river is in excess of 5 cubic 

feet per second measured at said point, irrespective of and notwithstanding the allotments 

granted to users in said Schedules 3 and 6 and to users of third priority class in said 

Schedule 5 . . . and that during the period from November 1 of each and every year to the 

last day of February of the succeeding year, both dates inclusive, the rights hereinafter 

provided for the storage of the waters of said Susan River and its tributaries shall be 

superior to all irrigation rights, from said stream system, but said storage rights shall at all 

times be inferior and subject to the rights from said stream system for domestic, stockwatering, municipal and industrial purposes of the parties hereto, who require water from 

said stream system for said domestic, stock-watering, municipal and industrial purposes.” 

The Present Dispute

Dow owns four ranches and leases one; together, they comprise the Dow Ranch, 

on which he raises cattle and grows grass hay, alfalfa hay, alfalfa seed, corn, pasture, and 

grains. As the owner/lessor of these lands, Dow possesses a number of water rights 

governed by the Susan River decree amounting to an aggregate flow of 26.38 cfs under 

Schedules 3, 5, and 6 of the decree.15 Dow‟s rights do not include any storage but 

instead are limited to diversion for direct application to beneficial use. All of Dow‟s 

points of diversion are downstream from the confluence of the Susan River and Willow 

Creek and thus below all of the Irrigation Company‟s points of diversion. 

In the spring of 2008, Dow believed he was not receiving his full allotment of 

water under the decree, so he contacted the watermaster to find out what was 

 

15 Specifically, Dow is entitled to 6.06 cfs under Schedule 3, 15.87 cfs under the 

third priority class in Schedule 5, and 4.45 cfs under the first priority class in Schedule 6.
18

happening.16 He was informed that the Irrigation Company was being allowed to divert 

water into Lake Leavitt even though the Irrigation Company was simultaneously 

releasing water from the reservoir for use by its shareholders. Believing this was not 

permitted by the decree, Dow filed a complaint with the watermaster. In his complaint, 

Dow asserted that the watermaster was “ „allowing [the Irrigation Company] to divert 

Schedule 6 water when Schedule 5 water is not at 100% allocation.‟ ” In essence, it was 

Dow‟s position that by diverting water into Lake Leavitt at the same time it was releasing 

water from the lake, the Irrigation Company was directly diverting water to beneficial use 

under its Schedule 6 right, which was in violation of the priorities in the decree since 

Schedule 5 users like Dow were not receiving all of their Schedule 5 water.

Ultimately, in May 2009, the watermaster formally denied Dow‟s claim. The 

watermaster interpreted paragraph 21 of the decree as allowing the Irrigation Company to 

either store or directly divert to beneficial use up to 31,500 acre-feet per year. Thus, the 

watermaster concluded that the Irrigation Company was not taking Schedule 6 water 

before all Schedule 5 users received their full allotment but instead was directly diverting 

water to beneficial use pursuant to its rights under paragraph 21 of the decree.

In December 2010, Dow filed a motion in the Fleming case (No. 4573) to interpret 

and enforce the decree. By his motion, Dow asked the court to confirm that: (1) the 

Susan River decree gives the Irrigation Company only two water rights, one for storage 

under paragraph 50 and one for direct diversion to beneficial use under Schedule 6; (2) 

nothing in the decree authorizes or empowers the Irrigation Company to divert its storage 

right under paragraph 50 for direct application to beneficial use; and (3) each year the 

Irrigation Company may fill each of its three reservoirs only once unless the Irrigation 

 

16 Before 2008, the Department of Water Resources provided watermaster services 

on the Susan River. In 2008, that role was assumed by the Honey Lake Valley Resource

Conservation District (the watermaster). 
19

Company uses water available under its Schedule 6 rights or water determined to be 

excess to the system. The main thrust of Dow‟s argument was that the watermaster erred 

in interpreting the decree to allow the Irrigation Company “to divert the continuous flow 

equivalent of 31,500 [acre feet] to be directly applied to a beneficial use.” 

The Irrigation Company opposed Dow‟s motion, contending that the decree 

“expressly allows [the Irrigation Company] to both divert or store Susan River water as 

long as certain flows are maintained in the Susan River.” 

The trial court sided with the Irrigation Company, concluding that the word 

“divert,” as used in paragraph 21, means “diversion for direct application [to] beneficial

use as opposed to storage.” Based on this interpretation, the court concluded that 

paragraph 21 allows the Irrigation Company to either divert for direct application to 

beneficial use or store up to 31,500 acre-feet of water annually, subject to the minimum 

flow requirements immediately above Willow Creek. 

Dow filed a timely notice of appeal from the order interpreting the decree. 

DISCUSSION

On appeal, Dow contends the trial court erred in construing the Susan River decree 

with respect to the Irrigation Company‟s rights. We agree.

