No. 95-377

IN THE SUPREME COURT OF THE STATE OF MONTANA

1995

IN THE MATTER OF THE ADJUDICATION OF THE EXISTING RIGHTS TO THE USE

OF ALL THE WATER, BOTH SURFACE AND UNDERGROUND WITHIN THE CLARK

FORK RIVER DRAINAGE AREA ABOVE THE BLACKFOOT RIVER, INCLUDING ALL

TRIBUTARIES OF THE CLARK FORK RIVER ABOVE THE BLACKFOOT RIVER

IN DEER LODGE, GRANITE, LEWIS AND CLARK, MISSOULA, POWELL, AND

SILVER BOW COUNTIES, MONTANA.

CLIFFORD E. GRAVELEY,

Claimant and Appellant,

and GRAVELEY BLACK MOUNTAIN RANCH, CLIFFORD E. GRAVELEY, JAMES

BIGNELL, DAN M. GRAVELEY, JIM C. QUIGLEY, WILLIAM MCINTOSH,

OLIVE MCDONALD, MONTANA DEPARTMENT OF FISH, WILDLIFE & PARKS,

Objectors and Respondents.

APPEAL FROM: Montana Water Court, Clark Fork Division! Clark

Fork River Above the Blackfoot River Basin (76G)

The Honorable Ted Mizner, Judge presiding.

COUNSEL OF RECORD:

For Appellant:

Peter C. Pauly, Helena, Montana

(Clifford E. Graveley)

For Respondents:

G. Steven Brown, Attorney at Law, Montana Dept.

of Fish, Wildlife & Parks, Helena, Montana;

John Bloomquist, Attorney at Law, Helena, Montana

(Graveley Black Mountain Ranch);

Cindy E. Younkin, Attorney at Law, Bozeman,

Montana (Jim C. Quigley);

David L. Pengelly, Attorney at Law, Missoula,

Montana (James Bignell and Dan Graveley)

For Amicus Curiae:

Submitted o n Briefs: December

December

7, 1995

21, 1995
Justice Terry N. Trieweiler delivered the opinion of the Court.

Clifford E. Graveley filed a statement of claim for one-half

of an existing water right of 350 miners inches (8.75 cfs) from

Three Mile Creek in Powell County. Olive McDonald, Jim C. Quigley,

Clifford E. Graveley, William McIntosh, Dan M. Graveley, James E.

Bignell, the Montana Department of Fish, Wildlife and Parks, and

the Graveley Black Mountain Ranch (Respondents) objected to his

claim. On March 17, 1994, following a hearing on respondents'

objections, the Water Master entered a report in which he found

that Clifford Graveley's water right had been abandoned by over

fifty years of nonuse, and in which he concluded that Graveley's

water right claim should be terminated, and that the water right

should not appear in the preliminary decree for the Clark Fork

River above the Blackfoot River Basin. Graveley objected to the

Water Master's report. On April 4, 1995, the Water Court, Clark

Fork Division, entered an opinion and order in which it adopted the

Water Master's report and terminated Graveley's water right.

Clifford Graveley appeals the Water Court's order. We affirm the

order of the Water Court.

There is one issue on appeal:

Did the Water Court err when it found that Graveley's water

right, appropriated and decreed for mining purposes, had been

abandoned by a long period of nonuse?

FACTUAL BACKGROUND

Pursuant to the statewide adjudication of water rights,

Clifford E. Graveley filed a claim for an existing water right to

2
divert 175 miners inches of water (4.375 cfs) from Three Mile

Creek, a tributary of the Little Blackfoot River. The means of

conveyance of Graveley's claim was the Ohio Ditch, which diverted

water southeast from Three Mile Creek to the Ophir Mining District.

The Ohio Ditch is the only ditch from Three Mile Creek capable of

serving Graveley's patented mining claims.

