EAST TWIN LAKES DITCHES v. Lake County

• Citation: 76 P.3d 918
• Decision Date: 08 September 2003
• Docket Number: No. 02SA270.,02SA270.
• Parties: EAST TWIN LAKES DITCHES AND WATER WORKS, INC., Complainant-Appellant, v. BOARD OF COUNTY COMMISSIONERS OF LAKE COUNTY, Respondent-Appellee, and The City of Aurora, Colorado, a municipal corporation of the counties of Adams, Arapahoe, and Douglas, acting by and through its Utility Enterprise, Intervenor-Appellee, and Steve Witte, Division Engineer, Appellee pursuant to C.A.R. 1(e).
• Court: Supreme Court of Colorado

76 P.3d 918

EAST TWIN LAKES DITCHES AND WATER WORKS, INC., Complainant-Appellant, v. BOARD OF COUNTY COMMISSIONERS OF LAKE COUNTY, Respondent-Appellee, and The City of Aurora, Colorado, a municipal corporation of the counties of Adams, Arapahoe, and Douglas, acting by and through its Utility Enterprise, Intervenor-Appellee, and Steve Witte, Division Engineer, Appellee pursuant to C.A.R. 1(e).

No. 02SA270.

Supreme Court of Colorado.

September 8, 2003.

Joseph B. Dischinger, Grimshaw & Harring, PC, Denver, Colorado, Attorneys for Complainant-Appellant.

Steven T. Monson, Bradford R. Benning, Felt, Monson & Culichia, LLC, Colorado Springs, Colorado, Attorneys for Respondent-Appellee.

John M. Dingess, Stephanie J. Neitzel, Duncan, Ostrander & Dingess, PC, Denver, Colorado, Attorneys for the Intervenor-Appellee.

Ken Salazar, Colorado Attorney General, Linda Bassi, Assistant Attorney General, Natural Resources Section, Denver, Colorado, Attorneys for Appellee Pursuant to C.A.R. 1(e).

Justice RICE delivered the Opinion of the Court.

East Twin Lakes Ditches and Water Works, Inc., ("ETLD") appeals the water court's holding that the water right in the Derry Ditch No. 1, owned by the Lake County Board of County Commissioners ("Lake County"), was not abandoned. ETLD contends that (1) the water right was abandoned due to non-use for approximately thirty years; and (2) the decision by the predecessors of Lake County to not line the ditch was affirmative proof of that abandonment.

Lake County, on the other hand, although conceding that non-beneficial use of the water for approximately thirty years gave rise to a presumption of abandonment, nevertheless argues that it successfully rebutted that presumption. Lake County contends that neither it nor its predecessors intended to abandon the water right, that they took numerous actions inconsistent with an intent to abandon, and that the decision to not line the ditch was made for reasons other than an intent to abandon.

We affirm the water court's holding that the water right was not abandoned. Abandonment of a water right is a factual matter that is properly left to the sound discretion of the trial court. That court's holding will not be overturned on appeal unless the evidence is "wholly insufficient to support the decision." Haystack Ranch, LLC v. Fazzio, 997 P.2d 548, 552 (Colo.2000). Because we find that the record contains sufficient evidence to support the holding of the water court in this case, we affirm.¹

I. FACTS AND PROCEDURAL HISTORY

The Derry Ditch No. 1 is a senior water right with an appropriation date of 1879 and an adjudication date of 1904. The decree for the Derry Ditch No. 1 is in the amount of four cubic feet of water per second ("cfs") for the irrigation of two hundred acres on what is commonly known as the "Hallenbeck Ranch"² in Lake County. The ditch has two decreed alternate points of diversion, one on the main stem of the Arkansas River, and another out of Beaver Dam Creek, a tributary of the Arkansas.

The ditch historically carried water a distance of approximately six miles to irrigate the Hallenbeck Ranch. From the 1930s through the 1960s, the water right was used for irrigation and in placer mining operations on the ranch. In 1962, a new lower Derry Ditch No. 1, paralleling the original ditch, was constructed in an effort to improve the delivery of water to the ranch. Testimony at trial indicated that at least some of the time during the 1960s, the full amount of the decreed water reached and was put to beneficial use on the ranch.

In 1972, the Hallenbeck Ranch and all of its water rights were purchased by the Twin Lakes Recreation Land Investment Company ("TLR"), a limited partnership comprised of two general partners and approximately eighty-two limited partners. TLR purchased the Hallenbeck Ranch and its water rights with the intent of reselling it for residential development. Despite apparently diligent sales efforts, however, the ranch and its water rights did not sell until 1998 when they were purchased by Lake County.

