Montgomery v. Lomos Altos, Inc.

Citation150 P.3d 971,2007 NMSC 002
Decision Date05 December 2006
Docket NumberNo. 29,202.,29,202.
PartiesLynn MONTGOMERY, Dr. Robert Wessely, and Dr. Catherine Harris, Protestants-Petitioners, v. LOMOS ALTOS, INC. and Garden Path Associates, Applicants-Respondents, and New Mexico State Engineer, Real Party in Interest.
CourtSupreme Court of New Mexico

Humphrey & Odé, P.C., Mary E. Humphrey, Connie Odé, El Prado, NM, for Petitioners.

Modrall, Sperling, Roehl, Harris & Sisk, P.A., Susan Bisong, Maria O'Brien, Timothy J. De Young, Hunt & Davis, P.C., Catherine F. Davis, Albuquerque, NM, for Respondents.

D.L. Sanders, Hilary Lamberton, Santa Fe, NM, for Real Party in Interest.

Sheehan, Sheehan & Stelzner, P.A., John W. Utton, Albuquerque, NM, for Amicus Curiae County of Santa Fe.

Peter Thomas White, Santa Fe, NM, for Amici Curiae 1000 Friends of New Mexico, New Mexico Acequia Association, and Amigos Bravos.

Stein & Brockmann, P.A., Jay F. Stein, James C. Brockmann, Santa Fe, NM, for Amici Curiae City of Alamogordo, City of Las Cruces and El Prado Water and Sanitation District.

OPINION

SERNA, Justice.

{1} Applicants applied for permits from the State Engineer to change the point of diversion and the place and purpose of use of surface water rights in Valencia County (move-from location) to groundwater rights in Sandoval County (move-to location). Both the move-from location and move-to location are within the Rio Grande Underground Water Basin. Applicants, developers, sought the transfer to provide water to the Overlook Subdivision, a 106-lot residential development. Protestants, existing surface water users at the move-to location, objected to the applications based on three statutory grounds: the transfer would (1) impair existing water rights at the move-to location, (2) be contrary to conservation of water within the state, and (3) be detrimental to the public welfare of the state. See NMSA 1978, §§ 72-5-23, 72-12-7(A) (1985). A State Engineer hearing examiner determined the Protestants' objections were without merit and approved the applications. Protestants appealed to the district court and, in a de novo proceeding, both Protestants and Applicants filed cross-motions for summary judgment. The district court adopted the hearing examiner's findings, granted Applicants' cross-motion for summary judgment, and denied Protestants' motion. Protestants appealed to the Court of Appeals, which affirmed in a split decision.

{2} Protestants appeal five issues to this Court: (1) Applicants' transfer applications should be considered new groundwater appropriations; (2) surface depletions at the move-to location caused by the applications should be considered per se impairment of existing rights; (3) the State Engineer should have considered all existing rights and not have impermissibly determined the validity of non-party declarants' water rights; (4) the district court should not have granted Applicants' cross-motion for summary judgment on the issue of impairment because material facts were in dispute; and (5) the Court of Appeals erred in holding that Protestants failed to preserve the issues of water conservation and detriment to the public welfare of the state. Applicants and the State Engineer urge us to affirm the Court of Appeals decision.

{3} We hold that (1) the Court of Appeals correctly determined that the applications were not for new appropriations of groundwater and (2) the surface depletions resulting from the granting of the applications are not per se impairment. However, we agree with Protestants that (3) the State Engineer should have either considered all existing water rights at the move-to location or extinguished those rights; (4) the district court erred by granting Applicants' cross-motion for summary judgment because there was a material fact dispute as to the extent of depletion at the move-to location; and (5) the district court erred in granting Applicants' cross-motion for summary judgment because the motion failed to provide Protestants notice that the issues of water conservation and detriment to the public welfare of the state were subject to summary judgment. This Opinion addresses (3) consideration of existing water rights and (4) the extent of depletion at the move-to location because both apply to the impairment analysis. Therefore, we remand to the district court for a de novo proceeding to determine the measure of existing rights and the extent of depletion at the move-to location, whether this depletion constitutes impairment of existing rights, and whether the applications are contrary to water conservation or detrimental to the public welfare of the state.

