City of Golden v. Simpson

• Decision Date: 12 January 2004
• Docket Number: No. 02SA364.,02SA364.
• Citation: 83 P.3d 87
• Parties: CITY OF GOLDEN, a Colorado municipal corporation, Plaintiff, v. Hal D. SIMPSON, in his official capacity as Colorado State Engineer, and Richard L. Stenzel, in his official capacity as Division Engineer for Water Division No. 1, and the Farmers High Line Canal and Reservoir Company, Defendant.
• Court: Colorado Supreme Court

83 P.3d 87

CITY OF GOLDEN, a Colorado municipal corporation, Plaintiff, v. Hal D. SIMPSON, in his official capacity as Colorado State Engineer, and Richard L. Stenzel, in his official capacity as Division Engineer for Water Division No. 1, and the Farmers High Line Canal and Reservoir Company, Defendant.

No. 02SA364.

Supreme Court of Colorado, En Banc.

January 12, 2004.

Rehearing Denied February 2, 2004.

Porzak Browning & Bushong LLP, Glenn E. Porzak, Steven J. Bushong, P. Fritz Holleman, Boulder, Colorado, Attorneys for Appellant.

Ken Salazar, Attorney General, Lori J. Coulter, Assistant Attorney General, Denver, Colorado, Attorneys for Appellee Hal D. Simpson.

The Law Offices of Brice Steele, P.C., Brice Steele, Brighton, Colorado, Carlson, Hammond & Paddock, L.L.C., Mary Mead Hammond, Lee H. Johnson, Karl D. Ohlsen, Denver, Colorado, Attorneys for Appellee Farmers High Line Canal and Reservoir Company.

Chief Justice MULLARKEY delivered the Opinion of the Court.

I. Introduction

In this water case, the State Water Engineer ordered the City of Golden to stop diverting water from Clear Creek at the Church Ditch during a river call in the drought year of 2002. Golden sought to prevent enforcement of the order by immediately moving for a temporary restraining order ("TRO"), a preliminary injunction, and a permanent injunction against the state. The state, in turn, orally requested an injunction to enforce its cease-and-desist order. After a full-day hearing, the water judge held that Golden did not have a valid right to the water it had been diverting at the Church Ditch and ordered Golden to comply with the state's order to enforce the conditions of a 1966 change of water right decree. Consequently, the judge denied the TRO and dismissed Golden's request for preliminary and permanent injunctions.

Golden makes two arguments as to how the water court erred. First, Golden claims that it has valid rights to the water, and should not have had to stop diverting. Second, Golden asserts that regardless of the merits, the court prematurely dismissed the case after simply holding a hearing on the TRO, and instead should have conducted another hearing involving the permanent injunction.

We reject both of Golden's arguments. The 1966 change decree that established Golden's rights is unambiguous and, under it, Golden does not have rights to the water it claims. Consequently, the water court was correct in dismissing Golden's complaint.

II. Facts and Procedural History

On Friday, September 6, 2002, the Division Engineer for Water Division No. 1 issued a cease-and-desist order directing the City of Golden to stop diverting water from Clear Creek under its Oulette Ditch Priority No. 5. The Division Engineer issued the order after concluding that Golden was in violation of a 1966 change decree. This change decree resulted when, in 1966, Golden obtained permission to move a very senior water right approximately six miles up Clear Creek from its original point of diversion and change the use of the water from irrigation to municipal.

Prior to 1966, Golden held irrigation water rights to divert 6.69 cubic feet per second ("cfs") from Clear Creek at the Oulette Ditch headgate, which is located several miles downstream from Golden. This was a very senior water right dating back to May 31, 1860. Golden, however, needed water for municipal uses, and needed the water much farther upstream where its municipal intake site was located. Consequently, the water court entered a change decree imposing certain conditions on Golden. This decree reduced Golden's rights from 6.69 cfs to 3.42 cfs to reflect historical beneficial use, moved the diversion point six miles upstream to the Church Ditch, and changed the use to municipal.

The decree confirmed a settlement agreement Golden negotiated with other water right holders on this stretch of Clear Creek. Farmers High Line Canal and Reservoir Company ("FHL") was one of these holders. It held water rights that entitled it to divert 44.4 cfs at the Farmers High Line Canal ("FHL Canal"), which intersects with Clear Creek between the Church and Oulette Ditches. Golden's Priority No. 5 was senior to many of FHL's rights, and so, before 1966, if Golden did not have 6.69 cfs available at Oulette Ditch during the irrigation season, it could put a call on the river and limit the amount of water that FHL and others diverted upstream.

