*1 IY.
CONCLUSION Judgment affirm the
We awarded Costs and fees are
court. City. BURDICK, Justice and Justices
Chief
EISMANN, W. JONES and HORTON
concur.
BIG
Counterdefendant-Appellant, THE
WATER USERS’ ASSOCIATION OF
BROADFORD SLOUGH AND ROCK DITCHES,
WELL BYPASS LATERAL
INC., Defendant-Counterclaimant-Re
spondent.
No. 41265. Idaho,
Supreme Court of
Burley, November 2014 Term.
March
Rehearing Denied
227 *2 purpose
ciation was formed the stated maintaining the Slough Bypass, both and the maintenance is funded annual which as- charged to Association sessments members. apportioned assessments based on Coie, LLP, Boise, attorneys for *3 Perkins particular the volume of water a member is argued. appellant. Richard C. Boardman legally entitled to use. The Association’s Bylaws adopted April were after Slette, PLLC, Falls, Twin & Robertson provided notice was to of the owners water Gary D. attorneys respondent. Slette for rights along Slough Bypass, the and and its argued. Incorрoration Articles of were filed the with 3, of Secretary May Idaho State on WALTERS, pro J. tem. The recite that the Articles Association was attempts by This action stems from the formed to Idaho Code section 42- Water Users’ Association of the Broadford original 1301. There were 17 of members Slough Bypass and Rockwell Lateral Ditch- the Association. BWR was not the owner of (Association) es, Inc. to collect assessments property Bylaws the at the time the were (BWR) Ranch, Big for from Wood LLC adopted and Articles the were filed. performed maintenance (Richards) Marc Richards is the sole and and Rock- (Slough) on the Broadford managing of member BWR. BWR (Bypass), conduits Bypass well which are for purchased property the at issue at 303 property of delivery the surface water (Wen- Broadford Road from Jann Wenner neighbors. owned and some of its ner). founding Wenner was one of the 17 originates from Big The water at issue the paid members of the Association. Wenner County, in Blaine Idaho. Wood River The during the Association’s invoices his owner- statutory right claims it has a Association ship, but no in there are facts the reсord to collect for maintenance of assessments its indicate whether Wenner informed BWR of delivery system, this a contention water purchased the Association’s existence. BWR disputes. summary judgment, On the $5,000,000, property sight the 117 acre for that the Association district court determined unseen, and Richards admitted never un- to Idaho Code dertaking inspection an of property the its 42-1301, and, trial, bench after a rights, beyond consulting water with li- payment found BWR owed for these out- company. censed realtor and title insurance standing appeals, assessments. BWR chal- of Certain the transaction documents related validity lenging the of the for- Association’s purchase (e.g., warranty the deed and title mation under the well as the report) identify failed to or reference the equity-based court’s alternative contract and Association, the and however Purchase Sale granting judgment in favor theories for of Agreement expressly provision contained a the We Association. reverse the advising any regarding BWR to seek advice and of and costs in the award fees rights acquired property.1 with the favor оf the Association. While the Association filed its Articles with May began invoicing State in 2002 and the its Background I. and Procedural thereafter, Factual shortly members it to rec- failed County ord evidence of its existence Blaine properties and at The water features issue prior purchase property BWR’s the Bellevue, are located near Idaho. The June for and serve as conduits the delivery along properties during of surface water to Because lived in New York Wenner ownership property, stretch of the Wood River. Asso- his he authоrized Agreement provides: quantity right acquired 1. The and with Agreement. real described in strongly [the] estate Rights Water It is advised verification: knowledgeable verify inspection Buyer Buyer during contact a attor- must same choice, Buyer's ney law, experienced period. in water validity, Buyer quality, to advise (Bouttier), original filed its and another Association answer Bouttier Robert alia, counterclaim, sought, neighboring land inter and wherein member Association declaratory regarding legality irrigate property. relief owner, to farm formation, permitted keep statutory au- Association’s Bouttier Specifically, land, thority to water to on the which deliver surface Associa- horses graze his members, right tion to collect assess- plant irrigate and its required Bouttier fences, sought weeds ments for the same. The Association abate pastures, maintain trees, recovery delinquent generally monitor the assessments and fallen $7,550. January On Irrigating BWR the amount of absence. property in Wenner’s calling the an answer to the Bouttier BWR filed counter- involved pastures claim, delivery of Wenner’s surface Association through waiving filеd notice all affirmative defenses water, activity Wenner ratified an invoices. asserted in its answer. of the Association’s payment his *4 Wenner, purchase Shortly after BWR’s 23, 2012, parties the filed On cross- with on the personally met Bouttier Richards summary judgment, motions for each accom- advised Bouttier to con- property. Richards by panied support in and memoranda numer- exactly as he under Wen- operating had tinue 21, 2012, May the ous affidavits. On district to agree seem that the parties ner. The hearing parties’ court held on the cross- Richards Bouttier and conversation between summary judgment. Following motions for great specificity detail go did into not argument, oral the district court ruled from Regardless, activities. regarding Bouttier’s bench, summary judgment granting the continued purchase, after Bouttier BWR’s of favor the Association on its counterclaim