Sanpete Water Conservancy District v. Carbon Water Conservancy District

226 F.3d 1170, 31 Envtl. L. Rep. (Envtl. Law Inst.) 20130, 2000 Colo. J. C.A.R. 5471, 2000 U.S. App. LEXIS 23359, 2000 WL 1335734
CourtCourt of Appeals for the Tenth Circuit
DecidedSeptember 15, 2000
Docket99-4136
StatusPublished
Cited by27 cases

This text of 226 F.3d 1170 (Sanpete Water Conservancy District v. Carbon Water Conservancy District) is published on Counsel Stack Legal Research, covering Court of Appeals for the Tenth Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Sanpete Water Conservancy District v. Carbon Water Conservancy District, 226 F.3d 1170, 31 Envtl. L. Rep. (Envtl. Law Inst.) 20130, 2000 Colo. J. C.A.R. 5471, 2000 U.S. App. LEXIS 23359, 2000 WL 1335734 (10th Cir. 2000).

Opinion

BRORBY, Circuit Judge.

This case flows from yet another skirmish in the never-ending war over water in the American West. Sanpete Water Conservancy District (Sanpete) and Carbon Water Conservancy District (Carbon) are the long-time combatants, and frequent litigants, in this battle concerning the capture and use of water in the Price River watershed in Utah. This most recent lawsuit is a contract interpretation case. The district court granted partial summary judgment to Carbon on Sanpete’s breach of contract claim and, after a four-day bench trial, entered judgment against San-pete on its claim of breach of the implied covenant of good faith and fair dealing. Sanpete appeals. We exercise jurisdiction pursuant to 28 U.S.C. § 1291 and affirm. 1

BACKGROUND

The basic, background facts are taken largely from the district court’s June 3, 1999 Findings of Fact and Conclusions of Law, because they are not in dispute. We also consult previous court cases involving the parties for historical perspective.

This case involves a disagreement over the scope of a contract involving Sanpete, Carbon, and the Price River Water Users Association (Price). 2 The parties entered the contract to resolve a decades-old conflict concerning “the priority and use of water rights owned by Price and Sanpete for water from the Price River.” “Utah is a prior appropriation state, where the appropriator first in time is first in right.” Salt Lake City v. Silver Fork *1173 Pipeline Corp., 5 P.3D 1206, 1218 (Utah 2000) (citing Utah Code Ann. § 73-3-1). Therefore, as the district court pointed out, the priority of one’s water right becomes very important in times of shortage because the “senior appropriator is guaranteed the full measure of his or her appropriation before any claim by a junior appropriator may be satisfied.” Id. The Utah Supreme Court has described the origins of the current dispute:

In 1933, [Reclamation] prepared a water storage plan known as the Gooseberry Project, which called for the creation of a reservoir on Gooseberry Creek, a tributary of the Price River, and for diversion of Gooseberry Creek water through a transmountain tunnel into the Sanpete County area. At that time, Price River Water Conservancy District ... held water rights in Gooseberry Creek,[ 3 ] storing this water in the privately owned Scofield Reservoir several miles downstream from the proposed diversion point.
As [Reclamation] prepared to carry out the Gooseberry Project, it became aware that the Scofield Dam was deteriorating and becoming dangerous and began to consider reconstructing the Scofield Dam in connection with the Gooseberry Project. In 1943, the Secretary of the Interior recommended that the Scofield Dam reconstruction be given priority over the Gooseberry Project and [Reclamation] entered into the [Tripartite [Agreement] with [Price and Carbon], conditionally promising to undertake such reconstruction. As part of the consideration for this reconstruction contract, [Price and Carbon] subordinated their water rights in Gooseberry Creek to the right of [Reclamation] to divert water for the Gooseberry Project at such time as the latter project might be completed.... [ 4 ]
Although [Reclamation] reconstructed the Scofield Dam according to [the Tripartite Agreement], the Gooseberry Project never materialized. In 1975, [Reclamation] assigned to [Sanpete] three pending applications for water rights relating to the proposed project. The purpose of the assignment, as stated in the parties’ assignment contract, was to allow [Sanpete] to keep the water applications current and to pursue any litigation which might be necessary in order to preserve the status of such applications. The assignment contract further provided that the applications would revert to [Reclamation] at such time as the Utah State Engineer might grant the requested rights and that [Sanpete] would reassign the applications to [Reclamation] before that time upon request.

Sanpete County Water Conservancy Dist. v. Price River Water Users Ass’n, 652 P.2d 1302, 1303 (Utah 1982).

After Reclamation assigned the three pending applications, Sanpete filed change applications with the Utah State Engineer 5 in order “to obtain permission to change the point of diversion, place of use, and nature of use of the three water rights.” Carbon filed protests with the State Engineer objecting to the change applications, and later joined others in filing a lawsuit in federal district court claiming Reclamation’s assignment was defective. In the wake of Sanpete’s desire to move forward with the Gooseberry Plan, and the pressure from Carbon to reject the change applications, the State Engineer began to broker an agreement be *1174 tween the parties. The parties eventually-signed an agreement on June 8, 1984, which is the subject of the current litigation.

The initial recitals in the agreement state:

WHEREAS, there has been a long standing controversy concerning the building of storage and diversion works on the Price River System for trans-mountain diversion of Gooseberry Creek water to the San Pitch River System; and
WHEREAS, the parties hereto desire to compromise and settle the controversy and their respective claims to such water.

The agreement then defines the approximate location of the proposed dam as the “Narrows Site” and names the “Narrows Project” as the successor project to the old Gooseberry Plan detailed in the Tripartite Agreement. Section II of the agreement lists the water rights owned by Price and Sanpete, and in Section III, Price subordinates its rights to Sanpete’s rights in order for Sanpete to divert, store and convey 5,400 acre-feet of water from the Narrows Site to the San Pitch River System. Section IV sets the storage capacity of the Narrows Project, increases Carbon’s storage rights in Scofield Reservoir an additional 35,000 acre-feet, and discusses the procedure to be followed in order to satisfy the prior water rights held downstream from Scofield Reservoir.

Finally, we come to the portions of the agreement that are the source of the current conflict.

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Bluebook (online)
226 F.3d 1170, 31 Envtl. L. Rep. (Envtl. Law Inst.) 20130, 2000 Colo. J. C.A.R. 5471, 2000 U.S. App. LEXIS 23359, 2000 WL 1335734, Counsel Stack Legal Research, https://law.counselstack.com/opinion/sanpete-water-conservancy-district-v-carbon-water-conservancy-district-ca10-2000.