Colman v. Utah State Land Bd.

• Citation: 795 P.2d 622
• Decision Date: 12 April 1990
• Docket Number: No. 860331,860331
• Parties: William J. COLMAN, Plaintiff and Appellant, v. UTAH STATE LAND BOARD; Ralph Miles, Director, Utah Division of State Lands and Forestry, Utah Department of Natural Resources; and Southern Pacific Transportation Company, a Delaware corporation, Defendants and Appellees.
• Court: Supreme Court of Utah

Page 622

795 P.2d 622

William J. COLMAN, Plaintiff and Appellant, v. UTAH STATE LAND BOARD; Ralph Miles, Director, Utah Division

of State Lands and Forestry, Utah Department of Natural

Resources; and Southern Pacific Transportation Company, a

Delaware corporation, Defendants and Appellees.

No. 860331.

Supreme Court of Utah.

April 12, 1990.

Rehearing Denied July 20, 1990.

Carol Clawson, Gary Bendinger, Salt Lake City, for Colman.

R. Paul Van Dam, Dallin W. Jensen, Michael M. Quealy, R. Douglas Credille, Salt Lake City, for State appellees.

L. Ridd Larson, Thomas L. Kay, Craig L. Taylor, Salt Lake City, for Southern Pacific.

STEWART, Justice:

William J. Colman filed an action against the Utah State Land Board and against Ralph Miles, Director of the Utah Division of State Lands and Forestry of the Department of Natural Resources (referred to collectively as "the State"), and against Southern Pacific Transportation Company for the destruction of an underwater brine canal Colman maintained on the bed of the Great Salt Lake. The trial court dismissed the complaint, and Colman appealed.

I. FACTS

This case arose out of the breach of the Great Salt Lake causeway on August 1, 1984. The causeway is a raised bed of fill which crosses the lake in an east-west direction. Southern Pacific runs a railroad line over the causeway. The causeway was constructed in 1959 by Southern Pacific after obtaining a right-of-way for its construction from the state of Utah.

The Great Salt Lake Causeway Act (the "Act"), 1984 Utah Laws ch. 32, enacted during the 1984 budget session of the Utah legislature, authorized breaching the causeway as a response to the rapid rise of the water level in the lake. During this same session, the legislature amended the Utah Governmental Immunity Act to limit the liability of governmental entities for management of flood waters. Utah Code Ann. § 63-30-3; 1984 Utah Laws ch. 33, § 1.

Prior to the breach of the causeway by the State and Southern Pacific, Colman operated and maintained a five-mile-long underwater brine canal running parallel to and approximately 1,300 feet north of the causeway. The canal was authorized by a lease and easement granted by the State. The brine canal was used in Colman's business of extracting minerals from deep lake brines.

On July 20, 1984, Colman filed a complaint in the Third District Court seeking (1) to enjoin the State and Southern Pacific from breaching the causeway, and (2) to recover monetary damages for the damage the breach would cause his property if the court did not grant the injunction.

Colman's mineral extraction operation was located on the western shore of the lake. The canal began near that point and ran five miles eastward into the lake. Colman alleged that for his mineral extraction operation to be economically feasible, it was necessary for him to draw brines from the deeper strata of the lake, where the brines are more dense. His complaint alleged that he had dredged and maintained the canal so that its bottom was at a constant elevation. Colman alleged that the canal made it possible for him to pump the deep-water brines into his mineral extraction operation.

Colman alleged that the breach of the causeway would cause water from the south arm of the lake to flow through the breach under great pressure and cut through the canal banks. He also claimed that the breach would create turbidity and sedimentation, making the use of the canal as a brine conduit impossible.

The trial court denied Colman's motion for a preliminary injunction on July 31, 1984, after an evidentiary hearing, and the causeway was breached the following day. On August 20, 1984, the State filed a motion to dismiss Colman's damage claims. That motion was granted by the trial court May 2, 1986. The trial court concluded that (1) the Utah Governmental Immunity Act immunized the State from liability, (2) the breach of the causeway was a valid exercise of the police powers of the State, (3) the breach of the causeway was in furtherance of the State's public trust responsibilities, and (4) there was no compensable taking of a property interest.

