v. State of Colorado ( 2019 )

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ADVANCE SHEET HEADNOTE
January 22, 2019
2019 CO 6No. 17SA220, Allen v. State of Colorado, —Water Court Jurisdiction —“Water
Matters”—Water Ownership v. Water Use.
This case concerns whether a water court has jurisdiction to consider a claim for
inverse condemnation alleging a judicial taking of shares in a mutual ditch company. The
water court dismissed plaintiff-appellant’s inverse condemnation claim, concluding that
his claim was “grounded in ownership and the conveyance of that ownership, not use,”
and therefore the claim was not a water matter within the exclusive jurisdiction of the
water court. The supreme court agrees and thus affirms the water court’s dismissal order.
The Supreme Court of the State of Colorado
2 East 14th Avenue • Denver, Colorado 80203
2019 CO 6Supreme Court Case No. 17SA220
Appeal from the District Court
Garfield County District Court, Water Division 5, Case No. 14CW3021
Honorable James B. Boyd, Water Judge
Plaintiff-Appellant:
Sam A. Allen,
v.
Defendants-Appellees:
State of Colorado; Colorado Court of Appeals; Margaret V. Morton; Larry L. Stevens;
and Mesa County Land Conservancy, Inc.,
and
Appellee Pursuant to C.A.R. 1(e):
Alan Martellaro, Division Engineer, Water Division 5.
Judgment Affirmed
en banc
January 22, 2019
Attorneys for Plaintiff-Appellant6
Dufford, Waldeck, Milburn & Krohn, L.L.P.
Nathan A. Keever
Grand Junction, Colorado
Attorneys for Defendant-Appellees State of Colorado and Colorado Court of
Appeals:
Philip J. Weiser, Attorney General
Patrick L. Sayas, Senior Assistant Attorney General
Denver, Colorado
Attorneys for Defendant-Appellee Mesa County Land Conservancy, Inc.:
Berg Hill Greenleaf & Ruscitti, LLP
Peter D. Nichols
Josh A. Marks
Boulder, Colorado
Attorneys for Appellee Division Engineer, Water Division 5:
Philip J. Weiser, Attorney General
Paul L. Benington, First Assistant Attorney General
Denver, Colorado
No appearance on behalf of Margaret V. Morton or Larry L. Stevens.
JUSTICE GABRIEL delivered the Opinion of the Court.
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¶1 This case concerns whether a water court has jurisdiction to consider a claim for
inverse condemnation alleging a judicial taking of shares in a mutual ditch company. The
water court dismissed plaintiff-appellant Sam Allen’s inverse condemnation claim,
concluding that his claim was “grounded in ownership and the conveyance of that
ownership, not use,” and therefore the claim was not a water matter within the exclusive
jurisdiction of the water court. We agree and thus affirm the water court’s dismissal
order.
I. Facts and Procedural History
¶2 The present dispute involves a ranch in Mesa County. The United States, acting
through the Farmers Home Administration (the “FmHA”), acquired title to the ranch,
including 140 acres of ranchland, certain decreed water rights, and nine shares of capital
stock in Big Creek Reservoir Company, a mutual ditch company. Several years later, the
FmHA granted a deed of conservation easement to Mesa County Land Conservancy, Inc.
The easement was recorded and provided that “[a]ll water rights held at the date of this
conveyance shall remain with the land.” Allen later purchased the ranch, the decreed
water rights, and the ditch company shares from the FmHA.
¶3 Thirteen years later, Allen sold the ranch and the decreed water rights to a third
party, but he did not include the ditch company shares in the sale. Mesa County Land
Conservancy then filed suit for declaratory and injunctive relief, alleging that Allen had
violated the terms of the conservation easement by attempting to sever the shares from
the land. The district court ultimately issued a permanent injunction requiring Allen to
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convey the shares to the purchaser and prohibiting Allen from severing those shares from
the property. A division of the court of appeals affirmed, Mesa Cty. Land Conservancy,
Inc. v. Allen, 2012 COA 95, ¶ 43, 318 P.3d 46, 57, and we denied Allen’s petition for a writ
of certiorari, Allen v. Mesa Cty. Land Conservancy, Inc., No. 12SC533, 2013 WL 4008745, at
*1 (Colo. Aug. 5, 2013).
