FARMERS RESERVOIR & IRR. v. City of Golden

• Court: Colorado Supreme Court
• Citation: FARMERS RESERVOIR & IRR. v. City of Golden, 44 P.3d 241 (Colo. 2002)
• Decision Date: 08 April 2002
• Docket Number: No. 01SA105.,01SA105.
• Parties: FARMERS RESERVOIR AND IRRIGATION COMPANY; The Farmers High Line Canal and Reservoir Company; the City of Arvada; the City of Westminster, Plaintiffs-Appellants, v. The CITY OF GOLDEN, Defendant-Appellee, and Richard Stenzel, Division Engineer, Water Division No. 1, Appellee pursuant to C.A.R. 1(e).

44 P.3d 241

FARMERS RESERVOIR AND IRRIGATION COMPANY; The Farmers High Line Canal and Reservoir Company; the City of Arvada; the City of Westminster, Plaintiffs-Appellants, v. The CITY OF GOLDEN, Defendant-Appellee, and Richard Stenzel, Division Engineer, Water Division No. 1, Appellee pursuant to C.A.R. 1(e).

No. 01SA105.

Supreme Court of Colorado, En Banc.

April 8, 2002.

John P. Akolt, III, Denver, CO, Attorney for Farmers Reservoir and Irrigation Company.

Gaunt, Dirrim, Coover & Steele, P.C., Brice Steele, IV, Brighton, CO, Attorneys for The Farmers High Line Canal and Reservoir Company.

Moses, Wittemyer, Harrison & Woodruff, P.C., Veronica A. Sperling, Boulder, CO, Attorneys for the City of Arvada.

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

Porzak Browning & Bushong LLP, Glenn E. Porzak, Steven J. Bushong, Boulder, CO, Trout Witwer & Freeman, P.C., James W. Witwer, Denver, CO, Attorneys for the City of Golden. Justice RICE delivered the Opinion of the Court.

Two water rights decrees ("60s decrees") entered in 1961 and 1964 ("60s proceedings") gave the City of Golden ("Golden") the right to divert up to 4.66 cubic feet per second ("c.f.s.") of Priority 12 water¹ continuously from May 1st through October 31st. In Farmers High Line Canal & Reservoir Co. v. City of Golden, 975 P.2d 189 (Colo.1999), we held that claim preclusion prohibited the imposition of volumetric limits on these rights. 975 P.2d at 192. We reasoned that appellants were "precluded from seeking a modification of the decrees at issue because the decrees are unambiguous and because an earlier change proceeding fully litigated the terms and conditions of the decrees necessary to prevent injury to junior appropriators." Id. However, we also recited the well-established rule that "`where an owner of a decreed right, after obtaining a decree permitting a change in point of diversion or a change in use, enlarges or attempts to enlarge the use of his water rights to the injury of other appropriators, the permissive decree does not bar relief to the latter.'" Id. at 202 (quoting City of Westminster v. Church, 167 Colo. 1, 9, 445 P.2d 52, 55 (1968)). According to this rule, we concluded that the appellants' claim of enlarged use due to increased lawn irrigation constitutes an allegation of a changed circumstance sufficient to defeat Golden's assertion of claim preclusion. Id. at 203. Because the water court made no findings or rulings with regard to this claim, we remanded the case to the water court for this purpose. Id. at 204. On remand, the water court held that Golden had not impermissibly expanded its use of Priority 12 water because it had not applied a greater amount of Priority 12 water to lawn irrigation than was anticipated in the 60s proceedings. With regard to the number of acres of lawn Golden has irrigated with Priority 12 water, the water court made no ruling, holding instead that whether Golden has increased the acreage of lawn it irrigates with Priority 12 water since the 60s proceedings "does not address the basic questions regarding Golden's entitlement under the present decree, or the extent to which Golden has exercised its entitlement." We affirm in part and reverse in part.

In Farmers High Line Canal & Reservoir Co., we held that the calculations of William W. Wheeler, an expert hydrologist who testified on behalf of Golden during the first of the 60s proceedings, govern the interpretation of the 60s decrees. 975 P.2d at 201. These calculations attempted to balance the consumptive use of the water by previous owners of the irrigation right with the amount of water that would be consumed by Golden's municipal use of the water after the transfer. See Farmers High Line Canal & Reservoir Co., 975 P.2d at 201. Therefore, because of the unique history of these decrees, the determinative inquiry in considering whether Golden has impermissibly expanded its use of Priority 12 water is whether Golden is consuming more Priority 12 water than Wheeler anticipated. Based on Wheeler's calculations, it is possible for Golden to increase its consumption of Priority 12 water by: (1) increasing the amount of Priority 12 water it applies to lawn irrigation or (2) increasing the number of acres it irrigates with Priority 12 water. Because either would upset the balance struck by Wheeler when he concluded that 4.66 c.f.s. could be transferred to Golden without injuring junior appropriators, both the number of acres Golden irrigates with Priority 12 water as well as the amount of Priority 12 water Golden applies to lawn irrigation are relevant to a determination of whether Golden has impermissibly expanded its use of Priority 12 water.