farming exactly he grazing, irrigating, and as seeking a declaration that the Association tenure, including during done Wenner’s had was Idaho Code formed under delivery surface of calling for denying motion and BWR’s for sum- Association. mary judgment. determining that the While 2007, attempted to Association wаs formed under the late BWR, disputed found first invoice to admits to the district court is- submit its but difficulty locating by mail. as to whether having BWR sues fact remained BWR Association, not invoice BWR contends it did receive this was whether member 2008/early until late 2009. BWR refused to Association was entitled recover as- assessments, subsequent beyond the pay and sessments from statute initial contract, part, understanding quan- on its that it under alternate theories of based enrichment, meruit, and, already annual tum if paying was dues to Water so, delivery for surface what was recoverable. On District No. 37 its amount June 15, 2012, court water. issued written 21, May rulings memorializing order 2010, 29, July com- On Specifically, from the bench. district against claims action menced a small “validly court found that the Association court magistrate division authority continuing act and is of outstanding seeking collect assessments 42-1301, et [section] to Idaho Code At years for the the time the seq.”; a canal pur- that the “is filed, outstanding action was small claims poses delivery right $4,950. totaled On November balance 42-1301, seq”; et Idaho Code that [section] complaint in BWR filed a district court legal over question “[a] exists whether declaratory regarding relief seeking Association]”; is [BWR] a member [of rights obligations both with and, of the amount assess- “the issue respect any past and future assessments any, owing charges, ments or if to the [Asso- date, the Association. On owed to the same outstanding. remains ciation] [BWR]” a motion to consolidate the Asso- BWR filed remaining claims action with new- issues were addressed dur- small BWR’s ciation’s action, ly separate days, grant- district court which was bench trial on three filed January spanning ed 2010. On on November December from November party either is entitled to an frag- 3."Whether unusually protracted and 2013. The appeal pursu- award of fees on by Rich- caused three-day trial was mented 12-120(3). ant to Idaho Code section occasions. appear on two failure to ards’ be- to a miscommunication due Specifically, Richards, Rich- III. counsel BWR’s of Review
tween Standard 13, 2012, in Hawaii on November ards was Summary Judgment. A. action. set for this original trial date from the of a On and evi- testified Although certain witnesses summary judgment, this motion for submitted, continued the trial was dence is the same as standard of review Court’s Richards an to afford to December court the standard used However, testify. appear opportunity Summary originally ruling on the motion. 18, 2012, again Richards was on December pleadings, “if judgment appropriate is Hawaii, again in he was absent because file, togeth depositions, and admissions on failure alleged mechanical due to an time affidavits, any, if with the show er was or- flight home. BWR impacting his fact genuine there no issue of material attorney fees pay the costs and dered to moving party that the is entitled to a in connection by the Association incurred a matter of law.” appearance. The trial its December with proving The burden of the absence of January with Richards concluded upon moving party. material facts is testifying. appearing and *5 however, “may not party, rest adverse 28, 2013, court February the district On upon allegations or denials of his the mere findings of fact and conclu- written entered pleadings, response, his affidavits but judgment in favor of granted sions of law provided otherwise Rule of [Idaho or as delinquent assess- for BWR’s 56], specific forth Civil Procedure must set BWR, the district ments. On motion showing genuine fаcts there is issue findings and adjusted of its factual court two moving party is therefore for trial.” The attorney fees to awarded costs also judgment to a when the nonmov- entitled 42- Association under showing sufficient ing party fails to make 1307, judg- untouched its left but otherwise existence of an element to establish the of the Association. findings favor ment party’s case on which that essential to judgment amended Specifically, a second proof the burden of at trial. party will bear 18, 2013, against on June entered action, here, an as will be tried "When pay was ordered tо outstand- wherein BWR jury, the trial the court without a before (with statutory penalties and ing assessments fact entitled to court as the trier of is interest) $9,500, well as in the amount of as probable inferences arrive at the most costs, $72,875 $2,209.19 in prop- upon undisputed evidence based timely filed a notice of fees. BWR summary judg- erly it and before 30, July conflicting despite possibility of ment possible con- Resolution of the
inferences. is flict between the inferences within Appeal II. Issues on the fact finder. This responsibilities of court erred in con- Whether the entire exercises free review over Court validly Association was cluding that the judge to that was before the district record to Idaho Code section formed either side was entitled determine whether 42-1301. and re- judgment as a matter of law drawn views the inferences in con- the district court erred 2. Whether the record judge to whether determine obligated under al- cluding that BWR is reasonably inferences. supports those contract, quantum ternative theories Ventures, Family Irrevo- meruit, pay- Inc. v. Loucks enrichment P.O. 870, Trust, 233, 237, 159 P.3d 144 Idaho delinquent assessments to the cable ment of (2007) (citations omittеd). 874 Association.
