In re Barthelmess Ranch Corp.
| Decision Date | 28 December 2016 |
| Docket Number | DA 15-0533 |
| Citation | 386 Mont. 121,2016 MT 348,386 P.3d 952 |
| Parties | CLAIMANT: United States of America, (Bureau of Land Management) OBJECTORS: Barthelmess Ranch Corporation; Double O Ranch, Inc. ; Lela M. French; William R. French ; Conni D. French; Craig R. French; M Cross Cattle Company. |
| Court | Montana Supreme Court |
For Appellants: John E. Bloomquist, Rachel K. Meredith (argued), Bloomquist Law Firm, P.C., Helena, Montana
For Appellee: John C. Cruden, Assistant Attorney General, Elizabeth Ann Peterson, John L. Smeltzer (argued), James J. Dubois, Anna K. Stimmel, Appellate Attorneys, United States Department of Justice, Washington, DC
¶1 This is an appeal by Barthelmess Ranch, Double O Ranch, William French, Conni French, Craig French and M Cross Cattle (the Objectors) from the Water Court's August 11, 2015 Order Granting Partial Summary Judgment and Order Remanding to the Master. We affirm.
¶2 We restate the issues on appeal as follows:
¶3 In Montana's ongoing water rights claims adjudication proceedings, the BLM filed six water right claims related to five reservoirs and one natural pothole. The five reservoir claims are based in Montana law while the Pothole Lake claim is based upon a federal reservation of lands. The water sources are located wholly or partially on federal land, and the BLM claims the right to use each for stockwatering by its grazing permittees and for wildlife. In June 2014 the BLM moved for summary judgment on the objections raised to each claim. The Water Court consolidated those claims, objections and motions for summary judgment into the present single case.
¶4 In November 2014 the Water Master recommended summary judgment in favor of the BLM on each of these claims, finding that the claims were valid and properly owned by the BLM. The Objectors objected to the Water Master's recommendation, but agreed in briefing that the BLM had the right to obtain water rights in its name under Montana law for use on federal lands.1 The Objectors stated the issue as whether the BLM "under applicable state and federal laws, actually made appropriations for beneficial use." The Objectors contend that the BLM did not perfect any water rights and sought an order from the Water Court transferring all of the claimed BLM water rights to the current grazing permittee on the federal lands, and an order terminating all the wildlife claims. The Water Court upheld the Water Master's recommendation in most respects, and the Objectors appeal.
¶5 The following is a summary of the BLM claims involved in the present case. Windy Day Reservoir (Claim 40M 74594-00) was built by the BLM in August 1955 with the participation and cost-sharing of Marie Karstens-Redding, the BLM grazing permittee at the time. The French objectors in the present appeal own property surrounding the Windy Day Reservoir. They claim that as early as 1911 individual "free grazers" who were ancestors or predecessors to their current land interests (hereafter "ancestral free grazers") "owned livestock" on the land now containing this reservoir.
¶6 North Flat Creek Reservoir (Claim 40M 74590-00) was built by the BLM in 1937. It is partially located on lands patented by Elsie Kemp/Tole in 1923 and conveyed to the Frenches in 1995. Frenches filed a statement of claim to a use right for stockwater out of the reservoir. They claim that as early as 1911 ancestral free grazers placed livestock on the land now containing this reservoir.
¶7 Tallow Creek Reservoir (Claim 40M 74670-00) was built by the BLM in June 1936. The Objectors contend that ancestral free grazers in the area of this reservoir owned livestock there as early as 1915, and that their stock grazed in the area and drank water.
¶8 Sharon Reservoir (Claim 40M 74883-00) was built by the BLM in 1961 with the assistance of the Oxarart Brothers, grazing permittees at the time. M Cross is a grazing permit successor to Oxararts and has repair and maintenance responsibility for the reservoir. M Cross claims that its ancestral free grazers "owned livestock" on property around Sharon Reservoir "as early as 1917" and that they grazed and watered the stock.
¶9 The Water Court found as undisputed facts that the preceding four reservoirs were developed by the BLM and that the BLM's claimed priority date for each stockwater right is the date the reservoir was completed. The BLM does not own livestock, but provides the water for use by grazing permittees and others. The Water Court found that the reservoirs have been "consistently used for stockwatering since they were completed."