Wheeler based his conclusion that 4.66 c.f.s. of Priority 12 water could be transferred to Golden without injury to junior appropriators on the assumption that Golden would only irrigate 225 acres of lawn with this water. Thus, we conclude that Golden would impermissibly expand its use of Priority 12 water by irrigating more than 225 acres of lawn with this water. Because the record demonstrates that Golden irrigated approximately 267 acres of lawn in 1994, we hold that Golden has impermissibly expanded its use of Priority 12 water by irrigating more than 225 acres of lawn with this water.

Wheeler also based his conclusion that 4.66 c.f.s. of Priority 12 water could be transferred to Golden without injury to junior appropriators on the assumption that Golden would only apply 53% of the Priority 12 water it is entitled to divert during the irrigation season, or 900 acre-feet, to lawn irrigation. Thus, we conclude that Golden would impermissibly expand its use of Priority 12 water by applying more than 53% of the Priority 12 water it is entitled to divert during the irrigation season, or 900 acre-feet, to lawn irrigation. Because the record demonstrates that Golden has never applied more than 476 acre-feet of water to lawn irrigation, we hold that Golden has not impermissibly expanded its use of Priority 12 water by applying more than 53% of the Priority 12 water it is entitled to divert during the irrigation season, or 900 acre-feet, to lawn irrigation. We preface our analysis of whether Golden has impermissibly expanded its use of Priority 12 water with a review of the general principles governing change proceedings and a discussion of the concept of enlarged use.

I. CHANGE OF WATER RIGHTS AND ENLARGED USE

"Scarcity and value of the water resource has always driven Colorado water law; accordingly, the state's policy is to efficiently manage, administer, and optimize water for operation of as many decreed uses as there is available supply." Farmers Reservoir & Irrigation Co., 33 P.3d at 806; see also § 37-92-501(2)(e), 10 C.R.S.2001 ("[All rules and regulations shall have as their objective the optimum use of water consistent with preservation of the priority system of water rights.]"). Flexibility, therefore, is essential to achieving this goal, and "flexibility emanates from the fact that the right of water use can be changed." Empire Lodge Homeowners' Ass'n. v. Moyer, 39 P.3d 1139, 1147 (Colo.2001).

Not only is the right to change the use of a vested water right an important component of the policy underlying the prior appropriation system as a whole, it is also an important stick in the bundle of rights that constitute a Colorado water right. Williams v. Midway Ranches Prop. Owners Ass'n., 938 P.2d 515, 523 (Colo.1997).² Notwithstanding its importance, the right to change is not absolute. New Cache La Poudre Irrigating Co. v. Water Supply & Storage Co., 49 Colo. 1, 3, 111 P. 610, 611 (1910). We have stated time and again that the need for security and predictability in the prior appropriation system dictates that holders of vested water rights are entitled to the continuation of stream conditions as they existed at the time they first made their appropriation.³Farmers Highline Canal & Reservoir Co. v. City of Golden, 129 Colo. 575, 579, 272 P.2d 629, 631-32 (1954); see also Santa Fe Trail Ranches Prop. Owners Ass'n., 990 P.2d at 52; Williams, 938 P.2d at 522; Orr v. Arapahoe Water & Sanitation Dist., 753 P.2d 1217, 1223 (Colo.1988); Church, 167 Colo. at 13-16, 445 P.2d at 58-59; Enlarged Southside Irrigation Ditch Co. v. John's Flood Ditch Co., 116 Colo. 580, 584-87, 183 P.2d 552, 554-55 (1947) [hereinafter John's Flood I]; Comstock v. Ramsay, 55 Colo. 244, 257, 133 P. 1107, 1111 (1913). From this principle springs the equally well-established rule that a change of water right cannot be approved if the change will injuriously affect the vested rights of other water users. See City of Thornton v. Bijou Irrigation Co., 926 P.2d 1, 80 (Colo.1996); Green v. Chaffee Ditch Co., 150 Colo. 91, 106, 371 P.2d 775, 783-84 (1962). "A classic form of injury involves diminution of the available water supply that a water rights holder would otherwise enjoy at the time and place and in the amount of demand for beneficial use under the holder's decreed water right operating in priority." Farmers Reservoir & Irrigation Co.,33 P.3d at 807; cf. City of Thornton,926 P.2d at 80 ("It has been fundamental law in this state that junior appropriators have rights in return flow to the extent that they may not be injured by a change in the place of use of the irrigation water which provides that return flow.").

To ensure that this most fundamental condition on the right to change the use of a water right is satisfied, a change in use must be accomplished "(1) by proper court decree," (2) only for "the extent of use contemplated at the time of appropriation," and (3) "strictly limited to the extent of formal actual usage."⁴ Santa Fe Trail Ranches Prop. Owners Ass'n., 990 P.2d at 53. "With its application, notice, and judicial determination requirements, change of water right adjudication serves to restrict an appropriation to the amount of its...