I. FACTUAL BACKGROUND

{4} Applicants Lomos Altos, Inc. and Garden Path Associates sought to provide water to a maximum of 106 residences that compose the Overlook Subdivision in Sandoval County near Placitas, New Mexico. As a result, Applicants filed three permit applications between June 30, 1997, and August 25, 1999, to change the diversion point1 and the place and purpose of use2 from surface to groundwater within the Rio Grande Underground Water Basin. The permits sought to transfer a total 15.05 acre feet per year (afy) in surface water rights from locations on the Rio Grande in Valencia County to groundwater pumping rights in Sandoval County, near Placitas.

{5} Applicants published a notice of the applications pursuant to NMSA 1978, Section 72-5-4 (1941, prior to 2001 amendment). See also NMSA 1978, § 72-12-3(D) (1985, prior to 2001 amendment) (containing the publication requirement for groundwater transfers). Sections 72-5-23 and 72-12-7(A) govern surface water and groundwater transfers, respectively, and allow water rights to be transferred from one location to another, without losing priority,3 if such transfer (1) can be made without detriment or impairment to existing water rights, (2) is not contrary to conservation of water within the state, and (3) is not detrimental to the public welfare of the state. The transfer must satisfy all three requirements before the State Engineer can approve it. See §§ 72-5-23, 72-12-7(A).

{6} Protestants Robert Wessely, Elizabeth Gardner, Lynn Montgomery, and Catherine Harris hold water rights at the move-to location. Protestants' water rights are taken from sources including Rosa de Castillo Spring,4 San Francisco Springs, Harris Spring, Tunnel Spring, and Placitas Springs.5 Protestants claimed that if Applicants' transfer applications were approved, then Protestants' respective water rights would be impaired by the resulting depletion at the water sources. Protestants also objected to the applications on the other two statutory grounds.

{7} The State Engineer hearing examiner held a hearing to discuss the three applications and to determine if they satisfied the three statutory requirements. The hearing examiner determined that the transfer applications met all three statutory criteria but focused his report and recommendation on whether the applications would impair existing rights at the move-to location. The impairment analysis concentrated on the proposed applications' effects on Rosa de Castillo Spring, San Francisco Springs, Harris Spring, Tunnel Spring, and Placitas Springs, the springs' estimated annual yields, and all existing water right declarations at each spring.

{8} At the hearing, Applicants, Protestants, and the State Engineer submitted simulations of the proposed applications' effects on existing wells and springs at the move-to location. Applicants' expert predicted drawdowns of less than 0.17 feet in neighboring wells of other ownership after 40 years of pumping and that the 15.05 afy retirement of surface water rights at the move-from location would offset6 the proposed groundwater pumping impacts on the Rio Grande.7 In other words, the applications would only slightly deplete the level in existing wells and springs and have no effect on the Rio Grande as whole. Protestants' expert's model, in contrast, showed more significant effects on the springs. The State Engineer Water Rights Division's (WRD) model yielded results similar to Applicants' model. The hearing examiner determined Protestants' model was less reliable than both Applicants' and WRD's models. The hearing examiner then listed the State Engineer's estimated annual yields of the springs at the move-to location. Rosa de Castillo Spring's annual yield is estimated at 161 afy, the San Francisco Springs annually yield approximately 129.6 afy, and Harris Spring yields an estimated 0.8 afy annually.

{9} Finally, the hearing examiner reviewed existing water right declarations8 at each of the springs at the move-to location. The hearing examiner observed that the depletion effects on Tunnel Springs and Placitas Springs would be de minimis and that there were no water rights associated with Harris Spring. Therefore, for purposes of this appeal, we look at all the water right declarations for Rosa de Castillo Spring and San Francisco Springs.

{10} Rosa de Castillo Spring is the source of three water right declarations: Protestant Montgomery's Declaration 03890 claims a right to irrigate 8 acres of land; Declaration 016449 describes an irrigation right used on a total of 83.92 acres of land; and Declaration 0342010 claims a water right applied to 17 acres of land. A WRD resource master's memorandum relied on aerial photographs from 1935, 1954, 1962, 1967, and 1975 to conclude that most of these irrigation rights had been discontinued. The hearing examiner's report and recommendation listed only Declaration 03890's claim for irrigation of 8 acres, and concluded that the Rosa de Castillo Spring's yield of 161 afy far exceeded the amount required by the declaration and that no existing water rights would be impaired by the transfer applications' pumping impacts.

{11} San Francisco Springs is the source of two water right declarations: Protestants Wessely and Gardner's Declaration 04358, which claims water put to beneficial use...

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