¶4 Thereafter, Allen filed the present action against defendants-appellees
(collectively, “defendants”) in the water court. As pertinent here, Allen sought just
compensation for an alleged loss of property rights, claiming that the division’s ruling in
the Mesa County Land Conservancy action amounted to a judicial taking of his interest in
the ditch company shares.
¶5 Defendants moved to dismiss Allen’s complaint pursuant to C.R.C.P. 12(b)(1) and
12(b)(5), asserting, as pertinent here, that the water court lacked subject matter
jurisdiction over Allen’s complaint. In a detailed and thorough written order, the water
court ultimately agreed with defendants and dismissed Allen’s complaint for lack of
subject matter jurisdiction. The court began by noting that water courts have exclusive
jurisdiction over “water matters.” It then observed that this court has explained that
“water matters” are matters relating to the use of water rights (as distinct from actions
concerning the ownership of such rights) and that such matters include applications for
initial decrees, actions seeking declarations regarding the scope of use allowed by
existing water rights, and declaratory judgment actions to determine what properties are
subject to the requirements of water decrees. The water court concluded that Allen’s
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claim was “grounded in ownership and the conveyance of that ownership, not use,” and
thus it was not a water matter within the water court’s exclusive jurisdiction. Rather, his
claim was a district court matter.
¶6 Allen now appeals the water court’s dismissal order.
II. Analysis
¶7 After summarizing the principles applicable to the water court’s jurisdiction, we
address the question before us, namely, whether Allen’s inverse condemnation claim
concerning the ditch company shares constitutes a “water matter” within the water
court’s jurisdiction. We conclude that it does not.
¶8 Water courts have exclusive jurisdiction over “water matters” within their
respective divisions. § 37-92-203(1), C.R.S. (2018). “Water matters” include “only those
matters which [article 92] and any other law shall specify to be heard by the water judge
of the district courts.” Id.
¶9 As this court has consistently made clear, the “[r]esolution of what constitutes a
water matter turns on the distinction between the legal right to use of water (acquired by
appropriation), and the ownership of a water right.” Humphrey v. Sw. Dev. Co., 734 P.2d
637, 640 (Colo. 1987).
¶10 “[A]ctions to determine the use of water belong exclusively in the water courts.”
Kobobel v. Colo. Dep’t of Nat. Res., 249 P.3d 1127, 1132 (Colo. 2011). Such actions include
applications for initial decrees and for decrees approving augmentation plans,
applications for changes of decreed water rights, and matters concerning the scope of
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previously decreed water rights and the abandonment, laches, and adverse possession of
water rights. See S. Ute Indian Tribe v. King Consol. Ditch Co., 250 P.3d 1226, 1234 (Colo.
2011) (“Water courts are authorized to construe and make determinations regarding the
scope of water rights adjudicated in prior decrees.”); In re Tonko, 154 P.3d 397, 404 & n.3
(Colo. 2007) (noting that applications for changes of decreed water rights and matters
involving the abandonment, laches, and adverse possession of water rights are within the
exclusive jurisdiction of the water court); Crystal Lakes Water & Sewer Ass’n v. Backlund,
908 P.2d 534, 542 (Colo. 1996) (“The specialized expertise of the water court is essential in
determining whether wells are subject to a plan for augmentation. Only a water court
can issue a decree approving a plan for augmentation.”).