“The same rules apply in ascertaining the meaning of a court order or judgment as 

in ascertaining the meaning of any other writing. [Citation.] The rule with respect to 

orders and judgments is that the entire record may be examined to determine their scope 

and effect . . . .” (L. A. Local etc. Bd. v. Stan’s Drive-Ins, Inc., supra, 136 Cal.App.2d at 

p. 94.) “Individual clauses or provisions of a judgment, just as in a contract or any other 

document, are not to be separately considered and construed but, on the contrary, the 

entire document is to be taken by its four corners and construed as a whole to effectuate 

the obvious intention.” (Lazar v. Superior Court (1940) 16 Cal.2d 617, 622.)

The main question here is whether, construing the Susan River decree as a whole, 

paragraph 21 of the decree can be reasonably understood as giving the Irrigation 
20

Company the right to directly divert to beneficial use up to 31,500 acre-feet of water 

annually provided the flow requirements immediately above Willow Creek are met. The 

answer to that question is “no.”

As Dow points out, construing paragraph 21 as giving the Irrigation Company a 

right to direct diversion not expressed elsewhere in the decree is inconsistent with the 

structure of the decree as a whole. As we have pointed out, paragraph 7 of the decree 

specifies that “the rights involved in [the underlying] action fall into four classifications” 

and then sets out those classifications as follows:

(a) Special class rights, as set forth in paragraphs 22 to 40;

(b) Interrelated rights on Willow Creek and the Susan River below Willow Creek, 

as set forth in paragraph 45 and Schedule 3;

(c) Interrelated rights on Gold Run Creek, Lassen Creek, Piute Creek and their 

tributaries, as set forth in paragraphs 41, 42, 43, and 46 and Schedule 4; and

(d) Interrelated rights on the Susan River and its tributaries above Piute Creek, as 

set forth in paragraphs 44 and 47 to 52 and Schedules 5 and 6. 

Similarly, paragraph 19 explains that special class rights are “set forth in 

paragraphs 22 to 40” and interrelated rights are “set forth in paragraphs 41 to 52 . . . and 

in Schedules 3, 4, 5 and 6.” 

It is reasonable to conclude that if the court had intended paragraph 21 to give the 

Irrigation Company a right to direct diversion not found elsewhere in the decree, the 

decree would have included paragraph 21 in the lists of paragraphs in paragraphs 7 and 

19. The fact that the decree does not do so supports Dow‟s position that paragraph 21 

was not intended to give the Irrigation Company a right to direct diversion not expressed 

elsewhere in the decree.

This understanding is consistent with paragraph 21‟s apparent role in the decree, 

when it is examined in connection with the remainder of the decree. In each paragraph in 

which water rights are granted or recognized, the decree specifies that the direct diversion 
21

or storage right can be exercised “during the season hereinbefore stated in paragraph 21.” 

Thus, for example, paragraph 48 specifies that “the various parties enumerated in 

Schedule 6 are entitled to rights in and to the use of the natural flow of Susan River and 

its tributaries during the seasons hereinbefore defined in paragraph 21.” As another 

example, paragraph 50 specifies that the Irrigation Company “is entitled to impound the 

natural flow of Susan River and its tributaries in the McCoy Flat, Hog Flat, and Lake 

Leavitt Reservoirs at points designated respectively on Division of Water Resources Map 

as Diversions 6, 7 and 239 as hereinafter described in Schedule 2, in an amount equal to 

the present combined capacity of said reservoirs, or approximately 31,500 acre-feet per 

annum, during the season hereinbefore stated in paragraph 21 . . . .” 

From these multiple references, it seems apparent that paragraph 21 was not 

intended to grant any water rights, but instead was intended to qualify or limit rights 

granted elsewhere in the decree -- particularly by specifying when those rights can be 

exercised. To that end, paragraph 21 begins by providing that “[a]ll diversion for 

domestic, stock-watering, municipal and industrial purposes under the rights hereinafter 

provided and for irrigation purposes under the rights of „special class‟ hereinafter set 

forth in paragraphs 22 to 40, inclusive, shall be for continuous usage without regard to 

season.” In other words, paragraph 21 first makes clear that there is no seasonal 

limitation on water diverted for domestic, stock-watering, municipal and industrial 

purposes or on water diverted for irrigation purposes by those with special class rights.

Next, paragraph 21 addresses irrigation rights for those with interrelated rights 

under Schedules 3, 4, 5, and 6 by specifying that “the season of diversion of water for 

[those rights] shall be for continuous usage during the period from March 1, to October 

31, both dates inclusive, of each and every year.” Paragraph 21 then establishes the 

relative priority between these interrelated irrigation rights and the various “storage rights 

hereinafter provided in paragraphs 41, 42, 43, 44, 50, 51 and 52” by specifying that from 

March through October -- the period during which the interrelated irrigation rights may 
22

be exercised -- those rights “shall be superior to” the storage rights. What then follow are 

a series of exceptions to the foregoing provisions on season of use and priority of 

irrigation rights over storage rights.

