R.T. Nahas Co. v. Hulet

• Decision Date: 03 February 1988
• Docket Number: No. 16556,16556
• Citation: 114 Idaho 23,752 P.2d 625
• Parties: R.T. NAHAS CO., a California corporation, Robert T. Nahas and Eva C. Nahas, Plaintiffs-Respondents, v. Jay H. HULET and Gertrude Hulet, husband and wife, Defendants-Appellants.
• Court: Idaho Court of Appeals

Page 625

752 P.2d 625

114 Idaho 23

R.T. NAHAS CO., a California corporation, Robert T. Nahas and Eva C. Nahas, Plaintiffs-Respondents, v. Jay H. HULET and Gertrude Hulet, husband and wife, Defendants-Appellants.

No. 16556.

Court of Appeals of Idaho.

Feb. 3, 1988.

Philip A. Peterson of White, Ahrens, Peterson & Perry, Nampa, for defendants-appellants.

James W. Kiser, Boise, for plaintiffs-respondents.

Jim Jones, Atty. Gen., A. Lynne Krogh-Hampe, Deputy Atty. Gen., for amicus curiae.

SWANSTROM, Judge.

This is the second appeal arising from a dispute over the appropriation of water from Sinker Creek, a tributary of the Snake River located in Owyhee County. Jay and Gertrude Hulet (Hulet) appeal from a judgment of the district court awarding damages to downstream appropriators, the R.T. Nahas Co. and Robert and Eva Nahas (Nahas). We are presented with several questions: (1) whether a statutory permit entitled the defendant to impound the flow of Sinker Creek regardless of prior downstream use by another irrigator; (2) whether the trial court erred in concluding that the defendant's actions were the cause of the plaintiff's damages; (3) whether the trial court abused its discretion by accepting a late-filed affidavit of an expert witness; (4) whether the plaintiff's mitigation efforts were reasonable; (5) whether the trial court properly awarded punitive damages; and (6) whether the trial court abused its discretion in awarding costs and attorney fees to the plaintiff as the prevailing party. For reasons explained below, we affirm the judgment in part, vacate in part, and remand for further proceedings.

The underlying facts may be stated briefly. In 1969, Nahas purchased land along Sinker Creek. A lake located on the property was filled each year by diverting the winter runoff from the creek. The stored lake water was then used during the latter part of the crop season for irrigation when Sinker Creek became dry. Nahas' water right had never been formally adjudicated. However, Nahas claimed a "constitutional" or "historical" right to the water based upon actual diversion, storage, and beneficial use. ¹ In 1976, Hulet constructed a dam across Sinker Creek upstream from the Nahas diversion. The dam was built pursuant to a water permit listing a priority date of October 28, 1975. From 1976 until 1981, Hulet impounded the winter flows of Sinker Creek, depriving Nahas of water historically used to fill the lake.

Nahas subsequently filed suit seeking a declaration of quiet title to his water right, an injunction against further interference by Hulet, and damages for the interference which had already occurred. The district court bifurcated the proceeding. The first trial adjudicated Nahas' constitutional right and accorded Nahas a priority date of April 1, 1966--a right senior to Hulet's statutory right by permit. Accordingly, the district court concluded that Hulet had wrongfully interfered with Nahas' senior appropriation. On appeal, we affirmed this ruling. R.T. Nahas Co. v. Hulet, 106 Idaho 37, 674 P.2d 1036 (Ct.App.1983). A trial then was held to determine the amount of damages appropriate to compensate for the wrongful interference. The trial court ultimately awarded Nahas $61,228.01 for crop losses, extra power and well-drilling expenses, punitive damages, costs, and attorney fees. This appeal followed.

I

Hulet first contends that the trial court erred in determining that he was liable for interference with Nahas' water right. He argues that he held a statutory preference to the water by virtue of having obtained a permit from the Department of Water Resources. Hulet would have us hold that a valid permit confers a right superior to an unadjudicated constitutional water right. We are unpersuaded.

Hulet's argument is based upon I.C. § 42-607 which provides:

It shall be the duty of said watermaster to distribute the waters of the public stream, streams or water supply, comprising his water district, among the several ditches taking water therefrom according to the prior rights of each respectively, in whole or in part, and to shut and fasten, or cause to be shut or fastened, under the direction of the department of water resources, the headgates of the ditches heading from such stream, streams or water supply, when in times of scarcity of water it is necessary so to do in order to supply the prior rights of others in such stream or water supply; provided, that any person or corporation claiming the right to the use of the waters of the stream or water supply comprising a water district, but not owning or having the use of an adjudicated or decreed right therein, or right therein evidenced by permit or license issued by the department of water resources, shall, for the purposes of distribution during the scarcity of water, be held to have a right subsequent to any adjudicated, decreed, permit, or licensed right in such stream or water supply, and the watermaster shall close all headgates of ditches or other diversions having no adjudicated, decreed, permit or licensed right if necessary to supply adjudicated, decreed, permit or licensed right in such stream or water supply. So long as a duly elected watermaster is charged with the administration of the waters within a water district, no water user within such district can adversely possess the right of any other water user. [Emphasis added.]