¶10 The Water Court found that it was undisputed that none of the Objectors or their predecessors filed claims for stockwatering from any of the sources of water that are impounded in the reservoirs. The exception is the claim filed by Lela and William French, claim 40M 169526-00, for stockwater from the North Flat Creek Reservoir.
¶11 The Water Court noted that the common law elements of a valid (use right) appropriation of water are intent to appropriate, notice of the appropriation, diversion and beneficial use. In the Matter of the Adjudication of Existing Rights (Bean Lake III) , 2002 MT 216, ¶ 10, 311 Mont. 327, 55 P.3d 396. Prior to 1973 an appropriator in Montana could secure a water right simply by putting the water to a beneficial use. Mont. Trout Unlimited v. Mont. DNRC , 2006 MT 72, ¶ 5, 331 Mont. 483, 133 P.3d 224. The Water Court concluded that impoundment of water in a reservoir is a sufficient diversion of water to support a claim to a use right of water under Bean Lake III , and noted that the Objectors contested only whether the BLM had applied the water to a beneficial use. The Objectors contended that since the BLM did not own any livestock of its own, it did not use water from the reservoirs and therefore could not have perfected the stockwatering claims under Montana law.
¶12 The Water Court resolved this issue by applying this Court's venerable opinion in Bailey v. Tintinger , 45 Mont. 154, 122 P. 575 (1912), relied upon by both the BLM and the Objectors. Bailey established that a person, association or corporation could appropriate water under Montana law "to sell, rent, or otherwise dispose to others." Under the principles of the Bailey case, an appropriation of water for the use of others was complete upon completion of the diversion system (in this case the reservoirs) and making the water available for use by others. Bailey , 45 Mont. at 166–67, 122 P. at 579. The Water Court concluded that these principles applied to appropriations by the United States and that ownership of stock was not required to complete the appropriation. Finally, the Water Court determined that participation by non-governmental parties in the construction or maintenance of some of the reservoirs did not affect the validity of the BLM claims because Montana law recognizes that multiple claims may exist in the same source of water. St. Onge v. Blake l y , 76 Mont. 1, 23, 245 P. 532, 536 (1926) ; Mont. Trout Unlimited , ¶ 7.
¶13 The BLM acquired the Funnells Reservoir (Claim 40M 74655-00) in 1951 when it acquired some of the surrounding property. At that time the dam was in place providing 1.2 acre feet of water storage. The BLM claims a priority date in this reservoir of August 1945. A portion of the reservoir is on Barthelmess land, and Barthelmess filed a stockwater claim in the reservoir. Barthelmess also contends that its ancestral free grazers had stock in the area around Funnells as early as 1915. The Water Court found as an undisputed fact that the reservoir has been used for stockwater consistently since the BLM acquired its interest in the property.
¶14 The Water Court concluded that under Montana law the BLM acquired any appurtenant water rights when it acquired the property. Section 85–2–403(1), MCA ; Maclay v. Missoula Irrig. Dist ., 90 Mont. 344, 353, 3 P.2d 286, 290 (1931). In addition, the Water Court rejected the Objectors' argument that the BLM could not show when the reservoir was constructed or when it was actually used for stockwatering, and that the BLM water claim therefore could only date from when it acquired the property in 1951. The Water Court noted that this argument was inconsistent with the Objectors' own contention that they derived rights from their ancestral free grazers who had grazed animals in the same area since 1915. In addition, the Water Court held that under Montana law a statement of water right claim is prima facie evidence of its content, § 85–2–227, MCA, and Teton Co – Op Canal Co. v. Teton Coop Reservoir Co. , 2015 MT 344, ¶ 20, 382 Mont. 1, 365 P.3d 442, and that the Objectors had not carried their burden to prove that essential elements of the BLM water right claim were incorrect. As was the case with the prior BLM reservoirs, the Water Court noted that under Montana law two parties can claim ownership in water rights from the same source.
¶15 Pothole Lake (Claim 40M 74579-00) is a natural feature2 located on BLM land that has been available for use by others. The Objectors, for example, claim that Frenches or their ancestral free grazers grazed stock in the area of the Pothole as early as 1917. The BLM claims a reserved water right in the Pothole with a priority date of April 1926. The claim of a reserved right is based upon the Stock Raising Homestead Act (SRHA) enacted by Congre...
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