Turning to the second of those exceptions (beginning with “except further”), 

which is the one at issue here, we can see that construing that exception as granting the 

Irrigation Company a right to directly divert to beneficial use up to 31,500 acre-feet of 

water annually -- as the trial court did here -- is not only inconsistent with the overall 

structure of the decree and with paragraph 21‟s apparent role in that structure (as we have 

explained), but it is also inconsistent with the grammatical structure of the exception 

itself. The exception specifies that the “Irrigation Company shall be entitled to divert, or 

store up to the present capacity of its reservoirs, estimated at 31,500 acre-feet, from the 

natural flow of Susan River” at certain times subject to certain flow requirements 

immediately above Willow Creek. “While not controlling, punctuation is to be 

considered in the interpretation of a [document].” (Duncanson-Harrelson Co. v. 

Travelers Indemnity Co. (1962) 209 Cal.App.2d 62, 66.) Where, as here, a phrase “is set 

off from the rest of the main sentence by commas,” it “should be read as a parenthetical 

[phrase]” because such a grammatical structure “indicates an intent to segregate th[e] 

[phrase] from the rest of the sentence.” (Ibid.)

The Irrigation Company‟s (and the trial court‟s) reading of the language at issue 

fails to account for the use of the two commas to create a parenthetical phrase. The 

Irrigation Company focuses on the word “or,” which, as the Irrigation Company points 

out, “[i]n its ordinary sense . . . indicates an alternative such as „either this or that.‟ ” (Los 

Angeles County-U.S.C. Medical Center v. Superior Court (1984) 155 Cal.App.3d 454, 

461.) According to the Irrigation Company, by its use of the word “or” the decree 

“expressly gives [the Irrigation Company] the right to either divert or store the subject 

water.” But this argument fails to account for the two commas that set off the phrase “or 

store up to the present capacity of its reservoirs, estimated at 31,500 acre-feet” from the 
23

remainder of the sentence.17 Had the drafters of the decree intended the meaning that the 

Irrigation Company advances (and that the trial court found), there would have been no 

need for the comma before the word “or.”18 But they included that comma, and we need 

to give it meaning if we can. We do that by reading the phrase set off by commas as a 

parenthetical phrase. 

Dow contends that parenthetical phrase -- “or store up to the present capacity of its 

reservoirs . . .” -- should be construed as “a parenthetical phrase explaining the meaning 

of the word „divert.‟ ” Thus, Dow would have us read the phrase like this: Lassen 

Irrigation Company shall be entitled to divert, in other words, store up to the present 

capacity of its reservoirs, estimated at 31,500 acre-feet, from the natural flow of Susan 

River. This is a recognized use of the word “or.” (See, e.g., Black‟s Law Dict. (5th ed. 

1979) p. 987, col. 2 [noting that “or” can be “used to clarify what has already been said, 

and in such cases, means „in other words,‟ „to-wit,‟ or „that is to say‟ ”].) And this 

interpretation has the virtue of giving meaning to the two commas used to set off the 

phrase from the rest of the sentence by reading that phrase as parenthetical. In our view, 

however, this interpretation does not properly capture the intended meaning of the 

exception in paragraph 21.

First of all, if the drafters of the decree had intended this exception in paragraph 21 

to encompass only the Irrigation Company‟s right to store water in its reservoirs, there 

 

17 In fact, this parenthetical phrase contains its own internal parenthetical phrase, 

“estimated at 31,500 acre-feet,” which is itself set off by commas. This internal 

parenthetical phrase serves to provide further detail as to what “the present capacity of 

[the Irrigation Company‟s] reservoirs” was at the time of the decree.

18 The comma following the word “acre-feet” still would have been needed, 

however, because it would still serve as the closing comma for the internal parenthetical 

phrase, “estimated at 31,500 acre-feet,” even if there were no broader parenthetical 

phrase beginning with the word “or.”
24

would have been no need to use the words “divert” or “or,” or to use two commas to 

create a parenthetical phrase. Instead, the provision could have simply provided that 

Lassen Irrigation Company shall be entitled to store up to the present capacity of its 

reservoirs, estimated at 31,500 acre-feet, from the natural flow of Susan River. Or the 

drafters could have provided that the Irrigation Company “shall be entitled to divert to 

storage up to the present capacity of its reservoirs . . . .” The least likely explanation for 

the language the drafters used is the one Dow advances -- that they intended the word 

“divert” to be the equivalent of “store up to the present capacity of its reservoirs, 

estimated at 31,500 acre-feet.”