Graveley's water right claim, identified as 76G-W-090819-00,

was based on a right decreed to the Ophir Gold Mining Company in

1913 with a claimed priority date of June 1, 1865. The Ophir Gold

Mining Company's right was specifically decreed "for the purpose of

placer mining in Ophir Gulch and Carpenter Bar and beyond and

without the watershed of said Three Mile Creek." That right was

transferred four times between 1939 and 1959. On July 6, 1959,

Graveley received the water right as part of a conveyance of

several placer claims, water rights and ditch rights. Immediately

thereafter, Graveley deeded a one-half interest in those mining

claims and water rights to William L. McIntosh.

On May 17, 1985, a water right for claim 76G-W-090819-00 was

granted to Graveley as part of a temporary preliminary decree for

the Clark Fork River Basin above the Blackfoot River (Basin 76G).

Respondents filed objections to Graveley's claim on the basis that

the claim had been abandoned through nonuse. On December 14, 1993,

a Water Master conducted a hearing to consider the respondents'

objections to Graveley's claim.

Although there was some testimony at the hearing that limited

mining activity took place after 1913 in the Ophir, Snowshoe, and

3
Carpenter Creek Mining District, in which Graveley's claim is

located, there was no dispute that that mining did not involve use

of Graveley's claimed water right. In fact, the parties agreed

that Graveley's water right had not been used at all for at least

fifty years prior to June 1, 1973. During this period of time, no

maintenance was done to the Ohio Ditch or its headgate on Three

Mile Creek. In fact, testimony revealed that at the time of the

hearing the headgate was approximately 150 feet from the creek and

was in a state of total disrepair.

Testimony at the hearing also revealed that Graveley had done

nothing to use the water right himself. Graveley testified that

his intention when he purchased the property associated with the

water right claim was for ranching. Although Graveley did state

that he was aware of the mining claims and the water rights

associated with them, he admitted that he is not a miner and had no

intention of mining the area himself. Graveley did not give a

reason for the long period of nonuse of his claim except for an

apparent lack of economic viability to warrant mining in the area.

Although the Water Master noted, based on the testimony of

Graveley's expert witnesses, that the Ophir Mining District might

have some potential for future mining activity, he concluded that

the evidence of a use of a right after July 1, 1973, is not

relevant to the determination of existing water rights. Therefore,

based on the testimony at trial, the Water Master found that there

was a rebuttable presumption that Graveley's water right had been

abandoned by a fifty-year period of nonuse. The Water Master

4
further found that Graveley had failed to give a reason for nonuse

that would overcome the presumption of abandonment. The Master

therefore held that Graveley's water right claim should be

terminated and that the claim should not appear in the preliminary

decree for the Clark Fork River above the Blackfoot River Basin.

Graveley objected to the Water Master's report and appealed the

decision to the Water Court, Clark Fork Division.

On appeal, the Water Court held that substantial credible

evidence supported the Water Master's findings of fact and that he

correctly applied the law. The court therefore denied Graveley's

objection to the Water Master's report and adopted the Water

Master's findings regarding Graveley's abandonment of the mining

water right. On the basis of these findings, the Water Court

ordered that water right claim 76G-W-090819-00 is terminated and

shall not appear in the preliminary decree of the Clark Fork River

above the Blackfoot River Basin (Basin 76G).

DISCUSSION

Did the Water Court err when it found that Graveley's water

right, appropriated and decreed for mining purposes, had been

abandoned by a long period of nonuse?

Whether a water right has been abandoned is a question of

fact. Section 89-802, RCM (applicable here; repealed in 1973); Inre

Adjudication of Water Rights of the Clark Fork River ( 1992 ) , 2 54 Mont. 11, 14, 633

P.2d 1120, 1122. We review a water court's findings of fact to

5
determine whether they are clearly erroneous. InreClarkForkRiver, 833

P.2d at 1122.

