Whitt v. Hat Bar Cattle Co. (In re Gen. Adjudication of All Rights to Use Water in the Big Horn River Sys.)

• Decision Date: 16 September 2015
• Docket Number: No. S–14–0257.,S–14–0257.
• Citation: 358 P.3d 1265,2015 WY 126
• Parties: In re The GENERAL ADJUDICATION OF ALL RIGHTS TO USE WATER IN the BIG HORN RIVER SYSTEM and All Other Sources, State of Wyoming, Betty Whitt, Appellant (Objector), v. Hat Bar Cattle Company, Appellee (Petitioner), and The State of Wyoming, Appellee (Respondent).
• Court: Wyoming Supreme Court

358 P.3d 1265

2015 WY 126

In re The GENERAL ADJUDICATION OF ALL RIGHTS TO USE WATER IN the BIG HORN RIVER SYSTEM and All Other Sources, State of Wyoming

Betty Whitt, Appellant (Objector)

v.Hat Bar Cattle Company, Appellee (Petitioner)andThe State of Wyoming, Appellee (Respondent).

No. S–14–0257.

Supreme Court of Wyoming.

Sept. 16, 2015.

Representing Appellant: Sky D. Phifer, Phifer Law Office, Lander, Wyoming.

Representing Hat Bar Cattle Company: William L. Miller, Miller & Fasse, P.C., Riverton, Wyoming.

Representing the State of Wyoming: Peter K. Michael, Attorney General; Jay Jerde, Deputy Attorney General; Christopher Brown, Senior Assistant Attorney General; Brian Annes, Student Intern. Argument by Mr. Annes.

Before BURKE, C.J., and HILL, KITE^* , DAVIS, and FOX, JJ.

Opinion

BURKE, Chief Justice.

[¶ 1] In this third and final phase of the general adjudication of water rights in the Big Horn River, the Special Master recommended adjudicating the right to irrigate 52 acres of land owned by Hat Bar Cattle Company.¹ That recommendation was made following a hearing on an objection to the adjudication from neighboring landowner Betty Whitt. The district court adopted the Special Master's Report and Recommendation, and adjudicated the Hat Bar's water rights. Ms. Whitt appeals the district court's decision. We will affirm.

ISSUES

[¶ 2] Ms. Whitt presents three issues, which we have reworded for clarification:

1. Did the Special Master err in shifting the burden of proof from the claimant, Hat Bar, to the objector, Ms. Whitt?

2. Was the finding by the Special Master that the water at issue had been put to beneficial use prior to December 31, 1963, clearly erroneous?

3. Was the finding by the Special Master that the 52 acres of Hat Bar lands had been continuously irrigated from December 31, 1963, to the date of the hearing clearly erroneous?

FACTS

[¶ 3] This appeal arises from the general adjudication of water rights in the Big Horn River system. The adjudication began on January 24, 1977, and was divided into three phases. Phase I dealt with Indian reserved water rights, Phase II with non-Indian reserved water rights, and Phase III with state water rights evidenced by a permit or certificate. In re General Adjudication of All Rights to Use Water in the Big Horn River System, 803 P.2d 61, 65 (Wyo.1990) (Big Horn II ). This appeal is part of Phase III.

[¶ 4] The Hat Bar Cattle Company, owned by Jerry Winchester and his wife, was the successor to State Permit No. 1366E, Enlarged Aragon Ditch, a permit originally filed by the United States Bureau of Indian Affairs on May 5, 1905. The Bureau routinely applied for and received extensions of time to accomplish beneficial use under the permit, but the permit eventually expired on December 31, 1963. However, it was never cancelled. Under the procedures adopted by the district court for this adjudication:

Permits not in good standing will be reinstated prior to adjudication. Delinquent notices will be filed, together with affidavits or other competent evidence, showing beneficial use prior to expiration of the permit deadline to the current date. The field inspection to confirm the requirements for reinstatement may be combined with that for adjudication to save time.

In re: The General Adjudication of All Rights to Use Water in the Big Horn River System, Docket No. 86–0012, Fifth Judicial District Court, 1997 Amended Big Horn Adjudication Phase III—Procedures, Chapter IV, Section A.3 (“Phase III Procedures ”).

[¶ 5] The field inspection was conducted in the spring of 1994 by Bobby Lane, a water rights specialist for the State Engineer's Office. He was accompanied by Mr. Winchester, Mike Redman representing the Tribal Water Engineer's Office, and Tony Shakespeare from the Bureau of Indian Affairs. Based on their inspection of the property, along with other information discussed below, the four reached a consensus that, of the 207 acres covered by the permit, 52 acres showed evidence of irrigation, and 155 did not. Accordingly, Mr. Lane's report recommended reinstating the permit for the 52 irrigated acres “with adjudication to follow.” The remaining 155 acres were eliminated from the permit, with Mr. Winchester's consent.

