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Salt Lake City Corp. v. Haik

Court of Appeals of Utah

January 10, 2019

Salt Lake City Corporation and Metropolitan Water District of Salt Lake and Sandy, Appellees,
v.
Mark C. Haik and Pearl Raty, Appellants.

          Third District Court, Salt Lake Department The Honorable Andrew H. Stone No. 140900915

          Paul R. Haik, Attorney for Appellants

          Shawn E. Draney, Scott H. Martin, and Dani N. Cepernich, Attorneys for Appellees

          Judge Kate Appleby authored this Opinion, in which Judges Michele M. Christiansen Forster and Diana Hagen concurred.

          APPLEBY, JUDGE

         ¶1 Salt Lake City Corporation (SLC) and the Metropolitan Water District of Salt Lake and Sandy (the District) filed a claim seeking a declaratory judgment as to the nature, validity, and priority of water rights claimed by Mark C. Haik (Haik) and Pearl Raty (Raty). Raty filed various counterclaims seeking to compel SLC to supply water to her lot in the Albion Basin Subdivision in Little Cottonwood Canyon. Haik and Raty appeal the district court's grant of partial summary judgment to SLC and the District on their declaratory judgment claim. Raty appeals the district court's dismissal of her counterclaims. We affirm.

          BACKGROUND

         ¶2 This appeal involves two sets of claims: (1) those asserted by SLC and the District seeking a declaratory judgment of Haik's and Raty's claimed water rights, and (2) those asserted by Raty seeking to compel SLC to provide water to her undeveloped lot. We discuss separately the relevant facts of each set of claims.

         Haik's and Raty's Water Rights

         ¶3 Haik and Raty claim water rights to Little Cottonwood Creek (the Creek), and seek to divert that water to their lots in the Albion Basin Subdivision. Their claimed rights are portions of an award made to the South Despain Ditch (the Ditch) in the Morse Decree of 1910. That award was a first primary right to a flow of .25 cubic feet per second (the Original Water Right).

         ¶4 In 1934, the Ditch signed an agreement (the 1934 Agreement) that granted SLC the right to use most of the Original Water Right "during the winter or non-irrigation season from October 1 to April 1 of the following year." During that "non-irrigation" period, the Ditch had only the right to 7, 500 gallons per day, which was to be diverted from the Creek.

         ¶5 The Ditch was originally used by four separate Despain families. In 1950, one of those families sold its property, and the purchaser claimed a one-fourth interest in the Original Water Right. The state engineer approved a change application, which authorized the purchaser to move the point of diversion from the Creek to a well on his property and to use the water to support three houses, livestock, and irrigation. After the purchaser filed a proof map and proof of permanent change, the state engineer certified the change application and designated the purchaser's water right as WRN 57-7800.

         ¶6 In 1978, the property with WRN 57-7800's point of diversion (the well) and place of use was subdivided into four lots. In 2000, the state engineer's records showed that the owner of one of those lots (Lot 31) owned 100 percent of WRN 57-7800. At that time, the state engineer approved a change application filed by Lot 31's owner, authorizing returning the point of diversion to the Creek. The approved change application specified that it was "subject to the conditions and provisions of" the 1934 Agreement.

         ¶7 In 2003, WRN 57-7800's owner conveyed it by quitclaim deed to six separate parties, in equal interests, as tenants in common. Haik was one of those six parties; Raty acquired her interest later.[1] WRN 57-7800 was divided into six new water right numbers, representing the six parties' relative interests. Each of the parties filed change applications with the state engineer, requesting to divert water from the Creek to their respective Albion Basin lots for year-round domestic use. The state engineer approved two of those change applications, but did not approve or deny Haik's or Raty's applications, which remain pending.[2]

         ¶8 SLC and the District filed this action seeking judicial review of the state engineer's decision on the two approved change applications. Additionally, they filed a cause of action seeking a declaratory judgment of the validity, nature, and priority of the water rights claimed by the two approved change application holders as well as the rights claimed by Haik and Raty. SLC and the District eventually reached a settlement agreement with the holders of the two approved change applications, in which SLC acquired the water rights of those two parties. As a result, all claims were dismissed except the claim seeking a declaratory judgment of Haik's and Raty's claimed water rights.

         ¶9 In the petition, SLC and the District alleged they had standing to bring their claim: SLC "owns a majority of the rights" to use the Creek's water, including its rights acquired from the Ditch in the 1934 Agreement. The petition also alleged that the water drawn under SLC's rights is treated in the District's water treatment plant, and the District sells that water to its member cities. It estimated that approximately 500, 000 Salt Lake County residents depend on the District for a portion of their water. Further, the District had submitted an application to appropriate "50, 000 acre-feet of high flow" water from the Creek.

         ¶10 SLC and the District asserted that Haik's and Raty's proposed use of their claimed water rights would "impair and interfere with [SLC's and the District's] respective rights to divert, treat and provide [the Creek's] water to the members of the public." They also said that, if the owner of WRN 57-7800 were to change the point of diversion from the well on Lot 31 to the Creek-as authorized by an approved change application- the water available to Creek water right holders, including SLC and the District, would diminish.

         ¶11 Haik and Raty filed a motion to dismiss SLC and the District's claim for lack of standing. They asserted that the petition did not allege an injury or a reasonable probability of future injury, as required to invoke the court's jurisdiction. The court denied the motion to dismiss, concluding that SLC and the District "have standing to assert [their claim] based on overlapping interests in a common source [of water], [the Creek]."

         ¶12 After discovery, SLC filed a motion for partial summary judgment. In that motion, it asked for a declaratory judgment that Haik's and Raty's claimed water rights to the Creek were limited by the 1934 Agreement. That is, during the "winter or non-irrigation months," Haik and Raty were each entitled to no more than their appropriate portion of the 7, 500 gallons reserved by the Ditch in the 1934 Agreement.

