Haik v. Jones

• Decision Date: 07 August 2018
• Docket Number: No. 20160878,20160878
• Citation: 427 P.3d 1155
• Parties: Mark Charles HAIK, Appellant, v. Kent L. JONES, as Utah State Engineer, and Salt Lake City Corporation, Appellees.
• Court: Utah Supreme Court

427 P.3d 1155

Mark Charles HAIK, Appellant,

v.Kent L. JONES, as Utah State Engineer, and Salt Lake City Corporation, Appellees.

No. 20160878

Supreme Court of Utah.

Filed August 7, 2018

Paul R. Haik, Eden Prairie, MN, for appellant

Sean D. Reyes, Att’y Gen., Norman K. Johnson, Julie I. Valdes, Asst. Att’ys Gen., Salt Lake City, for appellee Kent L. Jones

Shawn E. Draney, Scott H. Martin, Dani N. Cepernich, Salt Lake City, for appellee Salt Lake City Corporation

Justice Pearce authored the opinion of the Court in which Justice Himonas and Justice Petersen joined.

Associate Chief Justice Lee authored an opinion concurring in part and concurring in result in which Chief Justice Durrant joined.

On Direct Appeal

Justice Pearce, opinion of the Court:

INTRODUCTION

¶ 1 Mark Haik wants water for his undeveloped canyon lots. As part of an effort to obtain that water, Haik challenged a change application that sought to add acreage to accommodate a private water system that would serve ten homes in Little Cottonwood Canyon. The change application did not directly impact Haik’s property or his water rights. Haik sought judicial review of the State Engineer’s approval. The district court concluded Haik lacked standing to mount that challenge. The district court also rebuffed Haik’s efforts to amend his petition and dismissed. Haik appeals. We affirm.

BACKGROUND

¶ 2 As we noted when we last addressed a Haik appeal, "[Haik] has spent the better part of the last twenty years asking courts to order Salt Lake City to supply his undeveloped property in the Albion Basin Subdivision with enough water (at least 400 gallons per day) to allow him to build houses on it." Haik v. Salt Lake City Corp. , 2017 UT 14, ¶ 2, 393 P.3d 285. For a somewhat more complete history of Haik’s saga, see id. ¶¶ 2 –6.

¶ 3 This time around, Haik challenged Change Application #57-10013. The application explained its raison d’être:

This Change Application adds 25.165 acres, located and described in the attached Exhibit A, to the approved place of use. No other changes are sought. Salt Lake City adds this acreage to reflect the anticipated construction of a private stand-alone water system sourced from the Bay City Mine to serve only up to 10 single family homes to be located on said acreage. The right to use of this surplus water is based on the ... Water Supply Agreement between Salt Lake City and certain Alta area property owners, as amended by [a court order]. Under this Order, each of the up to 10 homes may receive up to 800 [gallons per day] average calculated on a monthly basis—for a maximum total of 8,000 [gallons per day] calculated on a monthly basis.

Haik is not one of these "certain Alta area property owners" the change application references. Indeed, Haik requested that the district court either enjoin the State Engineer’s decision or allow him "to similarly construct a private stand-alone system" that could serve his property.

¶ 4 Despite having no direct connection to the change application, Haik challenged it. Haik asserted that Salt Lake City Corporation (the City) failed to show that "its application was filed in ‘good faith and not for purposes of speculation or monopoly.’ " (Quoting UTAH CODE § 73-3-8(1)(a)(v) ). Haik also argued that the City had violated article XI, section 6 of the Utah Constitution, which provides:

No municipal corporation, shall directly or indirectly, lease, sell, alien or dispose of any waterworks, water rights, or sources of water supply now, or hereafter to be owned or controlled by it; but all such waterworks, water rights and sources of water supply now owned or hereafter to be acquired by any municipal corporation, shall be preserved, maintained and operated by it for supplying its inhabitants with water at reasonable charges ....

Haik contended that by "add[ing] a private system for the purpose of diverting [the] public water supply," the City unconstitutionally alienated water. Haik additionally asserted that the City abused its alleged monopoly power by denying landowners water.

¶ 5 Despite Haik’s objections, the State Engineer approved the change application. In response, Haik filed a petition in the district court seeking a trial de novo of the State Engineer’s order. Haik’s petition rehashed the arguments he made to the State Engineer. The City moved to dismiss, arguing that Haik lacked standing, had failed to exhaust his administrative remedies, and that the petition failed to state a viable claim. The State Engineer argued that Haik lacked standing and that Haik’s claims fell outside the scope of a trial de novo.

¶ 6 Haik opposed the motions, but also moved for leave to amend. Haik asked: "If the Court determines there is an insufficiency in the petition based upon the motions for dismissal of either the State Engineer or Salt Lake City Corporation, then Mark Haik requests leave to amend or supplement so as to cure any deficiency." But Haik did not attach a proposed amended petition or describe in any way, shape, or form how he might amend the petition to remedy the deficiencies the City and State Engineer attacked.

