Skeen v. Boyles, 27,910.

• Citation: 2009 NMCA 080,213 P.3d 531
• Decision Date: 29 June 2009
• Docket Number: No. 27,910.,No. 28,318.,27,910.,28,318.
• Parties: Mike SKEEN and Gail Skeen, husband and wife, and Mary Helen Skeen, individually and in her capacity as Attorney-in-Fact for Joseph R. Skeen and Mary Elisa Livingston, Plaintiffs-Appellees, v. Bob BOYLES, deceased, and Jim Boyles, Defendants-Appellants.
• Court: Court of Appeals of New Mexico

213 P.3d 531

2009 NMCA 080

Mike SKEEN and Gail Skeen, husband and wife, and Mary Helen Skeen, individually and in her capacity as Attorney-in-Fact for Joseph R. Skeen and Mary Elisa Livingston, Plaintiffs-Appellees, v. Bob BOYLES, deceased, and Jim Boyles, Defendants-Appellants.

No. 27,910.

No. 28,318.

Court of Appeals of New Mexico.

June 29, 2009.

Tucker Law Firm, P.C., Steven L. Tucker, Santa Fe, NM, David M. Stevens, Attorneys at Law, P.C., David M. Stevens, Ruidoso, NM, for Appellees.

Caren I. Friedman, Santa Fe, NM, Stevens and Associates, J. Monty Stevens, El Paso, TX, for Appellants.

OPINION

BUSTAMANTE, Judge.

{1} This case centers on the effect of a written land ownership and well-sharing agreement (Agreement) entered into some fifty years ago by the owners of adjacent ranches in southern New Mexico. The Agreement contained a provision that the ranch owners—Joseph and Mary Helen Skeen and William and Ramona Treat— would maintain wells located on their respective properties and supply water to each other's ranches for livestock. Defendants Bob and Jim Boyles (the Boyles) are the Treats' successors-in-interest. The district court ruled that the Agreement created a reciprocal easement appurtenant that ran with the land, that the easement placed a duty on the Boyles, as the Treats' successors-in-interest, to supply water to the Skeens, and that the Boyles breached that duty. The district court awarded compensatory and punitive damages as well as attorney fees to Plaintiffs.

{2} The Boyles appeal, arguing that the Agreement at most created a license that was unilaterally revocable or that they had no affirmative duty to supply water. The Boyles argue that the actual damages were improper because the Skeens failed to mitigate and that punitive damages are improper because they lacked culpability sufficient to justify the award. In a separate appeal the Boyles challenge the district court's award of attorney fees in favor of the Skeens. The award was based on the Skeens' unopposed motion because the Boyles failed to timely respond, and their request for an extension of time was denied. We consolidate the appeals and affirm all holdings of the district court in the main appeal. We reverse the attorney fee award and remand for further consideration.

BACKGROUND

{3} The Boyles and the Skeens own adjacent ranches in Lincoln County, New Mexico. Both ranches were, at one time, owned by the Skeens' ancestors. Mary Helen Skeen, and her late husband Joe, bought their ranch from Joe's grandmother in 1951. Joe's grandmother had another grandson, William Treat, who along with his wife Ramona, bought the adjacent property. On February 17, 1959, Joe and Mary Skeen and William and Ramona Treat executed the Agreement clarifying ownership of certain property and agreeing to share water from two wells, one located on each of their respective properties. Pursuant to the Agreement, the Skeens had the right to use water from the Treats' Dry Pasture Well, and the Treats had the right to use water from the Skeens' Headquarters Well. The Agreement in its entirety provides:

WHEREAS, William C. Treat and Ramona Treat, his wife, are the holders of a State Lease covering the NW1/4SW1/4 of Section 6, in Township 14 South, Range 19 East, N.M.P.M. in Chaves County, New Mexico, and,

WHEREAS, Joseph R. Skeen and Mary Helen Skeen, his wife, are the owners of the E1/2NE1/4 of Section 23, Township 13 South, Range 18 East, N.M.P.M. in Lincoln County, New Mexico, and

WHEREAS, each party desires to agree as to the ownership and rights to such property and to give to the other a right to obtain water from the premises owned or leased by them for the purpose of watering livestock.

NOW THEREFORE, for considerations received, the receipt of which are hereby acknowledged, William C. Treat and Ramona Treat, his wife, do hereby release and quitclaim to Joseph R. Skeen and Mary Helen Skeen, his wife, the E1/2NE1/4 of Section 23, Township 13 South, Range 18 East, N.M.P.M., excepting and reserving to themselves a right to go over and across the NE1/4NE1/4 of Section 23 for the purpose of obtaining water from the well located on the premises in such amount as may be necessary for the purpose of watering livestock owned by them, and Joseph R. Skeen and Mary Helen Skeen, his wife, do hereby release and convey to William C. Treat and Ramona Treat, his wife, any interest they have in and to the NW1/4SW1/4 of Section 6, in Township 14 South, Range 19 East, N.M.P.M., and William C. Treat and Ramona Treat, his wife, hereby grant to Joseph R. Skeen and Mary Helen Skeen, his wife, a right to go over and across this property for the purpose of obtaining water from the well located on these premises, in such amount as may be necessary for the purpose of watering livestock owned by them.