While we have concluded that neither the interpretation offered by the Irrigation 

Company nor the interpretation offered by Dow is satisfactory, there is a third option that 

recognizes the use of the two commas to create a parenthetical phrase (which the 

Irrigation Company‟s interpretation does not do) but at the same time gives the word “or” 

its more ordinary meaning (as a choice between alternatives) and does not result in an 

artificial explanation for the use of the parenthetical phrase (which Dow‟s interpretation 

does). This alternate interpretation treats the parenthetical phrase “or store up to the 

present capacity of its reservoirs . . .” as an alternative to the word “divert.” Reading the 

clause in that manner results in the following understanding of the operative exception in 

paragraph 21: “[B]etween March 1 and July 1 of each year when the flow of [the] Susan 

River is in excess of 20 cubic feet per second, measured immediately above the 

confluence of said river with Willow Creek, and at all other times when the flow of said 

river is in excess of 5 cubic feet per second measured at said point,” the Irrigation 

Company “shall be entitled to” (1) “divert . . . from the natural flow of Susan River” “or” 

(2) “store up to the present capacity of its reservoirs, estimated at 31,500 acre-feet” “from 

the natural flow of Susan River.”

Read in this manner, paragraph 21 does not grant the Irrigation Company the right 

to directly divert to beneficial use an amount of water equal to the capacity of its 
25

reservoirs, as the trial court concluded. This makes particular sense in light of the fact 

that nowhere else in the decree is a right to direct diversion to beneficial use expressed in 

acre-feet. An acre-foot is “the volume (as of irrigation water) that would cover one acre 

to a depth of one foot.” (Merriam-Webster‟s Collegiate Dict. (11th ed. 2006) p. 11, col. 

2.) Thus, it is a measure of water that is not moving. Indeed, the decree consistently uses 

acre-feet to describe the amount of water that may be stored in a reservoir. Moving

water, on the other hand -- that is, flowing water that is diverted for direct application to 

beneficial use -- is consistently described in the decree in terms of cubic feet per second.

While paragraph 21 does not specify how many cubic feet per second of water the 

Irrigation Company is “entitled to divert . . . from the natural flow of Susan River,” that 

omission is easily explained in a manner consistent with our understanding of paragraph 

21‟s role in the decree. Because paragraph 21 does not grant any water rights, but instead 

only qualifies or limits water rights granted elsewhere in the decree, the reference to the 

Irrigation Company‟s right to “divert . . . from the natural flow of Susan River” must be a 

reference to a right to direct diversion to beneficial use granted somewhere else in the 

decree. Because the Irrigation Company has only one right to direct diversion to 

beneficial use under the decree -- the right provided in Schedule 6 -- it follows that the 

reference in paragraph 21 to the Irrigation Company‟s right “to divert” must be a 

reference to the Irrigation Company‟s Schedule 6 right.

Understood in this manner, the exception in paragraph 21 under consideration 

serves to specify when the Irrigation Company may exercise its water rights under both 

Schedule 6 and paragraph 50 of the decree. Specifically, notwithstanding the general 

provisions in paragraph 21 that the interrelated irrigation rights in Schedules 3, 4, 5 and 6 

may be exercised only from March through October and that during that period those 

irrigation rights are superior to any storage rights in the decree, the Irrigation Company 

can either (1) divert under its Schedule 6 right, at up to 36.65 cfs, or (2) store up to the 

capacity of its reservoirs, estimated at 31,500 acre-feet, between March 1 and July 1 
26

when the flow of the Susan River is in excess of 20 cfs immediately above Willow Creek 

and at all other times when the flow is in excess of 5 cfs.19

This interpretation of paragraph 21 of the decree is supported by the genesis of the 

language we are called on to interpret. To explain why, we need to delve back into some 

of the background facts set forth above.

Recall that as far back as 1893, it was recognized by the judgment in the Byers

case that, at least as against the plaintiffs in that case, the Irrigation District‟s 

predecessors in interest had the right to divert to storage in their reservoirs as long as they 

maintained the 20 cfs/5 cfs minimum flows at Willow Creek. Now, fast forward to 1935. 

The Division, acting as referee in the stream adjudication of all rights in the Susan River 

stream system, recommended a plan for distribution of the water for the 1935 irrigation 

season based on an assumed duty of one cfs for every 80 acres of irrigated land, and 

virtually all of the water users agreed to that plan. 

Under the 1935 agreement, certain rights on the Susan River and Willow Creek 

were set forth in Schedule 3. The paragraph governing that schedule specifically noted 

the Irrigation Company‟s entitlement “to divert under their right hereinafter provided” as 

long as the minimum flows from the Byers judgment were maintained at Willow Creek. 

Schedule 4 in the 1935 agreement addressed additional rights on the Susan River, 

including a right for the Irrigation Company to directly divert 72.50 cfs under the first 

priority class in that schedule. The Irrigation Company was also entitled to divert this 

water to storage. Immediately thereafter, paragraph 22 of the 1935 agreement set forth 

the Irrigation Company‟s right to store water up to the capacity of its reservoirs.

