Opinion ID: 2638546
Heading Depth: 3
Heading Rank: 2

Heading: The Benchmark of the Parties' Water Rights Is Their State-Approved Rights to Put Water to Beneficial Use

Text: ¶ 28 The right to use water in Utah has been governed by statute since 1888. See Little, 839 P.2d at 794 (citing Compiled Laws of Utah 1888, vol. 2, ch. 2). Until 1903, water rights were established upon the filing of a diligence claim, a claim based on the historical appropriation of water toward a beneficial use. Id. In 1903, the legislature began to codify the application and certification procedures for the acquisition of water rights, and also declared for the first time that all natural waters of the state are public property. Id.; Utah Code Ann. § 73-1-1 (1989 & Supp.2002) (declaring all waters ... to be the property of the public). Public ownership is the basis upon which the state regulates the use of water for the benefit and well-being of the people. J.J.N.P. Co. v. State, 655 P.2d 1133, 1136 (Utah 1982). Our obligation is to ensure that water is put to the most beneficial use. [I]t is essential that putting water to the highest and best beneficial use should not only be encouraged, but carefully safeguarded. Fairfield Irrig. Co. v. White, 18 Utah 2d 93, 416 P.2d 641, 644 (Utah 1966). Both the statutory framework behind our water laws and the principle of beneficial use on which they are based are integral to the decision we reach today.
¶ 29 The legislature created the office of the State Engineer to keep records of all established water rights and those to be acquired in the future, to supervise the distribution of the water, and to keep records of and regulate future appropriations and changes in the place of diversion, use and nature of the use. United States v. District Court, Utah, 121 Utah 1, 238 P.2d 1132, 1134 (1951); see also Utah Code Ann. § 73-2-1 (1989 & Supp.2002) (identifying responsibilities of the State Engineer). Due to the scarcity of water resources in our state, appropriation of water is tightly controlled and the State Engineer oversees each step in the application and appropriation process. No person has a right to appropriate or use water in this state without approval from the State Engineer. Utah Code Ann. § 73-3-1 (1989 & Supp.2002). When the appropriation of water rights is in dispute, the State Engineer can initiate a general adjudication of water rights by filing an action in district court to determine the various rights of water users. Id. § 73-4-1. After investigating the various claims, the State Engineer submits a proposed determination of the parties' rights to the district court for its consideration in ruling on the general adjudication. Id. § 73-4-11. ¶ 30 Of course, [t]he State Engineer is an executive, not a judicial officer, East Bench Irrig. Co. v. State, 5 Utah 2d 235, 300 P.2d 603, 606 (1956), and the State Engineer's decisions are not binding on the courts of this state. Id. The State Engineer acts in an administrative capacity and does not have authority to adjudicate the rights of water users. Whitmore v. Murray City, 107 Utah 445, 154 P.2d 748, 750 (1944). However, while the State Engineer's decisions are generally not binding on the courts, the State Engineer's decisions in a general adjudication or pursuant to a proposed determination are binding upon the parties unless and until a party files a timely objection to the proposed determination. Utah Code Ann. § 73-4-11 (1989 & Supp.2002); United States Fuel Co. v. Huntington-Cleveland Irrigation Co., 2003 UT 49, ¶ 15, 79 P.3d 945. ¶ 31 The State Engineer has determined, pursuant to a 1974 proposed determination of the general adjudication of all water rights in the lower Green River drainage, [7] that 60 cfs, rather than 80 cfs is sufficient to meet the needs of GRCC's stock holders during the irrigation season. [8] Therefore, we must resolve the tension between the amount of GRCC's actual need as determined by the State Engineer and the amount of its claim in the 1952 Amendment. [A] court must attempt to construe the contract so as to `harmonize and give effect to all of [its] provisions.' Dixon v. Pro Image, 1999 UT 89, ¶ 14, 987 P.2d 48 (quoting Nielsen v. O'Reilly, 848 P.2d 664, 665 (Utah 1993)). In interpreting these provisions, we must bear in mind that the State Engineer's role is to determine the actual needs of water users. Utah Code Ann. § 73-2-1 (1989 & Supp.2002). Moreover, we must also recognize that the State Engineer has special training in the operation and control of natural streams and irrigation and other artificial use and control of water and water rights and that he is especially qualified to understand the facts involved in these problems. East Bench Irrig. Co., 300 P.2d at 606. ¶ 32 In this case, the State Engineer's proposed determination is controlling over the parties' water rights descriptions in the 1952 Amendment because GRCC has never filed an objection to the proposed determination; it, therefore, cannot collaterally attack that determination in this lawsuit. See United States Fuel, 2003 UT 49 at ¶ 20, 79 P.3d 945. Indeed, the record shows that GRCC has long acquiesced in the State Engineer's proposed determination. Under section 73-4-11, timely objections to decisions of the State Engineer are to be made within ninety days of the issuance of the proposed determination. Utah Code Ann. § 73-4-11. While GRCC has recently asked the State Engineer to modify the proposed determination, this request was denied. In a letter directed to GRCC's counsel, the Attorney General, speaking on behalf of that office and the State Engineer, noted that 60 cfs was apparently not a problem [for GRCC] when the proposed determination was issued, ... and it is sufficient now for [GRCC'S] described beneficial uses. ¶ 33 Recognizing that the State Engineer's proposed determination is controlling as to the amount of water GRCC can properly claim in the 1952 Amendment amounts to persuasive evidence that the 1952 Amendment merely describes the parties' water rights. At this point in time, the State Engineer has determined that GRCC's water right is 60 cfs and Thayn's is 635 cfs. To construe the contract to reduce Thayn's right would be as illogical as to construe it to expand GRCC's, particularly since GRCC gets its water first and has no right to use any more. Given that limitation, if Thayn cannot use his water, it would be wasted. We will not interpret the contract to yield such inequitable results. See Peirce v. Peirce, 2000 UT 7, ¶ 19, 994 P.2d 193 (holding that absent express contractual language an equitable interpretation of a contract is preferred over an inequitable or unreasonable one). Thus, in light of the State Engineer's decision, we hold that the quantities mentioned in the 1952 Amendment do not set the upper limits of the parties' water rights because the amounts mentioned therein do not reflect the amounts of water that the parties currently need and can put to beneficial use, i.e., the amounts to which they are lawfully entitled by the decision of the State Engineer, to which no timely objection has been filed.
