GROUNDWATER APP'RS OF SO. PLATTE v. Boulder

• Decision Date: 30 June 2003
• Docket Number: No. 02SA249.,02SA249.
• Citation: 73 P.3d 22
• Parties: Concerning the Application for Water Rights of Groundwater Appropriators of the South Platte River Basin, Inc., in Sedgwick County, GROUNDWATER APPROPRIATORS OF the SOUTH PLATTE RIVER BASIN, INC., Applicant-Appellant/Cross-Appellee, v. The CITY OF BOULDER; Henrylyn Irrigation District; Lower South Platte Water Conservancy District; the Ferguson Family Trust, Objectors-Appellees, and Fort Morgan Reservoir and Irrigation Company and Jackson Lake Reservoir and Irrigation Company, Objectors-Appellees/Cross-Appellants, and The Colorado State Engineer and the Division Engineer of Water Division No. 1., Objectors/Cross-Appellees.
• Court: Colorado Supreme Court

73 P.3d 22

Concerning the Application for Water Rights of Groundwater Appropriators of the South Platte River Basin, Inc., in Sedgwick County, GROUNDWATER APPROPRIATORS OF the SOUTH PLATTE RIVER BASIN, INC., Applicant-Appellant/Cross-Appellee, v. The CITY OF BOULDER; Henrylyn Irrigation District; Lower South Platte Water Conservancy District; the Ferguson Family Trust, Objectors-Appellees, and Fort Morgan Reservoir and Irrigation Company and Jackson Lake Reservoir and Irrigation Company, Objectors-Appellees/Cross-Appellants, and The Colorado State Engineer and the Division Engineer of Water Division No. 1., Objectors/Cross-Appellees.

No. 02SA249.

Supreme Court of Colorado, En Banc.

June 30, 2003.

Hill & Robbins, P.C., David W. Robbins, Dennis M. Montgomery, Avi S. Rocklin, Denver, Colorado, Attorney for Applicant-Appellant/Cross-Appellee.

Moses, Wittemyer, Harrison and Woodruff, P.C., Veronica A. Sperling, Gabriel D. Carter, Boulder, Colorado, Attorneys for the Objectors-Appellees, City of Boulder.

Timothy R. Buchanan, P.C., Timothy R. Buchanan, Arvada, Colorado, Attorney for Objectors-Appellees/Cross-Appellants.

Ken Salazar, Attorney General, Matthew Poznanovic, Denver, Colorado, Attorneys for Objectors/Cross-Appellees, Colorado State Engineer, and Division Engineer of Water Division # 1.

Justice COATS delivered the Opinion of the Court.

The Groundwater Appropriators of the South Platte River Basin, Inc. (GASP) appealed from the water court's order imposing attorney fees as a condition for granting GASP's motion to dismiss two of its applications for conditional water rights. Opposers Ft. Morgan Reservoir and Irrigation and Jackson Lake Reservoir and Irrigation Companies cross-appealed from the water court's refusal to consider their motion to enjoin out-of-priority pumping by GASP members, in which the City of Boulder had joined at trial. Because C.R.C.P. 41(a)(2) does not authorize the imposition of attorney fees as terms and conditions for the voluntary dismissal of applications for water rights with prejudice, the Water Court's order for attorney fees is reversed; and because the injunction sought by the irrigation companies and the City of Boulder is outside the statutorily prescribed scope of a proceeding for the determination of water rights and would conflict with the purposes of such a proceeding, the water court's denial of the motion made by the irrigation companies and the City of Boulder is affirmed.

I.

This dispute arises out of several applications for water rights made by the Groundwater Appropriators of the South Platte River Basin, Inc. (GASP). GASP, an organization of owners of more than 3000 wells, filed separate applications for conditional water storage rights in 1995, 1996, and 1998, which were consolidated for adjudication. Fort Morgan Reservoir and Irrigation Company, Jackson Lake Reservoir and Irrigation Company, City of Boulder, Henrylyn Irrigation District, Lower South Platte Water Conservancy District, The Ferguson Family Trust, The Colorado State Engineer, and The Division Engineer of Water Division No. 1 each filed Statements of Opposition to one or more of the applications. After moving to consolidate the three cases, GASP filed a Motion for Partial Summary Judgment, seeking a declaration that it would not be required to identify well depletions to be augmented as a prerequisite to a decree for the water storage rights requested in the three consolidated cases.

Fort Morgan Reservoir and Irrigation Company and Jackson Lake Reservoir and Irrigation Company ("the irrigation companies") filed a joint cross-motion for summary judgment, which sought a denial of GASP's application or, in the alternative, a requirement that GASP identify potential depletions and submit augmentation plans. In addition, it sought a mandatory injunction on GASP members' out-of-priority pumping, which was permissible under a "temporary" substitute supply plan that was approved by the state engineer in 1972.¹ Boulder joined in the motion in its entirety. The state and division engineers opposed the irrigation companies' cross-motion for a mandatory injunction and filed a brief to that effect.

