Anderson v. Pursell, Case No. 09SA119
| Citation | Case No. 09SA119 |
| Case Date | December 13, 2010 |
| Court | Supreme Court of Colorado |
Applicant-Appellant: Mark Anderson,
v.
Opposers-Appellees: Richard Pursell; Henry R. Sebesta and
Mary M. Sebesta Revocable Trust; and C&K Properties, Inc.;
and
Appellee pursuant to C.A.R. 1(e): Division Engineer, Water Division 2.
Case No. 09SA119
SUPREME COURT, STATE OF COLORADO
December 13, 2010
The supreme court upholds the portions of the water court's order granting attorney fees and costs associated with the Final Decree to Pursell and those associated with the Motion to Enforce to Sebesta and Pursell. The court agrees with the water court's ruling that Pursell was the "prevailing party" under the parties' Water Agreement and that the water court did not err in considering Pursell's late filed motion. It also holds that Anderson's Motion to Enforce lacked substantial justification under section 13-17-102(4), C.R.S. (2010).
The supreme court reverses the portion of the water court's order granting attorney fees and costs to Sebesta and Pursell for defending Anderson's abandoned appeal of the water court's denial of his Motion to Enforce. Because Anderson abandoned the appeal before filing an opening brief, there is no way for the court to determine if the appeal was frivolous. And, even if it was frivolous, there was no reason that Sebesta or Pursell
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should have incurred any costs or attorney fees because the appeal was abandoned.
The supreme court also reverses the portion of the water court order awarding costs and attorney fees to Sebesta and Pursell for litigating the underlying fee issue. The court holds that costs and attorney fees incurred in pursuit of costs and attorney fees are only appropriate if the proffered defenses are frivolous. Because Anderson's defenses were not frivolous, Sebesta and Pursell are not entitled to those costs and attorney fees.
Appeal from the District Court Water Division 2, Case No. 02CW176 Honorable Dennis Maes, Water Judge
Concerning the Application for Water Rights of Mark Anderson in Chaffee County, Colorado
Paul G. Anderson, LLC
Paul G. Anderson
Colorado Springs, Colorado
Attorneys for Applicant-Appellant
Anthony L. Martinez, Esq., P.C.
Anthony L. Martinez
Salida, Colorado
Attorneys for Opposer-Appellee Richard Pursell
Jonathan S. Bender
Meghan N. Winokur
Holland and Hart, LLP
Denver, Colorado
Attorneys for Opposers-Appellees Henry R. Sebesta and Mary M. Sebesta Revocable Trust and C&K Properties, Inc.
JUSTICE RICE delivered the Opinion of the Court.
JUSTICE MARQUEZ does not participate.
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Mark Anderson ("Anderson") challenges an April 3, 2009, water court order that granted attorney fees and costs to Henry R. Sebesta and Mary M. Sebesta Revocable Trust and C&K Properties, Inc. (collectively "Sebesta"), and Richard Pursell
("Pursell") for various stages of the litigation. We hold that the water court was correct in granting attorney fees and costs associated with the Final Decree to Pursell because he was the "prevailing party" under the parties' Water Agreement. Further, the water court was correct in both the award and the amount of attorney fees and costs to both Sebesta and Pursell for defending Anderson's Motion to Enforce because it lacked substantial justification under section 13-17-102(4), C.R.S.
(2010). But, we hold that the water court incorrectly awarded attorney fees and costs to Sebesta and Pursell for defending Anderson's appeal and pursuing the underlying fee award. Therefore, we affirm in part and reverse in part.
At this stage, this case involves a dispute over attorney fees. This attorney fee dispute arises from an ongoing clash over the Eureka Ditch water right, the procedural history of which is necessary to understand the attorney fee dispute now at issue.
