Garetson Bros. v. Am. Warrior, Inc.

• Decision Date: 03 April 2015
• Docket Number: 111,975.
• Citation: 347 P.3d 687,51 Kan.App.2d 370
• Parties: GARETSON BROTHERS and Foreland Real Estate, LLC, Appellees, v. AMERICAN WARRIOR, INC., Successor in Interest to Kelly and Diana Unruh, Appellant. and Rick Koehn, Appellee.
• Court: Kansas Court of Appeals

51 Kan.App.2d 370

347 P.3d 687

GARETSON BROTHERS and Foreland Real Estate, LLC, Appellees

v. AMERICAN WARRIOR, INC., Successor in Interest to Kelly and Diana Unruh, Appellant.andRick Koehn, Appellee.

111,975.

Court of Appeals of Kansas.

April 3, 2015.

Gerald O. Schultz and Zachary D. Schultz, of Schultz Law Office, of Garden City, for appellant American Warrior, Inc.

Lynn D. Preheim, J. Michael Kennalley, and Jordan E. Kiefer, of Stinson Leonard Street LLP, of Wichita, for appellees Garetson Brothers and Foreland Land Real Estate, LLC.

Rick Koehn, appellee pro se.

Before BRUNS, P.J., BUSER and POWELL, JJ.

Opinion

BRUNS, J.

This is an interlocutory appeal arising out of a water appropriations action in Haskell County. Specifically, this action involves the priority of water rights between a senior right holder and a junior right holder to use water from the Ogallala Aquifer. The district court granted a temporary injunction in favor of the senior right holder and ordered the junior right holder to refrain from pumping water from two wells located on the junior right holder's land during the pendency of this action. On appeal, the junior right holder seeks to vacate the temporary injunction. Because we conclude that the district court did not abuse its discretion, we affirm the district court's decision to grant a temporary injunction.

Facts

Historical Background

On March 14, 2005, Garetson Brothers, a Kansas general partnership, filed a complaint with the Kansas Department of Agriculture's Division of Water Resources (DWR) alleging that two junior water rights located on neighboring land had impaired its senior water right. At that time, Garetson Brothers owned a tract of land in Haskell County upon which a single well—used for crop irrigation—is located. A prior owner of Garetson Brothers' land had filed for and received a vested water right in the well on September 12, 1950. This vested right is numbered HS–003.

The first neighboring well at issue in this action was approved in 1964 and was given an appropriation water right numbered 10,467. The second neighboring well was approved in 1976 and was given an appropriation water right numbered 25,275. Both of these wells are also used for the irrigation of crops. All of the wells are located in Groundwater Management District 3 in Southwest Kansas, overlying the Ogallala Aquifer. The Ogallala Aquifer is part of the High Plains Aquifer System spanning eight Midwestern states.

DWR immediately began investigating the complaint by installing water level monitoring equipment and gathering data to help determine the degree of well-to-well impairment—if any—occurring between the water rights at issue. In addition, DWR began investigating three other neighboring wells that pulled water from the same source. In 2007, however, Garetson Brothers withdrew the complaint. In their letter withdrawing the complaint, Garetson Brothers wrote:

“During the nearly two years since we filed for relief, our goal has been to bring attention to the urgent state of decline of the Ogallala Aquifer in [Southwest Kansas]. Rather than being a positive catalyst for change in the effort to extend the useful life of the aquifer as a whole we have been perceived as selfishly damaging our neighbors for our own gain.”

Despite the withdrawal of the complaint, DWR continued to monitor these wells and record data.

Filing of Present Action

On May 1, 2012, Garetson Brothers filed a petition in Haskell County District Court, alleging impairment of its senior water right by Kelly and Diana Unruh—who owned water rights 10,467 and 25,275 at that time. The Unruhs filed an answer on June 11, 2012, in which they admitted to owning the two junior water rights but denied the allegations of impairment. In addition, the Unruhs asserted a counterclaim against Garetson Brothers, claiming that the senior water right had been lost when the well on the Garetson Brothers' land had been redrilled, allegedly changing the water's point of diversion. The Unruhs also alleged that the new well was impairing their junior water rights.

On January 31, 2013, the district court appointed DWR as the referee for fact investigation and report pursuant to K.S.A. 82a–725. In a preliminary report filed with the district court on April 3, 2013, DWR concluded that the Garetson Brothers' senior water right “has been substantially impaired by operation of [Junior] Water Rights 10,467 and 25,275 [,]” as well as by other neighboring water rights. The preliminary report stated, however, that more testing and data were needed to determine the extent of the impairment.

