Vaughn v. People ex rel. Simpson, 04SA381.

• Decision Date: 15 May 2006
• Docket Number: No. 04SA381.,04SA381.
• Citation: 135 P.3d 721
• Parties: Defendant-Appellant: Michael VAUGHN, v. Plaintiffs-Appellees: The PEOPLE of the State of Colorado, ex rel. Harold D. SIMPSON, State Engineer for the State of Colorado, and James R. Hall, Division Engineer for Water Division 1.
• Court: Colorado Supreme Court

Page 721

135 P.3d 721

Defendant-Appellant: Michael VAUGHN, v. Plaintiffs-Appellees: The PEOPLE of the State of Colorado, ex rel. Harold D. SIMPSON, State Engineer for the State of Colorado, and James R. Hall, Division Engineer for Water Division 1.

No. 04SA381.

Supreme Court of Colorado, En Banc.

May 15, 2006.

Riske & Salisbury, P.C., Don W. Riske, Cheyenne, WY, for Defendant-Appellant.

John Suthers, Attorney General, Alexandra L. Davis, Assistant Attorney General, John J. Cyran, Assistant Attorney General, Denver, for Plaintiffs-Appellees.

Justice EID does not participate.

COATS, Justice.

Michael Vaughn appealed directly to this court from a judgment of the water court assessing a monetary penalty against him for diverting ground water contrary to a valid order of the division engineer. After ordering the discontinuance of any further diversions from Vaughn's well, the division engineer, along with the state engineer, brought an action in the name of the People against Vaughn, seeking injunctive relief and civil penalties authorized by statute for violation of such an order. The water court found a permanent injunction unnecessary but fined Vaughn $1,400 for unauthorized pumping and awarded the People costs, including attorney fees.

Because the People presented sufficient evidence to support the water court's finding that Vaughn diverted ground water within the meaning of section 37-92-503(6)(a), C.R.S. (2003), contrary to the division engineer's order, its judgment is affirmed.

I.

Pursuant to the authority granted them by section 37-92-503, C.R.S. (2003),¹ the state and division engineers brought an action in the Water Court for Water Division 1 against Michael Vaughn. The complaint alleged violations of the division engineer's order requiring Vaughn to discontinue diverting from a permitted well he owned, and it sought an injunction against further violations, civil penalties for past violations, and costs, including attorney fees. In October 2004, the matter was tried to the court.

In support of the state's theory that Vaughn or members of his family continued using the well to irrigate their 2003 alfalfa crop in violation of a valid order, it presented the testimony of the division engineer and a member of his staff; the water commissioner for the district; and a manager of an organization that supplies augmentation water for the out-of-priority use of its members' wells, called Groundwater Appropriators of the South Platte. The People presented direct evidence of the order and its posting, of notification by mail to the defendant, and of inspections indicating substantial use of the well after the order was posted; but the state's evidence of the particular persons who physically operated the well and of the specific use made of the water was all circumstantial.

Vaughn testified himself and was the only witness for the defense. He did not dispute, and in fact stipulated to, the validity of the order and compliance with statutory notice requirements, but he denied having any actual knowledge of the order or the continued use of his well. While he suggested other possible explanations for the pumping of the well, his theory of defense was simply that the statute imposes liability only upon the person who actually turns the well pump on. He argued to the court that the People failed to present any evidence that he did so personally, or even that a member of his family did so.

The water court ruled orally and several weeks later issued a written clarification. In its ruling, the court highlighted a number of its factual findings. Among them, the court indicated that Vaughn owned the subject well and through the 2002 growing season used it to irrigate, with a pivotal irrigation system, a parcel of his land producing alfalfa. In early 2003, Groundwater Appropriators of the South Platte sent Vaughn a letter warning him that its water supplies might become unavailable because of changes in the legal situation in the South Platte River Basin. In March the division engineer notified Vaughn that an order to discontinue diverting would be issued and that violation of that order might result in penalties. Finally, the division engineer issued a legal and valid discontinuance order,² and on April 28, 2003, the water commissioner posted it on the power meter for the well, in accordance with statutory requirements.

