Bar 70 Enterprises, Inc. v. Highland Ditch Ass'n

694 P.2d 1253
CourtSupreme Court of Colorado
DecidedFebruary 4, 1985
Docket83SA353
StatusPublished
Cited by5 cases

This text of 694 P.2d 1253 (Bar 70 Enterprises, Inc. v. Highland Ditch Ass'n) is published on Counsel Stack Legal Research, covering Supreme Court of Colorado primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Bar 70 Enterprises, Inc. v. Highland Ditch Ass'n, 694 P.2d 1253 (Colo. 1985).

Opinion

ROVIRA, Justice.

This case is an appeal from a decision of the district court in Water Division No. 5 (the “water court”). The water court held that the late filing of an application for a finding of reasonable diligence did not preclude the applicant from proving diligence, and found reasonable diligence in Highland Ditch Association’s (Highland) development of the proposed appropriation of 50.1 cubic feet of water per second (cfs) from the White River in Rio Blanco County for projected domestic, municipal, stock, and industrial purposes. We reverse.

I.

On December 27, 1976, Highland filed an “Application for Water Right” in the water court claiming an absolute water right for *1254 50.1 cfs “for irrigation, stock water, domestic uses, as well as municipal and industrial and all beneficial uses recognized by law.” The application was filed after it was discovered earlier in that year that Highland had been diverting approximately 190 cfs when the ditch was only decreed for a total of 135.3 cfs absolute. On August 23, 1977, the referee awarded Highland an absolute water right for 50.1 cfs for irrigation purposes, and a conditional water right for the same water for domestic, municipal, stock, and industrial uses with an appropriation date of May 1, 1968. The water court confirmed and approved the referee’s ruling and made the ruling its judgment and decree on November 11, 1977.

As required by section 37-92-301(4), 15 C.R.S. (1973), 1 of the Water Right Determination and Administration Act of 1969 (the 1969 Act), the referee’s ruling specified that as to the water conditionally awarded, an application for a quadrennial finding of reasonable diligence was to be filed with the water clerk during

August of 1981 and in August of every fourth calendar year thereafter so long as the claimant desires to maintain the conditional water right or until a determination has been made that the conditional water right has become an absolute water right by reason of the completion of the appropriation.

In May 1981, the clerk of the water court, pursuant to section 37-92-305(7), 15 C.R.S. (1984 Supp.), 2 sent a certified letter addressed to Highland’s attorney, president, and secretary-treasurer notifying them that the conditional water right would be considered abandoned and cancelled unless an application for a quadrennial finding of reasonable diligence was filed during the month of August, 1981. Despite the August deadline set out in the ruling, decree, and notice, Highland did not file its application for a quadrennial finding until September 4, 1981.

On November 30, 1981, Bar 70 Enterprises, Inc. (Bar 70) filed its statement of opposition to Highland’s application in the water court. Bar 70 claimed that if the application was granted, its water rights could be injured. It also claimed that Highland may not have been reasonably diligent, but did not raise the issue of Highland’s late filing. Sixteen months later and only eight days before trial, Bar 70 discovered the late filing and filed a motion for summary judgment claiming that since Highland’s application was not filed in August, 1981, the conditional water rights were abandoned and the application should be denied as a matter of law. On the first day of trial, the water judge orally denied the motion on the grounds that motions for summary judgment are designed to save trial time and that filing such a motion on the eve of trial did not save much time for anybody.

Following a two-day trial, the water court entered its written “Findings and Judgment” on April 4, 1983. With respect to Bar 70’s objection to the late filing, the water court ruled that a conditional water right

is not automatically deemed abandoned or, more accurately, subject to cancella *1255 tion by mere nonfiling. Under the 1975 amendment, ... [§ 37-92-305(7), 15 C.R.S. (1984 Supp.)], for a conditional decree to fail because of nonfiling, there must be a nonfiling and also a failure adequately to respond to notice by registered or certified mail to show cause why the decree should not be cancelled. Upon a showing of a continued intent to appropriate or to complete the appropriation, the decree should not be cancelled for mere failure to file within the four year period of diligence as required by the statute.

The water court then found that diligence had been shown to the extent of 50.1 cfs for domestic and municipal use, to the extent of 40 cfs for stock use, and the entire 50.1 cfs for industrial purposes without limitation as to oil shale or gravel operations.

II.

Bar 70 objects to the water court’s ruling that conditional water rights cannot be can-celled or abandoned under section 301(4) because of a late filing where an applicant adequately responds to the notice required by section 305(7) and can show diligence. Bar 70 argues that Town of De Beque v. Enewold, 199 Colo. 110, 606 P.2d 48 (1980) requires a holder of conditional water rights to comply with the filing requirements of section 301(4) or lose those rights. In support of the water court’s ruling, Highland argues that De Beque is not controlling since the notice provisions of section 305(7) did not apply in De Beque. Therefore, it was entitled to make a showing of diligence after adequately responding to the notice, even if it did file four days late.

Initially, we note that the purpose behind section 301(4) is to prevent the accumulation of conditional water rights without diligent efforts to complete projects to the detriment of those needing and seeking to make immediate beneficial use of the same water. Colorado River Water Conservation District v. City and County of Denver⅛ 640 P.2d 1139 (Colo.1982). Section 301(4) thus requires holders of conditional water rights to obtain a finding of reasonable diligence every four years. That section also expressly states that applications for such findings shall be filed with the water clerk in the month and calendar year specified by the ruling of the referee and by the judgment and decree of the court determining a conditional water right.

In De Beque, we held that the owner or user of a conditional decree must comply with section 301(4) and that a failure to do so results in the loss of his conditional rights. 199 Colo, at 118, 606 P.2d at 54. 3 See also Simineo v. Retting, 199 Colo. 225, 607 P.2d 1289 (1980). Before reaching this conclusion, we found that the General Assembly had equated a failure to obtain a finding of reasonable diligence under section 301(4) with a “failure to develop with reasonable diligence,” the statutory definition of abandonment of a conditional water right found in section 103(1).

Highland points out, however, that the conditional water rights holders in De Be-que

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