Sweetie K, LLC v. Owens

Decision Date05 February 2020
Docket NumberNo. 2 CA-CV 2018-0102,No. 2 CA-CV 2019-0012 (Consolidated),2 CA-CV 2018-0102,2 CA-CV 2019-0012 (Consolidated)
PartiesSWEETIE K, LLC, A WYOMING LIMITED LIABILITY COMPANY, Plaintiff/Appellant, v. DAVID OWENS; DAVID J. WEST; EAST VERDE RIVER MCLACHLAN DITCH USERS LLC, AN ARIZONA LIMITED LIABILITY COMPANY; ROBERT K. MITCHELL AND ANGELA J. MITCHELL, HUSBAND AND WIFE, Defendants/Appellees. EAST VERDE RIVER MCLACHLAN DITCH USERS LLC, AN ARIZONA LIMITED LIABILITY COMPANY; DAVID J. WEST; RIVERS EDGE PAYSON LLC, AN ARIZONA LIMITED LIABILITY COMPANY; DAVID J. WEST, AS TRUSTEE OF THE WEST REVOCABLE TRUST ESTABLISHED JULY 10, 1998, Plaintiffs/Appellees v. SWEETIE K, LLC, A WYOMING LIMITED LIABILITY COMPANY, Defendant/Appellant.
CourtArizona Court of Appeals

THIS DECISION DOES NOT CREATE LEGAL PRECEDENT AND MAY NOT BE CITED EXCEPT AS AUTHORIZED BY APPLICABLE RULES.

NOT FOR PUBLICATION

See Ariz. R. Sup. Ct. 111(c)(1); Ariz. R. Civ. App. P. 28(a)(1), (f).

Appeal from the Superior Court in Gila County

Nos. CV201500121 and CV201700102

The Honorable Timothy M. Wright, Judge

AFFIRMED

COUNSEL

Moyes Sellers & Hendricks, Phoenix

By Steve L. Wene and Joshua T. Greer

Counsel for Plaintiff/Appellant

Harper Law Offices PC, Payson

By Michael J. Harper

Counsel for Defendants/Appellees
MEMORANDUM DECISION

Judge Brearcliffe authored the decision of the Court, in which Presiding Judge Staring and Chief Judge Vásquez concurred.

BREARCLIFFE, Judge:

¶1 Sweetie K LLC appeals from the trial court's grants of summary judgment for David Owens and David J. West, and for Robert K. and Angela J. Mitchell, and East Verde River McLachlan Ditch Users EVRMDU LLC (EVRMDU). This dispute is, essentially, over the relative rights of the parties to water from the East Verde River conveyed through a ditch that carries the water across several parcels of land owned by various persons and entities.

¶2 Sweetie K filed suit against users and potential users of the water from the ditch, including the appellees here, asserting its exclusive property right to both the ditch and water. The trial court granted summary judgment for the appellees because Sweetie K failed to raise a genuine issue of material fact as to its exclusive right either to the ditch or to the water within it. Sweetie K contends that it presented sufficient evidence of itsright to the ditch and the water as against the appellees to defeat summary judgment. We affirm.

Factual and Procedural Background

¶3 We view the evidence and all reasonable inferences therefrom in the light most favorable to the party opposing the motion for summary judgment. Andrews v. Blake, 205 Ariz. 236, ¶ 12 (2003). In the early twentieth century, William McLachlan acquired a homestead patent for 160 acres of land in Gila County, which was later divided, creating the Verde Glen 3 subdivision. From the East Verde River, which borders the east side of Verde Glen 3, a head gate diverts water into an irrigation ditch. The ditch runs south, crossing over federal land controlled by the United States Forest Service, and then through several privately-owned parcels, the first of which is owned by West. It then continues south through property owned by EVRMDU, turns west through Verde Glen Home Owner's Association (VGHOA) property, continues south and southeast through a non-party property, enters Sweetie K's property for the first time, and then finally exits through another non-party property spilling its water back into the East Verde River.

¶4 In 2000, John and Betty Kerr, from whom Sweetie K acquired its land, obtained an easement from the Forest Service "for occupancy with water conveyance system facilities of land . . . enclos[ed] [within] 0.2820 acres of National Forest System Land." The easement "authorizes only the right-of-way and water conveyance system facilities," and did not "authorize extensions or enlargements of the water conveyance system." The easement is fully transferable, requiring the holder to notify the Forest Service within sixty days of any change in ownership.1 Additionally, the easement is non-exclusive, giving the Forest Service the right to permit others to use the easement "provided such use does not unreasonably interfere with the rights and privileges hereby authorized."