The Eureka Ditch flows in turn through the properties of Sebesta, Diana and Wail Hashimi ("Hashimi"), 1 Pursell, and Anderson, with each landowner owning an interest in the water right. Anderson owns 50%, Sebesta and Hashimi each own 20%, and Pursell owns 10%. The Eureka Ditch is not a simple straight line canal. Instead, it is a complex hydrological system that
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flows through a series of ponds and lateral ditches on the parties' land. Despite the presence of the ponds, only Anderson has storage rights to store water on his land.
On September 12, 2000, Sebesta and Anderson entered into a Joint Water Use and Maintenance Agreement ("Water Agreement").2 In this agreement, the parties established that Sebesta had the right to divert water from the Eureka Ditch so long as one-half of the water remained in the ditch to supply Anderson with his allocated share.3 The parties also agreed that "[i]n the event of a dispute concerning the intent or construction of [the Water Agreement], the prevailing party shall be entitled to reasonable attorney's fees."
Anderson submitted an application to the division engineer seeking to, among other things, adjudicate absolute water
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rights, change his portion of the Eureka Ditch water right to allow for pond storage and other uses, and provide a plan for augmentation to replace out of priority depletions. Sebesta and Pursell both opposed the application because they were concerned that if the water court approved the application, their shares of the water right would be harmed.
Before the water court ruled on Anderson's application, Anderson moved for injunctive relief against Sebesta and Pursell claiming that he was not receiving his share of the water from the Eureka Ditch. Anderson argued that the reason for his shortfall was that Sebesta and Pursell had both added new ponds and expanded existing ones on their land, causing more water to sit in the ponds and less water to be delivered to Anderson. Sebesta responded to this motion but Pursell did not.
The water court granted the injunction in November 2003, and ordered Sebesta and Pursell to cease diverting and storing the water and to affirmatively deliver one-half of the flow of the Eureka Ditch to Anderson. In so doing, the water court ordered Sebesta and Pursell to by-pass their ponds to ensure that Anderson would receive his share. The water court also awarded attorney fees to Anderson for the injunction.
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Sebesta filed a timely Motion to Alter, Amend or Vacate the injunction. Pursell also filed a Motion to Alter, Amend or Vacate, but did so after the fifteen-day deadline. Before the water court ruled on either of the motions, Anderson and Sebesta entered into a stipulation in April, 2004. In the stipulation, Anderson agreed to dismiss the water court's injunction order against Sebesta. In exchange, Sebesta dismissed his opposition to Anderson's application. Sebesta and Anderson also agreed to reasonably accommodate each other's ownership interests in times of low flow and to cooperate in constructing and installing additional structures to facilitate the delivery of Anderson's 50% interest. The stipulation did not require Sebesta to by-pass the ponds on his land. The water court accepted the stipulation.
Neither the injunction nor the stipulation affected Anderson's pending application.
The water court ultimately held a trial on Anderson's application in November 2004, and issued a decree on the matter ("Final Decree") on February 10, 2005. The Final Decree incorporated the Water Agreement and granted Anderson much of what he requested in his application. The water court ruled, however, that Anderson's share of the water right was only in
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the main channel of the Eureka Ditch, that he was to bear transit losses, and that Pursell and Sebesta were not required to by-pass the ponds on their land.4
Anderson submitted a timely motion for costs under C.R.C.P. 54(d). Pursell, on the other hand, submitted a motion for costs and attorney fees, alleging that he was the "prevailing party" under the Water Agreement, but did so on November 2, 2005, over eight months after the fifteen-day deadline. The water court denied both motions on December 26, 2006--Pursell's because it was late and Anderson's because he was not the prevailing party. With regard to Anderson not being the prevailing party, the water court stated that "[w]hile Anderson obtained some of the relief he requested, a substantial portion of the trial surrounded the interpretation of certain aspects of the [Water Agreement] which were determined contrary to Anderson's position."
Pursell made a timely motion for reconsideration of this order.
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In October 2006, because he was again not receiving his share of the water right, Anderson filed a Motion to Enforce seeking to compel Pursell to comply with the injunction order and Sebesta to comply with the stipulation. Anderson also asked the water court to modify the stipulation to require Sebesta to by-pass the ponds on...
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