Salt River Valley Water Users' Ass'n v. Giglio

Decision Date16 April 1976
Docket NumberNo. 12207,12207
Citation549 P.2d 162,113 Ariz. 190
PartiesSALT RIVER VALLEY WATER USERS' ASSOCIATION, an Arizona Corporation, Appellant, v. George and Caroll GIGLIO, Alvin and Shirley Brassow, Wallace and Gladys Ewald, et al., Coe and Van Loo Consulting Engineers, Inc., and Hallcraft Homes, Inc., an Arizona Corporation, Appellees. George and Caroll GIGLIO, Alvin and Shirley Brassow, Wallace and Gladys Ewald, et al., Cross-Appellants, v. SALT RIVER PROJECT AGRICULTURAL IMPROVEMENT AND POWER DISTRICT, Cross-Appellee.
CourtArizona Supreme Court

Jennings, Strouss & Salmon, by Nicholas Udall and M. Byron Lewis, Phoenix, for appellant and cross-appellee.

Robertson, Molloy, Fickett & Jones, P.C., by John F. Molloy, Tucson, and Burton J. Kinerk, Tucson, Osmond A. Burton, Jr. Scottsdale, for appellees and cross-appellants Giglio et ux, et al.

O'Connor, Cavanagh, Anderson, Westover, Killingsworth & Beshears, by John H. Killingsworth and Harding B. Cure, Phoenix, and Gust, Rosenfeld, Divelbess & Henderson, by James M. Koontz, Phoenix, for appellees Hallcraft Homes and Coe and Van Loo Consulting Engineers, Inc.

CAMERON, Chief Justice.

This is an appeal by defendant, Salt River Valley Water Users' Association, from a jury verdict and judgment on behalf of the 219 plaintiffs for damages, compensatory and punitive, totaling $1,154,345.45, sustained as a result of the flooding of their property located south of the Arizona Canal and west of Pima Road in Scottsdale, Arizona.

We must answer the following questions:

1. Do the Arizona courts have jurisdiction over the defendant Salt River Valley Water Users' Association and the subject matter of this action?

2. Does the Salt River Valley Water Users' Association have flood control responsibilities in the operation of the Salt River Project?

3. Was there sufficient evidence of negligence to go to the jury?

4. Was there sufficient evidence of recklessness to submit the issue of punitive damages to the jury?

5. Are the irrigation canals of the Salt River Project to be treated as 'natural watercourses' for the purposes of liability to nearby landowners by the operator of the canals?

6. Was there any reversible error in the admission and rejection of evidence and in charging the jury?

7. Did the trial court err in dismissing the defendant Salt River Valley Water Users' Association's cross-claims against Hallcraft and Coe & Van Loo?

In 1867 when Phoenix was a hay camp for the United States Cavalry at Fort McDowell, Jack Swilling organized the Swilling Ditch Company. The company completed its first canal, the Salt River Valley Canal, in March, 1868, and harvested a spring crop irrigated by water from the canal. More settlers migrated to the Valley, and by 1888 more than 100,000 acres were under cultivation. New canals, some built upon the original Hohokam canal sites constructed in 300 to 200 B.C., were built to carry water to the freshly-cleared farmland. The Tempe Canal was built in 1970; San Francisco Canal, 1871; Utah Canal, 1877; Grand Canal, 1878; Mesa Canal, 1879; Arizona Canal, 1883; and Highland Canal, 1888.

The Hansbrough-Newlands Act which came to be known as the Federal Reclamation Act became law on 17 June 1902. The Salt River Valley Water Users' Association was incorporated under the laws of the Territory of Arizona on 9 February 1903 for the purpose of negotiating with the United States to provide an adequate supply of irrigation water for the benefit of the approximately 4,800 individual landowners living in the Valley at the time. From its inception the Salt River Valley Water Users' Association has been a private Arizona corporation operated for the benefit of its shareholders who were landowners desirous of receiving irrigation water from the Salt River Project and who had in writing agreed to have their land bound by the '* * * articles of incorporation and the rules and regulations of its by-laws. * * *' Orme v. Salt River Valley Water Users' Association, 25 Ariz. 324, 330, 217 P. 935, 937 (1923).

Between 1904 and 1917, the Salt River Project was under the operation and control of the United States Reclamation Service as a part of the Salt River Reclamation Project. During this time the United States government acquired ownership of the water distribution system of the Salt River Project.

Members of the Association became concerned over the rising cost of the Project and the manner in which the government was operating it. After lengthy negotiations a contract between the United States government and the Association was signed on 6 September 1917, in which the government agreed to turn over to the Association the care, operation and maintenance of the Salt River Project consisting of the Salt River Project consisting laterals, ditches, and various other properties as well as all of the irrigation facilities. The Associatiion took over the operation of the canal system on 1 November 1917, and from that time has assumed full responsibility for its care, operation, and management:

'* * * The Association entered into contracts with the Federal Government, which provided substantially as follows: The government advanced the funds necessary for the building of the Roosevelt reservoir and later the extension of the distributing irrigation system of the valley, and retained and still retains the legal title thereto, although the actual operation of the system has long since been turned over to the association. The association obligated itself to repay to the government, within a stipulated period of time, the amount of money expended 'by the latter for the irrigation system, together with the interest thereon. * * *' Reichenberger v. Salt River Project, etc., 50 Ariz. 144, 146--147, 70 P.2d 452, 453 (1937).

