2019 UT 31
Utah2019Background
- Rocky Ford and Kents Lake hold historical direct-flow and storage water rights in the Beaver River system, established/confirmed by a 1931 Beaver River Decree; Kents Lake’s direct-storage change was perfected with an 1890 priority.
- In 1953 the parties entered an Agreement to facilitate administration of storage: Rocky Ford agreed not to protest Kents Lake’s change application and Rocky Ford received exclusive winter storage rights (Nov 1–Apr 1).
- Beginning in the 1970s upper users converted from flood to sprinkler irrigation, reducing return flows and complicating river administration; Rocky Ford claims Kents Lake’s direct-storage changes and measurement failures have impaired its rights.
- Kents Lake obtained State Engineer approval for direct-storage changes and later perfected the change; Rocky Ford did not protest or seek timely administrative review of the change approval.
- Rocky Ford sued (2010) seeking declaratory, injunctive relief, rescission of the 1953 Agreement, and other remedies; trial court denied Rocky Ford relief, refused to rescind the Agreement, denied injunctive/declaratory relief on measurement, and awarded attorney fees to Kents Lake and Beaver City; Rocky Ford appealed.
Issues
| Issue | Plaintiff's Argument (Rocky Ford) | Defendant's Argument (Kents Lake) | Held |
|---|---|---|---|
| Whether the 1953 Agreement subordinated Rocky Ford’s direct-flow rights to Kents Lake’s changed (direct-storage) use | Agreement language does not unambiguously waive Rocky Ford’s direct-flow rights; changed use should be junior where it impairs Rocky Ford | Rocky Ford waived protest/claims; changed use accepted and perfected administratively, giving Kents Lake 1890 priority | Court: Agreement not clearly an express subordination; but Rocky Ford failed to protest/seek administrative review, so Kents Lake’s perfected change retains 1890 priority and Rocky Ford cannot now claim impairment (summary judgment denial affirmed on alternative ground) |
| Whether Kents Lake may store water saved by efficiency (sprinklers) so as to detriment of lower users | Rocky Ford seeks declaratory relief prohibiting Kents Lake from storing efficiency gains because it reduces return flow to lower users | Kents Lake may use water efficiently and store saved water consistent with its rights; lower users' rights attach only to return flow once it reenters the stream | Held: Upper users may capture/use efficiency gains before return flow; Rocky Ford has no claim on Kents Lake’s efficiency gains (affirmed) |
| Whether Kents Lake must measure diversions consistent with Beaver River Decree and statute; and whether court should order injunctive/declaratory relief | Rocky Ford seeks declaration and injunction that Kents Lake install/maintain measuring devices per Decree/statute; measurement failures impair administration | Kents Lake contends compliance with State Engineer’s directives suffices; State Engineer oversight controls | Held: Injunctive relief denied (Rocky Ford failed to show irreparable harm on appeal); declaratory relief on measurement duties reversed and remanded—court must clarify parties’ independent measurement obligations under Utah Code §73-5-4 and the Decree |
| Whether the 1953 Agreement should be rescinded for material breach or by doctrines (impracticability, frustration, mutual mistake) | Rocky Ford argues Kents Lake materially breached (winter storage control and measurement failures); historic return-flow reduction makes performance frustrated/impracticable or was mutual mistake | Kents Lake says alleged breaches not material and return flows were not a material part of the Agreement’s object | Held: Trial court did not abuse discretion—breaches not material and return flows were not central to Agreement; exclusion of Rocky Ford’s return-flow evidence upheld; rescission denied (affirmed) |
| Whether court properly awarded attorney fees under Utah Code §78B-5-825 (action without merit and not in good faith) | Rocky Ford contends claims made in good faith though ultimately unsuccessful | Kents Lake and Beaver City argued Rocky Ford’s claims were meritless and pursued in bad faith | Held: Fee award reversed—district court conflated lack of merit with bad faith and made insufficient fact findings to support a bad-faith determination |
Key Cases Cited
- Rocky Ford Irrigation Co. v. Kents Lake Reservoir Co., 135 P.2d 108 (Utah 1943) (upheld State Engineer’s approval of Kents Lake’s changed use)
- Hague v. Nephi Irrigation Co., 52 P. 765 (Utah 1898) (changed use preserves original priority so long as it does not injure prior rights)
- Searle v. Milburn Irrigation Co., 133 P.3d 382 (Utah 2006) (State Engineer lacks final adjudicatory authority; approvals issued when there is "reason to believe" no impairment will occur)
- Badger v. Brooklyn Canal Co., 966 P.2d 844 (Utah 1998) (protest/administrative participation is protesters' responsibility; failure undermines later challenges)
- S & G, Inc. v. Morgan, 797 P.2d 1085 (Utah 1990) (standing to challenge a change application may be lost by inaction at administrative level)
- Loosle v. First Federal Savings & Loan Ass'n of Logan, 858 P.2d 999 (Utah 1993) (State Engineer certificate is prima facie evidence of perfected change)
- Gunnison Irrigation Co. v. Peterson, 280 P. 715 (Utah 1929) (a party cannot purge a decree violation merely by pointing to absence of an appointed enforcement official)