 

19 It should be noted that under the terms of paragraph 48, the Irrigation Company is 

entitled to divert water under its Schedule 6 right to storage as an alternative to diverting 

that water for direct application to beneficial use. 
27

At this point, we pause to note that the paragraph governing Schedule 3 in the 

1935 agreement contained an ambiguity with respect to the Irrigation Company, because 

it referred to the Irrigation Company‟s entitlement “to divert under their right hereinafter 

provided” (italics added) as long as the required minimum flows were maintained at 

Willow Creek. In fact, the 1935 agreement thereafter contained two diversion rights for 

the Irrigation Company: the right to divert 72.50 cfs either for direct application to 

beneficial use or to storage under Schedule 4 and the right to divert to storage up to the 

capacity of its reservoirs under paragraph 22. The agreement was ambiguous because it 

was not clear which of these rights the paragraph governing Schedule 3 in the 1935 

agreement was meant to refer to.

With that noted, we move on to the stipulation for judgment. In the paragraph 

describing the water rights under Schedule 5 (Schedule 3 in the 1935 agreement), the 

same use of the singular “right hereinafter provided” appeared with respect to the 

Irrigation Company, even though the stipulation thereafter recognized the Irrigation 

Company‟s right to direct diversion (or diversion to storage) under Schedule 6 and the 

Irrigation Company‟s right to divert to storage under paragraph 41. Additionally, the 

new paragraph regarding seasons of use (paragraph 12) contained a similar provision 

recognizing that “diversion shall be made . . . by Lassen Irrigation Company” subject to 

the minimum flow requirements at Willow Creek. Like the language in the paragraph 

governing Schedule 5, this reference to a singular “diversion” was ambiguous, because 

the stipulation thereafter recognized that the Irrigation Company had two diversion rights 

-- the right under Schedule 6 and the right under paragraph 41.

As we have noted, the Irrigation Company signed the stipulation for judgment 

with a specific reservation regarding the construction of paragraph 12, and in its “Report 

of Referee” the Division proposed to the court that the language of the Irrigation 

Company‟s reservation be used virtually verbatim for the seasons of use paragraph in the 

judgment. Instead of simply providing that the Irrigation Company‟s “diversion” would 
28

be subject to the minimum flow requirements at Willow Creek, the new language for the 

seasons of use paragraph provided that the Irrigation Company was “entitled to divert, or 

store up to the present capacity of its reservoirs, estimated at 31,500 acre-feet,” subject to 

the minimum flow requirements at Willow Creek, and the new language provided that 

this entitlement was “irrespective of and notwithstanding the allotments granted to users 

in Schedules 3 and 6 and to users of third priority class in Schedule 5.”20

By specifically referring to the Irrigation Company‟s right “to divert, or store up to 

the present capacity of its reservoirs, . . .” we believe this revision of the seasons of use 

paragraph was intended to make clear reference to the two water rights set forth thereafter 

for the Irrigation Company, which the singular word “diversion” did not previously do. 

In other words, it appears the Irrigation Company wanted to be sure it was understood 

that the Irrigation Company was entitled to operate under the exception set forth in 

paragraph 21 both in exercising its direct diversion rights under Schedule 6 as well as in 

exercising its right to divert to storage under paragraph 50.

This understanding of the language that the Irrigation Company proposed for use 

in paragraph 21 is bolstered by what happened to the reference to the Irrigation Company 

in the paragraph governing Schedule 5 between the stipulation for judgment and the 

decree itself. As we have noted, the stipulation for judgment referred to the Irrigation 

Company‟s entitlement “to divert under their right hereinafter provided . . . .” The 

decree, however, refers to the Irrigation Company‟s entitlement “to divert under their 

rights hereinafter set forth in paragraph 50 . . . .” The significance of this change is that 

the drafters of the decree found a way, in relation to Schedule 5, to refer only to the 

Irrigation Company‟s right to divert to storage in paragraph 50. Had the drafters intended 

 

20 The only change from the Irrigation Company‟s original proposal was to refer 

only to the third priority class in Schedule 5 rather than to all of Schedule 5 as the 

Irrigation Company had proposed.
29

the exception in paragraph 21 to have a similar limited scope, they reasonably could have 

been expected to use the same language. In other words, they could have written the 

exception in paragraph 21 to provide that the Irrigation Company shall be entitled to 

divert under their rights hereinafter set forth in paragraph 50 from the natural flow of 

Susan River. The fact that they did not do so, but instead referred to the Irrigation 

Company‟s entitlement “to divert, or store up to the present capacity of its reservoirs,” 

supports the conclusion that the drafters specifically intended to refer to something more 

than just the Irrigation Company‟s storage rights under paragraph 50 by using this 

language. We believe the something more the drafters intended to refer to was the 

Irrigation Company‟s right to divert directly to beneficial use (or storage) under Schedule 

6. Thus, the genesis of the language in paragraph 21 supports our construction of that 

language to mean that, as long as the minimum flows at Willow Creek are met, the 

Irrigation Company can either (1) divert under its Schedule 6 right, at up to 36.65 cfs, or 

(2) store up to the capacity of its reservoirs, estimated at 31,500 acre-feet. 