The water court granted GASP's motion for partial summary judgment and denied the cross-motion submitted by the irrigation companies and Boulder, indicating that "[t]he legality of the GASP temporary substitute supply plan, as annually approved by the state engineer, is not properly at issue in these applications nor a proper subject of this motion."

Approximately one month before trial, GASP filed a motion to dismiss, with prejudice, the applications that it had filed in 1995 and 1996. The state and division engineers joined in the motion to dismiss. The irrigation companies and Boulder argued that the motion should be granted only if it included certain terms and conditions, including an order that GASP pay the attorney fees related to their opposition to the two applications at issue. The water court granted GASP's motion but ordered GASP to pay that portion of the irrigation companies' and Boulder's costs and attorney fees that was related to their opposition to the two sites after June 30, 1998. At the same time, the water court denied the request made by the irrigation companies and Boulder that it retain jurisdiction to determine the issues pertaining to the legality of the temporary substitute supply plan and their concomitant request for a mandatory injunction.

GASP appealed the water judge's award of attorney fees in favor of the irrigation companies and Boulder. The irrigation companies cross-appealed the water court's refusal to address the legality of the GASP temporary substitute supply plan as part of this case.

II.

In its orders imposing attorney fees and denying GASP's motion to reconsider, the water court made clear that it considered itself to be exercising discretion afforded it by C.R.C.P. 41(a)(2), to impose terms and conditions on a voluntary dismissal. It interpreted the rule to grant such discretion without regard to any finding of bad faith or unreasonableness, and without regard (at least in the case of an application for water rights) to the fact that the application was dismissed with, rather than without, prejudice. Noting that GASP was well within its rights to file on numerous projects, the court found simply that it should not be permitted to file several applications and, after determining the best alternative, dismiss the other applications "with prejudice," to avoid the imposition of attorney fees as part of the dismissal.

As this court has previously recognized, the Uniform Local Rules For All State Water Court Divisions indicate their intent that the Colorado Rules of Civil Procedure apply to water court practice and procedure, "[e]xcept as expressly provided in these rules." Am. Water Dev., Inc. v. City of Alamosa, 874 P.2d 352, 381 (Colo. 1994) (AWDI)(quoting introductory note preceding the rules). Similarly, the civil rules limit themselves from governing the "procedure and practice in any special statutory proceeding insofar as they are inconsistent or in conflict with the procedure and practice provided by the applicable statute." C.R.C.P. 81(a). Although an application for a water right is clearly a special statutory proceeding, see § 37-92-302, 10 C.R.S. (2002), to which the rules governing practice and procedure in water courts apply, this court has expressly rejected "the contention that C.R.C.P. 41(a)(2) does not apply to water rights adjudications." AWDI,874 P.2d at 381 (finding no express conflict or contradiction in § 37-92-203(1)(b)'s relaxation of traditional standing requirements for water rights opposers or Rule 5(b)'s specific provisions for voluntary dismissals of applications for water rights).

Although our holding in AWDI involved the imposition of attorney fees as a condition of granting a voluntary dismissal without prejudice pursuant to C.R.C.P. 41(a)(2), the rationale for our holding foreshadowed our resolution of dismissal with prejudice as well. There we found helpful a body of federal precedent interpreting the virtually identical federal rule. AWDI, 874 P.2d at 378. The federal authorities interpreting the rule uniformly reject any construction that would authorize the imposition of attorney fees, in the absence of bad faith, upon dismissal with prejudice. See, e.g., Cauley v. Wilson, 754 F.2d 769, 772 (7th Cir.1985)

("Fees are not awarded when a plaintiff obtains a dismissal with prejudice ....")(emphasis in original); Colombrito v. Kelly, 764 F.2d 122, 133-34 (2nd Cir.1985) (attorney fees not available when dismissal is with prejudice under Federal Rule 41(a)(2) without "statutory authorization" or "exceptional circumstances"); see generally 8 James Wm. Moore, et al., Moore's Federal Practice § 41.40[10][d][viii][Costs Inappropriate if Dismissal is With Prejudice] at pp. 41-168 ("An award of costs and attorney's fees should be denied if the voluntary dismissal is granted with prejudice, since the defendant is not confronted with the future risk of litigation.").

In rejecting an assertion that attorney fees, even for a dismissal without prejudice pursuant to rule 41(a)(2), should be limited to cases involving frivolous, groundless, or vexatious actions, see § 13-17-102, 5 C.R.S. (2002), AWDI emphasized the vastly different purposes of the rule and the statute. We characterized rule 41(a)(2), rather than punishment for the plaintiff, as providing "a means for preserving a potentially meritorious claim for another day or another forum provided that conditions of dismissal [could] be devised to protect the defendants from prejudice." AWDI, 874 P.2d at 380. We relied on various federal authorities, noting their characterization of the terms and conditions imposed pursuant to the rule as the quid pro quo of allowing the plaintiff to dismiss a potentially meritorious claim without being prevented by the doctrine of res judicata from...