Central Utah Water Conservancy District v. Upper East Union Irrigation Co.

2013 UT 67, 321 P.3d 1113, 747 Utah Adv. Rep. 4, 2013 WL 6038824, 2013 Utah LEXIS 190
CourtUtah Supreme Court
DecidedNovember 15, 2013
DocketNo. 20111028
StatusPublished
Cited by12 cases

This text of 2013 UT 67 (Central Utah Water Conservancy District v. Upper East Union Irrigation Co.) is published on Counsel Stack Legal Research, covering Utah Supreme Court primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Central Utah Water Conservancy District v. Upper East Union Irrigation Co., 2013 UT 67, 321 P.3d 1113, 747 Utah Adv. Rep. 4, 2013 WL 6038824, 2013 Utah LEXIS 190 (Utah 2013).

Opinion

Justice PARRISH,

opinion of the Court:

INTRODUCTION

T 1 This appeal arises from the Central Utah _ Water - Conservancy _- District's (CUWCD) January 7, 2008 agreement (Agreement) to improve irrigation structures belonging to Upper East Union Irrigation Company (UEU), East River Bottom Water Company (ERB), and Timpanogos Canal Company (TCC) (collectively, Canal Companies) in exchange for rights to the increased water flow arising from the improvements. CUWCD failed to complete its obligations under the Agreement. After negotiations with the Canal Companies broke down, CUWCD filed a declaratory action to establish its contractual rights.

T 2 The district court ruled that because CUWCD breached its obligations under the Agreement, UEU and ERB were entitled to enforce the bargained-for damages provisions, resulting in the loss of CUWCD's prospective water rights. CUWCD appeals, asserting that the district court erred by: (1) granting summary judgment in favor of the Canal Companies, (2) failing to recognize that UEU and ERB received the benefit of their bargain, (8) refusing to reconsider its summary judgment ruling, (4) rejecting CUWCD's claims that its performance was excused under the doctrine of impracticability, (5) failing to recognize CUWCD's tender of cash in lieu of performance, and (6) refusing to allow CUWCD to amend its pleadings to add allegedly necessary parties.

1 3 We affirm the judgment of the district court in its entirety. Specifically, we hold that CUWCID's breach was material because UEU and ERB did not receive the benefit of their bargain. And the breach was not excused by the doctrine of impracticability or CUWCID's tender of cash in lieu of performance. Therefore, the district court appropriately entered summary judgment in favor of UEU and ERB and was under no obligation to reconsider its ruling. Finally, the district court did not abuse its discretion when it refused to allow CUWCD to amend its pleadings to join allegedly necessary parties.

BACKGROUND

T 4 CUWCD, ERB, UEU, TCC, Brigham Young University (BYU), and Provo City Corporation (Provo) entered into an Agreement to affect the diversion and conveyance of water from the Provo River throughout the Provo and Orem areas.1 The Agreement describes the seope of the project as follows:

[1117]*1117PROJECT DESCRIPTION: The project would convert portions of existing open ditch water delivery systems of both the ERB and UEU to a piped delivery system.... The proposed project includes the piping of portions of both the ERB and UEU canal systems, the rehabilitation of the TCC [Dliversion, and the replacement or enlargement of an existing 1,500-foot section of 80" HDPE pipe in the TCC piped system.

The Agreement required that ERB and UEU abandon their existing diversion in favor of the improved TCC - Diversion. CUWCD agreed to undertake and pay all costs for these improvements. In return, the Canal Companies agreed to convey to CUWCD the rights to the water that would be conserved as a result of the improvements and to convey by quitclaim deed the percentage of water rights CUWCD already owned in the Canal Companies.

T 5 To insure against CUWCD's breach, the Agreement required that CUWCD place quitclaim deeds in escrow, representing the water rights it would receive upon completion of the agreed-to improvements. The Agreement states that "[in the event CUWCD defaults in the performance of its obligation to construct the project as defined in this Agreement ... [the Canal Companies] may request the delivery of th{ese] escrowed quitclaim deed[s] as [their] sole remedy." The Agreement states that the project will be completed by April 15, 2004.

1 6 By May 3, 2004, CUWCD had substantially completed the improvements to the piping portions of the canal systems as required by the Agreement. But it had not completed, nor even begun to replace, the TCC Diversion.

T 7 On March 80, 2007, almost three years after the improvements were to have been completed, CUWCD sent a letter to the Canal Companies "to summarize and confirm our discussions and negotiations" related to the replacement of the TCC Diversion. CUWCD stated that it would not be possible to complete the TCC Diversion work based on "environment[al]l and permitting concerns," and that "[in lieu of further work on the diversion structure, [CUWCD] offers to pay to [the Canal Companies], collectively, the sum of $75,000." CUWCD further stated that "this letter will also serve as a tender of that sum of money together with [CUWCD]I's prior work and improvements ... under Utah Code Ann. [section] 78-27-1 as full performance of obligations under [the] Agreement." It concluded by stating that if the Canal Companies did not expressly reject its offer by April 16, 2007, CUWCD would consider its purported tender accepted. The Canal Companies did not respond to CUWCID's letter.

T 8 On June 11, 2007, the Canal Companies sent written notice informing CUWCD that it had defaulted on its obligation to replace the TCC Diversion. Thirty days after sending the default letter, the Canal Companies requested delivery of the es-crowed quitclaim deeds under the damage provisions of the Agreement because CUWCD had not commenced to cure its default. In the interim, CUWCD filed the complaint in the underlying lawsuit seeking a judicial determination that the Canal Companies had accepted CUWCD's purported tender by failing to timely object. The Canal Companies individually responded by filing answers, counterclaims, and cross-claims.

T 9 After the parties had completed discovery, UEU filed a motion for partial summary judgment, arguing that CUWCD's offer of payment in lieu of performance was not a valid tender of performance and that CUWCD's obligation to reconstruct the TCC Diversion was not excused by the doctrine of impracticability. UEU further alleged that CUWCD's breach was material because CUWCD had not substantially completed its contractual obligations.

T 10 TCC also sought partial summary judgment. It concurred in UEU's motion for partial summary judgment, arguing that a valid tender offer requires tender of the amount due or the performance required under the contract. ERB also sought partial summary judgment, concurring in UEU's summary judgment motion and raising essentially the same arguments made by UEU and TCC.

[1118]*1118€ 11 CUWCD opposed the motions, arguing that it had substantially performed all of its obligations under the Agreement and that, in any case, the parties had waived any objection to CUWCD's tender of payment in lieu of performance. CUWCD also filed a motion for leave to assert the additional affirmative defense that the Canal Companies had failed to join necessary parties. Specifically, CUWCD argued that the United States Department of the Interior (DOI) and the Utah Reclamation Mitigation Conservation Commission (URMCC) were necessary and indispensable parties because "federal funds were used to create the saved water rights" and the saved water rights were to benefit, in part, federal purposes.

€ 12 The district court granted the Canal Companies' motions for partial summary judgment, ordered the delivery of the quitclaim deeds in favor of UEU and ERB, and reserved ruling on the issue of TCC's appropriate remedy.

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Bluebook (online)
2013 UT 67, 321 P.3d 1113, 747 Utah Adv. Rep. 4, 2013 WL 6038824, 2013 Utah LEXIS 190, Counsel Stack Legal Research, https://law.counselstack.com/opinion/central-utah-water-conservancy-district-v-upper-east-union-irrigation-co-utah-2013.