In 1937 the Association transferred all its property to the Salt River Project Agricultural Improvement and Power District which District had the status of a municipal corporation for the purposes of bonding. Reichenberger v. Salt River Project, etc., supra, 50 Ariz. at 149--151, 70 P.2d at 454--455.

The Association, as presently constituted and operated, is a private corporation operated for the benefit of its shareholders and in such capacity is a service and operating company of the Salt River Project. The District, on the other hand, has been described as follows:

'The District's exact status escapes a simple definition. It is not a 'public service corporation' as set forth in the Constitution, Art. 15, § 2, A.R.S. and is not subject to regulation by the corporation commission as to its services and rates. (citation omitted) It is denominated a political subdivision of the state and entitled to all the immunities and benefits granted to municipalities by the Constitution or statutes, Constitution, Art. 13, § 7 (Amendment of 1940). Yet as a political subdivision its powers are obviously limited to the purposes justifying its political existence. The privileges and immunities granted extend only so far as they have a legitimate relationship to the legal objectives for which the District is organized. * * *' City of Mesa v. Salt River Project Agr. Imp. & P. Dist., 92 Ariz. 91, 97, 373 P.2d 722, 726 (1962).

Both the Association and the District appear to hold themselves out as the 'Salt River Project,' but it does not appear to be a separate entity. In this opinion when we refer to the 'Salt River Project' or simply the 'Project,' we will be concerned with the actual physical irrigation system operated by the Accociation. The Salt River Valley Water Users' Association will be referred to as the 'Association' and the Salt River Project Agricultural Improvement and Power District as the 'District.'

The Arizona Canal is the most northerly of all the Project canals. It begins at Granite Reef Dam on the Salt River and runs approximately 50 miles to a point on the New River. It runs in a west to northwesterly direction on the north side of the Salt River and somewhat parallel to the Salt River. When the Arizona Canal was built in 1883, it carried water through relatively unpopulated rural areas, but the metropolitan area of Phoenix grew and the City of Scottsdale came into existence so that today the canal runs through highly populated residential and commercial districts in Scottsdale and Phoenix. The canal is an open earthenbanked canal somewhat elevated above the land on each side with the south bank slightly higher than the north bank.

An irrigation system is contracuted with its greatest capacity at the head of the canal where the water enters, and it diminishes as water deliveries are made so that the water can be contained in a smaller channel as it nears the end of the system. At the head of the Arizona Canal, Granite Reef Dam, the canal has a capacity of 1,900 cubic feet per second. The canal narrows or pinches in as it moves westward through Scottsdale and Phoenix. It reduces to 1,125 cubic feet per second at 64th Street and continues to narrow to about 300 second feet at the end of the system.

On 5 September 1970, a severe rainstorm hit the central Arizona area. In parts of Phoenix and Scottsdale four to five inches of rain fell within a period of 24 hours. It was determined that this heavy precipitation was at least of the magnitude of a 100 year storm. A 100 year storm is a storm of such severity that it is calculated it will occur once every 100 years. Whenever there is a severe rainstorm in the Phoenix area, there is a substantial surface flow or runoff from the mountains surrounding the Valley. The Arizona Canal is situated between the McDowell Mountains to the north and the bed of the Salt River to the south. The canal therefore intersects some alluvial fans emanating from the McDowell Mountains. Thus, any water from the McDowell Mouintains will, in following its natural course toward the Salt River, flow toward the Arizona Canal. The canal then acts as an elongated dam and there is...

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23 cases
  • Nienstedt v. Wetzel, 1
    • United States
    • Arizona Court of Appeals
    • 8 Julio 1982
    ...are allowed where the conduct of the wrongdoer is wanton, reckless or shows spite or ill will. E.g., Salt River Valley Water Users Association v. Giglio, 113 Ariz. 190, 549 P.2d 162 (1976); Country Escrow Service v. Janes, 121 Ariz. 511, 591 P.2d 999 Where the trial court has refused to int......
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    ...under the control of and for the benefit of the principal for an agency relationship to exist. Salt River Valley Water Users' Association v. Giglio, 113 Ariz. 190, 195, 549 P.2d 162, 167 (1976). This is similar to two persons acting in It is possible that the legislature excepted damages ca......
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    ...reckless indifference to the interests of others. Smith v. Chapman, 115 Ariz. 211, 564 P.2d 900 (1977); Salt River Valley Water Users' Ass'n v. Giglio, 113 Ariz. 190, 549 P.2d 162 (1976); Neilson v. Flashberg, 101 Ariz. 335, 419 P.2d 514 (1966). With respect to this question, we adopt and i......
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1 books & journal articles
  • Chapter 18 ALLOCATIONS OF RISK BEFORE AND AFTER THE FLOOD-WHO PICKS UP THE PIECES?
    • United States
    • FNREL - Annual Institute Vol. 30 Rocky Mountain Mineral Law Institute (FNREL)
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