Hulet urges that the language emphasized above gives his claim superiority over rights that are unadjudicated. We cannot construe the statute in this manner. To do so, we would be obliged to ignore well-settled precepts of this state's water law.

It is the long-standing rule in Idaho that, as between competing appropriators of water, "the first in time is first in right." I.C. § 42-106. See also Beecher v. Cassia Creek Irrigation Company, Inc., 66 Idaho 1, 154 P.2d 507 (1944); Nielson v. Parker, 19 Idaho 727, 115 P. 488 (1911). Each junior appropriator is entitled to divert water only when the rights of previous appropriators have been satisfied. Beecher v. Cassia Creek Irrigation Company, Inc., supra. The right to divert and use the unappropriated water of any natural stream is guaranteed by the Idaho Constitution in article 15, § 3. Until the law was changed in 1971, see 1971 Idaho Session Laws, ch. 177 at 843, a person desiring to appropriate the water of a stream could do so either by actually diverting the water and applying it to a beneficial use or by pursuing the statutory method, which entailed an application to the Department of Water Resources for a permit and then fulfilling the requirements of the permit. Cantlin v. Carter, 88 Idaho 179, 397 P.2d 761 (1964). Since 1971 the exclusive way to acquire a water right has been by the permit method. Nevertheless, those rights acquired by the so-called constitutional method prior to that time are still valid. I.C. §§ 42-103, 42-201. Thus, an appropriator, whose right is based upon a valid, although unadjudicated, constitutional method of appropriation, retains a senior claim in relation to a person holding a later issued permit. See State ex rel. Tappan v. Smith, 92 Idaho 451, 444 P.2d 412 (1968).

Idaho Code § 42-607 does not alter the doctrine of prior appropriation as applied to private water right disputes. Rather, the statute, in clear and unambiguous terms, governs the duties of the state's agent--the watermaster. It directs the watermaster to prefer rights of record when he is distributing water within his district in times of scarcity. See, e.g., Nettleton v. Higginson, 98 Idaho 87, 558 P.2d 1048 (1977) and DeRousse v. Higginson, 95 Idaho 173, 505 P.2d 321 (1973). The Nettleton opinion reveals that the preference which I.C. § 42-607 gives to decreed rights and to rights evidenced by permits and licenses (recorded rights) reflects the Legislature's awareness of the difficulties facing a watermaster in the exercise of his duties in times of water scarcity. The statute obviously is intended to make the authority of the watermaster more certain, his duties less difficult and his decisions less controversial. However, nowhere in Nettleton is there a hint that I.C. § 42-607 applies outside its own language to subordinate constitutional water rights for all purposes. It does not authorize one water user unilaterally to interfere with another's superior rights. The statute is not applicable to private disputes such as the present case. Such disputes remain controlled by the doctrine of prior appropriation.

Here it is uncontroverted that Hulet's water right was junior to that of Nahas and that Hulet's impoundment of water interfered with Nahas' senior entitlement. Accordingly, Hulet is liable for any damages caused by the wrongful interference. Beecher v. Cassia Creek Irrigation Company, Inc., supra.

II

Hulet next challenges the trial court's determination that his actions were the cause in fact of Nahas' damages. ² Nahas counters that this issue was settled at the first trial and cannot now be contested. This assertion is not entirely accurate. The court's findings after the first trial were that from 1966 through 1976 the Nahas lake was filled completely prior to April 1 each year. The trial court found further that after the Hulet dam was built, Nahas was unable to fill the lake, and that the impoundment of the water from the creek was the cause of the inability to fill the lake. However, the first trial did not resolve specifically the question whether crop losses were caused by the lower water level in the lake.

At the second trial Hulet contended that Nahas' damages were caused not by his actions but by Nahas' poor water management in 1977--a drought year. Hulet presented an expert witness who testified that power records for the years 1977 and subsequent years indicated that Nahas was actually pumping more water from the lake than he had prior to 1977. Nahas countered this testimony with another expert who stated that the raw power figures...