The FHL Canal, however, is several miles upstream from Oulette Ditch, and historically there has typically been water entering and leaving Clear Creek between the FHL Canal and the Oulette Ditch.¹ Thus, even when FHL diverted all of the available water at the headgate of the FHL Canal, there was frequently sufficient water for Golden to divert 6.69 cfs at the Oulette Ditch headgate. Consequently, Golden's right was often satisfied from sources below the FHL Canal, and FHL was free to divert water at the FHL Canal without regard to Golden's more senior right.

In the attempt not to harm other appropriators, paragraph 7(e) of the 1966 change decree sought to recreate the pre-change relationship between FHL and Golden. If conditions on Clear Creek were such that Golden would not have had to call for FHL's water absent the change decree, Golden was prohibited from taking water from FHL after the change decree as well. Specifically, paragraph 7(e) said that when water flowing at the Oulette Ditch was 3.5 cfs or greater— sufficient to satisfy Golden's new volume at its prior point of diversion—and when Clear Creek did not have enough water to satisfy both Golden's and FHL's rights, Golden must stop diverting water at the Church Ditch.² These two requirements were intended to mitigate the harm from moving Golden's point of diversion from several miles downstream from the FHL Canal to just upstream from the FHL Canal. If there was at least 3.5 cfs at the Oulette Ditch headgate, Golden's new rights were effectively subordinated to FHL's. At all other times, Golden's Priority No. 5 continued to be senior.³ Under these terms, FHL would not be harmed by Golden's change of the point of diversion.

In mid-July of 2002, during a severe drought, there was not sufficient water at the FHL headgate to satisfy FHL's water rights. Consequently, it placed a call on Clear Creek. Although FHL was using all of the water available at the FHL headgate, inflows downstream from the FHL Canal provided approximately 5-10 cfs at the Oulette Ditch headgate. In August, FHL obtained data revealing that Golden was exercising its Priority No. 5 despite FHL's call and the 5-10 cfs flow at the Oulette Ditch headgate.

FHL reported to the Division Engineer that Golden was in violation of the 1966 change decree. After discussing the situation with Golden twice in two weeks, the Division Engineer issued the cease-and-desist order of September 6, 2002. The cease-and-desist order demanded that Golden stop diverting at the Church Ditch by 12:01 am on Sunday, September 8, 2002. Golden did not comply, but immediately filed a motion for a temporary restraining order, a motion for preliminary injunction, and a complaint for injunctive relief to prevent the state from enforcing its order.

Monday, September 9, the Water Court for Water Division No. 1 held a hearing on Golden's motion for a temporary restraining order. The hearing lasted all day, and addressed two issues: whether Golden had a legally enforceable right to continue its diversion, and if so, whether Golden would suffer immediate and irreparable injury if forced to stop diverting water from Clear Creek.

Based on testimony at the hearing, and on his interpretation of the 1966 decree, the water judge held that Golden did not have a legally enforceable right to continue diverting water. Consequently, the judge denied Golden's motions for a temporary restraining order and preliminary injunction, and dismissed Golden's complaint for injunctive relief. The judge further ordered Golden to comply with the state's cease-and-desist order. Golden appealed directly to the Supreme Court as required by section 13-4-102(1)(d). § 13-4-102(1)(d), 5 C.R.S. (2003); § 37-92-304(9), 10 C.R.S. (2003).

III. Analysis

The City of Golden, the petitioner, makes two arguments. First, it claims that the water court was incorrect when it employed the plain language of the 1966 change decree to hold that Golden did not have a valid right to 3.42 cfs of Priority No. 5 water when two conditions were met: over 3.5 cfs of water was flowing at the Oulette Ditch headgate, and FHL had a call on Clear Creek. Second, Golden argues that the water court erred when it dismissed Golden's complaint for injunctive relief without a separate hearing on the matter.

We reject both arguments. Although the City of Golden offers several creative interpretations of the 1966 change decree, we agree with the water judge that the terms are clear: Golden does not have the right to divert water from Clear Creek when the two conditions are satisfied, and in this case they were. Because the decree is clear on its face, no extrinsic evidence is admissible to alter its plain meaning.

We also hold that the water judge acted within his discretion when he dismissed Golden's motion for a preliminary injunction and its complaint for injunctive relief after just one hearing. At the TRO hearing, the water judge stated that he would hear evidence on the merits of the case if time permitted, and indeed all of the parties presented expert testimony regarding the merits. At the end of the hearing, Golden's attorney told the judge that he knew of no additional evidence that he would present at a subsequent hearing. After the hearing, the judge decided that Golden did not have a legal right to the Priority No. 5 water and could not prevail. Therefore, he properly ordered Golden to comply with the state's cease-and-desist order and dismissed Golden's complaint.

In the following sections, we examine each of...