¶ 34 Water is a resource of inestimable value to our state and we have likened a drop of water [to] a drop of gold. Longley v. Leucadia Fin. Corp., 2000 UT 69, ¶ 15, 9 P.3d 762 (quoting Carbon Canal Co. v. Sanpete Water Users Ass'n, 19 Utah 2d 6, 425 P.2d 405, 407 (1967)). Thus, the guiding principle behind our water law statutes and the work of the State Engineer is that water must always be put to the most beneficial use. Because of the vital importance of water in this arid region both our statutory and decisional law have been fashioned in recognition of the desirability and of the necessity of insuring the highest possible development and of the most continuous beneficial use of all available water with as little waste as possible. Wayman v. Murray City Corp., 23 Utah 2d 97, 458 P.2d 861, 863 (1969). A water user's appropriations are limited to the amount that can be put to beneficial use. No one can acquire the right to use more water than is necessary, with reasonable efficiency, to satisfy his beneficial requirements. McNaughton v. Eaton, 121 Utah 394, 242 P.2d 570, 572 (1952). This is true regardless of the quantity [of water] that has been used for [past] purposes and the length of time it may have been used. Big Cottonwood Tanner Ditch Co., 164 P. at 859 (Utah 1916). ¶ 35 The principle of beneficial use supports the decision we reach today. Thayn enjoys a state-approved right to divert 600 cfs to generate hydroelectric power. We have concluded that the contract does not restrict Thayn to the use of only 435 cfs to pump irrigation water, and allowing him to use his water rights to generate hydroelectric power ensures that our water is put to the highest and best use. Indeed, our water statutes specifically list power development as a beneficial use for water resources. Utah Code Ann. § 73-3-8(1) (1989 & Supp. 2002). GRCC argues that the 1952 Amendment does not prevent Thayn from using his 600 cfs, only that he must find a means to divert his water other than by using GRCC's diversion works for any amounts above 435 cfs. However, the 1952 Agreement explicitly requires that Thayn's water must be diverted through GRCC's diversion facilities. [9] Thus, if Thayn did not use GRCC's facilities to divert his water, he would be in explicit breach of the 1952 Agreement. Similarly, Thayn could never put the whole of his 600 cfs toward power generation because GRCC's interpretation of the 1952 Amendment precludes any use other than pumping irrigation water, the use mentioned therein. We find that the 1952 Amendment does not impose such unreasonable restraints in outright conflict with the beneficial use doctrine. ¶ 36 GRCC's construction of the 1952 Amendment runs contrary to beneficial use principles and would result in tremendous waste: GRCC would be permitted to take much more water than it needs and is entitled to while preventing Thayn from using all of the water that he has a right to put to a beneficial use. In Cleary v. Daniels, 50 Utah 494, 167 P. 820, 823 (1917) we rejected such a result, ruling that the holder of a prior water right cannot prevent another from using the water during the period of time that he cannot use it, or make it available for use. While ... he retains his right to the water, ... he may not insist that the water be wasted merely because he has a prior right to use it. The existence of the 1952 Agreement and Amendment do not alter this conclusion. Those documents establish priorities of use and resolve issues of facility ownership and canal maintenance. They do not give GRCC the unilateral right to control the amount or use of Thayn's water. ¶ 37 So long as GRCC gets its water (either 20 cfs during the non-irrigation season, or 60 cfs during the irrigation season), we see no reason to prevent Thayn from putting to beneficial use the water that will nevertheless continue to flow down the raceway, without causing any harm to GRCC. Regardless of the parties' past contentions about the capacity of the raceway, the record reveals that the dam was diverting the same amount of water when Thayn began operating his hydroelectric facility as when Wilson signed the 1952 Agreement and there has always been enough water for both parties. The flow measurements taken by the parties reveal that, when properly maintained, the raceway has ample capacity to satisfy the needs of both water users. [10] Because we find that Thayn did not breach the contract, we need not address the other contractual issues Thayn also raises on appeal.