2006 Litigation

¶5 In 2006, the Kerrs and Verde Glen Property Owners Association (VGPOA) filed a lawsuit in the Gila County Superior Court against David West (and others who are not parties to this appeal) allegingtrespass and wrongful taking of water and seeking declaratory relief.2 In its ruling issued in 2008, granting a cross-motion for summary judgment in favor of the plaintiffs ("the 2008 Ruling"), the trial court found, based on the undisputed facts before it, that:

The Kerrs operate and maintain the ditch under a watering system easement granted by the government for use of Forest Service land. This permit authorizes only the Kerrs to operate and maintain the Kerr Ditch as it existed on October 21, 1976; extensions or enlargements of the ditch are not authorized. Defendants do not have permission from the Forest Service to use forest land to divert and carry water through the Kerr ditch.

And that:

Defendants entered upon Plaintiff[']s property, constructed facilities to alter the Kerr Ditch, and were prepared to take water from the ditch even though Plaintiffs denied them permission to do so. Plaintiffs asked Defendants to remove their irrigation works and to restore the Kerr Ditch and Association property to its original condition. Defendants refuse to do so.

¶6 As the trial court noted, the defendants argued that they had the right "to appropriate water from the East Verde [River] even if theyneed to cross Plaintiffs' property to access and transport the water" because a common predecessor in interest held water rights that benefitted their property. They also asserted that case law gave "them the right to enter and use property of others without consent in order to get water." The court acknowledged case law barring interference by landowners with the extraction of water by those with priority beneficial water rights. Nonetheless, it concluded that the case law did "not give anyone the right to use someone else's ditch . . . . Defendants just do not have any right to use . . . Plaintiffs' property, the Kerr Ditch."

Current Litigation

¶7 In 2013, the Kerrs sold their Verde Glen property to Sweetie K. In June 2015, Sweetie K filed a complaint against Richard and Judith Caron, Owens, and West, alleging trespass, conversion, and intentional interference with contract, and seeking declaratory and injunctive relief. In December 2015, Sweetie K amended that complaint adding the Mitchells as defendants, and did so again in April 2017, adding EVRMDU as a defendant. In March 2017, the trial court granted the Carons' motion for summary judgment, dismissing them from the action, which ruling we upheld in a separate appeal. Sweetie K LLC v. Caron, No. 2 CA-CV 2017-0108 (Ariz. App. Feb. 14, 2018) (mem. decision).

¶8 At that time, the subject irrigation ditch carried water to several property owners, some of whom have their own easements from the Forest Service, including West and the Mitchells.3 Between 2013 and 2014, West and Owens built a pipeline to retrieve water from the ditch on EVRMDU land, in order to distribute water to other properties in Verde Glen 3 by pipeline. The pipeline crosses the Mitchells' parcel, with Robert Mitchell's express permission.

Mitchells' and Owens' Motion for Partial Summary Judgment

¶9 In October 2016, the Mitchells and Owens filed a motion for partial summary judgment on Sweetie K's claims. In that motion, the Mitchells and Owens sought a ruling that they were not bound by the findings in the 2008 Ruling under the doctrine of collateral estoppel given that they were not parties to that litigation and that the facts and legal issues in that action were different. In its response to the motion, Sweetie K statedthat it was not contending that the Mitchells and Owens were bound by the 2008 Ruling but only that it bound the Carons and West. To that end, Sweetie K stated that it did "not object to the Court entering an order to confirm its rulings in the [2006 litigation] do not bind" the Mitchells and Owens. Consequently, the trial court entered such a ruling, granting the motion, determining that, "because the moving Defendants [including the Mitchells and Owens] were not parties to [the 2006 litigation], any orders in that case are not binding upon them." This ruling was not appealed.

Appellees' Motions for Summary Judgment

¶10 Thereafter, in May 2017, West and Owens filed a motion for summary judgment asserting, in salient part, that Sweetie K had not and could not present evidence of its exclusive ownership of the ditch or its authority to bar others from extracting East Verde River water from the ditch. Absent that authority, they asserted, Sweetie K could not sustain and prevail on its claims.

¶11 In the motion, supported by the unsworn declaration of David West, West and Owens asserted that the diversion of water from the ditch complained of occurs from a tap located "on property then owned by Lone R. Builders, 401k PSP." They further claimed that Sweetie K "holds no interest in the Lone R. Builders parcel, has never held any rights under an easement or other recorded instrument in the land, and has no right—established or otherwise—to control the use of that land." West and Owens also relied on correspondence between Sweetie K's counsel and National Forest Service personnel. In an e-mail to the Forest Service, Sweetie K's counsel objected to the Forest Service issuing a permit for the use of the irrigation ditch on Forest Service land to the EVRMDU. Sweetie K's counsel claimed, "This is not the Forest Service's ditch. This is our ditch. We will seek to enjoin any such action."

¶12 Sweetie K's counsel explained to a Forest Service official that:

The Kerrs were the original owners and the only owners until the property was purchased by Sweetie K. This has been
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