¶ 7 The district court granted the motions to dismiss. The district court concluded that it lacked jurisdiction because Haik lacked standing. The court also held that Haik had asserted claims that were not the proper subject of a trial de novo of a change application.¹ Finally, the district court denied Haik’s motion to amend because he had "failed to provide a proposed amended petition with his motion" and because "any proposed amendment would be futile ...."

¶ 8 Haik appeals.

ISSUES AND STANDARDS OF REVIEW

¶ 9 Haik argues that the district court erred in granting the motions to dismiss his petition. The grant of a motion to dismiss presents a question of law that we review for correctness. Salt Lake City Corp. v. Big Ditch Irrigation Co. , 2011 UT 33, ¶ 19, 258 P.3d 539.

¶ 10 Haik also argues that the district court erred in denying his motion for leave to amend. The district court denied the motion because Haik failed to attach a proposed amended petition and because it found that any amendment would be futile.

¶ 11 We have reviewed denial of motions for leave to amend under an abuse of discretion standard. Holmes Dev., LLC v. Cook , 2002 UT 38, ¶ 56, 48 P.3d 895. And we have drawn no distinction between denials premised on a procedural defect—such as timeliness or failure to attach a proposed amended pleading—and denials based upon the amendment’s futility. See, e.g. , McLaughlin v. Schenk , 2009 UT 64, ¶ 41, 220 P.3d 146 ("[W]e hold the district court did not abuse its discretion because McLaughlin’s amendment failed to state new facts or a new theory that had not already been addressed by the court; an amendment would have been futile.").

¶ 12 Our court of appeals, on the other hand, has drawn just such a distinction. For example, in Powder Run at Deer Valley Owner Ass’n v. Black Diamond Lodge at Deer Valley Ass’n of Unit Owners , the appeals court noted that while it reviews for "abuse of discretion a ruling on a motion for leave to amend a pleading, we review a futility determination for correctness." 2014 UT App 43, ¶ 6, 320 P.3d 1076.

¶ 13 The State Engineer noted this distinction in its brief and expressed confusion over the appropriate standard. And we think the court of appeals has it right. Futility of an amendment asks for a legal determination of the merits of the proposed amendment. But before overturning our precedent, we must conduct a stare decisis analysis. See Eldridge v. Johndrow , 2015 UT 21, 345 P.3d 553. "Stare decisis ‘is a cornerstone of Anglo–American jurisprudence’ because it ‘is crucial to the predictability of the law and the fairness of adjudication.’ Because stare decisis is so important to the predictability and fairness of a common law system, we do not overrule our precedents ‘lightly.’ " Id. ¶ 21 (citations omitted).

¶ 14 "Our decisions have identified two broad factors that distinguish between weighty precedents and less weighty ones: (1) the persuasiveness of the authority and reasoning on which the precedent was originally based, and (2) how firmly the precedent has become established in the law since it was handed down." Id. ¶ 22. It appears that we have simply not analyzed whether we should employ a separate standard of review for denying a motion for leave to amend because of futility. In McLaughlin , we reviewed a denial of a motion to amend on grounds of futility and summarily stated that "[w]e review a district court’s decision to deny a plaintiff’s motion to amend its complaint for abuse of discretion." 2009 UT 64, ¶ 14, 220 P.3d 146. And we applied that standard of review without analysis. See id. ¶ 41. We have noted that precedent is less weighty when we have "simply presumed ... without analy[sis]." State v. Legg , 2018 UT 12, ¶ 11, 417 P.3d 592.

¶ 15 As for "how firmly the precedent has become established," Eldridge , 2015 UT 21, ¶ 22, 345 P.3d 553, the court of appeals apparently saw a gap to fill and applied a separate standard. See Powder Run, 2014 UT App 43, ¶ 6, 320 P.3d 1076 ; Shah v. Intermountain Healthcare , 2013 UT App 261, ¶ 6, 314 P.3d 1079 (reviewing a district court’s denial of a motion to amend on grounds of futility for correctness). Meanwhile, it appears that McLaughlin ’s standard of review has yet to be cited in a published case.

¶ 16 Taken together, we can safely conclude that this is a case in which the Eldridge factors have been satisfied and that more harm than good will come from adherence to stare decisis principles. As such, we disavow the portion of McLaughlin where we reviewed the denial of a motion to amend on futility grounds for an abuse of discretion. When the purported futility of the amendment justifies the denial of a motion to amend, we review for correctness.

ANALYSIS

I. Haik Lacks Standing Because He Is Not "Aggrieved by an Order of the State Engineer"

¶ 17 Before the district court, Haik argued he had standing to challenge ...