[¶ 6] According to the expired permit, water was conveyed to Hat Bar property out of the Wind River through the Enlarged Aragon Ditch, then through a ditch that runs through Ms. Whitt's property to the Hat Bar. Ms. Whitt objected to the State's recommendation to adjudicate water rights for the 52 acres. The Special Master conducted a contested case hearing, and much of the evidence received will be discussed in detail below. The Special Master upheld the State's Report, and submitted a report to the district court recommending adjudication of the 52 acres at issue.

[¶ 7] In the district court, Ms. Whitt filed an objection to the Special Master's Report and Recommendation, asserting that the evidence from the hearing did not support the Special Master's findings. The district court noted that, under W.R.C.P. 53(e)(2), the Special Master's report had to be adopted unless it was clearly erroneous. Determining that Ms. Whitt had not shown the report to be clearly erroneous, the district court adopted the Special Master's decision and adjudicated Hat Bar's water rights. On September 5, 2014, the district court entered its Final Order concluding the general adjudication of the Big Horn River system. Ms. Whitt filed this timely appeal.

DISCUSSION

[¶ 8] Ms. Whitt first contends that the Special Master improperly shifted the burden of proof from Hat Bar to her. Allocation of the burden of proof is a matter of law. Our review is therefore de novo. JB v. State, 2013 WY 85, ¶ 5, 305 P.3d 1137, 1139 (Wyo.2013).

[¶ 9] A brief discussion of the procedures used in this general adjudication is helpful as background. With regard to permits not in good standing, like Hat Bar's, the procedures adopted by the district court provided for the State to prepare a report on reinstating those permits, including proof by affidavits or other evidence that the lands covered by the permit had been irrigated. Proof of irrigation was to be confirmed by a field inspection performed by the State. Phase III—Procedures, Chapter IV, Sections A.3 and B.5(a). The State's reports were submitted to the district court for review by the Special Master, and notice of the reports was published in local newspapers and mailed to interested parties. Id., Chapter IV, Sections A.5 and A.6. If a report was not contested, the Special Master and district court generally approved it. See Regulations and Instructions of the State Board of Control, Chapter IV, Section 1.i.² However,

In the event an advertised proof is contested ... the procedures outlined in Section 4 of this chapter shall be followed:

(1) A claimant may not rest upon the allegations contained in affidavits as sufficient evidence to support the adjudication of a water right.

(2) The claimant must produce credible evidence in the form of testimony, subject to cross examination which supports the statements made on the proof form.

Id., Chapter IV, Section 1.j. As Ms. Whitt correctly asserts, these procedures and regulations establish that the burden of proof was on Hat Bar to provide evidence supporting the adjudication of its water right.

[¶ 10] Ms. Whitt points out that the Special Master's report in this matter included this conclusion of law:

6. The Special Master's Order dated January 25, 2007 provides that the State of Wyoming will have the initial burden of establishing the foundation for and the authenticity of the [State's] Report concerning this permit. The objecting parties shall then have the burden of challenging the State's Report. The State has met its burden, and the objector's challenge to the State's Report did not provide evidence refuting the determination of historic irrigation.

She claims that the Special Master erred in placing the burden of proof on her.

[¶ 11] We agree that this conclusion of law is not entirely accurate. It overlooks the claimant's burden to “produce credible evidence in the form of testimony, subject to cross examination which supports the statements made on the proof form.” Despite the misstatement, however, review of the Special Master's Report and Recommendation demonstrates that the Special Master did not actually err in placing the burden of proof.

[¶ 12] In the Report and Recommendation's fourth conclusion of law, the Special Master quoted the applicable regulation regarding the burden of proof:

In the event an advertised proof is contested ... the procedures outlined in Section 4 of this chapter should be followed:

(1) A claimant may not rest upon the allegations contained in affidavits as sufficient evidence to support the adjudication of a water right.

(2) The claimant must produce credible evidence in the form of testimony, subject to cross examination which supports the statements made on the Proof form.

This demonstrates that the Special Master was aware that the burden of proof fell on Hat Bar. The State and Hat Bar were first to present witnesses and exhibits, followed by Ms. Whitt. We have previously recognized that the party with the burden of proof generally presents its case first. See JB, ¶ 10, 305 P.3d at 1140. The Report and Recommendation carefully catalogues and discusses the testimony and other evidence presented by the State and Hat Bar, further indicating that the Special Master correctly required them to present evidence supporting their case.

[¶ 13] The Special Master required the State and Hat Bar to produce their evidence first. After the State had established the foundation for and authenticity of its report recommending the adjudication of water rights, Hat Bar presented its witnesses and exhibits concerning irrigation on the property. The Special Master then allowed Ms. Whitt an opportunity to present her evidence. After all of the evidence was received, the Special Master considered it, and found the...