Court Opinion

ID: 5152581
Source: CourtListenerOpinion
Date Created: 2022-01-02 02:03:21.778923+00
Date Added: 2024-06-11T08:25:08.899744
License: Public Domain

Justice HOBBS,
dissenting.
I respectfully dissent. In my view, the water court erred by depriving East Ridge of the benefit of the bargain for which its predecessors in interest contracted under the 1878 and 1879 contracts. Those predecessors had valuable water rights and rights-of-way for the No. 10 Ditch, which they conveyed to Benjamin Eaton for construction and operation of the Larimer and Weld Canal in return for a perpetual water guarantee.
The 3 cfs No. 10 Ditch water right carried an appropriation date of June 1, 1864, a very early date for the Poudre River and the South Platte Basin as a whole. Benjamin Eaton, designer of the much longer Larimer and Weld Canal, wanted to align his new ditch on the right-of-way of the No. 10 Ditch. He also wanted the advantage of the No. 10 Ditch’s early priority, knowing that the other water rights for the Larimer and Weld Canal would carry a later date. In fact, the court *977adjudication decree of 1882 makes the remainder of Larimer Weld’s 721.47 cfs right junior to the 3 cfs right.
The agreements at issue here are absolutely clear that the owners of the No. 10 water rights and right-of-way were bargaining for a perpetual first draw on the water diverted by the Larimer and Weld Canal. All the shareholders of The Larimer and Weld Irrigation Company were to stand perpetually in the second position. The Majority, as did the water court, recognizes that this was the intent of the parties, but restricts the rights of the original owners of the No. 10 water right only to irrigation of particular plots of land in perpetuity.
Yet, the water court and the Majority assume that everyone else holding a water interest in the ditch by reason of share ownership in the Larimer and Weld Irrigation Company may change the use of their irrigation water to other uses and may remove the water from the parcels they historically irrigated. Only the beneficiaries of the first and best priority in the ditch are restricted to irrigation on particular parcels, on pain of forfeiting their right to water delivery from the ditch altogether.
This result is shocking, unconscionable, and contrary to Colorado law, in my view. While all others on the ditch are free to realize modern-day market value of their water, the owners of first priority are made to be last in realizing that value.
I agree with the Majority that the contracts between the No. 10 Ditch owners and Eaton are ambiguous. Accordingly, extrinsic evidence surrounding the formation of the agreements is admissible to arrive at a construction that carries out the intent of the parties.
The Majority relies primarily on expressions in the agreement and irrigation company minutes that the water was to be delivered only for irrigation on particular parcels. In my view, however, neither the water court nor the Majority take into account the most important extrinsic evidence bearing on the parties’ intent.
When the agreement was made between the No. 10 Ditch owners and Benjamin Eaton, no one in Colorado was obtaining priorities for any use of water other than irrigation. In fact, the Act of 1879 (Act of Feb. 19, 1879, sec. 18, 1879 Colo. Sess. Laws 94, 99) and the Act of 1881 (Act of Feb. 23,1881, sec. 22, 1881 Colo. Sess. Laws 142, 154-55) were restricted to the adjudication of irrigation priorities.
This changed as a result of cities’ growing demand for water as the Nineteenth Century ran its course. Not until 1891, in Strickler v. City of Colorado Springs, 16 Colo. 61, 26 P. 313, 315 (1891), did we recognize that cities could obtain irrigation rights and change them to municipal use. Following our decision, the 1899 act authorized a change of irrigation rights to other uses (Act of Apr. 6, 1899, ch. 105, see. 1, 1899 Colo. Sess. Laws 235, 235-36). In 1903, the General Assembly authorized adjudication of priorities for all other types of uses in addition to irrigation. (Act of Apr. 11, 1903, eh. 130, sec. 1, 1903 Colo. Sess. Laws 297,297).
Inexorably, irrigation in the South Platte Basin and population growth was giving rise to municipal and industrial use. Colorado’s changing economy necessitated a market mechanism for transferring water from irrigation to other uses, despite the assumption of the original founders of the ditches that only irrigation use for lands under the ditches would be made perpetually. Because the valuable senior priorities in the South Platte, and elsewhere in the state, were obtained only for irrigation of land under ditches-as the adjudications so specified-Colorado had to find a way to allow a market for this altered expectation.
In the Twenty-First Century, water courts are routinely engaged in changing irrigation water use to other uses on a willing buyer/willing seller basis, unless the ditch company has a by-law restricting water from being taken out of the ditch. Apparently, the Larimer and Weld Irrigation Company has no such by-law for anyone else but the successors in interest to the No. 10 Ditch water right owners.
I fully recognize that our case law typically characterizes a water delivery contract as being less than a full water right. But the *978facts in this case are unique, and the contract should be given its full effect. The No. 10 Ditch water right owners had fully vested water rights and traded them for the preferred right in the new Larimer and Weld Canal. So long as only irrigation use can be made as to all parcels under the Larimer and Weld Canal, the benefit of the bargain mutually arrived at in the 1870s is mutually honored. But, if those who are successors in interest to the second users of Larimer and Weld Canal water are allowed to change them water use, then the successors in interest to the preferred users should be accorded the same privilege. Only such a construction will honor the intent of the parties.
If some water users on this ditch are accorded an opportunity to quantify the amount of water historically used on their irrigated parcels and change the delivery of that water to other uses, then all should be accorded such opportunity. The water court is well-equipped to impose the necessary conditions to accomplish this outcome without injury to other water rights.
Accordingly, I respectfully dissent.