230
(3)
B. Bench Trial.
or more
take water from [the]
same canal or reservoir at the
point
same
Review of a trial court’s conclu
conveyed
respective
be
to their
premises for
following
sions
a bench trial is limited to
through
distance
a lateral
distributing
ascertaining
sup
whether
the evidence
ditch or
distributing
laterals or
ditches such
fact,
ports
findings
and whether the
parties shall constitute a water users’ associ-
findings
support
of fact
the conclusions of
§
ation.” I.C.
Specifically,
for the
Derifield,
Benninger
law.
v.
142 Idaho
satisfy
statutory requirе-
those
(2006)
486, 488-89,
129 P.3d
(1)
ments there must be
par-
three or more
Co.,
(citing
Grazing
Alumet v. Bear Lake
(2)
ties,
all
who
take water from the same
946, 949,
119 Idaho
812 P.2d
256
(3)
reservoir,
canal or
at the same
(1991)).
diversion
province
Since
is the
of the trial
(4)
point,
conveyed
which is then
via a lateral
weigh conflicting
court
evidence and
(or
distributing
ditch
series of
testimony
judge
and to
laterals/dis-
credibility
ditches)
tributing
parties’ respective
witnesses,
liberally
this Court will
construe
premises.
findings
the trial court’s
of fact in favor of
Rowley
entered.
v. Fuhr
summary judgment,
On
the district court
man,
133 Idaho
found that the Association
(1999). This Court will not set aside a trial
to this
following
statute. The
two
findings
of fact
findings
unless the
(1)
heavily litigated:
issues were
whether the
clearly
erroneous. Ransom Topaz
upper portion
con-
L.P.,
Mktg.,
643, 152
143 Idaho
P.3d
canal,
sidered a
opposed
to a natural
(2006);
52(a).
I.R.C.P.
If the trial court
(2)
watercourse, and
whether alternative
findings
evidence,
based its
on substantial
points
common
of diversion exist where the
even if
conflicting,
the evidence is
diverts out of the
Wood River
Court will not overturn
findings
those
and also where the
diverts water out
appeal. Benninger,
142 Idaho at
Thus,
Slough.
elements twо and three
Additionally,
P.3d at 1238.
this Court will
expressly litigated.
were
appeal,
On
not substitute its view of the facts for that
*6
challenges the
findings
regarding
Ransom,
of the trial court.
143 Idaho at
elements,
these
namely that
upper por-
the
643,
The Slough water to the the Lower would need delivery proper- the of surface to for lateral, categorized Big be a ditch or a deter- Wood River. as along ties a stretch unsupported mination which the originates the is record. Slough The River finding Slough In that Upper the is it before canal relatively parallel runs re-enter- and has as otherwise lost its character Bypass The point it at a downstream. watercourse, finding natural BWR chal- Slough. ditch fed the The a man-made lenges appeal, the district court went to Slough the Bypass parallel runs before great lengths segregate findings be- judg- At emptying summary back into it. Upper Sloughs. Spe- the tween and Lower ment, Slough conceptually the divided cifically, judge the “I stated: would portions, into two which this Court will refer [Sjlough conclude that lost its the has charac- Slough” “Upper the “Lower ter as a I think natural channel. the case Slough.” Upper Slough segment is the The there, pointed law is it’s been to. The running Slough’s initial point from the [Sjlough clarify, I want to and that’s Big River to point diversion off the Wood the —and well, [Sjlough above where the empties Slough. into Bypass where the between — it, Bypass empties [Sjlough Rockwell into begins Slough Bypass where the Lоwer point that above has lost its character as a Slough empties into the and stretches until plainly, natural channel.” More re-joins Slough the River. findings only court careful to limit its During summary proceedings Upper Slough, and made no formal de- court, photographs aerial before the district Slough’s termination as the Lower charac- properties and water features at issue ter. photographs jointly were These introduced. Even without a formal determination single pho- exhibit. The constituted aerial court, the record demonstrates River, tоgraphs depict Wood that the character of the Lower is not addition, Slough, Bypass. they and the dispute, suggests as all that evidence identify precise locations where individu- Lower a natural is considered water- ultimately get al Association members their and not For course a ditch or lateral. exam- Slough. or Lower A from the response admission, ple, request to a exhibit, parties’ discovery review of this “portions stated responses, arguments reveals [Slough] are a canal or treated as satisfy Association fails to the statu- delivery system portions while at the lower tory for a water users’ associa- may regarded reach thereof as a be natural tion. The Association fails meet the re- Furthermore, channel.” the Association con- quirements because of the statute the vast *7 in appellate ceded its brief that the Lower majority members of Association take water Slough is properly considered natural (which Slough from the Lower is not a ditch “Only at a stating: point stream below lateral), only or and two members take di- Bypass rejoined where the