Significantly, the exception in paragraph 21 pertaining to the Irrigation Company 

also specifies that the Irrigation Company‟s rights to divert and store water subject to the 

flow requirements immediately above Willow Creek are “irrespective of and 

notwithstanding the allotments granted to users in said Schedules 3 and 6 and to users of 

third priority class in said Schedule 5.” This provision is significant because essentially it 

gives the Irrigation Company‟s rights a different priority than they would otherwise have 

under the terms of the decree. To truly understand the effect of this altered priority, it is 

necessary to take a closer look at the schedules in the decree.

First, it must be noted that the exception in paragraph 21 pertaining to the 

Irrigation Company‟s rights does not mention Schedule 4. This makes sense because, as 

we have noted, Schedule 4 involves rights on Gold Run Creek, Lassen Creek, and Piute 

Creek, which are all tributary to the Susan River. Because the Irrigation Company‟s 

points of diversion are all on the Susan River itself, the Irrigation Company‟s diversion of 
30

water from the river can have no direct effect on those water users entitled to divert under 

Schedule 4, because those users take their water from the system before it ever reaches 

the Susan River.

Users (like Dow) entitled to water under Schedules 3, 5, and 6, or at least some of 

them, stand in a different position with respect to the Irrigation Company because their 

water rights can be affected by the Irrigation Company‟s exercise of its rights.21 As we 

have seen, however, the exception in paragraph 21 pertaining to the Irrigation Company 

entitles the Irrigation Company to exercise its rights “irrespective of and notwithstanding 

the allotments granted to users in said Schedules 3 and 6 and to users of third priority 

class in said Schedule 5.” The only users not mentioned in this clause are those in the 

first and second priority classes in Schedule 5. A review of Schedule 5 reveals that the 

first and second priority classes in that schedule encompass points of diversion ranging 

from Diversion 2 to Diversion 54. And an examination of the map included with the 

hydrographic report shows that all of those points of diversion lie along the Susan River 

above the confluence of the river with Willow Creek, with Diversion 54 being the last 

point of diversion on the river before Willow Creek.

What this means is that, provided the required flow immediately above Willow 

Creek is met, the exception in paragraph 21 pertaining to the Irrigation Company allows 

the Irrigation Company to exercise its rights to direct diversion under Schedule 6 or to 

storage under paragraph 50 irrespective of the allotments granted to all other users on the 

Susan River except for those with points of diversion above the confluence with Willow 

Creek. In essence, then, the Irrigation Company must leave enough water in the river: 

 

21 This is not true of users under Schedule 3 who take their water from Willow Creek 

above its confluence with the Susan River, nor is it true of the user entitled to divert from 

the Susan River at Diversions 2, 3, 4, and 5, because those points of diversion all lie 

above the Irrigation Company‟s first point of diversion (Diversion 6) at McCoy Flat 

Reservoir. 
31

(1) to satisfy the users along the river from immediately below the McCoy Flat and Hog 

Flat Reservoirs down to the confluence of the river with Willow Creek (i.e., those users 

in the first and second priority classes in Schedule 5); and (2) to meet the minimum flow 

requirements immediately above Willow Creek. If it does so, then the Irrigation 

Company can divert up to 36.65 cfs for direct application to beneficial use (or for 

storage) under its Schedule 6 right or it can store up to the capacity of its reservoirs, 

estimated at 31,500 acre-feet, under paragraph 50.

Based on this reading of the Susan River decree, we conclude the trial court erred 

in construing the decree with respect to the Irrigation Company‟s rights. Specifically, the 

trial court was incorrect in its conclusion that under paragraph 21 the Irrigation Company 

has a right to direct diversion to beneficial use that is measured by the capacity of its 

reservoirs, estimated at 31,500 acre-feet. The Irrigation Company‟s only right to divert 

for direct application to beneficial use is its right under Schedule 6, which is measured in 

cubic feet per second (36.65).