During the entire twenty-six years that TLR owned the property, the ranch and its water rights were managed by Walter Clotworthy. Throughout this period of time, Clotworthy was unable to get the Derry Ditch No. 1 to carry water more than one-half to one mile down its length. The first section of the ditch was evidently so porous that even the full decree of four cfs would travel only a short distance before it seeped into the bottom of the ditch and disappeared. Clotworthy testified that at various times during his tenure he did grading and shovel work on the ditch in an unsuccessful attempt to improve its carrying capacity. He also made numerous diversions of water into the ditch in a similarly unsuccessful effort to saturate and seal the bottom of the ditch.

In 1985, TLR commissioned Leonard Rice Consulting Water Engineers to perform an investigation and appraisal of its water rights ("Rice Report"). The report concluded that the Derry Ditch No. 1 had not transported water to the ranch in approximately twenty years, and accordingly attributed no transferable consumptive yield to the water right. Upon receipt of the Rice Report, one of TLR's general partners, Gordon Mickelson, evidently unaware up until this point that the ditch was inoperable,³ instructed Clotworthy to "do whatever he could" to get the ditch to carry water. After once again attempting unsuccessfully to improve the ditch's carrying capacity, Clotworthy informed Mickelson sometime in the late 1980s that it was Clotworthy's opinion that the ditch would need to be lined in order to successfully transport irrigation water to the ranch.

Mickelson subsequently raised the issue of lining the ditch to the limited partners at a partnership meeting. Because the amount of money that could be assessed the limited partners had already been exhausted, and because it was believed that a sale of the ranch was imminent, Mickelson was unable to secure the partnership funds necessary to line the ditch. As a result, the Derry Ditch No. 1 remained functionally inoperable for approximately another ten years, up until and after the ranch and water rights were sold to Lake County in 1998.

Despite its failure to line the ditch, TLR took other actions that were consistent with an intent to protect and maintain all of its water rights, including the Derry Ditch No. 1. In 1995, for example, TLR filed an action seeking to correct a discrepancy between the decreed and actual points of diversion for the Derry Ditch No. 1. Some time prior, TLR had also filed a statement of opposition to a water rights application out of concern that it might conflict with TLR's water rights.

Lake County proceeded with the purchase of the ranch in 1998 with full knowledge of the status of the Derry Ditch No. 1. A former Lake County Commissioner testified that (1) the county believed the ditch might be repaired, and (2) the water right had value to the county because they could use it for wetlands mitigation in the event that the county successfully consummated a land swap with the federal government.⁴ After acquiring the water right, Lake County repaired the headgate and ran water into the Derry Ditch No. 1 in 1999 and 2000.

ETLD filed suit in late 1998 seeking a declaratory judgment that the water right associated with the Derry Ditch No. 1 had been abandoned. After hearing three and one-half days of testimony, the judge in Water Division No. 2 held that ETLD had failed to establish by a preponderance of the evidence that the water right to the Derry Ditch No. 1 had been abandoned.

On appeal to this court, ETLD does not challenge the trial court's findings with respect to the period prior to 1972. ETLD instead urges this court to find that the Derry Ditch No. 1 was abandoned due to non-use for the approximately thirty-year time period between 1972 and 2002. ETLD also contends that even if the water right was not abandoned during the 1970s, the decision by TLR in the late 1980s to not line the ditch, followed by approximately another ten years of non-use, is sufficient by itself to give rise to a presumption of abandonment pursuant to section 37-92-402(11), 10 C.R.S. (2002). ETLD argues that the trial court erred in its conclusion that the evidence presented by Lake County was sufficient to successfully rebut that presumption.

Lake County concedes that the approximately thirty-year period between 1972 and 2002 during which the Derry Ditch No. 1 water right was not applied to beneficial use gave rise to a presumption of abandonment. The county contends, however, that there was no intent to abandon, that the county and TLR engaged in numerous activities that were inconsistent with an intent to abandon, and that the water court correctly concluded that the presumption had been rebutted. We agree. Our examination of the record reveals sufficient evidence to support the trial court's finding of no abandonment.

II. ANALYSIS

The principles of law governing the issue of abandonment in Colorado are well established. "Abandonment of a water right" is defined as "the termination of a water right in whole or in part as a result of the intent of the owner thereof to discontinue permanently the use of all or part of the water available thereunder." § 37-92-103(2), 10 C.R.S. (2002). This court has consistently held that a finding of abandonment requires the concurrence of two elements: a sustained period of non-use and an intent to abandon. Haystack Ranch, LLC v. Fazzio, 997 P.2d 548, 552 (Colo.2000); Southeastern Colo. Water Conservancy Dist. v. Twin Lakes Assoc., Inc., 770 P.2d 1231, 1237 (Colo.1989); Farmers Reservoir & Irrigation Co. v. Fulton Irrigating Ditch Co., 108 Colo. 482, 486, 120 P.2d 196, 199 (1941). The objector must prove abandonment by a preponderance of the evidence. Haystack Ranch, 997 P.2d at 552.

Because intent is a subjective element that is difficult for a complainant to...