Application No. 5189-3 to Extend Time, Matter of, 17097

• Decision Date: 24 April 1991
• Docket Number: No. 17097,17097
• Citation: 467 N.W.2d 907
• Parties: In the Matter of APPLICATION NO. 5189-3 TO EXTEND TIME.
• Court: South Dakota Supreme Court

Page 907

467 N.W.2d 907

In the Matter of APPLICATION NO. 5189-3 TO EXTEND TIME.

No. 17097.

Supreme Court of South Dakota.

Argued Jan. 8, 1991.

Decided March 27, 1991.

Rehearing Denied April 24, 1991.

Harold H. Deering, Jr., Asst. Atty. Gen., Sioux Falls, Roger A. Tellinghuisen, Atty Gen., Pierre, on the brief, for plaintiff and appellee Division of Water Rights.

Danny R. Smeins, Britton, for appellant.

Rory King, Siegel, Barnett & Schutz, Aberdeen, for appellee, Isabel Fryer.

WUEST, Justice.

Mr. Gerald Person appeals the judgment of the circuit court, affirming the decision of the Water Management Board to extend the time for construction of an irrigation works under Water Permit No. 4780-3. We affirm in part and reverse in part.

On June 8, 1981, Walter W. Johnson applied for a permit to appropriate water for the irrigation of farmland located in Marshall County, South Dakota. The farmland was owned by Vincent and Isabel Fryer. Mr. Johnson was a long-time tenant on the Fryer farmland pursuant to an oral crop-share lease and was a close personal friend of the Fryers. The application was approved by the Water Management Board (Board) on July 29, 1981, and Water Permit No. 4780-3 was issued with a priority date of June 8, 1981. Pursuant to the permit, construction necessary to put the water to beneficial use was to be completed on or before July 29, 1986, and the water was to be put to beneficial use on or before July 29, 1990.

A dam from which the irrigation water was to be appropriated was constructed and filled with water in the spring of 1982. The dam was built by Teiger Construction Co. in return for gravel from the Fryers' land worth approximately $32,000. Mr. Johnson assisted in the construction of the dam.

In 1982, a dispute arose between Mr. Johnson and the Fryers. The dispute culminated in the Fryers commencing an eviction action against Mr. Johnson in April 1983. A judgment of eviction was entered against Mr. Johnson on July 5, 1983. Mrs. Fryer transferred Water Permit No. 4780-3 into her name, alone, on August 23, 1983.

In the fall of 1982, the Fryers rented their land to Curtis and Richard Foster, the present tenants on the land. The Fosters checked into completing the irrigation project and discussed it with the Fryers. Plans to finish the project were put on hold, however, because Mr. Johnson commenced a lawsuit against the Fryers on August 24, 1983, seeking over $100,000 in damages for lost improvements made during the oral lease.

At the time Mr. Johnson filed his lawsuit, Mr. Fryer was in his early eighties and had, and continued to suffer, serious health problems which ultimately resulted in permanent mental impairment and memory loss. Mr. Fryer was hospitalized with congestive heart failure and suffered psychological stress as a result of the falling-out with Mr. Johnson. Mrs. Fryer was in her mid-seventies.

This second lawsuit was settled in June of 1987. In March 1988, Curtis Foster contacted the Water Rights Division concerning completion of the irrigation project and on March 19, 1988, Mrs. Fryer made application to reinstate Water Permit No. 4780-3. This application was subsequently revised to an application to extend the time for completion of the construction works under Permit No. 4780-3, and was formally filed August 15, 1988.

Mr. Gerald Person intervened in opposition to the extension of time for construction. Mr. Person is a downstream irrigator who has two water permits, one with a priority date of February 23, 1983, and another with priority as of October 24, 1984. Mr. Person's interest in this matter stems from the fact that Mrs. Fryer's water permit retains its original priority date (June 8, 1981) if it is "extended," but loses its priority date if it must be reinstated. ¹

The Board determined that "exigent circumstances" existed under SDCL 46-5-26 and extended the time for construction to July 29, 1989. Mr. Person appealed to circuit court, which affirmed the Board's decision. Mr. Person appeals to this court and raises seven issues. ² Under our holding, we need address only:

I. Whether the Board lacks jurisdiction to amend a permit to extend the construction period pursuant to SDCL 46-5-26 by an application filed after the expiration of the permit's five-year construction period;

II. Whether the 1983 amendment to SDCL 46-5-26 constitutes an unlawful delegation of legislative authority; and

III. Whether the Board's conclusion of law that "exigent circumstances" existed is supported by the record.

I.

