Toltec Watershed Imp. Dist. v. Associated Enterprises, Inc., Through Johnston

• Decision Date: 15 April 1992
• Docket Number: No. 91-170,91-170
• Citation: 829 P.2d 819
• Parties: TOLTEC WATERSHED IMPROVEMENT DISTRICT, Appellant (Appellant/Contestee), v. ASSOCIATED ENTERPRISES, INC., acting through its President, Mr. Eldon JOHNSTON, Appellee (Appellee/Petitioner), Wyoming State Board of Control, Appellee.
• Court: Wyoming Supreme Court

Page 819

829 P.2d 819

TOLTEC WATERSHED IMPROVEMENT DISTRICT, Appellant (Appellant/Contestee), v. ASSOCIATED ENTERPRISES, INC., acting through its President, Mr. Eldon JOHNSTON, Appellee (Appellee/Petitioner), Wyoming State Board of Control, Appellee.

No. 91-170.

Supreme Court of Wyoming.

April 15, 1992.

Fred W. Phifer, Wheatland, for appellant.

Wm. R. Jones, Wheatland, for appellee Associated Enterprises, Inc.

Joseph B. Meyer, Atty. Gen., Mary B. Guthrie, Dennis C. Cook, Sr. Asst. Attys. Gen., and Frederick E. Chemay, Asst. Atty. Gen., for appellee Wyoming State Bd. of Control.

Before URBIGKIT, C.J., and THOMAS, CARDINE, MACY and GOLDEN, JJ.

MACY, Justice.

Pursuant to Wyo.Stat. § 41-3-107 (Supp.1991), the Wyoming State Board of Control granted Appellee Associated Enterprises, Inc.'s petition to transfer its water rights from lands submerged by Appellant Toltec Watershed Improvement District's reservoir. Toltec petitioned the district court for review, claiming that Associated Enterprises could not transfer the water rights for lack of ownership. The district court affirmed the Board of Control's decision.

We affirm.

Toltec raises the following issues on appeal:

1. Did the Order of Award dated May 21, 1982, pass title to the water rights appurtenant to the land which Appellants condemned?

2. Do water rights that are abandoned revert back to the previous owner?

Associated Enterprises owned land in Albany County, Wyoming, which Toltec condemned in 1981 for use as a reservoir. When completed, the reservoir inundated land previously irrigated by Associated Enterprises, prompting Associated Enterprises to seek a transfer of its water to lands west of the reservoir. To transfer its water, Associated Enterprises petitioned the Board of Control, pursuant to § 41-3-107, ¹ for amended certificates of appropriation for the affected appropriations and to grant a change in the point of diversion and means of conveyance.

The Board of Control referred the petition to the Superintendent of Water Division Number I, who held a public hearing on September 19, 1990. On the basis of that hearing, the Board of Control found that Associated Enterprises complied with all the requirements of § 41-3-107 and granted the petition. Toltec appealed the Board of Control's decision to the district court. In a summary affirmance, the district court found that the Board of Control's decision was supported by substantial evidence. Toltec now appeals from the district court's affirmance.

Pursuant to § 41-3-107, the owner of water rights submerged by a reservoir may change the point of diversion and means of conveyance in order to irrigate lands outside the reservoir basin. The statute contains several requirements, but, as a threshold matter, the petitioner must own the water rights to be transferred. Toltec maintains that Associated Enterprises cannot transfer the water rights because Toltec acquired them when it condemned Associated Enterprises' land. The Board of Control disagreed with Toltec's position, finding that Toltec "condemned and purchased [Associated Enterprises'] lands to be inundated by Toltec Reservoir, but the water rights of [Associated Enterprises] were not purchased in that action." Because Toltec did not purchase the water rights, the Board of Control concluded that Associated Enterprises retained ownership of the rights.

The scope of our review of the Board of Control's decision is governed by Wyo.Stat. § 16-3-114 (1990) and W.R.A.P. 12.09. When considering the district court's review of an agency's action, "we are not bound to accept any of the conclusions reached in the district court, but we are obligated to review the appeal as if it came directly to this court from the agency." Mountain Fuel Supply Company v. Public Service Commission of Wyoming, 662 P.2d 878, 882 (Wyo.1983).

If the whole record establishes that substantial evidence exists to support the Board of Control's findings of fact, then this Court must accept those findings. City of Cheyenne Policemen Pension Board v. Perreault, 727 P.2d 702, 704 (Wyo.1986). We have previously defined substantial evidence as being " 'such relevant evidence as a reasonable mind might accept as adequate to support a conclusion; it may be less than the weight of the evidence but cannot be contrary to the overwhelming weight of the evidence.' " Vandehei Developers v. Public Service Commission of Wyoming, 790 P.2d 1282, 1287 (Wyo.1990) (quoting Wyoming Insurance Department v. Avemco Insurance Company, 726 P.2d 507, 509 (Wyo.1986)). Once substantial evidence has been found to exist, the possibility of reaching two inconsistent conclusions from the evidence presented does not preclude a finding that the Board of Control's decision was supported by substantial evidence. Id.; Burlington Northern Railroad Company v. Public Service Commission of Wyoming, 698 P.2d 1135, 1139 (Wyo.1985).

Applying the foregoing standard of review, we examine the record to determine whether substantial evidence existed to support the Board of Control's findings. The record in this case is unique because almost all the evidence introduced was a recitation of pleadings and orders from prior litigations between the parties. These prior pleadings and various orders support the Board of Control's finding that Toltec did not purchase Associated Enterprises' water rights. Among the evidence was Toltec's complaint for condemnation, which did not seek condemnation of Associated Enterprises' water rights. Other evidence included the judge's order awarding compensation, an order granting compensation and appointing appraisers to assess compensation, and an order describing the land, none of which made any reference to water rights.

Additional support for the Board of Control's finding is the position taken by Toltec in a previous litigation with Associated Enterprises. When Associated Enterprises appealed the condemnation award to this Court in 1982, Toltec argued that the "land was condemned as irrigated land and compensation was awarded on that basis, but that [Associated Enterprises] still own[ed] the water rights." Associated Enterprises, Inc. v. Toltec Watershed Improvement District, 656 P.2d 1144, 1146 (Wyo.1983).

The pleadings, orders, and Toltec's previous arguments are all relevant evidence which a reasonable mind might accept as being adequate to support the finding that Toltec did not purchase the water rights as part of its condemnation action. Therefore, we hold that substantial evidence existed to support the Board of Control's finding.

Although substantial evidence existed to support the Board of Control's finding that Toltec did not purchase the water rights, we must still address Toltec's contention that the water rights were automatically conveyed as part of the condemnation. Toltec first refers us to the almost-century-old rule in Wyoming that water rights appurtenant to land pass with the conveyance of the land, even though the conveyance makes no mention of the water rights. Frank v. Hicks, 4 Wyo. 502, 35 P. 475 (1894). See also Big Goose and Beaver Ditch Company v. Wallop, 382 P.2d 388, 393 (Wyo.1963). Toltec then claims that, since Associated Enterprises failed to detach or transfer...