There are two essential elements for the abandonment of a

water right: nonuse of the water associated with the water right

and intent to abandon the water right. In re Clark Fork River, 0 3 3 P .2 d

at 1123. In 79Ranch,Inc.v.Pitsch (1983), 204 Mont. 426, 666 P.2d 215,

we set forth the criteria for determining whether a water right has

been abandoned. The objectors have the initial burden of proving

that a water right has not been used for a sufficiently long period

of time to raise a rebuttable presumption of an intent to abandon

that right. 79 Ranch, 666 P.2d at 218. Once a period of nonuse

sufficient to raise the presumption of an intent to abandon has

been established, the burden shifts to the claimant of the water

right to explain the reasons for nonuse. 79 Ranch, 666 P.2d at 218.

T o rebut the presumption of abandonment, the claimant must

establish "some fact or condition excusing the long period of

nonuse, not mere expressions of hope or desire reflecting a

'gleam-in-the-eye philosophy' regarding future use of the water."

In re Clark Fork River, 833 P.2d at 1123 (quoting 79Ranch, 666 P.2d at

219).

In this case, it is undisputed that Graveley's water right was

not used for a period of at least fifty years prior to July 1,

6
1973.1 Three of the objectors who testified at the Water Master's

hearing in 1993 (whose ages were 83, 71, and 49) stated that the

Ohio Ditch had not been used to divert any water from Three Mile

Creek during their lifetimes. Graveley's expert witness, Dr.

McCleran, testified that in his opinion the Ohio Ditch had not been

used to divert water since the early part of this century.

Graveley himself, who was 71 at the time of the hearing, testified

that there had never been a call for the disputed water right

during his lifetime.

1n 79Ranch, we held that a period of forty years of continuous

nonuse of an irrigation right was sufficient to raise a presumption

of abandonment. 79 Ranch, 666 P.2d at 218. III In re Clark Fork River, we

held that a period of twenty-three years of continuous nonuse of

municipal water rights was sufficient to raise a presumption of

abandonment. InreClarkForkRiver, 833 P.2d at 1123. In this case, the

uncontroverted evidence establishes that Graveley's water right

claim, appropriated and decreed for mining purposes, was not used

for a period of over fifty years prior to 1973. Based on the

standards established by this Court, it is clear that this showing

of fifty years of continuous nonuse raised a rebuttable presumption

that Graveley intended to abandon his water right.

1 We note that the purpose of the statewide adjudication of

water rights is to determine water rights as they existed on

July 1, 1973, when the Montana Water Use Act was enacted.

Therefore, evidence of the use of a right after July 1, 1973, is

not relevant to the determination of abandonment of an existing

water right. See In re Clark Fork River, 833 P.2d at 1123-24.

7
The burden of proof therefore shifted to Graveley to rebut the

presumption of abandonment by explaining the reasons for nonuse of

the water right. At the Water Master's hearing, however, Graveley

offered no excuse for the nonuse of his mining water right claim

except for the apparent lack of economic viability of mining the

area. Graveley did not present evidence that either he or his

predecessors had made any effort to make use of the disputed water

right for over fifty years prior to July 1, 1973. In fact,

Graveley admitted that he had done nothing to use the water right

himself and had made no effort to make the Ohio Ditch functional

for exercise of that right.

Instead, Graveley maintained that the cyclical nature of the

mining industry and its uncertain economics were reason enough to

explain the long period of nonuse. Graveley testified that he was

aware of the underlying land's potential for mineral development

when he purchased the patented mining claim and was awaiting a turn

of events in the mining industry to realize the value of both his

water right and the underlying mineral interest. Graveley's expert

witness, Dr. McCleran, testified that Graveley's mineral rights,

like other rights in Powell County, were merely "awaiting renewed

interest." Dr. McCleran testified that the mining industry is

subject to fluctuations in the national and international

economies, the price of commodities such as gold, developments in

mining technology, and the regulatory climate in the national,

state, and local levels.

8
On appeal, both Graveley and the Montana Mining Association,

which filed an amicuscuriae brief, contend that the uniqueness of the

mining industry compels a different standard for the determination

of the abandonment of a water right. In its brief, the Montana

Mining Association maintains that "[tlhe rule of abandonment as

applied to water rights used for mining purposes must recognize

that periods of nonuse are common for mineral properties and rarely

indicate an intent to abandon the appurtenant water rights." In

effect, Graveley and the Montana Mining Association ask this Court

to differentiate between the different uses of water in determining

the factual question of whether a water right has been abandoned.

