Court Opinion

ID: 5151379
Source: CourtListenerOpinion
Date Created: 2022-01-02 01:57:18.783168+00
Date Added: 2024-06-11T08:25:04.477684
License: Public Domain

Justice HOBBS,
dissenting:
I respectfully dissent. The water court found that (1) an investment partnership purchased the Hallenbeck Ranch and associated water rights in 1972; (2) the "purpose of the partnership was to hold the property until it could be re-sold to a developer" and the "premise was that the next big development boom would be in the Lake County area;" (3) Mr. Bethel, a water engineer-who investigated this water right and whom the water court found to be credible-"concluded that the water [had] not been delivered since 1972;"1 (4) the ranch manager reported to *926the partnership that "the Derry No. 1 needed to be lined to get water to the Ranch;" and (5) the subsequent manager of the ranch "was unable to get the partnership to fund the project."
Despite making these findings, the trial court concluded that the purchaser of the water right, Lake County, had overcome the presumption of abandonment that arises under Colorado law from an extended period of nonuse and that the party invoking abandonment did not prove it by a preponderance of the evidence.
Based on the trial court's findings and the record as a whole, I conclude that the water court reached this conclusion of law erroneously-abusing its discretion-by: (1) giving effect to unsuccessful attempts at putting the water right to use; (2) rewarding an extended period of speculating in the water right after the owner of the right decided it would not invest the funds necessary to use the water right; and (8) failing to conclude, based on the evidence, that the water right had been abandoned before Lake County purchased it in 1998.
A. Unsuccessful Attempts to Put the Water Right to Use
In my view, the water court erroneously excused the investment partnership's nonuse of the Derry Ditch No. 1 water right.
First, having found that the ranch manager was unable to get the diverted water to its place of beneficial use, unless the investment partnership funded water delivery improvements-which it decided not to do-the water court gave effect to the ranch manager's request to fund the necessary improvements despite the owner's affirmative decision not to:
(Clotworthy) testified that from 1972-1980 he tried on at least ten occasions to get water down the Derry No. 1.... The Court finds that the failure to fund the project was unfortunate. The important factor is that the request to fund is indicative of a desire to maintain the ditch and is contrary to an intent to abandon.
The evidence is clear on this point: the ranch manager desired to make the necessary water delivery improvements, so that the water right could be utilized for its decreed use, and the investment partnership desired not to.
Second, the water court gave effect to a lease that did not result in any beneficial use of the water. The lease was to the ranch manager for a mining venture that never materialized:
Clotworthy had a mining lease for the Hallenbeck Ranch from 1980 to 1998 and the lease included water rights. He envisioned using the water rights in an exchange by using the irrigation water for another use (mining).
The water court again refers to Clotworthy's intent:
Clotworthy specifically testified that the water rights to Derry No. 1 were such an integral part of his operation that he would never have intended to relinquish the rights.
No use of the water right resulted from the lease. In contrast, water rights leased to an actual water user, for example as an emergency reserve for a city, indicate intent to preserve the rights. Beaver Park Water, Inc. v. City of Victor, 649 P.2d 300, 302-03 (Colo.1982).
The water court mentions Clotworthy's intent not to abandon the water right several times in its order, but his intent-cither as holder of the mining lease or as ranch manager-is immaterial. The issue is the owner's intent.
B. Speculation
Beneficial use is essential to the establishment of a water right and its perpetuation. Knapp v. Colorado River Water Conservation Dist., 131 Colo. 42, 52, 279 P.2d 420, 425 (1955). "Speculation on the market, or sale expectancy, is wholly foreign to the principle of keeping life in a proprietary right and is no exeuse for failure to perform that which the law requires." Id. at 56, 279 P.2d at 427; see Southeastern Colo. Water Conservancy Dist. v. Twin Lakes Assocs., 770 P.2d 1231, 1238 (Colo.1989).
*927Our cases repeatedly provide that "[cJon-tinued and unexplained nonuse of a water right for an unreasonable period of time creates a rebuttable presumption of intent to abandon." City & County of Denver v. Snake River Water Dist., 788 P.2d 772, 776 (Colo.1990)(emphasis added); see Haystack Ranch v. Fazzio, 997 P.2d 548, 552 (Colo.2000); Consol. Home Supply Ditch & Reservoir Co. v. Town of Berthoud, 896 P.2d 260, 266 (Colo.1995).
Here, the nonuse is explained, but this explanation supports abandonment, and not the water court's conclusion that the presumption of abandonment was rebutted. The explanation for nonuse is that the ditch ° could not deliver the water to its place of use, and the owner did not wish to make the investment an actual water user would be required to make to maintain the priority of the water right.
A water right is decreed to a particular diversion structure for beneficial use by delivery through it. Dallas Creek Water Co. v. Huey, 933 P.2d 27, 39 (Colo.1997). Affirmatively deciding not to make repairs necessary to utilize a water right is convincing evidence of intent to abandon it. Southeastern Colo. Water Conservancy Dist., 770 P.2d at 1241 (upholding finding of abandonment when ditches deteriorated and were not repaired); Masters Inv. Co. v. Irrigationists Ass'n, 702 P.2d 268, 270 (Colo.1985) (upholding finding of abandonment where ditch had washed away and was not replaced). Evidence of non-repair is especially persuasive where the owner ignored advice that the repairs were required. Haystack Ranch, 997 P.2d at 553. Failure to maintain the entire length of the ditch is also evidence of intent to abandon. Southeastern Colo. Water Conservancy Dist., 770 P.2d at 1236-37.