II. STANDARD OF REVIEW

A dismissal is a severe measure and should be granted by the trial court only if it is clear that a party is not entitled to relief under any state of facts which could be proved in support of its claim. Liquor Control Comm'n v. Athas, 121 Utah 457, 460, 243 P.2d 441, 443 (1952). The courts are a forum for settling controversies, and if there is any doubt about whether a claim should be dismissed for the lack of a factual basis, the issue should be resolved in favor of giving the party an opportunity to present its proof. Baur v. Pacific Fin. Corp., 14 Utah 2d 283, 284, 383 P.2d 397, 397 (1963). On this appeal, we look solely to the material allegations of Colman's complaint, not to the evidence presented at the preliminary injunction hearing. In their briefs and at oral argument, the State and Southern Pacific rely extensively on the evidence presented at the preliminary injunction hearing to support their position. We do not, however, consider this evidence on this appeal. See Utah R.Civ.P. 12(b). Colman's complaint was dismissed on a rule 12 motion to dismiss. When reviewing a dismissal based on rule 12, an appellate court must accept the material allegations of the complaint as true, Petersen v. Jones, 16 Utah 2d 121, 122, 396 P.2d 748, 748 (1964), and the trial court's ruling should be affirmed only if it clearly appears that Colman can prove no set of facts in support of his claim. Arrow Industries, Inc. v. Zions First Nat'l Bank, 767 P.2d 935, 936 (Utah 1988); Freegard v. First Western Nat'l Bank, 738 P.2d 614, 616 (Utah 1987); Wells v. Walker Bank & Trust Co., 590 P.2d 1261, 1263 (Utah 1979).

The State argues in its supplemental brief that "[t]here is no virtue in rigid adherence to a technical rule that has no practical bearing on the proper outcome of a particular case." We decline to follow the State's suggestion that we should ignore the Utah Rules of Civil Procedure. The "technical rule" the State refers to is found in rule 12(b), which provides that a motion to dismiss for failure to state a claim upon which relief can be granted shall be treated as a motion for summary judgment under rule 56 if matters outside the pleadings are presented to and not excluded by the court. However, the rule provides that if a motion to dismiss is converted to a motion for summary judgment, it must only be done so as to not create procedural prejudice to one of the parties. The rule states, "[A]ll parties shall be given reasonable opportunity to present all material made pertinent to such a motion by Rule 56." Utah R.Civ.P. 12(b). This rule gives the opposing party an opportunity to gather evidence to rebut the movant's evidence. Without such a rule, one party could have the benefit of significant, supporting evidence while the other party would be left to rely solely on the unsubstantiated pleadings.

This rule has much "practical bearing on the proper outcome" of this case. The State and Southern Pacific moved for dismissal based on Colman's failure to state a claim upon which relief could be granted. Colman responded to these motions with a memorandum opposing the motions to dismiss, which focused exclusively on points of law. Colman appears to have assumed at that point that the rule 12 standard would be followed. His memorandum began by stating, "For purposes of a motion to dismiss, the truth of the Complaint's fact allegations must be assumed." Colman was not given reasonable opportunity to present additional evidence pursuant to rule 12(b). Had Colman known that the State would rely on the preliminary injunction evidence, he could have submitted other evidence to the trial court rebutting that evidence.

Furthermore, the trial court treated the motion to dismiss only under rule 12 and not under rule 56. The trial court did not make any factual findings in denying Colman's motion for a preliminary injunction. The trial court specifically stated that it only ruled that plaintiff had not met his burden of proof for a preliminary injunction and that its ruling was not dispositive of any other issues. The trial court also refused to order Colman to order the transcript of the preliminary injunction proceedings for this appeal. In granting the State's motion to dismiss, the trial court only entered conclusions of law.

Finally, if a trial court cannot on its own motion convert a rule 12 motion to dismiss to a Rule 56 motion for summary judgment, Hill v. Grand Central, Inc., 25 Utah 2d 121, 123, 477 P.2d 150, 151 (1970), then certainly we should not allow the moving party to do so on appeal.

III. TAKING OR DAMAGING PROPERTY

A. Was Colman's canal "property" for purposes of article I, section 22?

Article I, section 22 of the Utah Constitution provides, "Private property shall not be taken or damaged for public use without just compensation." A claimant must possess some protectible interest in property before that interest is entitled to recover under this provision. Colman alleged that the Utah Division of State Lands and Forestry granted him, as part of a lease with the state, an easement for the maintenance and operation of the canal. It has always been accepted in this state that even an implied easement is a property interest protectible under article I, section 22. Utah State Road Comm'n v. Miya, 526 P.2d 926, 928-29 (Utah 1974); Hampton v. State ex rel. Road Comm'n, 21 Utah 2d 342, 345, 445 P.2d 708, 710 (1968); Dooly Block v. Salt Lake Rapid Transit Co., 9 Utah 31, 37, 33 P. 229, 231-32 (1893). An express easement, such as that alleged by Colman, is also "private property" for the purposes of article I, section 22. See Whiterocks Irrigation Co. v. Mooseman, 45 Utah 79, 79-80, 141 P. 459, 460 (1914); Utah Code Ann. § 78-34-2(2) (Supp.1989). Nichols on Eminent Domain states, "An easement is an interest in...