Salt Lake City Corp. v. Big Ditch Irrigation Co.
2011 UT 33
| Utah | 2011Background
- 1905 water exchange between Salt Lake City and Big Ditch: Big Ditch conveys its water right in exchange for City delivering irrigation water.
- City has delivered irrigation water to Big Ditch for over a century; Big Ditch distributes to its shareholders.
- Big Ditch and a shareholder filed change applications with the State Engineer in 2006 to alter the water rights.
- District court granted summary judgment to City on most issues; issues remained on title, change applications, estoppel, modification, and antitrust.
- Court held: City holds title to the exchange water; Big Ditch may file change applications; no estoppel or modification bar; City antitrust claims against Shareholders improper; district court erred on several points.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the Shareholders may be sued personally by the City. | City | Shareholders immune under corporate shield doctrine | Shareholders dismissed; immune from City claims. |
| Who holds title to the exchange water rights under the 1905 Agreement. | City holds title to all contract water | Big Ditch holds title to its water right | City holds title to all water rights exchanged. |
| Whether Big Ditch may file change applications under Utah Code § 73-3-3(2)(a). | Big Ditch not entitled to file changes | Big Ditch entitled to file changes as entitle to use water | Big Ditch entitled to file change applications. |
| Whether equitable estoppel or modification bars Big Ditch from full entitlement. | Equitable estoppel/modification limit Big Ditch | No modification; full entitlement preserved | Estoppel and modification do not bar Big Ditch; original contract remains in force. |
| Whether City antitrust counterclaims were properly dismissed as exempt. | Antitrust claims merit | Municipal exemption applies; actions foreseeably authorized by state law | Antitrust claims dismissed as exempt under municipal status exemption. |
Key Cases Cited
- East Jordan Irrigation Co. v. Morgan, 860 P.2d 310 (Utah 1993) (shareholder-rights to file change applications depend on corporate control; not independently filed by shareholders)
- Prisbrey v. Bloomington Water Co., 2003 UT 56, 82 P.3d 1119 (Utah 2003) (owner/appropriator status not determinative of entitlement to use or change)
- Strawberry Water Users Ass'n v. Bureau of Reclamation, 2006 UT 19, 133 P.3d 410 (Utah 2006) (recognizes entitlement to use water beyond simple ownership/appropriator status)
- Summit Water Distribution Company v. Summit County, 2005 UT 73, 123 P.3d 437 (Utah 2005) (municipal exemption scope under Utah Antitrust Act)
- Morgan v. Bd. of State Lands, 549 P.2d 695 (Utah 1976) (equitable estoppel traditionally requires inconsistency and inducement)
- Reedeker v. Salisbury, 952 P.2d 577 (Utah Ct.App.1998) (corporate entity separation; officers/shareholders not personally liable for corporate debts)
- Colman v. Colman, 743 P.2d 782 (Utah Ct.App.1987) (corporate form generally preserved; individual liability limited)