As we have explained, however, the Irrigation Company‟s right to divert under 

Schedule 6 is subject to the terms of paragraph 21, and those terms give the Irrigation 

Company‟s Schedule 6 right greater priority than it would otherwise have. For example, 

as long as the minimum flow requirements immediately above Willow Creek are satisfied 

and the Irrigation Company leaves enough additional water in the river to satisfy the 

users on the river above the confluence with Willow Creek, the Irrigation Company can 

directly divert up to 36.65 cfs under its Schedule 6 right irrespective of other users like 

Dow with rights under the third priority class in Schedule 5 and the first priority class in 

Schedule 6. And this is true even if the Irrigation Company has already stored all the 

water it is entitled to store under paragraph 50 of the decree. That means there may be 

times when Dow is not receiving all of the water to which he is entitled under Schedules 

5 and 6 but the Irrigation Company is able to divert water into an otherwise full Lake 

Leavitt at the same time it is simultaneously releasing water from the reservoir for use by 
32

its shareholders. In such an instance, the water passing through the lake is water 

available to the Irrigation Company under its Schedule 6 right, which by the terms of 

paragraph 21 takes priority over Dow‟s rights.

Dow challenges this aspect of our interpretation of the decree on the ground that it 

conflicts with various other provisions in the decree relating to the issue of priority. We 

address (and reject) each of those arguments in turn.

First, he contends our interpretation of paragraph 21 conflicts with paragraph 48 

and Schedule 6. As Dow points out, paragraph 48 provides that the rights of the parties 

enumerated in Schedule 6 are “[s]ubject to all of the foregoing rights and provisions” --

i.e., subject to the rights of the parties enumerated in Schedules 3, 4, and 5. Dow also 

observes that paragraph 48 provides that “all allotments set forth in said Schedule 6, 

which are within the same priority class, are equal in priority and corelative in right.” 

Finally, Dow points out that Schedule 6 itself bears the title, “ALLOCATIONS TO 

VARIOUS WATER USERS FROM SUSAN RIVER STREAM SYSTEM SUBJECT 

TO ALLOCATIONS SET FORTH IN SCHEDULES 3, 4, and 5.” In his view, all of 

these provisions serve to establish that Schedule 6 first class priority rights are inferior to 

rights under Schedules 3, 4, and 5, and equal to other Schedule 6 first class priority rights, 

and therefore our interpretation of the exception in paragraph 21 as giving altered priority 

to the Irrigation Company‟s rights under Schedule 6 creates a conflict in the decree.

This is not so, however, because, as even Dow has recognized, paragraph 48 

provides that the rights of the parties enumerated in Schedule 6 are “[s]ubject to all of the 

foregoing rights and provisions.” Among those “rights and provisions” are those set out 

in paragraph 21. Thus, paragraph 48 and Schedule 6 are expressly subject to whatever 

altered priority paragraph 21 creates for the Irrigation Company‟s rights, and therefore 

there is no conflict.

With respect to the decree‟s structure and schedules overall, Dow contends our 

interpretation of “[t]he Decree‟s „altered priority‟ is inconsistent with the numbered 
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schedules and the priorities established between those schedules.” In effect, however, 

this argument adds nothing to Dow‟s previous argument. Inasmuch as all of the 

paragraphs describing the interrelated rights under the schedules begin with the phrase 

“[s]ubject to all of the foregoing rights and provisions,” all of those interrelated rights are 

subject to the provisions of paragraph 21, and whatever altered priority those provisions 

may impose.

Pointing to paragraph 49, however, Dow contends that our interpretation of 

paragraph 21 creates a conflict that cannot be reconciled like those we have just discussed 

because paragraph 49 does not begin with the same phrase. Paragraph 49 of the decree 

provides in pertinent part that “[a]ll rights in first priority class hereinafter set forth in . . . 

Schedule 5 are superior in priority and in right to all other rights set forth in said 

Schedules 5 and 6; all rights in second priority class hereinafter set forth in said Schedule 

5 are subject and inferior to said rights in first priority class set forth in said Schedule 5, 

but are superior in priority and in right to all other rights set forth in said Schedules 5 and 

6; and all rights in third priority class hereinafter set forth in said Schedule 5 are inferior 

and subject to all other rights set forth in said Schedule 5, but are superior in priority and 

in right to all other rights set forth in said Schedule 6. All rights in first priority class 

hereinafter set forth in said Schedule 6 are subject and inferior to all rights set forth in 

said Schedules 3, 4 and 5, but are superior in priority and in right to all other rights set 

forth in said Schedule 6; all rights in second priority class hereinafter set forth in said 

Schedule 6 are subject and inferior to said rights in first priority class set forth in said 

Schedule 6 and all rights in Schedules 3, 4, and 5, but are superior in priority and in right 

to all other rights set forth in said Schedule 5; and all rights in third priority class 

hereinafter set forth in said Schedule 6 are subject and inferior to all other rights set forth 

in said Schedule 6 and all rights set forth in said Schedules 3, 4, and 5.” 