         ¶13 The district court granted SLC's motion for partial summary judgment. It concluded that, because the 1934 Agreement was "admitted and unambiguous," "any rights owned by [Haik or Raty] are limited" by the 1934 Agreement.

         ¶14 SLC and the District filed another motion for partial summary judgment, claiming that any portion of WRN 57-7800 Haik and Raty acquired had been forfeited as the result of seven consecutive years of nonuse. See Utah Code Ann. § 73-1-4(2)(a) (LexisNexis 2012). In support, they asserted that Haik and Raty produced no evidence of having used any portion of WRN 57-7800 from 2003, when they obtained their claimed rights, through January 2014, shortly before SLC and the District filed their claim. Further, "there has been no opportunity for [Haik and Raty] to use WRN 57-7800, as they have no interest in Lot 31[, ] . . . its current point of diversion." And although Haik and Raty offered evidence that others had used the water, they never entered an agreement with any other person or entity to allow that use, as the forfeiture statute requires. See id. § 73-1-4(2)(e)(i).

         ¶15 Haik and Raty opposed the motion for partial summary judgment. They argued that their water rights had been put to beneficial use and in support presented records and testimony that showed WRN 57-7800's water allowance had been diverted to the Ditch, and that others, including successors of the Original Water Right, had used substantially all of the diverted water. They also argued that the motion did not legally establish forfeiture because it did not address the volume, materiality, or substantiality of any nonuse, but instead merely alleged there had been no use at all.

         ¶16 The district court granted SLC and the District's motion for partial summary judgment, declaring "that any portion of WRN 57-7800 acquired by [Haik and Raty] has been forfeited by nonuse." The court determined that SLC and the District "submitted straightforward facts, that . . . [n]o use has been made by anyone of WRN 57-7800 as it existed in Lot 31 since 2003, and no nonuse application has been filed." It noted that Haik and Raty did not own an interest in Lot 31 that would have allowed them to use WRN 57-7800's point of diversion. And although an approved change application authorized the owners of WRN 57-7800 to change the point of diversion from the well on Lot 31 to the Creek, Haik and Raty never attempted to certify that change.[3]

         ¶17 The court also considered Haik's and Raty's proposed evidence of beneficial use. It noted the evidence tended to show that water had been diverted to the Ditch, and that others, including successors to the Original Water Right, used the water. But the court concluded, "[D]iversion does not equal use, and does not support an inference of use." And absent a lease or agreement with Haik or Raty, the fact that others used the water was legally insufficient. (Citing Utah Code Ann. § 73-1-4(2)(e)(i).) The court explained that the Original Water Right is no longer a communal water right, and WRN 57-7800 is a separate right, representing a one-fourth interest of the Original Water Right. Because the relevant water right is WRN 57-7800, not the Original Water Right, the court concluded that use by the Ditch's successors was also insufficient. In the end, the court concluded that "any rights received under the 2003 transfer . . . were lost after 7 years of undisputed non-use."

         Raty's Counterclaims

         ¶18 Raty filed various counterclaims against SLC attempting to compel SLC to provide water to her lot in the Albion Basin Subdivision. Raty's lot is outside SLC's corporate boundaries, but the Albion Basin Subdivision is inside the city's approved service area. Specifically, SLC holds an approved change application authorizing it to divert water to the Albion Basin Subdivision for the domestic requirements of thirty-five houses.

         ¶19 First, Raty argued she was entitled to receive water from SLC under Article XI, Section 6 of the Utah Constitution, which requires municipalities to preserve, maintain, and operate the water it owns or controls "for supplying its inhabitants with water at reasonable charges." Utah Const. art. XI, § 6. Second, she argued she was entitled to protections from SLC's refusal to supply her lot with water under the due process clause of the Utah Constitution. See id. art. I, § 7. Third, she argued that, in refusing to supply her lot with water, SLC was in violation of the uniform operation of laws provision of the Utah Constitution. See id. art. I, § 24. Fourth, Raty sought a declaration that SLC's provision of water outside of its city limits was subject to regulation by the Public Service Commission.

         ¶20 SLC and the District moved to dismiss Raty's counterclaims, asserting each failed to state a claim upon which relief could be granted. The district court agreed and dismissed Raty's counterclaims. It determined that Raty failed to allege she was entitled to water from SLC under Article XI, Section 6 because her lot was outside Salt Lake City's corporate boundaries and she was therefore not an "inhabitant" of Salt Lake City as required to receive protection under that provision.

         ¶21 The court also determined that Raty failed "to allege a violation of uniform treatment of laws" because she did not identify "any similarly situated person . . . that had been treated differently" and she did not allege "personal animus or bias" against her. Further, SLC's decision "to curtail further development in Albion Basin in order to protect the watershed" was "unquestionably a legitimate interest of the city." The court determined Raty's due process claim failed "for lack of a protectable property interest" because she "does not have a resident's right to water service." And the court refused to declare that SLC was subject to public regulation as a utility, citing multiple opinions of the Utah Supreme Court that rejected such a theory.

         ¶22 The district court entered a final judgment reflecting its rulings on SLC and the District's motions for partial summary judgment and Raty's counterclaims. Haik and Raty appeal.

         ISSUES AND STANDARDS OF REVIEW

         ¶23 First, Haik and Raty argue that SLC and the District lacked standing to bring their claim. "[W]hether a given individual or association has standing to request a particular form of relief is primarily a question of law, although there may be factual findings that bear on the issue." Washington County Water Conservancy Dist. v. Morgan, 2003 UT 58, ¶ 18, 82 P.3d 1125 (quotation simplified). "We review such factual determinations made by a [district] court with deference," but "we closely review [district] court determinations of whether a ...


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