Rockwell rectly оnly If two Bypass. from the Associa- Slough Broadford channel was it considered Bypass tion members take from and the ‘original that to have water’ of its own result- remaining members take from Lower characterizing portion ed in the IDWR that Slough, to satisfy the Association fails Slough channel as a Broadford natural elements, statute’s first and fourth the nu- watercourse.” (“three more”) merosity requirement or ditch(es)/lateral(s) requirement, Although litigated the shared elements were not these Although respectively. elements two and the same level of detail as elements two three, opinion, arguments three in this these are not addressed ele- raised requires opposition ment all association its the Association’s motion for two members reservoir, summary judgment. Specifically, take from same canal or BWR ar- that gued properly element three mandates that water from this the Association cannot be “given point qualified shared source be diverted at common the statute some alleged Bypass out of the shared canal or reservoir. members take from Slough.” others take from the B. [Lower] The district cоurt erred alternative- “According also stated: ly documents granting judgment to the Associa- prepared by expert, the Association’s there unpled equity- tion on contract and (2) only alleged rights two based theories. directly Bypass.” take water Setting aside whether the Associa record, Based on this Court’s review of the tion satisfied the of Idaho Code elements one and four of the statute have 42-1301, the district court alterna not been Element established. one is not tively found that the Association is entitled to because, satisfied while is undis- outstanding collect assessments from BWR ditch, putedly only two users take water under the common law theories of breach of directly Bypass, from the not “three or contract, quantum meruit, enrich more.” Element four is not satisfied be- However, ment. these theories were never cause the is not Lower a ditch or pled by the Association. The Association’s any taking lateral and users water from the pleadings contain grounded solely claims Lower cannot be considered the water users’ association Idaho any members of water users’ association un- Code seсtion 42-1301. These theories were der Idaho Code section 42-1301. For these during raised reasons, the bench trial when carry the Association failed to the dis court, trict establishing sponte, burden of all of sua required found alternative bas elements, grant and the district recovery court’s es for outside of the water users’ summary judgment in its favor on the issue Association, however, statute. The never statutory compliance improper. As moved under Idaho Rule of Civil Procedure such, summary 15(b) to amend pleadings and conform its in the Association’s favor is re- Furthermore, these theories. the record versed. does support not a conclusion that the alter
In native light equity-based contract and these deficiencies with elements theories four, one and qualified Association is not were tried express either implied con operate as a water users’ association un- sent and therefore cannot stand as a basis der Idaho Code section 42-1301. Given this the district court’s decision. M.K holding, this Court will refrain from address- Grover, Transp., Inc. v. 101 Idaho ing alleged statutory the other deficiencies 1192, 1196(1980). appeal, specifically raised on regarding ele- ments two and three and the Association’s attorney C. BWR is entitled to fees and Slough. maintenance of the Resolution of appeal. costs on these necessary adjudicate issues is not appeal. BWR and the request Association both attorney fees to Idaho Code section reversal, Based on this 12-120(3). That section provides: attorney court’s award of fees and costs based on Idaho Code section 42-1307 is also civil action to open recover on an reversed. per account, stated, note, bill, account negotia- amits water users’ association to collect rea instrument, ble guaranty, or contract relat- sonable fees and costs in an action purchase wares, goods, sale of outstanding collect assessments from its *8 merchandise, any or services and in com- § members. I.C. 42-1307. Given that mercial transaction unless pro- otherwise Association does not statutory meet the re law, by vided the prevailing party shall be quirements association, of a water users’ allowed a attorney’s reasonable fee to be there is no attorney basis to award fees and by court, set to be taxed and collected costs under section 42-1307. Because the as costs. district court rely any did not on alternative grounds 12-120(3). making award, § I.C. the award of “compels This section an attorney fees and costs in the attorney Association’s award of prevailing par fees to the favor is also reversed. ty in an action to recover on a commercial