During inspections conducted in July and November, the water commissioner discovered that the well was still being used, and from the power meter readings, engineers of the division calculated that approximately 6,239,000 gallons of water, more than 18 acre-feet, must have been pumped after the posting of the order to discontinue. If the well had been pumping 24 hours a day, this would have taken seven and a quarter full days. Power company records further indicated that significant amounts of pumping occurred in each of five monthly periods from the middle of May until the middle of October, and Vaughn paid each of the monthly utility bills within days.

The court found that the well was clearly being pumped in violation of the engineer's order. From circumstantial evidence it also found that Vaughn was actually aware of the order, and under these particular circumstances he could not have been unaware of pumping in violation of the order or what was happening to the six million gallons of water. In light of Vaughn's admission that he delegated the production of the alfalfa crop to his children and the irrigation of his fields to his father, in conjunction with the absence of any credible evidence of theft, or any diversion without his authorization, the court found that Vaughn or a family member must have pumped the water and that even if the latter were the case, Vaughn would be liable for violating the order according to a principal-agent theory.

Although it found that Vaughn's subsequent disabling of the well made a permanent injunction against continued violations unnecessary, the water court imposed the requested monetary penalty of $1,400. It also held Vaughn responsible for the costs of the proceedings, including the People's attorney fees, in accordance with the statute.³ Vaughn appealed directly to this court, asserting that the unambiguous language of the statute imposes liability only on the individual who personally turns on a well pump in violation of an order not to do so; and in any event, the People failed to prove that either he or someone acting as his agent actually pumped the well.

II.

Although not criminal in nature, the penalty authorized in section 37-92-503(6)(a), and imposed by the water court in this case, is entirely a creature of statute. Precisely what constitutes sanctionable conduct under this provision, and whether an owner or user of water rights can be vicariously liable for the conduct of others, are therefore matters of legislative intent. Within constitutional limitations, which have not been drawn into question here, the behavior subject to this civil penalty is determined by interpretation of the statutory provisions themselves.

Upon non-compliance with an order mandating partial or total discontinuance of any diversion, see § 37-92-502(1), (2), C.R.S. (2005), section 37-92-503, C.R.S. (2005), imposes a duty on the state and division engineers to apply for an injunction enjoining the person to whom the order was directed from further violations, and it makes clear an intent that contempt sanctions punish any violation of such an injunction. § 37-92-503(1), (4). In addition, subsection (6) mandates civil penalties for a range of conduct involving ground water and well operation. In particular, subsection (6)(a) provides that:

Any person who diverts ground water contrary to a valid order of the state engineer or division engineer issued pursuant to section 37-92-502, in violation of a plan approved pursuant to rules and regulations adopted by the state engineer, or otherwise in violation of rules and regulations adopted by the state engineer to regulate or measure diversions of ground water shall forfeit and pay a sum not to exceed five hundred dollars for each day such violation continues.

Central to the defendant's assignment of error are the words, "[a]ny person who diverts." Although "person" and "divert" are both commonly used terms, they have particular significance for the acquisition and regulation of water rights in this jurisdiction and both are therefore specifically defined for purposes of the "Water Right Determination and Administration Act of 1969." Title 37, article 92, Colorado Revised States. Unless the context requires otherwise, when used in article 92 the term "person" refers not only to an individual, or natural person, but also to legal entities, both public and private, including partnerships, corporations, municipalities, the state, and even the nation. § 37-92-103(8), C.R.S. (2005).⁴ The term "divert," refers to removing water from its natural course or location by means of some structure or device, like a well or pump. § 37-92-103(7), C.R.S. (2005).⁵

Defined this way, the words of subsection (6)(a) cannot be understood to restrict the imposition of liability to natural persons physically acting to pump the well, much less exclude any broader reading as unreasonable. When the term "person" is...