Associated Enterprises, Inc. v. Toltec Watershed Imp. Dist.

• Citation: 656 P.2d 1144
• Decision Date: 06 January 1983
• Docket Number: No. 5694,5694
• Parties: ASSOCIATED ENTERPRISES, INC., Johnston's Fuel Liners, Inc., Appellants (Defendants), v. TOLTEC WATERSHED IMPROVEMENT DISTRICT, Appellee (Plaintiff).
• Court: United States State Supreme Court of Wyoming

Page 1144

656 P.2d 1144

ASSOCIATED ENTERPRISES, INC., Johnston's Fuel Liners, Inc., Appellants (Defendants), v. TOLTEC WATERSHED IMPROVEMENT DISTRICT, Appellee (Plaintiff).

No. 5694.

Supreme Court of Wyoming.

Jan. 6, 1983.

Henry A. Burgess, Sheridan, for appellants.

Fred W. Phifer, Wheatland, for appellee.

Before ROONEY, C.J., ^* and RAPER, THOMAS, ROSE ^** and BROWN, JJ.

BROWN, Justice.

Appellee condemned appellants' land to construct a reservoir. The trial court entered an order granting condemnation and an order of award. A judgment on a jury verdict awarding just compensation for the land taken was also entered. This appeal is from both orders and from the judgment on the verdict.

We will affirm.

Appellants designate the issues on appeal:

"I. Appellee, Toltec Watershed Improvement District, was denied the right to condemn the land of Appellants, Associated Enterprises, Inc., Johnston's Fuel Liners, Inc., and Anabel Malmquist Michele, by reason of W.S.1977, § 41-8-126, which prohibits impairment of existing water rights, appropriations or priorities.

"II. Appellee, Toltec Watershed Improvement District, was not authorized to condemn land initially for recreation contrary to W.S.1977, § 41-8-102.

"III. The exercise of the right of eminent domain by Toltec Watershed Improvement District for supplemental water and recreation is not a public necessity, benefit, or advantage which justifies the taking of Appellants' land and impairing its existing water rights permits and appropriations for a reservoir.

"IV. The Verdict should be set aside and vacated as it is not supported by competent evidence and is contrary to the evidence.

"V. Proper interest was not awarded Appellants."

Appellee Toltec Watershed Improvement District was established after a referendum, held pursuant to the Watershed Improvement District Act. Sections 41-354.1 to 41-354.26, W.S.1957 (Cum.Supp.1971) (Now §§ 41-8-101 to 41-8-126, W.S.1977).

The parties here have been involved in litigation for more than twelve years. In 1970 appellee sought a right to enter on to land owned by appellant Associated Enterprises, Inc. and leased by appellant Johnston Fuel Liners, Inc. to carry out foundation studies for a dam site. Appellants resisted, claiming that the Watershed Improvement District Act was unconstitutional because it violated the "one man, one vote" concept under the Wyoming and the United States Constitutions. ¹

We held in Associated Enterprises, Inc. v. Toltec Watershed Improvement District, Wyo., 490 P.2d 1069 (1971), that the "one man, one vote" concept of equal protection under state and federal constitutions is not to be applied to entities such as watershed improvement districts and that the statute creating watershed improvement districts is not unconstitutional as offending such concept. The United States Supreme Court affirmed this decision. Associated Enterprises, Inc. v. Toltec Watershed Improvement District, 410 U.S. 743, 93 S.Ct. 1237, 35 L.Ed.2d 675 (1973).

In 1978 the parties were again before this court. In that action appellants here contested the authority of the State Engineer to grant appellees an extension of time to commence and complete construction of a reservoir. We affirmed the district court in its decision affirming the State Engineer granting such extension. Associated Enterprises, Inc. v. Toltec Watershed Improvement District, Wyo., 578 P.2d 1359 (1978).

In 1974 appellee filed a complaint to condemn 264.68 acres of appellants' land on which to construct a reservoir. ² Appellants appeal from the district court's order granting condemnation, order of award and judgment awarding compensation.

I

Appellants' most compelling argument for reversal is their contention that § 41-8-126, W.S.1977, constitutes a statutory limitation upon appellee's eminent domain authority. This statute provides:

"Nothing in this Act shall be so construed as to in any manner impair existing water rights, appropriations or priorities."