We see no reason, however, to make such a differentiation.

The law of abandonment has not developed by distinguishing the

various uses of water. The statutory guidelines for the determination of abandonment of a water right set forth in § 85-2-404, MCA,

characterize all water rights as "appropriation rights," and make

no distinction between the uses of water. Although § 85-2-404,

MCA, will not become effective for existing rights until they have

been finally adjudicated, we cited the statute in our decision in

79 Ranch, 666 P.2d at 219, as the "general, modern trend," and

recognized the importance of "providing an approach for the

determination of abandonment of water rights consistent with the

express intent of our legislature." The Montana Legislature has

clearly not chosen to accord a different standard for the

9
determination of the abandonment of water rights used for mining

purposes.

In addition, Montana's case law has never discriminated

between the different uses of water in determining whether a water

right has been abandoned. See, e.g., Smith Y. Hope Mining Co. (1896),

18 Mont. 432, 45 P. 632 (water rights for mining); HolstromLandCo.v,

MeagherCountyNewlanCveekWaterDistrict (1979), 185 Mont. 409, 605 P.2d 1060

(water rights for irrigation); 79 Ranch, 666 P.2d 215 (water rights

for irrigation) ; In re Clark Fork River, 833 P.2d 1120 (municipal water

rights). In fact, in 79 Ranch, in response to a claim that a water

right claimant's predecessor had not had sufficient funds to

irrigate with the water from the claim, this Court relied on a

Colorado mining water rights case, CF & I Steel Corporation Y. Purgatoire River

Water Conservation Distvict (Cola. 1973), 515 P.2d 456, in which the

Colorado Supreme Court held that the economic realities of the

mining industry were not enough to justify fifty-four years of

nonuse of a water right. Without making a differentiation between

mining and irrigation water rights, we stated:

Here, [the claimant1 argues that his predecessors in

interest did not have sufficient funds to irrigate. . . .

In resoonse to this same arqument, the Colorado Court has

stated:

II Considering the large demands for all

of the appropriable water in this state . . .,

it might be said that nearly every abandoned

water right could have its non-use justified

by the economics that might prevail sometime

in the future for the use of this water

. . . . This gleam-in-the-eye philosophy is

not consistent with the protection and

10
preservation of existing water rights." CF&I

Steel Corporation, 515 P.2d at 458.

(Emphasis added).

Graveley's claim that his mining rights might someday become

economically viable reflects nothing more than this "gleam-in-theeye philosophy" of hope, which we specifically rejected in both 79

Ranch and In ye Clark Fork River. At the Water Master's hearing, Graveley

established no fact or condition which would excuse the fifty-year

period of nonuse. In addition, he produced no evidence that he had

intended to put the water right to beneficial use. Graveley's only

rationale for the nonuse of his water right was the lack of

profitability of mining his patented mining claims. His only

evidence of intent was a hope that that claim might someday become

economically viable. However, as the Colorado Supreme Court stated

in CF & I Steel Corp., 515 P.2d at 459: "In viewing the issue of

abandonment, one must look to the water right as decreed and not to

some possible hoped-for future use at some undetermined place."

Therefore, because we reject the argument that mining water

right uses should receive unique treatment for the purposes of the

factual determination of abandonment, and because we find that

Graveley did not introduce evidence sufficient to rebut the

presumption of abandonment in this case, we conclude that the Water

Court's finding that Graveley abandoned his claim to the disputed

water right is supported by substantial evidence. Accordingly, we

affirm the order of the Water Court which terminated Graveley's

water right claim and ordered that the water right shall not appear
in the preliminary decree for the Clark Fork River above the

Blackfoot River Basin.

We concur:

-,//,-flfZl--J&

I Chief Justice

12