Pape Partners, Ltd., Glenn R. Pape and Kenneth W. Pape v. Drr Family Properties Lp

CourtTexas Supreme Court
DecidedMay 20, 2022
Docket21-0049
StatusPublished

This text of Pape Partners, Ltd., Glenn R. Pape and Kenneth W. Pape v. Drr Family Properties Lp (Pape Partners, Ltd., Glenn R. Pape and Kenneth W. Pape v. Drr Family Properties Lp) is published on Counsel Stack Legal Research, covering Texas Supreme Court primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Pape Partners, Ltd., Glenn R. Pape and Kenneth W. Pape v. Drr Family Properties Lp, (Tex. 2022).

Opinion

Supreme Court of Texas ══════════ No. 21-0049 ══════════

Pape Partners, Ltd., Glenn R. Pape and Kenneth W. Pape, Petitioners,

v.

DRR Family Properties LP, Respondent

═══════════════════════════════════════ On Petition for Review from the Court of Appeals for the Tenth District of Texas ═══════════════════════════════════════

Argued March 24, 2022

CHIEF JUSTICE HECHT delivered the opinion of the Court.

By statute, the Texas Commission on Environmental Quality (TCEQ) “has general jurisdiction over . . . water and water rights including the issuance of water rights permits[] [and] water rights adjudication”. 1 The question before us is whether this jurisdiction includes the authority to adjudicate conflicting claims to ownership of surface-water rights. We hold that the adjudication of such claims is for

1 TEX. WATER CODE § 5.013(a)(1). the courts, not the agency. We reverse the judgment of the court of appeals 2 and remand this case to the trial court for further proceedings. I A In 2014, petitioners Pape Partners, Ltd., Glenn R. Pape, and Kenneth W. Pape (collectively, Pape) 3 purchased from Lola Robinson and her closely held corporation, Swirl Investments, a 1,086-acre farm in McLennan County, including the right to use water diverted from the Brazos River for irrigation under a permit issued by TCEQ. As explained further below, TCEQ issues a surface-water-use permit—called a certificate of adjudication—to a person whose ownership of “rights to the waters of a stream” has been finally determined by a district court after both an initial administrative process and then a final judicial process. 4 Robinson warranted to Pape that TCEQ had recognized her exclusive right to the water covered by the permit. Robinson first obtained water rights for the farm in two permits issued in 1986. The permits did not cover an adjacent 250-acre tract that Robinson owned, which had no direct river access or any appurtenant water rights. In 1990, Robinson conveyed the 250-acre tract to Swirl. In 1997, after proceedings initiated by Robinson, TCEQ replaced the two 1986 permits with a single amended permit. The amended permit granted Robinson, individually, the authority to irrigate both the farm and the adjacent tract from water-diversion points located on the farm.

2 623 S.W.3d 436 (Tex. App.—Waco 2020) (2-1). 3 Pape is pronounced like poppy. 4 TEX. WATER CODE § 11.323(a).

2 Pape alleges that Robinson failed to inform the commission that she no longer owned the 250-acre tract. After the amended permit was issued, the 250-acre tract changed hands several more times. In 2012, it was conveyed to respondent DRR Family Properties, LP. TCEQ rules provide a process for updating the commission when water rights have been transferred. The purchaser must record in the county clerk’s office “[t]he written instrument evidencing a water right ownership transfer” and then submit to the commission’s executive director copies “of the recorded instruments establishing the complete chain of title . . . along with a completed Change of Ownership Form and an ownership recording fee”. 5 After Pape submitted its ownership documentation, the executive director updated the commission’s records to reflect that Pape owned the water rights appurtenant to the farm. But later, TCEQ identified DRR as the owner of the 250-acre parcel for which Robinson was granted irrigation rights in the 1997 amended permit, and it invited DRR to submit its own change-of-ownership application and documentation. Other landowners who purchased nearby parcels with chains of title traceable to Robinson also filed ownership documentation after being notified by the commission of potential water rights. In late 2015, acting on DRR’s application, the executive director changed TCEQ’s records again, this time to reflect that the water rights recorded in the amended permit were owned proportionally by Pape,

5 30 TEX. ADMIN. CODE § 297.83.

3 DRR, and Robinson. The update had the effect of reducing the amount of land Pape is authorized to irrigate from 1,086 acres to 821 acres. Pape filed a motion to overturn the director’s decision in accordance with the commission’s rules. 6 The director’s office prepared a response for the full commission, which stressed that “[t]he Executive Director’s review for change of ownership requests is ministerial.” The response explained: [I]t is unclear whether Pape Partners is entitled to any other relief at the agency level. There is no indication in statute or rule that a change of ownership request requires anything other than a ministerial act from the Commission, recognizing that ownership has changed. There is no right to a contested case hearing on a change of ownership request, which requires no public notice. . . . The determination of whether a complete chain of title has been established between an owner of record and a new owner is made by the Executive Director based upon the documentation submitted with a change of ownership request . . . . Pape’s motion was overruled by operation of law in early 2016. 7 B Pape sued DRR, Robinson, Swirl, and several individual landowners seeking declarations that it is the sole owner of water rights appurtenant to the 1,086-acre farm and that none of the defendants possess water rights recognized by the 1997 amended permit. With respect to the 250-acre tract now owned by DRR, Pape argues that because Robinson did not own the tract when the amended permit was

6 Id. § 50.139(a). 7 See id. § 50.139(f)(2).

4 issued, the surface-water rights granted her with respect to that tract were personal to her and did not pass with subsequent conveyances of the land. 8 Pape also pleaded alternative claims for adverse possession, to quiet title, and for breach of contract and fraud. DRR moved to dismiss Pape’s claims for lack of subject-matter jurisdiction, arguing that TCEQ has exclusive original jurisdiction to determine water-ownership rights and that under TCEQ’s enabling statute, Pape could have sued for judicial review of the commission’s action on DRR’s application within 30 days but did not. 9 The trial court granted DRR’s motion to dismiss and then severed all claims against it into a separate suit to permit an immediate appeal. 10 A divided court of appeals affirmed. The majority concluded, with no supporting analysis, that “the regulatory scheme behind surface water permits is pervasive and indicative of the Legislature’s intent that jurisdiction over the adjudication of surface water permits is ceded to

8 “[T]he right to use water for the purpose of irrigation is appurtenant to the land authorized to be irrigated, and a conveyance of land with an appurtenant water right also conveys the water right unless expressly reserved or excepted; provided, however, that if the water right has been granted for the irrigation of land not owned by the applicant, such a water right is personal to the permittee and does not pass with a conveyance of the land.” Id. § 297.81(a) (emphasis added). 9 See TEX. WATER CODE § 5.351(a) (providing for judicial review of “a ruling, order, decision, or other act of the commission”). An individual defendant, Champagne, filed a motion to dismiss on 10

the same grounds as DRR, which was granted by the trial court. Champagne appeared as an appellee in the court of appeals but was dismissed by agreement before the court rendered judgment.

5 the TCEQ.” 11 It thus agreed with DRR that Pape’s only remedy was a suit for judicial review under Chapter 5 of the Water Code, which by then was time-barred. We granted Pape’s petition for review, which is supported by amicus submissions from TCEQ itself and three agricultural associations.

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Cite This Page — Counsel Stack

Bluebook (online)
Pape Partners, Ltd., Glenn R. Pape and Kenneth W. Pape v. Drr Family Properties Lp, Counsel Stack Legal Research, https://law.counselstack.com/opinion/pape-partners-ltd-glenn-r-pape-and-kenneth-w-pape-v-drr-family-tex-2022.