Appellee says that appellants still have their water rights and priorities. Appellee contends that appellants' land was condemned as irrigated land and compensation was awarded on that basis, but that appellants still own the water rights. Appellants argue that this is a valueless property right. Appellants placed in evidence an affidavit that there was no land to which appellants' water rights could be transferred. Furthermore, appellants' water rights, if they have any left, are subject to being extinguished by nonuse. ³

Appellee says that its right to condemn appellants' land was determined by this court in a prior case between the same parties. In Associated Enterprises, Inc. v. Toltec Watershed Improvement District, supra, at 1363, we said we would not assume that the legislature would pass an act which would have no force or effect, because the legislature will not be presumed to intend futile things. We went on to say that appellants' interpretation of § 41-8-126, supra, would force a construction that would nullify the entire Watershed Improvement District Act:

"For the legislature to say, on the one hand, that a watershed district has the power of eminent domain to enable it to build dams and irrigation systems, while, at the same time limiting that right to only those situations in which no existing water rights, appropriations or priorities are impaired, would be inconsistent, impractical, and would have the effect of charging the legislature with the passage of a useless act. The rivers and streams of Wyoming are so completely appropriated that it is now virtually impossible to undertake construction of a reservoir without in some manner affecting an existing water right. The requirement under the statutory provisions for condemnation that this impairment must be compensated for in a just manner nullifies any equitable argument on the part of the prior appropriator."

We also said in that case that the land to be taken would be compensated for as irrigated land, unless it could be shown that the water rights were to be transferred to a third party or transferred to other lands. ⁴ Appellants vigorously contend that what we said in the 1978 case of Associated Enterprises, Inc. v. Toltec regarding eminent domain was dicta and not precedent. Appellants further contend that this court's decision in that case assumed facts not in the record. We will not review the issues and record in the 1978 case to determine whether what we said in that case was dicta. We are satisfied that the analysis is sound, and that it is applicable to this case, where the issue of appellee's right to condemn appellants' land is squarely before this court.

It is difficult to see how the purposes of the Act could be accomplished without in some way affecting existing water rights. While the construction of a reservoir may be the key to a water improvement project, other facilities are also necessary. Canals, laterals, flumes and diversion structures must also be built. Construction of any of these facilities would have to affect existing water rights in some way. If we were to accept appellants' argument here and interpret § 41-8-126 literally, we would nullify the Act. " 'The will or caprice of an individual would often defeat the most useful and extensive enterprises * * * '." 4 Clark, Waters & Water Rights, § 303.1, p. 72 (Allen Smith Company, 1970).

Part of the problem here may be due to the feeling which a commentator said could apply to Wyoming law of water transfers, and which we think could also apply to the condemnation of property that has appurtenant water rights:

" * * * [I]t may be hazarded that the answer lies in a strong 'heirloom attitude' of the Wyoming ranch and farm water user. He feels that water is his most precious asset, his heritage, his birthright. To sell it would be sinful. Laws against sin are much in favor. In part this attitude may come from a misunderstanding, a fear that stability of water rights is at stake, that water will be 'taken' from irrigators without compensation, as may be done in some eastern states. * * * " 1 Land & Water Review, p. 73 (1966).

Here, appellants have been compensated for the untransferred water rights by being paid for irrigated land. We would venture a guess, therefore, that their real objection comes from a feeling that a "birthright" has been taken from them, and that no compensation for the loss of that "birthright" would be adequate.

We can easily understand such an objection, but we do not believe that the legislature would provide for a comprehensive watershed improvement scheme in the 25 sections of the Act and then render it meaningless in one sentence. We hold that the prohibition against impairment of existing water rights, appropriations, or priorities contained in § 41-8-126, supra, is not absolute and that the purpose of the statute is satisfied if just compensation is awarded. This holding is consistent with general condemnation law, although general condemnation law admittedly does not contain a provision identical to § 41-8-126.

II

When this condemnation was commenced in 1974 the purposes of the Watershed Improvement District Act were:

"The purposes of this act are to provide for the prevention and control of erosion, flood water and sediment damages, and the storage, conservation development, utilization, and disposal of water, and thereby to preserve and protect land and water resources, and protect and promote the health, safety, and general welfare of the people of this state." § 41-354.2, W.S.1957 (Cum.Supp.1975).

In 1975 the following provision was added to the purposes of the Act:

"Recreational use may be included in conjunction with projects developed in compliance with the purposes of this act, but nothing in this act shall be interpreted to give initial power of condemnation for recreational purposes. * * * " § 41-354.2, W.S.1957 (Cum.Supp.1971).

Appellants submit that recreational use cannot be included in the...