Scott v. McTiernan

• Decision Date: 22 March 1999
• Docket Number: No. 98-113,98-113
• Citation: 974 P.2d 966
• Parties: Sam J. SCOTT and Mona R. Scott, Appellants (Petitioners), v. John McTIERNAN and Donna Dubrow; and Board of Control of the State of Wyoming, Appellees (Respondents).
• Court: Wyoming Supreme Court

Page 966

974 P.2d 966

Sam J. SCOTT and Mona R. Scott, Appellants (Petitioners), v. John McTIERNAN and Donna Dubrow; and Board of Control of the State of Wyoming, Appellees (Respondents).

No. 98-113.

Supreme Court of Wyoming.

March 22, 1999.

Tom C. Toner and John G. Fenn of Yonkee & Toner, Sheridan, Wyoming, Representing Appellants.

Kim D. Cannon and Anthony Wendtland of Davis & Cannon, Sheridan, Wyoming, Representing Appellees McTiernan and Dubrow.

William U. Hill, Attorney General; Thomas J. Davidson, Deputy Attorney General;

and S. Jane Caton, Senior Assistant Attorney General, Representing Appellee Board of Control.

Before LEHMAN, C.J., and THOMAS, MACY, GOLDEN & TAYLOR, ^* JJ.

MACY, Justice.

Appellants Sam Scott and Mona Scott (the Scotts) petitioned for a review of the order in which Appellee Board of Control of the State of Wyoming (the board) concluded that the Scotts had abandoned a portion of their water rights. The district court certified the case to the Wyoming Supreme Court.

We affirm in part, reverse in part, and remand.

ISSUES

The Scotts present the following issues on appeal:

1. Can a senior appropriator's water rights be abandoned on the petition of a junior appropriator who deliberately blocked and destroyed ditches to prevent the senior appropriator from receiving irrigation water during the five year[ ] period immediately preceding the filing of the abandonment petition and who during that five year period assured the senior appropriator that he would restore the ditches?

2. Was the Board's conclusion that only 14.1 acres of the Shallcross property were irrigated in the five years immediately preceding the filing of the abandonment petition supported by substantial evidence and sufficiently detailed findings of fact?

3. Was the Board's conclusion that only 7.6 acres of Tracts 3 and 4 between the Northeast 22 Draw and Smith Creek were irrigated supported by substantial evidence and sufficiently detailed findings of fact?

4. Did the Board correctly conclude that the No. 3 right did not apply to the 10.1 acres south of Smith Creek in Tracts 3 and 4?

FACTS

The Scotts owned property in Sheridan County, and Appellee John McTiernan and Appellee Donna Dubrow (John's wife) (collectively referred to as McTiernan), owned a ranch which neighbored the Scotts' property. At one time, McTiernan's property and the Scotts' property were owned in common. McTiernan and the Scotts held water rights in Smith Creek to irrigate their respective properties.

The Scotts owned part of the John Ross Appropriation, which was a territorial water right with the priority date of May 1882 and was the number three priority on Smith Creek. ¹ Two parcels of land owned by the Scotts were irrigated by the John Ross Appropriation: (1) Tracts 3 and 4; and (2) the Shallcross property. The adjudicated point of diversion for the John Ross Appropriation was the Ross No. 1 Ditch. A prior common owner of McTiernan's property and the Scotts' property developed a complex system of diversions and ditches to utilize his water rights. As a result, the John Ross Appropriation was not actually diverted through the Ross No. 1 Ditch but was, instead, diverted through several other points of diversion. The Scotts' irrigation water for Tracts 3 and 4 was, therefore, conveyed in ditches across McTiernan's property.

In 1991, McTiernan started deliberately preventing water from flowing down the ditches to Tracts 3 and 4. McTiernan also filled in ditches which had previously conveyed water to the Scotts' property in order to facilitate the movement of his side-roll sprinklers. McTiernan's ranch manager and another McTiernan employee assured the Scotts that the ditches would be replaced.

On August 29, 1996, McTiernan filed a petition with the board for a declaration of abandonment of the John Ross Appropriation. McTiernan claimed that the water from the John Ross Appropriation had not been beneficially used in the five years immediately preceding the abandonment petition. The Scotts reciprocated by filing a petition The superintendent of Water Division Number Two held a contested case hearing in the summer of 1997 on the consolidated petitions. On January 5, 1998, the board entered an order which granted McTiernan's petition in part and denied it in part and which granted the Scotts' petition in part and denied it in part. With respect to McTiernan's petition, the board ruled that part of the John Ross Appropriation had been abandoned. The board reduced the John Ross Appropriation from 1.78 cubic feet per second for the irrigation of 125 acres to 0.46 cubic feet per second for the irrigation of 32 acres. Specifically, the board determined that, during the preceding five years, the Scotts had irrigated only 17.9 acres of Tracts 3 and 4 and 14.1 acres of the Shallcross property.

for a declaration of abandonment of several of McTiernan's water rights. The board consolidated the abandonment petitions for a hearing.