We have considered economic difficulty a justifiable excuse for nonuse in very limited cireumstances. We recognized that the Great Depression, material and labor shortages during World War II, and federal regulatory requirements can provide an excuse for nonuse. Hallenbeck v. Granby Ditch & Reservoir Co., 160 Colo. 555, 568, 420 P.2d 419, 426 (1966). However, run-of-the-mill economic difficulties are not recognized. "Nonuse resulting from present economic difficulties, coupled with an expectation of a more favorable economic climate for future use, will not constitute justifiable excuse." Southeastern Colo. Water Conservancy Dist., 770 P.2d at 1238.
Without doubt, the investment partnership tried repeatedly to sell the ranch and the water rights. However, in Knapp, we held that intent to sell a water right, including listing the right with a real estate agent, was not sufficient to overcome the presumption of abandonment raised by a long period of non-use. 131 Colo. at 55-56, 279 P.2d at 427.
I would distinguish our decision in Danielson v. City of Thornton, 775 P.2d 11 (Colo.1989), from this case. There, a developer acquired the water rights for use in a central water system for a subdivision it was creating. Id. at 21. It sought to obtain a change of point of diversion for the wells to effectuate its use. Id. at 21-22. Upon finding that a centralized water system would be impractical, it diligently and continuously attempted to sell the water rights to a party who would use the water under the water rights. Id. The wells were in good condition and capable of operation throughout the efforts to sell them. Id. at 16 n. 5. Within eight years, the developer sold the water rights. Id. at 17. The water court held that, under the cireum-stances, eight years was a reasonable time period to effectuate sale of the water rights.2 Id. On appeal, we applied a legal standard that took into account the "totality of the evidence in evaluating whether a water right [had] been abandoned" and eoncluded that it had not. Id. at 20. In contrast, in this case, the investment partnership never had a use for the water, never effectuated a use, and when put on actual notice of the need to maintain the water rights, affirmatively decided not to repair the structure so the right could be utilized under its decree.
As we recognized in Damielson, efforts to sell the water right, in light of other evidence *928in the case, may be sufficient to overcome the presumption of abandonment arising from a prolonged period of nonuse. But, we also said that the presumption of abandonment is a strong one. Id. at 21. The Knapp anti-speculation basis for the abandonment doe-trine continues to be good law, in my view.
A water right is a use right in the public's water resource; water that a senior cannot use belongs to juniors in the order of their decreed appropriation. See Santa Fe Trail Ranches v. Simpson, 990 P.2d 46, 54-55 (Colo.1999). Since 1972, owners of other decreed water rights in the over-appropriated Arkansas Basin have been using the water that the Derry No. 1 right could have utilized, if repairs to the ditch had been made.
The water court's order demonstrates a great deal of inclination towards the plans of Lake County for this water right, but these plans are irrelevant-for they cannot revive a water right the investment partnership left to the stream. Haystack Ranch, 997 P.2d at 554. As demonstrated by Santa Fe Trail Ranches-which involved an apparent thirty or forty year period of nonuse of the water right at its decreed point of diversion-developers often wish to reinvigorate or revive a water right that was not used. 990 P.2d at 51. Often, as in Santa Fe Trail Ranches, the developer is attempting to use a senior priority to augment a new or different use. This is what Lake County wishes to do; but, the abandonment doctrine guards against injecting water into what has become a paper right.
In this case, it is undisputed that no water was used under the Derry Ditch No. 1 for twenty-six years, nearly three times the statutory presumptive period for intent to abandon. § 87-92-402(11), 10 C.R.S. (2002). "The owner's mere declaration of intent, without the facts showing a reasonable justification for non-use, will not overcome the presumption." Hallenbeck, 160 Colo. at 567, 420 P.2d at 426. I disagree with the Majority conclusion that there is competent evidence in the record to rebut the strong presumption of abandonment arising from the investment partnership's prolonged period of nonuse.3 Maj. op. at 924-925. The investment partnership's decision not to repair the ditch is factually no different from those cases in which water courts and we have declared abandonment based upon prolonged failure to repair. Here, the evidence of holding the right for speculation is manifest. - Like Knapp, this case involved twenty-six years of nonuse and "[on the whole their conduct is much more indicative of being speculative than operative." 131 Colo. at 51, 279 P.2d at 425.
Accordingly, I would reverse the judgment of the water court and, therefore, respectfully dissent.
I am authorized to say that Chief Justice MULLARKEY and Justice KOURLIS join in the dissent.

. The appropriation date of the Derry Ditch No. 1 was December 1, 1879, 4 cf.s., for irrigation. Leonard Rive Consulting Water Engineers, Inc., *926Report of Water Rights Investigation & Appraisal 12 (1985).

. In Danielson, both the water court and this court applied the totality of circumstances test. 775 P.2d 11, 17, 20. Both courts considered the developer's original plan to use the wells for a centralized water supply, the finding that this use was impracticable, and its diligent efforts to sell the wells. Id. In my view, under all the circumstances here, the water right was abandoned.

. The water court and the Majority observe that the State Engineer had not placed this water right on the abandonment list. Maj. op. at 923. The Engineer's decision to list or not list a water right on the abandonment list is administrative in nature and says nothing about the owner's intent. The State Engineer's administrative action or inaction does not determine the existence or non-existence of a water right. See Empire Lodge Homeowner's Ass'n v. Moyer, 39 P.3d 1139, 1156-57 (Colo.2001).