233 Summer, 13), provided therein Idaho but Troupis 148 transaction.” (2009). factual situa- 1138, 1142 do not include Association’s 218 P.3d tion. dispute from a action stems This allegedly outstanding invoices years of over finding that court erred in The district Association BWR owing to the due and pursuant Association was with the in connection rendered for services The Associa- section 42-1301. Idaho Code surface of BWR’s delivery and maintenance but, Chapter under 13 tion was not “formed” a commercial rights. This constitutes rather, Idaho Chapter Title Although holds this Court transaction. Code, Nonprofit Corporation Act. While Idaho qualified under is not validly-formed corporation, appears to be a operate as water 42-1301 to Code section qualify not as a lateral the Association does association, agree that the both users’ under Idaho water users association ditch is a commercial of this lawsuit gravamen Association’s cor- Code section The reasons, and because For these transaction. dependent upon quali- porate existence is not party appeal, on prevailing is the Chapter entity. According fication as attorney appeal pursu on fees is entitled Incorporation, Article II of its Articles of 12-120(3). Code section ant to Idaho non-profit was formed to “be matter of appeal, as a to costs on
As corporation complying with the Idaho Non- prevail- course, as to the costs are awarded Corporation Act.” Article V described Profit section under Idaho Code party corporate purposes powers of this 40(a). Al- Rule Saint Appellate Idaho entity: Care, MRI As- Inc. v. phonsus Diversified corporation purpose The for which this LLP, socs., Idaho lawful formed is the transaction (2009). Thus, on costs limitation, activity, including, without awarded to BWR. аlso ownership, operation and maintenance By- the Broadford and Rockwell V. Conclusion pass lateral ditches located Blaine Coun- finding summary The district Idaho, ty, into which certain waters qualified to the Association is judgment that conveyed River are diverted and Wood 42- section pursuant to Idaho Code operate corporation, and to to the members of the reversed, and the award of 1301 is members, in the levy and assess from its under Idaho fees and costs to the Association law, assess- prescribed manner annual 42-1307 is also reversed. Code section reasonably provide ments calculated equi- alternative contract district court’s necessary improvement, repair, main- findings are not based on theories ty-based lateral ditch- operation of said tenance and therefore must pled by the Association es, including sufficient monies to establish entitled to attor- reversed. BWR is also be unexpected contingency fund for or ney appeal. fees and costs repairs replacements; and emergency dispose of such real purchase, lease аnd BURDICK, Justices Chief Justice may be neces- personal property as concur. and HORTON EISMANN sary expedient proper for the conduct business; purposes and and all other JONES, Justice, specially concurring. J. granted to lateral ditch powers The Court opinion. in the Court’s I concur provi- pursuant users’ associations does not correctly that the Association finds 13, Idaho Code. Chapter Title sions of water user’s associa- qualify as a lateral ditch Thus, to trans- 42-1301, corporation is authorized tion to Idaho Code activity.” Conducting busi- “any lawful act qualifications established due to the narrow not such an Chapter 13 is may It be ness in that section. Legislature it does not Association since activity for the intended entities such Legislature that the *9 of Idaho Code section requirements parameters meet to fit within (Chapter Chapter Title Idaho Code correctly just enrichment, quantum meruit, The Court also finds that plain- or put eggs Chapter all of properly plead tiff must prove the same. basket, failing properly allege claims That did not occur here. contract, recovery under theories of meruit, quantum enrichment. may granted recovery
The district court have
under those alternate theories because an
entity position in the of the Association is
generally entitled to recover for maintenance
charges that benefit a water user such as
However,
necessity
BWR.
it overlooked the
assessment of § (pro
I.C. 42-1303 rata assessment of later- users);
al § ditch water (pro I.C. 42-1206 ditch);
rata assessment of users of a common § (pro
I.C. 42-5113 rata assessment of mem- districts). groundwater management
bers of
Where a user of water benefits from the
maintenance of a ditch or other “conduit for purpose irrigation,” generally
expected that there is no free ride and that pay
such user will proportionate share of
the maintenance costs. provides every “person, compa-
ny corporation or ... controlling any ...
conduit for the purpose irrigation shall ...
keep a flow of water therein sufficient to the persons such as are
entitled to the use of the water therefrom.”
Idaho Code section 42-1202 requires per-
sons control of such conduit to “maintain good
the same in repair, ready order and
deliver ...” Idaho Code 42- provides that where “there is a common
right to the use of water of a ditch without therefor,”
payment may the watermaster pro
make fair rata necessary assessment of
repair cleaning But, of the ditch. in order provisions, recover under of these general contract, theories such as un-