FARMERS RESERVOIR & IRR. CO. v. City of Golden

• Decision Date: 23 May 2005
• Docket Number: No. 02SA298.,02SA298.
• Citation: 113 P.3d 119
• Parties: FARMERS RESERVOIR AND IRRIGATION COMPANY; the Church Ditch Company; Farmers' High Line Canal and Reservoir Company; City of Westminster; City of Thornton; City of Northglenn; and City of Arvada, Plaintiffs-Appellants, v. CITY OF GOLDEN, Defendant-Appellee, and Consolidated Mutual Water Company, Plaintiff-Appellee, and James Hall, Division Engineer, Water Division One, Appellee Pursuant to C.A.R. 1(e).
• Court: Colorado Supreme Court

113 P.3d 119

FARMERS RESERVOIR AND IRRIGATION COMPANY; the Church Ditch Company; Farmers' High Line Canal and Reservoir Company; City of Westminster; City of Thornton; City of Northglenn; and City of Arvada, Plaintiffs-Appellants, v. CITY OF GOLDEN, Defendant-Appellee, and Consolidated Mutual Water Company, Plaintiff-Appellee, and James Hall, Division Engineer, Water Division One, Appellee Pursuant to C.A.R. 1(e).

No. 02SA298.

Supreme Court of Colorado, En Banc.

May 23, 2005.

Rehearing Denied June 13, 2005.¹

John P. Akolt, III, Brighton, for Farmers Reservoir and Irrigation Company.

Law Office of Brice Steele, Brice Steele, IV, Brighton, for Farmers' High Line Canal and Reservoir Company.

Carlson, Hammond & Paddock, LLC, Mary Mead Hammond, Lee H. Johnson, Karl Ohlsen, Denver, for the City of Westminster.

Porzak Browning & Bushong LLP, Glenn E. Porzak, Steven J. Bushong, Michael F. Browning, Boulder, for the City of Golden.

Moses, Wittemyer, Harrison & Woodruff, PC, Veronica A. Sperling, Boulder, for the City of Arvada. Thornton City Attorney's Office, Dennis Hanson, Thornton, for the City of Thornton.

Fischer, Brown & Gunn, PC, William R. Fischer, Fort Collins, for the City of Northglenn and The Church Ditch Company.

Justice MARTINEZ delivered the Judgment of the Court with respect to Part II.A. and the Opinion of the Court with respect to all other sections of the Opinion.

We review this water rights dispute involving an alleged expansion of use for the third time. See Farmers High Line Canal & Reservoir Co. v. City of Golden, 975 P.2d 189 (Colo.1999)

(hereinafter "FHL I"); Farmers Reservoir & Irrigation Co. v. City of Golden, 44 P.3d 241 (Colo.2002) (hereinafter "FHL II"). We here consider the water court's award of attorney fees, costs, and moratory interest to Appellee, the City of Golden ("Golden") and against Appellants, Farmers Reservoir and Irrigation Company, The Church Ditch Company, Farmers' High Line Canal and Reservoir Company, the City of Westminster, the City of Thornton, the City of Northglenn, and the City of Arvada.²

The judgment of the water court that Appellants' judicial estoppel claim was groundless and that Golden is entitled to attorney fees is affirmed. By operation of C.A.R. 35(e), where the Colorado Supreme Court is equally divided, the judgment of the lower court is affirmed without opinion. We address the remaining issues raised on appeal in this opinion. We affirm the amount of the attorney fees awarded. We also affirm both the water court's award of costs to Golden as the prevailing party and the amount of the award. We reverse, however, the water court's award of costs against the municipal appellants, the cities of Westminster, Thornton, Northglenn and Arvada, because such an award lacked statutory authorization. We nevertheless note that the cost award was authorized against the private litigants. We also reverse the water court's award of moratory interest on the fees and costs because the awards were in the nature of costs, not damages.

I. Facts and Proceedings

A. Background

We first provide a cursory review of the decrees governing Golden's and Con Mutual's interests in the disputed water right, Clear Creek Priority 12 ("Priority 12"). For further background, see FHL I and FHL II.

1. The 1960s Decrees and the Consolidated Mutual Decree

Two 1960s decrees govern Golden's present interest in Priority 12. The first ("1961 decree") expressly permits Golden to divert a maximum annual flow of 2.86 cubic feet per second (c.f.s.)³ for municipal use. The 1961 decree contains no stated acre-feet,⁴ or volumetric, limit. The second ("1964 decree") expressly permits Golden to divert an additional 1.8 c.f.s. of Priority 12 for municipal use and likewise contains no volumetric limits. Cumulatively, the express terms of the 1961 and the 1964 decrees give Golden the right to divert up to 4.66 c.f.s. of water from May through October of each year.

