Opinion ID: 783261
Heading Depth: 3
Heading Rank: 4

Heading: All Applications Granting Transfers Must be Remanded

Text: 63 At oral argument, several transfer applicants argued that even if we overruled the blanket intrafarm equitable exemption, the approval of their applications could be upheld on the basis of the Engineer's other findings with respect to their parcels of land. For example, counsel for the Matley-Gomes appellees and counsel for the group of appellees including Rambling River, Dieckman, Stix, and Wolf argue that their transfers should be affirmed because there is sufficient evidence in the record to uphold the transfers irrespective of the blanket equitable exemption for intrafarm transfers. We have reviewed the record and conclude that there is insufficient evidence to affirm the district court's judgment with respect to these parcels. Accordingly, we vacate the judgment and remand for further proceedings consistent with this opinion. 64 For example, the Matley-Gomes appellees allege that the Tribe and the United States failed to meet their burden of proving that the Matley-Gomes applicants forfeited or abandoned the water rights at issue and therefore the transfers should be upheld despite the intrafarm equitable exemption allowed by the Engineer. The Matley-Gomes appellees also argue that because they used water for irrigation on the transferee parcels, they have satisfied the beneficial use requirement. We rejected this argument in Alpine V, where applicants also argued that as long as they were putting the water to beneficial use elsewhere on their farm, the use of the water on the actual parcel originally associated with the water right was not required. The landowners in Alpine V argued that intrafarm applicants have the contractual right to use water and have applied the water to beneficial use, albeit in a location different from the original place of use. Alpine V, 291 F.3d at 1075. 65 Citing Alpine II, we explained that the law of forfeiture and abandonment applies to all parcels in the Project — if there was no beneficial use on an individual parcel, the water rights that were originally granted to that parcel could be abandoned or forfeited for lack of use and therefore the water right attached to that parcel could not be transferred. It is clear that under both federal and state law, a water right is appurtenant to the land irrigated. Therefore, as a matter of law, it is correct to say that the water rights in question attached to the specific parcel to which water was beneficially applied, rather than the entire property under contract. Id. n. 18 (internal citations omitted). If the water was applied at an improper place of use, the forfeiture statute still applies. If we were to hold otherwise, we would in effect be granting an equitable exemption to all transfers within a farm as long as the use was beneficial in some parcel on the farm. This result would directly contradict our prior rulings that all transfers must comply with Nevada state law. See, e.g., Alpine II, 878 F.2d at 1222-23. 66 The Matley-Gomes appellees also invite us to reconsider once again our holding in Alpine III, as affirmed in Orr Ditch and Alpine V, that not all Project water rights were initiated before 1913, the effective date of Nevada's forfeiture law. We decline the invitation, and again re-affirm the reasoning we have repeatedly articulated. [L]andowners cannot claim 1902 as the date their water rights were initiated, but rather had to demonstrate that they took `affirmative steps' to appropriate water prior to 1913 to be exempted from the state forfeiture statute. Alpine V, 291 F.3d at 1073. 67 Finally, we reject the Matley-Gomes argument that the Tribe and the United States failed to challenge in district court the State Engineer's specific findings and conclusions on abandonment with respect to the Matley-Gomes applications and therefore are precluded from urging this court to reverse and remand for further proceedings. The Tribe's opening brief in the district court, in addition to addressing the intrafarm transfer exemption, also asked that the State Engineer make individual findings on remand as to whether the existing places of use have not been irrigated. 68 Although the State Engineer did state in several of his findings that he did not find abandonment, this was in the context of finding abandonment with respect to the transferee parcel, rather than the transferor parcel. This was a logical conclusion under the reasoning that supported the intrafarm exemption; however, as noted, we have rejected this reasoning. Because the State Engineer based his abandonment analysis on the incorrect presumption that the transfer was exempt from the laws of forfeiture and abandonment, his statements about abandonment carry less weight. For example, with respect to the Matley applications, the Engineer stated the following: 69 The State Engineer concludes that the water rights requested for transfer under Applications 51137, 51138, and 51139 are intrafarm transfers not subject to the doctrines of forfeiture or abandonment pursuant to Judge McKibben's Order of September 3, 1998, and the applications were filed to correct the records as to where the water was actually being used to irrigate farm property. 70 Nev. State Eng'r Ruling 4798 at 317-18. 