Tanner v. Carter

2001 UT 18, 20 P.3d 332, 415 Utah Adv. Rep. 20, 2001 Utah LEXIS 50, 2001 WL 175225
CourtUtah Supreme Court
DecidedFebruary 23, 2001
Docket981846
StatusPublished
Cited by17 cases

This text of 2001 UT 18 (Tanner v. Carter) 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
Tanner v. Carter, 2001 UT 18, 20 P.3d 332, 415 Utah Adv. Rep. 20, 2001 Utah LEXIS 50, 2001 WL 175225 (Utah 2001).

Opinion

DURRANT, Justice:

11 Mary Tanner appeals certain portions of the district court's ruling, which quieted title to various water rights. Her action derives from a divorce settlement in which she was awarded one-half of the water rights held by her former husband, Lloyd Carter. At trial, Tanner alleged that she never received her share of water rights and that Lloyd, his brother Steve, and their father, Howard, 1 conspired to deprive her of water rights she had acquired by virtue of the divorce settlement. Michael Longley, the | Hurricane Valley Mutual Water Company, and Shirl Graff, acting as trustee of the Emil J. Graff Revocable Trust (collectively, the "Longley plaintiffs") filed suit to protect their interests in the disputed rights. The cases were consolidated, and the court conducted a bench trial. Prior to trial, the parties stipulated that Tanner owned certain of the disputed water rights. At the conclusion of trial, the court quieted title in the remaining disputed water rights. Tanner contests multiple facets of the court's ruling. We affirm on most issues, but remand for entry of findings and rulings on two discrete points.

BACKGROUND

T2 On appeal from a bench trial, "[flind-ings of fact ... shall not be set aside unless clearly erroneous, and due regard shall be given to the opportunity of the trial court to judge the credibility of the witnesses." Utah R. Civ. P. 52(a). We relate the facts accord *334 ingly, granting due deference to the trial court's resolution of factual disputes.

13 Tanner was formerly married to Lloyd Carter. In April of 1980, Lloyd's brother Steve arranged to purchase Grassy Meadows Ranch from Emil J. Graff for an agreed purchase price of $1,116,000. This purchase was to include water rights that Graff also owned, but which were not yet perfected. 2 Graff's original water right was designated as application number 81-900. In a series of transactions occurring shortly before and after the 1980 agreement, this right was divided into four applications. The numbers of those applications were designated as: (1) 81-900, which included 515.56 acre-feet; (2) 81-1628, which included 559.98 acre-feet; (8) 81-1475, which included 425.94 acre-feet, and (4) 81-2158, which included 109.74 acre-feet. .

T4 Steve's intent was to purchase the property, perfect the water rights, and then subdivide the land and water rights into smaller parcels and sell them at a profit. In furtherance of this plan, Steve incorporated a company known as Kristy Enterprises. Lloyd was not involved in the original transaction with Graff and had no interest in Kristy Enterprises at that time. Kristy Enterprises made a $150,000 down payment on the purchase price, with the balance to be paid over fifteen years and carried pursuant to a Trust Deed Note secured by the purchased ranch property itself. According to the purchase contract, Kristy Enterprises was obligated to perfect the rights to the water. To facilitate fulfillment of this obligation, Steve received a power of attorney from Graff, but did not receive title to the water, the rights for which were placed in escrow with a title company.

T5 Thereafter, Kristy Enterprises began to contract with various third parties to sell parcels of land and water rights to go with the land. The water was not considered to be appurtenant to the specific parcels sold, but was to be drawn generally from the existing water rights and sold at a ratio of eighteen acre-feet per each twenty-acre parcel of land. One of the major third party purchasers was Michael Longley. Longley created a number of companies to facilitate development of the land he intended to buy. In the early 1980's, he and various partners and associates arranged to buy several sizea-ble tracts of Grassy Meadows.

T6 In 1983, Kristy Enterprises began to suffer financial difficulties. Some buyers began making payments directly to Graff, A few of them received water deeds directly from Graff, but many never received their water. As Steve's difficulties in meeting Kristy Enterprises' financial obligations mounted, he turned to his brother Lloyd (who is a certified public accountant) for assistance. Lloyd performed a significant amount of work in the effort to save Kristy Enterprises and was promised an interest in the company's profits. In 1984, Kristy Enterprises executed a warranty deed designating Lloyd as the grantee. That deed conveyed a two-acre parcel and included a clause that purported to transfer to Lioyd any water rights that Kristy Enterprises then owned or would later acquire. For a time, Steve moved to Las Vegas, leaving management of Kristy Enterprises in Lloyd's hands.

17 In subsequent years, Lloyd was involved in a number of complicated transactions respecting Kristy Enterprises and third parties. Despite Lloyd's efforts, Kristy Enterprises continued to suffer financially and stopped paying taxes in 1986. The Utah Division of Corporations dissolved Kristy En-. terprises the following year. Steve and Lloyd negotiated with Graff to avoid foreclosure on the original Trust Deed. They proposed returning the land that had not been resold or paid for, but also asked to keep some land in exchange for their sales efforts and their work in perfecting the water rights. Graff accepted a deed in lieu of foreclosure in 1987. The deed conveyed all land back to Graff, with the exception of various parcels already sold to third party bona fide purchasers, two twenty-acre parcels for Steve and Lloyd, and the two-acre parcel Kristy Enterprises had conveyed to Lloyd in 1984.

*335 18 The escrow on the remaining water rights was closed and the files were returned to Graff. Nevertheless, a number of third party purchasers had not yet received their water. In 1989, Longley began negotiations with Graff, with the intent of purchasing the remaining Grassy Meadow property and water rights. Also, during the first part of that year, Steve approached Graff and inquired about satisfying various water rights sold to third parties and the rights associated with the forty-two acres received by Lloyd. 3 Graff handed Steve the master deed for water right 81-1475. Steve turned the deed over to Lloyd.

19 In August of 1989, Lloyd and Tanner divorced. The decree incorporated the provisions of a stipulation between Lioyd and Tanner, which accorded her one-half of all water rights that Lloyd had acquired during their marriage and owned at the time of their divoree. The decree did not specify which water rights Lloyd in fact owned. In September of 1989, Lloyd delivered a quitclaim deed to Tanner, purporting to describe the various water rights she had obtained by virtue of the decree. However, the following day Lloyd called Tanner and informed her that the deed was inaccurate and asked her not to record it. Lloyd did not tell Tanner in what specific respects the deed was inaceu-rate, nor did he provide a corrected deed despite numerous requests that he do so. Fearing that Lloyd would sell some of the water rights without her knowledge, Tanner recorded the deed in February of 1990.

10 In April of 1990, Graff died. In June of that year, Steve delivered the deed to water right 81-1475 to his father, Howard. Steve testified that he did so because Lloyd had done nothing to satisfy the claims of the third party purchasers, and Steve did not .

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Bluebook (online)
2001 UT 18, 20 P.3d 332, 415 Utah Adv. Rep. 20, 2001 Utah LEXIS 50, 2001 WL 175225, Counsel Stack Legal Research, https://law.counselstack.com/opinion/tanner-v-carter-utah-2001.