As Dow observes, “[i]n this manner, Paragraph 49 establishes that the water rights 

in the lower numbered schedules are superior to the higher numbered schedules,” and our 
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interpretation of paragraph 21 subverts that ordering of priorities to some extent by 

giving the Irrigation District‟s Schedule 6 rights higher priority than other Schedule 6 

rights. We acknowledge that this is so, but we are nonetheless unpersuaded from our 

interpretation of paragraph 21 because to conclude otherwise would require us to accept 

Dow‟s construction of the exception clause in paragraph 21, which we have rejected 

already. It is also worth noting that paragraph 49 had no equivalent in the stipulation for 

judgment. Therefore, it appears that in preparing the final decree, the drafters decided 

that a new paragraph more explicitly describing the relationship between the various 

schedules and priority classes would be helpful. Inasmuch as paragraph 49 was an 

attempt to summarize the priority structure of the interrelated rights in the decree, it made 

sense not to begin that paragraph with the phrase, “[s]ubject to the foregoing rights and 

provisions,” because paragraph 49 was an attempt to describe more explicitly the 

interrelation of those rights and provisions and thus was not itself subject to them.

What was missing from paragraph 49, however, was recognition that the exception 

clause in paragraph 21 altered the priorities of the schedules with respect to the Irrigation 

Company. This may have been a simple oversight in the final drafting of the decree. In 

any event, we do not believe this paragraph‟s failure to specifically mention that the 

Irrigation Company‟s Schedule 6 right was subject to altered priority under the provisions 

of paragraph 21 justifies construing paragraph 21 in the manner Dow proposes. In the 

end, taking everything we have discussed into account, and for all of the reasons 

previously set forth, we simply cannot accept Dow‟s construction of the exception in 

paragraph 21 as referring only to the Irrigation Company‟s storage rights under paragraph 

50.

Dow also argues that our interpretation of paragraph 21 creates a conflict with 

paragraph 47, which governs Schedule 5 rights. Specifically, Dow argues that the 

exception in that paragraph relating to the Irrigation Company gives priority only to the 

Irrigation Company‟s storage rights under paragraph 50, and not to the Irrigation 
35

Company‟s direct diversion rights under Schedule 6. That is true, but we have explained 

already how this only serves to bolster our interpretation of the decree, because if the 

drafters had intended the exception in paragraph 21 to refer only to the Irrigation 

Company‟s storage rights under paragraph 50, they could have used the same language in 

paragraph 21 that they used in paragraph 47, but they did not do so.

Dow contends our construction of the decree renders portions of paragraph 21 

meaningless because our construction “fails to give effect to the parenthetical phrase after 

the word „divert‟ ” and “construes the „except further‟ clause . . . in a manner that makes 

it not an exception to the general premise that irrigation rights are superior to storage.” 

We are not persuaded by either of these arguments.

First, with respect to the parenthetical phrase, we absolutely do give effect to it. 

As we have explained, under our interpretation that phrase operates as an alternative to 

the word “divert.” Indicating an alternative is the most “ordinary sense” of the word 

“or.” (Los Angeles County-U.S.C. Medical Center v. Superior Court, supra, 155 

Cal.App.3d at p. 461.) Dow is simply wrong in his assertion that a phrase operates as a 

parenthetical only if it is construed “to clarify and explain the preceding term.” 

Second, with respect to Dow‟s assertion that our interpretation does not make the 

exception clause “an exception to the general premise that irrigation rights are superior to 

storage,” again we are unpersuaded. As we have explained, we believe the history of the 

operative language shows that that language was inserted into the seasons of use 

paragraph at the behest of the Irrigation Company to clarify that it could exercise its right 

to direct diversion under Schedule 6 and/or its right to storage under paragraph 50 as long 

as the minimum flow requirements were met immediately above Willow Creek, subject 

only to the rights under the first and second priority classes in Schedule 5. Whether the 

language the Irrigation Company proposed serves to make the exception as a whole 

operate as an exception to the narrow premise that irrigation rights are superior to storage 

rights -- which is only one of the premises in paragraph 21 -- is not dispositive to us. Too 
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much else, as set forth above, weighs in favor of construing the language the way we 

have. Even as we have interpreted it, the exception clause relating to the Irrigation 

Company does express an exception to the seasons of use aspect of paragraph 21 and thus 

does not (contrary to Dow‟s argument) render “the phrase „except further‟ meaningless.” 

Although we reject all of Dow‟s challenges to our interpretation of the decree, we 

nonetheless conclude that the trial court did not correctly interpret the decree, and we 

reverse the trial court‟s order and remand for the court to enter a new order consistent 

with our interpretation as set forth in this opinion.

DISPOSITION

The order is reversed and the case is remanded to the trial court to enter a new 

order consistent with this opinion. Dow shall recover his costs on appeal. (Cal. Rules of 

Court, rule 8.276(a)(1).)

 ROBIE , Acting P. J.

We concur:

 BUTZ , J.

 MAURO , J.