71 This ruling discussed beneficial use, but only in the context of the intrafarm exemption. It suggests that the use of the water on the transferee parcel would be sufficient to overcome a claim of abandonment as to the transferor parcel. This is not correct under the current state of the law, which does not allow for a blanket special treatment to intrafarm transfers. Furthermore, the State Engineer did not apply the other standards for determining whether abandonment had occurred as set forth in Alpine V, including considering evidence that the landowner attempted to apply for a water right transfer. Thus, remand for further factual findings is necessary. 72 The group of appellees comprising Rambling River Ranches, David Stix, Henry Dieckman, and Howard Wolf raise the same major issues as the other parties. They argue that there is sufficient evidence in the record to defeat the forfeiture and abandonment claims independent of the blanket intrafarm equitable exemption. Appellees raise the same major issues as the other appellees. As to the individual appellees: Rambling River, Stix, Dieckman, and Wolf, they argue that there is sufficient evidence in the record to defeat the forfeiture and abandonment claims independent of the blanket intrafarm equitable exemption. 73 For Rambling River Ranches, Application No. 50008, the appellees cite portions of the record from hearings before the State Engineer that show a lack of intent to abandon their water rights. They also point to evidence showing that they attempted to file for a transfer of rights but were thwarted by the government or TCID, and contend that they have demonstrated their entitlement to equitable relief. For example, applicant George Frey testified that he notified the TCID that he was going to use the water on a different parcel of land in 1948, the TCID engineer visited his farm, and Frey presumed that the engineer changed the place of use of the water on TCID records. Although this evidence may be persuasive on remand, here we are limited by the State Engineer's express findings. The State Engineer's ruling does not cite any of this evidence, but rather relies on the blanket exemption for intra-farm transfers. The State Engineer finds that even though Rambling River Ranches has properties that may not be adjacent to each other it was Judge McKibben's intent that those persons moving water within their own properties and not purchasing water rights from some removed third party should have the benefit of his equitable ruling. Nev. State Eng'r Ruling 4798 at 235. Stix, Dieckman, and Wolf point to similar evidence before the Engineer, about which the Engineer did not make specific findings. 74 Because the Engineer did not make findings of fact with respect to the Rambling River appellees' evidence, but instead relied on the intrafarm transfer exemption to support his ruling, we must remand to permit the Engineer to make new findings in light of our decision in Alpine V. Under Alpine V, 291 F.3d at 1077, to determine whether an applicant had the intent to abandon the water right at issue, on remand the District Court or the State Engineer must assess the circumstances as a whole and at a minimum make the following findings: (1) that the applicant made continuous use of the water right, and (2) that the applicant attempted unsuccessfully to file for a change in place of use, or inquired about the possibility of a transfer. Appeals by Applicants Winder and Norman 75 We affirm the district court's judgment to the extent that it upheld the State Engineer's rulings denying the transfer applications of the following landowners: Isabelle Winder (Application 49111, parcel 1) and Darrell and Patricia Norman (Application 49285, parcel 1). On appeal, these applicants argue that they could not have applied for a transfer while the moratorium was in effect and that they have been unfairly penalized. As noted above, this argument is foreclosed by our decision in Alpine II. 76 We also reject Isabelle E. Winder's appeal of the denial of her transfer application 49111. The district court upheld the State Engineer's findings that Winder had abandoned the water rights at issue and the State Engineer's ruling excluding documentary evidence that showed that the proposed transfer was actually an intrafarm transfer. Evidence in the record established that water had not been used on the land for 22 years and that the use of the land was inconsistent with irrigated agriculture. Nev. State Eng'r Ruling 4798 at 103. Winder's claim that the Engineer erred in rejecting her documentary evidence is moot after Alpine V — the fact that the transfer was an intrafarm transfer no longer permits a blanket exemption from the application of forfeiture and abandonment law. There is substantial evidence to uphold the Engineer's determination that Winder abandoned the water rights at issue. 77 Finally, we also affirm the district court's judgment upholding the Engineer's denial of Darrell W. and Patricia A. Norman's transfer application 49285 15 on the basis of abandonment. The State Engineer found that no water had been applied to the parcel for at least seven years and that it was occupied by a church and an adjacent dirt parking lot. Nev. State Eng'r Ruling No. 4798 at 169. These are improvements inconsistent with irrigation, and there was substantial evidence to support the Engineer's determination that the Applicants failed to show a lack of intent to abandon the water right. 16 78