The Scotts petitioned the district court for a review of the board's decision. McTiernan did not, however, appeal from the board's abandonment decision regarding his water rights. The district court certified the case to the Wyoming Supreme Court pursuant to W.R.A.P. 12.09(b).

STANDARD OF REVIEW

When we review cases which have been certified to the Wyoming Supreme Court pursuant to W.R.A.P. 12.09(b), we apply the appellate standards which are applicable to the court of the first instance. Union Telephone Company, Inc. v. Wyoming Public Service Commission, 907 P.2d 340, 341-42 (Wyo.1995). Wyo. Stat. Ann. § 16-3-114(c) (Michie 1997) governs judicial review of administrative decisions. W.R.A.P. 12.09(a); Everheart v. S & L Industrial, 957 P.2d 847, 851 (Wyo.1998).

In reviewing an agency's findings of fact, we determine whether substantial evidence supports the findings. DeWall v. State ex rel. Wyoming Workers' Safety and Compensation Division, 960 P.2d 502, 503 (Wyo.1998). "Substantial evidence is relevant evidence which a reasonable mind might accept in support of the agency's conclusions." Id. We affirm an agency's conclusions of law when they are in accordance with law. Corman v. State ex rel. Wyoming Workers' Compensation Division, 909 P.2d 966, 970 (Wyo.1996). When an agency has not invoked and properly applied the correct rule of law, we correct the agency's errors. Weaver v. Cost Cutters, 953 P.2d 851, 855 (Wyo.1998); Gneiting v. State ex rel. Wyoming Workers' Compensation Division, 897 P.2d 1306, 1308 (Wyo.1995).

An administrative agency is charged with the duty of supporting its action with adequate findings of fact. Wyo. Stat. Ann. § 16-3-110 (Michie 1997). Section 16-3-110 states in pertinent part:

A final decision or order adverse to a party in a contested case shall be in writing or dictated into the record. The final decision shall include findings of fact and conclusions of law separately stated. Findings of fact if set forth in statutory language, shall be accompanied by a concise and explicit statement of the underlying facts supporting the findings.

In discharging its duty under § 16-3-110, the agency must "make findings of basic facts upon all of the material issues in the proceeding and upon which its ultimate findings of fact or conclusions are based." Pan American Petroleum Corporation v. Wyoming Oil and Gas Conservation Commission, 446 P.2d 550, 555 (Wyo.1968). See also Billings v. Wyoming State Board of Outfitters and Professional Guides, 837 P.2d 84, 86 (Wyo.1992). This Court needs to know "why" an agency decided the way it did. Billings, 837 P.2d at 86; Geraud v. Schrader, 531 P.2d 872, 879 (Wyo.), cert. denied sub nom. Wind River Indian Education Association, Inc. v. Ward, 423 U.S. 904, 96 S.Ct. 205, 46 L.Ed.2d 134 (1975). When an agency does not make adequate findings of basic fact, we do not have a rational basis upon which to review its ultimate findings and conclusions. Billings, 837 P.2d at 86; see also Schulthess v. Carollo, 832 P.2d 552, 558-59 (Wyo.1992). In cases where the findings do not adequately explain the rationale for the agency's decision, we remand the matter

to the agency so that it can make additional findings. Billings, 837 P.2d at 86.

DISCUSSION

A. Lands North of Smith Creek

The Scotts contend that the board should not have determined that they abandoned the John Ross Appropriation as it applied to the land north of Smith Creek in Tracts 3 and 4. They claim that they did not voluntarily abandon their water right but that they were, instead, forced to discontinue using the water because McTiernan blocked the ditches. The appellees counter by arguing that a literal reading of the abandonment statute supports the board's decision. We agree with the Scotts.

Wyo. Stat. Ann. § 41-3-401 (Michie 1997) governs the abandonment of water rights. That statute provides in pertinent part:

(a) Where the holder of an appropriation of water from a surface, underground or reservoir water source fails, either intentionally or unintentionally, to use the water therefrom for the beneficial purposes for which it was appropriated, whether under an adjudicated or unadjudicated right, during any five (5) successive years, he is considered as having abandoned the water right and shall forfeit all water rights and privileges appurtenant thereto.

Section 41-3-401(a). "[W]e have long adhered to the rule that adjudicated water rights will not be set aside unless justified by clear and convincing evidence." Wheatland Irrigation District v. Pioneer Canal Co., 464 P.2d 533, 537 (Wyo.1970).

In finding of fact number 24, the board stated:

24. THAT the evidence was persuasive that Scott was prohibited from receiving water by the upstream actions of McTiernan on McTiernan's own property blocking and closing in ditches which could have supplied Scott water and which did supply water to Scott's land when the properties were all in one ownership. The testimony is clear, however, that Scott failed to...