Opinion ID: 1236532
Heading Depth: 1
Heading Rank: 1

Heading: The Water Court's Ruling

Text: The present case requires this court to determine whether the 1990 statute governs an application for a quadrennial finding of reasonable diligence filed in December of 1988, for a diligence period commencing in 1985. The 1990 statute provides: (a) In every sixth calendar year after the calendar year in which a water right is conditionally decreed, or in which a finding of reasonable diligence has been decreed, the owner or user thereof, if he desires to maintain the same, shall file an application for a finding of reasonable diligence, or said conditional water right shall be considered abandoned.... (b) The measure of reasonable diligence is the steady application of effort to complete the appropriation in a reasonably expedient and efficient manner under all the facts and circumstances. When a project or integrated system is comprised of several features, work on one feature of the project or system shall be considered in finding that reasonable diligence has been shown in the development of water rights for all features of the entire project or system. [1] § 37-92-301(4)(a), (b), 15 C.R.S. (1990). Prior to 1990, section 37-92-301(4), 15 C.R.S. (1988 Supp.), provided: In every fourth calendar year after the calendar year in which a water right is conditionally decreed, the owner or user thereof, if he desires to maintain the same, shall file an application for a quadrennial finding of reasonable diligence or said conditional water right shall be considered abandoned.... [S]uch application shall be filed during the same month every four years thereafter until the right is made absolute or otherwise disposed of. In order to determine whether the 1990 statute governs, we first review the procedural background and the water court's ruling in the present case. In 1961, the Conservancy District acquired sixteen conditional water rights, by two decrees. [2] On December 30, 1988, the Conservancy District filed an application for quadrennial finding of reasonable diligence, as required by section 37-92-301(4), 15 C.R.S. (1988 Supp.). On February 27, 1989, Arapahoe County filed a statement of opposition. [3] The application was referred to a referee, who, on December 27, 1989, found that all sixteen conditional water rights were abandoned for failure to prosecute with reasonable diligence. [4] On January 16, 1990, the Conservancy District filed a protest to the referee's ruling in the water court. From May through October of 1990, the parties filed initial and supplemental disclosure certificates. On October 17, 1990, the water court entered an order setting November 26, 1990, as the date on which a three-day trial would begin. On November 28, 1990, the water court held a status conference and entered an order resetting the date for commencement of a four-day trial as April 30, 1991. Approximately one year after filing its protest to the referee's ruling, the Conservancy District filed a motion to determine [the] applicability of the 1990 amendments to the diligence statute, on January 24, 1991. In the following February, Arapahoe County filed a motion in response to the Conservancy District's motion regarding application of the 1990 statute to the present case. On March 26, 1991, the Conservancy District and Arapahoe County filed a stipulation for resolution of pending motions. Among other things, the parties stipulated that the 1990 statute applied to their proceedings. The parties stipulated that the 1990 statute sets forth the measure of reasonable diligence in § 37-92-301(4)(b) by requiring reasonably expedient and efficient efforts. The parties agree that prior to the enactment of [the 1990 statute] the measure of diligence was succinctly defined in Trans County [Water], Inc. v. Central Colorado Water Conservancy District, 727 P.2d 60 (Colo.1986).... . . . . This Stipulation does not reach the issue as to whether [the 1990 statute] changed the measure of reasonable diligence as defined in the Trans County case. The parties reserve the right to argue the issue after the submission of evidence. The water court approved the stipulations. A four-day trial commenced on April 30, 1991, and on May 30, 1991, the water court entered its findings of fact, conclusions of law, and judgment. In its findings of fact, the water court noted that [t]he [1961] Decrees ... relate to and describe the water rights for a single comprehensive project known as the Upper Gunnison Basin Project. (Emphasis added.) The water court also noted that the original decrees recognized [t]hat the Upper Gunnison Basin Project is one project with multiple `interrelated features' referring to the identified units and the structures comprising said units. (Emphasis added.) Noting that diligence with respect to the subject water rights was last approved by the water court on July 2, 1985, the water court made detailed findings of prior diligence work on the subject water rights. The water court identified the present diligence period as beginning on January 1, 1985, and ending on December 31, 1988. The water court subsequently made detailed findings of diligence work occurring during the present diligence period. [5] In its conclusions of law, the water court recounted the parties' stipulation that section 37-92-301(4)(b) and (c), 15 C.R.S. (1990), governed the instant action. The water court stated that, prior to the adoption of the 1990 statute, the standard for showing diligence was set forth in Trans-County Water, Inc. v. Central Colorado Water Conservancy District, 727 P.2d 60 (Colo.1986). [6] The water court concluded that the 1990 statute modified the diligence standard set forth in Trans-County. [7] As a result, the water court concluded that the standard adopted by the statute is less onerous than the standard in Trans County.  The water court also stated that [i]t is the court's understanding of the statutory measure that many facts and circumstances are to be considered, and that the factors listed in the Trans County case continue to be applicable. In its application of a diligence standard, the water court considered the following factors, among others: the length of delay in construction; the resources and relative size of the Conservancy District; whether any work was site-specific; recommendations regarding alternate sites; financing for all or part of the project; the feasibility of original reservoir sites; and the degree to which any of the features of the project were integrated. Regarding integration, the water court interpreted the 1990 statute to mean that diligence work on one aspect of a project does not necessarily mandate a finding of diligence with respect to the entire project. The water court subsequently framed the diligence test as whether the Applicant demonstrate[d] `the steady application of effort to complete the appropriation in a reasonably expedient and efficient manner.'  The water court further concluded that after the significant lapse of time since the original decrees, [the water court] has some obligation under ... § 37-92-301(4)(b) and (c) C.R.S. 15 (1990 Repl. Vol.) to find diligence only with respect to those features (including their integrated parts, if any, and alternative sites therefor[], if applicable) which continue to be viable and feasible. The water court canceled four conditional water rights, but found that the remaining twelve were in full force and effect. [8] The water court decreed that the Conservancy District must file an application for a finding of diligence every six years, commencing in the month of May 1997.