Fellows v. Saylor

• Decision Date: 01 March 2016
• Docket Number: No. DA 15–0392.,DA 15–0392.
• Citation: 367 P.3d 732,2016 MT 45,382 Mont. 298
• Parties: Charles E. FELLOWS, an individual, Plaintiff and Appellee, Monte Giese, Steve Kelly and William Reichelt, Plaintiffs–Intervenors and Appellees, v. Patrick SAYLOR, an individual; Farmers Cooperative Canal Company, Eldorado Cooperative Canal Company, Teton Cooperative Canal Company; Teton Cooperative Reservoir Company; John D. Peebles, an individual, William S. Peebles, an individual; Ottis Bryan, an individual; and Sylvia Bryan, an individual, Defendants and Appellants, The Office of Water Commissioner for Perry v. Beattie Decree Case No. 371; Teton Cooperative Reservoir Company, Defendants.
• Court: Montana Supreme Court

382 Mont. 298
367 P.3d 732
2016 MT 45

Charles E. FELLOWS, an individual, Plaintiff and Appellee,

Monte Giese, Steve Kelly and William Reichelt, Plaintiffs–Intervenors and Appellees,
v.
Patrick SAYLOR, an individual; Farmers Cooperative Canal Company, Eldorado Cooperative Canal Company, Teton Cooperative Canal Company; Teton Cooperative Reservoir Company; John D. Peebles, an individual, William S. Peebles, an individual; Ottis Bryan, an individual; and Sylvia Bryan, an individual, Defendants and Appellants,

The Office of Water Commissioner for Perry v. Beattie Decree Case No. 371; Teton Cooperative Reservoir Company, Defendants.

No. DA 15–0392.

Supreme Court of Montana.

Submitted on Briefs Dec. 30, 2015.
Decided March 1, 2016.

367 P.3d 734

For Appellants: Michael J.L. Cusick, Abigail R. Brown, Moore, O'Connell & Refling, PC, Bozeman, Montana.

For Appellees: Peter G. Scott, Gough, Shanahan, Johnson & Waterman, Bozeman, Montana (for Charles E. Fellows), Stephen R. Brown, Garlington, Lohn & Robinson, PLLP Missoula, Montana (for Intervenors).

Justice BETH BAKER delivered the Opinion of the Court.

382 Mont. 299

¶ 1 Appellants¹ appeal the order of the Water Court denying their

382 Mont. 300

motion to alter or amend its final order on certification that tabulated the water rights necessary to address Charles Fellows's underlying complaint in the Ninth Judicial District Court, Teton County. This is the second time this matter has been before this Court on appeal. Fellows v. Office of Water Comm'r, 2012 MT 169, 365 Mont. 540, 285 P.3d 448 (hereafter Fellows I ). The Perry Defendants raise several issues on appeal that we restate as follows:

1. Whether the water right claims in controversy were properly determined following this Court's remand in Fellows I.



2. Whether the District Court erred in granting Fellows's motion for substitution.

¶ 2 We affirm.

PROCEDURAL AND FACTUAL BACKGROUND

¶ 3 Because the background facts are delineated in Fellows I, we restate the facts only briefly.

¶ 4 Montana's Constitution requires the Legislature to "provide for the administration, control, and regulation of water rights" and to "establish a system of centralized records" for those rights. Mont. Const. art. IX, § 3 (4). In implementing this constitutional mandate, the Legislature created the Water Court, which has jurisdiction over "all matters relating to the determination of existing water rights within the boundaries of the state of Montana." Section 3–7–224(2), MCA. The law provides district courts with jurisdiction to enforce the provisions of water rights decrees and to supervise the distribution of adjudicated water. Tit. 3, Ch. 7, Pt. 2, MCA; Tit. 85, Ch. 2, MCA. The Water Court is in the process of adjudicating the water rights of all appropriators in Basin 41O, which includes the Teton River and Spring Creek—the sources of water at issue here. Although the Water Court has issued a temporary preliminary decree for Basin 41O, it has not yet issued a final decree. Therefore, the adjudication process in Basin 41O is still ongoing.

367 P.3d 735

¶ 5 Fellows owns several water rights in Spring Creek near Choteau, Montana. His rights were decreed in Sands Cattle & Land Co. v. Jackson, Case 727 (Mont. 10th Judicial Dist. Ct., May 31, 1892). Fellows claims that Spring Creek is recharged by water seeping through a subsurface aquifer from a stretch of the Teton River known as the Springhill Reach. In other words, Fellows asserts that Spring Creek and the Teton River are hydrologically connected. Fellows

382 Mont. 301

therefore contends that maintaining the flow of Spring Creek is dependent upon maintaining water in the Springhill Reach.