We set forth in full several pertinent statutes in order to establish a background for our discussion. SDCL 46-2A-8 provides:

Any construction necessary to put the water to beneficial use shall be completed within five years of approval of the permit and the water shall be put to beneficial use within an additional four years. The water management board may, in its discretion, approve any application for a lesser amount of water or may vary the periods of annual use and the permit to appropriate water shall be regarded as limited accordingly.

SDCL 46-5-24 provides:

The plans of construction or place of diversion may be amended, but no amendment may authorize any extension of time for construction beyond five years from the date of the permit, except as provided by this chapter. A change in the proposed point of diversion of water or change of construction plans shall be subject to the procedures contained in chapter 46-2A and may not be allowed to the detriment of the rights of others having valid water permits or rights to the use of the water.

And SDCL 46-5-26 provides:

A permit may be amended by extending the time for the completion of construction, or for application to beneficial use, for a reasonable time, but only on account of delays due to physical or engineering difficulties which could not have been reasonably anticipated, due to operation of law beyond the power of the applicant to avoid, or due to other exigent circumstances identified by the water management board.

It is undisputed that the construction works of the Fryers' irrigation project were not completed within five years or that Mrs. Fryer did not apply for an extension of the construction period prior to the expiration of the original five-year construction period.

Mr. Person contends the Board is without jurisdiction to consider permit amendments to extend the construction period filed after the original five-year period. He asserts two lines of argument: (1) SDCL 46-5-26 does not expressly or impliedly grant the Board authority to consider applications to amend after the five-year period, and (2) Mrs. Fryer's water permit lapsed by operation of law and thus was not an "existing permit" which could be amended. We address these arguments separately.

A.

The Board clearly has authority to amend water permits. See, e.g., SDCL 46-1-14, ³ SDCL 46-5-30.4, ⁴ SDCL 46-5-24, SDCL 46-5-26. The language of SDCL 46-5-26, which authorizes amendments to extend the construction period, is silent as to the timing of such amendments; the statute does not expressly provide for or prohibit the consideration of amendments filed after the five-year construction period. The Board determined that the Legislature intended to broaden the circumstances under which construction extensions could be granted by amending SDCL 46-5-26 to include "exigent circumstances." The Board thus concluded the existence of exigent circumstances could operate to permit consideration of amendments filed after the initial five-year construction period.

In addition to powers expressly conferred, an agency has such implied powers as are reasonably necessary to effectuate its express powers. Spies Realty Co. v. State Dept. of Social Services, 321 N.W.2d 924, 926 (S.D.1982). An agency may exercise some degree of discretion in construing its obligations under a statutory grant of authority. See In re Application of Kohlman, 263 N.W.2d 674 (S.D.1978). The Board's interpretation of the "exigent circumstances" provision is consonant with legislative intent and not beyond the scope of its authority. We affirm the Board on this issue.

B.

SDCL 46-2A-8.1 provides:

The water management board may reinstate any water permit with a priority date after March 31, 1977, if unappropriated water is available, when construction necessary to put water to beneficial use was not completed pursuant to Sec. 46-2A-8 or Sec. 46-5-26. An application to reinstate a permit may be made without reapplying for a soil-water compatibility permit pursuant to Sec. 46-5-6.2. Any application under this section must be made within three years of the expiration of the original construction period pursuant to chapter 46-2A. The priority date for the application to reinstate a permit shall be the date the application to reinstate is filed.

SDCL 46-2A-12 provides:

An amendment of an existing permit or license may be granted for a change in use, a change in point of diversion or other change only if the change does not unlawfully impair existing rights and is for a beneficial use and in the public interest.

Mr. Person argues that once the initial five-year construction period passed without application to extend, Mrs. Fryer's water permit "lapsed" and no longer could be amended as an "existing permit" under SDCL 46-2A-12; the permit could only be reinstated pursuant to SDCL 46-2A-8.1. Under Mr. Person's "lapse" theory, Mrs. Fryer did not lose her water right per se, but rather, lost her priority as against other appropriators. Mr. Person analogizes this situation to the lapse of an Article 9 financing statement by not filing a continuation within five years or the lapse of a collateral real estate mortgage for failure to file an addendum prior to the expiration period. Mr. Person makes a good argument, but we are bound by precedent under the circumstances.

In In re Cancellation of the Stabio Ditch Water Right, 417 N.W.2d 391 (S.D.1987), we examined SDCL...