First Temporary Injunction

After receiving DWR's preliminary report, the Garetson Brothers filed a motion for temporary injunction. On the morning of May 16, 2013, prior to the commencement of an evidentiary hearing on the motion, counsel for the Unruhs disclosed for the first time that his clients had sold the land and the water rights to American Warrior, Inc. (AWI), a gas compressor packager. Because AWI had previously been represented by District Judge Bradley E. Ambrosier when he was in private practice, he stepped down from the case and the hearing was continued.

Ultimately, District Judge Clinton B. Peterson heard the motion for temporary injunction on May 20, 2013. During the hearing, it was disclosed that the property and junior water rights had been sold to AWI on May 30, 2012, which was before the Unruhs filed their answer in this case. Upon learning that the sale had not been disclosed for nearly a year while the lawsuit continued to move forward, the district judge appropriately noted her concern over “the Defendants' and their attorney's lack of candor, both to the plaintiff and the Court, regarding the true owner of this property.”

The day after the evidentiary hearing, the district court granted the Garetson Brothers' motion for temporary injunction. In doing so, the district court applied the principle of “first in time, first in right” and found that AWI's junior water rights were substantially impairing the Garetson Brothers' senior water right. Accordingly, the district court ordered “the defendants, their successors, their tenants, and their agents ... to refrain from pumping Well 10,467 and Well 25,257 for the pendency of this matter or until ordered otherwise by this Court.” Furthermore, the district court ordered that Cecil O'Brate—the owner and chief executive officer of AWI—be joined as a defendant.

On August 5, 2013, Garetson Brothers filed an amended petition adding AWI and Rick Koehn—the tenant farming on AWI's land—as defendants. Subsequently, the district court dismissed O'Brate as a party. Moreover, on October 14, 2013, Garetson Brothers transferred its senior water right to Foreland Real Estate, LLC (FRE), and FRE subsequently joined the lawsuit as a named plaintiff under K.S.A.2014 Supp. 60–221.

In an order entered on December 2, 2013, District Judge Linda P. Gilmore vacated the initial temporary injunction because Koehn had not been joined as a party at the time it was entered. In addition, the district court directed DWR to “continue to investigate and report upon any or all of the physical facts concerning the water rights referenced in this case” pursuant to the procedure set forth in K.S.A. 82a–725. Specifically, the district court ordered:

“The report shall set forth findings of fact in regard to the degree HS–003 is being impaired by water rights 10,467 and 25,257. The report shall set forth the opinions of DWR regarding whether any such impairment ... [is] a substantial impairment to HS–003. If DWR concludes substantial impairment to HS–003 exists, DWR shall advise as to recommended remedies to curtail [the] substantial impairment to HS–003 and explain why these remedies are recommended.”

DWR's Final Report

Prior to the filing of the final report with the district court, the parties received a copy of the report from DWR and were given the opportunity to file objections. Both FRE and AWI filed objections with DWR as well as exceptions with the district court as permitted by K.S.A. 82a–725. Although it does not appear that Koehn filed an objection with DWR, he did file exceptions with the district court that generally followed those asserted by AWI.

DWR filed its final report with the district court on March 31, 2014. In the 30–page report—including an executive summary and attachments—DWR sets forth its findings, conclusions, and potential remedies. The final report notes that for several decades there has been a substantial decline in groundwater in the area of Southwest Kansas where the land owned by FRE and AWI is located.

In fact, the average annual rate of water extraction is 1,200 to 1,500 acre-feet per year while the average rate of water recharge is less than 100 acre-feet per year. As a result, scientists from the Kansas Geological Survey have concluded that “if recent practices continue, well operators in the area are facing the imminent end of the productive life of the isolated compartment of [the Ogallala] aquifer that they share.”

According to the final report, DWR examined six water rights: FRE's senior water right, AWI's two junior water rights, and three other neighboring junior water rights. The final report notes that a seventh junior water right—number 8,157—uses water from two wells: the well authorized under HS–003, and another well 1 mile away. However, DWR found that it is unlikely that this junior water right affects FRE's well because it appears to be pumping water from a different compartment of the Ogallala Aquifer.

Although FRE's senior water right—HS–003—is authorized to pump up to 240 acre-feet of water at a rate of 600 gallons per minute for the irrigation of crops, DWR's testing revealed that the well's maximum sustained rate of pumping under current conditions is only 404 gallons per minute. DWR also found that “only one other well can be allowed to irrigate crops concurrently with File No. HS 003, and then only under a strict time...