2013 CO 41
Colo.2013Background
- Raftopoulos Brothers and Vermillion Ranch are neighboring ranchers in Moffat County, Colorado, with decreed rights on Talamantes Creek; both sought to develop additional uses and storage from the same water source.
- Raftopoulos sought (08CW89) alternate points of diversion and place-of-use changes for absolute ditch rights (Rouff No.1 and Yarnell No.1) limited to irrigation, and conditional storage rights (up to 1,440 AF) at two proposed Elk Ranch reservoir sites for multiple uses including industrial/commercial.
- Vermillion opposed and also filed applications (06CW61 and 08CW54) seeking (a) a new conditional storage right (additional 1,200 AF) for four reservoir sites for industrial/commercial uses and (b) a sexennial finding of reasonable diligence on a previously decreed conditional right for the same sites.
- The water court granted Raftopoulos’ change requests and conditional storage rights (generally), and later granted Vermillion both a finding of reasonable diligence and a new conditional storage right after reconsidering its initial denial.
- On appeal the Supreme Court (Justice Marquez) addressed: (1) whether the water court properly interpreted 1974 change decrees’ phrase "and all other beneficial uses" to include industrial/commercial uses and whether those uses were abandoned; (2) whether Raftopoulos proved non-speculative intent/need for industrial/commercial conditional storage; and (3) whether Vermillion proved the statutory "can and will" and reasonable-diligence requirements for its conditional storage projects.
Issues
| Issue | Plaintiff's Argument (who sought the right) | Defendant's Argument (opposer) | Held |
|---|---|---|---|
| Interpretation of 1974 decrees phrase "and all other beneficial uses" and abandonment of industrial/commercial uses (Raftopoulos ditches) | Raftopoulos limited its change application to irrigation; did not seek a change in use | Vermillion argued the 1974 decrees should not be read to allow industrial/commercial uses or, alternatively, those uses had been abandoned | Vacated the water court's interpretation and abandonment ruling as unnecessary: issue was not properly before the court because Raftopoulos’ application was limited to irrigation |
| Conditional storage decree to Raftopoulos permitting industrial/commercial uses (Elk Ranch reservoir sites) | Raftopoulos: presented testimony of regional oil/gas activity, mineral rights, and post-application contracts showing likely demand | Vermillion: argued uses were speculative and quantities not demonstrated; existing absolute rights may suffice | Reversed as to industrial/commercial uses: evidence was insufficient to show a non-speculative, quantified plan or need at time of application; conditional storage cannot be granted for speculative commercial/industrial uses |
| Vermillion’s new conditional storage application (06CW61): "can and will" completion of reservoirs | Vermillion: argued contingencies and costs do not bar a decree unless they make construction impossible; presented limited diligence activities and some engineering work | Raftopoulos: argued Vermillion failed to prove technical/financial feasibility, timeline, permits, or ability to complete; burdens rests on applicant | Reversed: Vermillion failed to prove by a preponderance there was a substantial probability the projects "can and will" be completed with diligence and within a reasonable time |
| Vermillion’s sexennial finding of reasonable diligence for previously decreed conditional right (08CW54) | Vermillion: pointed to prior efforts, grant applications, conceptual engineering and intent to serve future industrial demand | Raftopoulos: argued Vermillion offered no evidence of steady application of effort, feasibility, costs, timeline, or ability to surmount impediments | Reversed: water court erred in later relaxing the standard; Vermillion did not meet the statutory "can and will" or reasonable-diligence requirements |
Key Cases Cited
- Pagosa Area Water & Sanitation Dist. v. Trout Unlimited, 219 P.3d 774 (Colo. 2009) (mixed law/fact review of conditional-right standards)
- City of Black Hawk v. City of Central, 97 P.3d 951 (Colo. 2004) (access, technical feasibility, and evidentiary support under "can and will")
- Colo. River Water Conservation Dist. v. Vidler Tunnel Water Co., 594 P.2d 566 (Colo. 1979) (anti-speculation principle for appropriations)
- ACJ P’ship v. (cited authority), 209 P.3d 1076 (Colo. 2009) (substantial-probability standard for "can and will")
- Upper Yampa Water Conservancy Dist. v. Dequine Family L.L.C., 249 P.3d 794 (Colo. 2011) (need and quantification for claimed conditional amounts)
- City of Thornton v. Bijou Irr. Co., 926 P.2d 1 (Colo. 1996) (future contingencies considered but not dispositive under "can and will")
- Public Service Co. of Colo. v. Bd. of Water Works, 831 P.2d 470 (Colo. 1992) (economic feasibility is a relevant factor under "can and will")
- Dallas Creek Water Co. v. Huey, 933 P.2d 27 (Colo. 1997) (continued scrutiny of conditional rights; diligence and project features considered)