Each party agrees to maintain the well on the premises owned or leased by them, and to supply such water as may be necessary for the other, and each party agrees to maintain his own tanks and tubs for the purpose of watering livestock.

{4} In 1964 William and Ramona Treat conveyed their ranch, including the Dry Pasture Well, to their son Anthony Treat. Anthony Treat owned the ranch for approximately thirty years. During his tenure on the ranch, Anthony Treat performed the necessary maintenance on the Dry Pasture Well, and always honored the Agreement with the Skeens.

{5} In 1995 Anthony Treat conveyed the ranch to the Boyles. Anthony did not provide the Boyles with a copy of the Agreement, but he orally advised them of the existence of a water sharing agreement concerning the Dry Pasture Well. The district court found that the Boyles were aware of their obligation to provide water to the Skeens. The Boyles acknowledged that they knew of the Agreement, but asserted they thought the obligation could be unilaterally terminated by either party.

{6} In the spring of 2001, in the midst of a severe drought, the Dry Pasture Well quit pumping water. Mike Skeen noticed that the well had stopped producing water and contacted Jim Boyles. Jim Boyles testified that he personally made efforts to get the well back online, but that nothing worked and so he assumed that the water table had dropped. Jim Boyles told Mike Skeen that he was attempting to repair the well and that he had called Keys Windmill for service on the well, but that "the sorry son of a guns would never get out there and get on the job." However, when Mike Skeen called Keys Windmill to inquire about their unresponsiveness, he was informed that Keys had never received any service call for the Dry Pasture Well. The district court found that Jim Boyles never actually made the request and that he lied about having called Keys Windmill.

{7} In August 2001 Jim Boyles called in a well expert, Ken Wheeler, ostensibly to inspect the Dry Pasture Well. Mr. Wheeler determined that the depth of the well to bottom was 600 feet, and that while there was water in the well starting at 545 feet below the surface, the well cylinder penetrated to a depth of only 505 feet. Thus, there was a forty-foot gap between the water's surface and the well cylinder. Mr. Wheeler also found that the well had been damaged by a cave-in. Based on his findings, Mr. Wheeler felt the well should be abandoned. Jim Boyles eventually abandoned the well by removing all of the pumping equipment, including the windmill, and installing a welded cap.

{8} In September 2001 Mike Skeen brought in a different well expert, Charlie Lewis, to evaluate the Dry Pasture Well. Mr. Lewis measured the depth of the well, employing two methods of measurement. First, a rod was lowered into the well while measuring the length of cable required to reach the bottom. Next, a sonic measuring device was used to determine the depth to the water. Mr. Lewis's findings were inconsistent with those of Mr. Wheeler. Based on his measurements, Mr. Lewis determined that the depth to the bottom was 519 feet and that there was water in the well starting 312 feet below the surface. Thus, Mr. Lewis determined that the well was capable of producing because it contained a little more than 200 feet of water. In October of the following year, the Skeens had Mr. Lewis install pumping equipment at the Dry Pasture Well, and it consistently produced twelve to thirteen gallons per minute. Four days later, Mr. Lewis and Mike Skeen recapped the well out of concern that it could be easily ruined if something fell down the pipe. The district court reviewed a video tape of the process employed by Mr. Lewis, including measuring the depth of the well, installing the pumping equipment, and the actual pumping of water from the Dry Pasture Well. The district court determined that Mr. Lewis's findings most accurately represented the actual characteristics of the well.

{9} Ken Wheeler passed away before this case went to trial. In his deposition testimony, prior to his death, he explained that one possible reason for Mr. Lewis's conflicting findings could have been that another water strata had broken into the well as a result of an earthquake. However, Mr. Lewis testified that there had been no seismic activity in the area and that he had never heard of any seismic activity effecting the wells in that area.

{10} The district court found that the actual reason for the discrepancies was that the Boyles directed Mr. Wheeler to measure the wrong well. This was based on the court's findings that the Boyles own another well, the Divide Well, which bears characteristics consistent with the findings of Mr. Wheeler. The court found that there was no way that Mr. Wheeler's measurements were made at the Dry Pasture Well and that the Boyles intentionally misled Mr. Wheeler by taking him to the Divide Well and telling him that it was the Dry Pasture Well.

{11} Based on Mr. Lewis's findings, the Skeens were aware as of September 2001 that the Dry Pasture Well could in fact produce water. However, the Skeens did not inform...