These flow rates are based on the 1961 engineering studies and trial testimony of Golden's expert water engineer, W.W. Wheeler. During the 1960s proceedings, Wheeler testified that, given Golden's pattern of municipal water use, which included irrigating 138 acres of lawn, the total historical consumptive use associated with Golden's two Priority 12 decrees was approximately 374 acre-feet per year. He further testified that 2.86 c.f.s. of water could be transferred to Golden and that, after these rights were changed from agricultural use to municipal use, Golden's annual approximate consumptive use would be 278 acre-feet per year.

Con Mutual's present interest in Priority 12 was established in part through 1993 litigation. In 1992, Con Mutual applied to change the use of its 2.5855 c.f.s. of Priority 12 water from agricultural to municipal use. Con Mutual's then-existing decree, like Golden's in the instant case, contained no express volumetric limitation. Golden objected to Con Mutual's proposed change and argued the change would injure Golden unless the court imposed an acre-foot per year volumetric limitation.

To determine Con Mutual's entitlement to Priority 12 water, the water court looked to Golden's entitlement pursuant to the 1960s change proceedings. To this end, Golden's expert water engineer, Gary Thompson, relied on Wheeler's calculations prepared for the 1960s proceedings to create a table and testified to the historical consumptive use of Priority 12 water. Thompson fixed the average total annual consumptive use of Priority 12 water at 411 acre-feet. Thompson testified that, although Golden's interest under the 1960s decrees was not subject to express volumetric limitations, Con Mutual's share of Priority 12 could nevertheless be calculated by subtracting the acre-footage of water transferred to Golden in the 1960s proceedings. Thompson concluded Con Mutual was entitled to consume an average of 124 acre-feet of water per year and thus implicitly fixed Golden's share of Priority 12 at an average of 278 acre-feet per year.⁵ The water court imposed a volumetric limitation on Con Mutual's decree to prevent injury to Golden and other users.

2. The Current Litigation

In 1995, Appellants filed a complaint for declaratory judgment, interpretation of decrees, and permanent injunction. Pointing to proceedings giving and decrees governing Priority 12 water rights of Golden and Con Mutual, Appellants alleged Golden had impermissibly expanded its use of Priority 12.

Appellants' complaint requested the water court to interpret and declare the 1960s decrees subject to implied volumetric limitations restricting Golden's municipal use of its interest in Priority 12 to its historical consumptive use, 278 acre-feet. In this regard, Appellants made two requests. First, Appellants requested the water court to declare that the average volume of water historically diverted under Golden's interest in Priority 12 was 428 acre-feet, of which 278 acre-feet was historically consumed.

Second, Appellants' complaint requested the water court to restrain Golden from enlarging its municipal use over the historical use of Priority 12. Specifically, it requested the water court to permanently enjoin Golden from diverting water under the 1960s decrees in excess of: (a) an average annual diversion of 428 acre-feet and 278 acre-feet of consumptive use, and (b) a maximum annual diversion of 535 acre-feet and 348 acre-feet of consumptive use.

The complaint made no reference to or request regarding Golden's lawn acreage irrigation.

Golden moved to dismiss Appellants' claim seeking volumetric limitations on its decrees on the grounds that such modifications were barred by principles of claim and issue preclusion based on the 1960s proceedings and decrees.

Appellants responded and filed a cross-motion for partial summary judgment under the doctrines of issue preclusion and judicial estoppel. Appellants maintained Gary Thompson's testimony in the Con Mutual litigation bound Golden to the specific acre-footage limitations. Because the acre-footage limitations associated with Golden's decrees were actually and necessarily decided in the 1993 litigation, Appellants asserted issue preclusion prevented Golden from relitigating this issue. Appellants further alleged Golden was judicially estopped from arguing that Thompson's testimony in the 1993 Con Mutual litigation did not govern the terms of its decrees.

The water court denied both motions. The water court held Appellants' claims were not barred by claim preclusion because the 1960s decrees implicitly limited the amount of water Golden could divert thereunder and had not been previously litigated. As to Appellants' cross-motion for summary judgment, the water court concluded Gary Thompson's testimony in the 1993 litigation did not judicially estop Golden from arguing that its decrees should not be modified to reflect volumetric limitations because the cases were not the same or related. In this regard, the water court stated the facts at issue in this case were sufficiently different to prevent Golden from being legally bound to a volumetric limitation determined in Con Mutual, Golden could not be bound by the factual determinations made with regard to historical consumptive use in Con Mutual because its rights were not at issue, and Golden did not "prevail" in Con Mutual. The water court subsequently denied Golden's motion for reconsideration.

Trial began in May 1997. At trial, Appellants advanced three claims of injury to support their request for declaratory relief. First, as specifically stated in its pre-trial motions, Appellants argued Golden impermissibly enlarged its use beyond the extent of its decreed rights because Golden was consuming water in excess of the historical consumptive use, expressed in acre-feet. Second, Appellants argued Golden impermissibly enlarged its use of Priority 12 water by changing its use patterns, thereby altering its right from a "peaking flow right," used...