¶ 6 The Perry Defendants own various water rights in the upper Teton River northwest of Choteau. Their rights were decreed in Perry v. Beattie, Case 371 (Mont. 11th Judicial Dist. Ct., March 28, 1908). The Ninth Judicial District Court, Teton County, now supervises the distribution of water pursuant to both Perry and Sands. The water rights decreed in Perry are administered by a water commissioner pursuant to § 85–5–101, MCA. In administering water rights under Perry, the Water Commissioner has diverted water out of the Teton River into the Bateman Ditch above the Springhill Reach as a water management tool. Fellows I, ¶ 4; Eldorado Co–op Canal Co. v. Lower Teton Joint Objectors, 2014 MT 272, ¶ 32, 376 Mont. 420, 337 P.3d 74 (hereafter Eldorado ). Fellows alleges that water diversion through the Bateman Ditch diminishes the flow of water through the Springhill Reach and adversely affects the water available to satisfy his Spring Creek rights.

¶ 7 In February 2011, Fellows filed a complaint challenging the Water Commissioner's administration of water under the Perry decree. Specifically, he challenged the Water Commissioner's authority to divert water out of the Teton River by means of the Bateman Ditch. The District Court ultimately dismissed Fellows's complaint under M. R. Civ. P. 12(b)(6) for failure to state a claim upon which relief could be granted, and Fellows appealed.

¶ 8 In Fellows I, we reversed the District Court's dismissal and remanded for further proceedings. Fellows I, ¶ 22. We agreed with the District Court that Fellows could not seek relief from the action of the Perry Water Commissioner under § 85–5–301, MCA, because he did "not derive his Spring Creek water right from the Perry decree...." Fellows I, ¶ 16. We concluded, however, that Fellows could seek declaratory relief and that his allegations were sufficient to state a claim under M. R. Civ. P. 12(b)(6). Fellows I, ¶ 19. We concluded further that if Fellows could "prove hydrological connectivity between Spring Creek and the Teton River, then the next step should be certification to the chief water judge under § 85–2–406(2)(b), MCA." Fellows I, ¶ 21.

¶ 9 On remand, Fellows filed a motion for substitution of district court judge, which Judge Olson granted. After Judge Oldenburg assumed jurisdiction, Monte Giese, William Reichelt, and Steve Kelly

382 Mont. 302

(Intervenors) intervened.² Fellows then moved for summary judgment on the issue of hydrological connectivity. Following consideration of the parties' expert depositions, the District Court granted Fellows's motion, concluding that Spring Creek and the Teton River are hydrologically connected. The court found it unnecessary "at this stage of the proceeding" to address the scope, extent, or timing of the connectivity.

¶ 10 Fellows then requested the court to certify a question to the Water Court. The Perry Defendants objected to the request; the District Court held, however, that the "applicable and appropriate scope of the determination of the rights involved in the controversy is best left to the processes of the Water Court." Accordingly, the District Court certified the following issue for determination by the Water Court:

Upon remand from the Montana Supreme Court in Cause No. 2012 MT 169, pursuant to this Court's determination of the hydrological connectivity between the Teton River and Spring Creek, and pursuant to

367 P.3d 736

MCA Section 85–2–406(2)(b), the Ninth Judicial District Court certifies this matter to the Montana Water Court for determination of the existing rights involved in this controversy, pursuant to Chapter 2 of Title 85, MCA. Upon its determination, the Water Court shall issue to the District Court a list or tabulation of rights, priorities, and approved points of diversion in a form determined appropriate by the Water Judge.

The Water Court issued its final order on certification on March 13, 2015.

¶ 11 In its final order, the Water Court concluded that the purpose of certification under § 85–2–406(2)(b), MCA, is "to provide sufficient information to enable the District Court to resolve the immediate controversy." Because it concluded that the underlying controversy stemmed from the Water Commissioner's use of the Bateman Ditch as a water management tool, the Water Court determined that the scope of the controversy should be defined by Fellows's water right claims and by the water right claims that historically utilized the Bateman Ditch. Consequently, the Water Court concluded that three Patrick Saylor Teton River water right claims, a Choteau Cattle Company Teton River water right claim, and Fellows's Spring Creek water right

382 Mont. 303

claims "constitute the claims properly before the Water Court in this certification." By the time of its certification order, all of the Saylor, Choteau Cattle Company, and Fellows water right claims had been adjudicated in the temporary preliminary decree. The court therefore concluded that further proceedings were not required in answering the certification issue. The Water Court tabulated the claims at issue and ordered that the matter be closed and returned to the District Court.

¶ 12 The Perry Defendants then filed a M. R. Civ. P. 59(e)...