¶11 In contrast, “[a]ctions to determine legal ownership of a water right fall within the
general jurisdiction of district courts.” Tonko, 154 P.3d at 404. Examples of such actions
include quiet title proceedings, real estate matters, dissolution proceedings, and other
civil actions in the district courts. Kobobel, 249 P.3d at 1132. Such actions also include
matters involving “[t]he construction of instruments of grant or conveyance and the
identification of the legal rights transferred and retained pursuant to such instruments,”
and this is so even if that construction “will have an incidental impact on the use of water
on the land.” Bijou Irr. Dist. v. Empire Club, 804 P.2d 175, 180 (Colo. 1991).
¶12 Here, Allen contends that his right to compensation arising from the deprivation
of his rights in his ditch company shares constituted a water matter within the water
court’s jurisdiction. He asserts that the question of the ownership of those shares is no
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longer an issue because the Mesa County Land Conservancy division previously ordered
him to transfer those shares to the purchaser of the ranch and he did so. As a result, in
his view, the only issue remaining is whether he was deprived of his use of the water
without just compensation. We are not persuaded.
¶13 The right at issue in this case involves Allen’s alleged property interest in the ditch
company shares, not the right to use water. In our view, such a dispute is of the same
type as a quiet title proceeding or a matter involving the identification of legal rights
transferred and retained pursuant to instruments of grant or conveyance because all of
such matters principally concern ownership interests in property and the rights that
derive therefrom. See Kobobel, 249 P.3d at 1132; Bijou Irr. Dist., 804 P.2d at 180. Moreover,
the parties do not dispute—and Allen’s complaint would not require the water court to
determine—any water use matters. To the contrary, as the water court observed, “There
is no water use issue that will affect a takings analysis.”
¶14 Accordingly, we conclude that the water court correctly determined that this case
does not involve a water matter and that, therefore, the court lacked subject matter
jurisdiction here. And this is true even if Allen’s inverse condemnation claim could be
said to have an incidental impact on the use of water on Allen’s property. See Bijou Irr.
Dist., 804 P.2d at 180.
¶15 We are not persuaded otherwise by Allen’s reliance on Kobobel. There, the
plaintiffs owned certain irrigation wells from which they pumped water to irrigate their
farmland. Kobobel, 249 P.3d at 1129–30. The plaintiffs received letters from the State
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Engineer’s Office ordering them to cease and desist using their wells to divert water,
pending the water court’s adoption of a decreed plan for augmentation. Id. at 1130. The
plaintiffs then filed an inverse condemnation claim, asserting that the state’s action
amounted to an unconstitutional taking of vested property rights in their wells, water,
farmland, and improvements. Id. at 1130–31. The water court dismissed the plaintiffs’
claim, and they appealed to this court, arguing, as pertinent here, that the district court
and not the water court was the proper forum because the plaintiffs’ inverse
condemnation claim was not a water matter within the water court’s jurisdiction. Id. at
1131. We ultimately rejected this argument, concluding that the nature of the plaintiffs’
claim and the relief sought required the court to determine whether the plaintiffs had the
right to use water from their wells without state interference. Id. at 1132–33. Thus, the
case involved a water matter within the water court’s exclusive jurisdiction. Id. at 1133.
¶16 Contrary to Allen’s assertions, Kobobel is distinguishable from the present case
because the inverse condemnation claim at issue there involved the state’s curtailment of
the plaintiffs’ use of water (i.e., the right to pump water). It did not involve the ownership
of a water right or, as here, an ownership interest in an entity that owns water rights. See
§ 7-42-104(4), C.R.S. (2018) (noting that shares of stock in a ditch company “shall be
deemed personal property and transferable as such in the manner provided by the
bylaws”).
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¶17 Accordingly, we agree with the water court that this case involves Allen’s rights
in shares of a ditch company and not his right to use water and that, therefore, the case
does not involve a water matter within the water court’s jurisdiction.
III. Conclusion
¶18 Because we conclude that Allen’s complaint raised only questions about the
ownership of his interest in the ditch company shares and not questions about the use of
water rights, we conclude that this case does not involve a “water matter” within the
water court’s jurisdiction. We therefore affirm the water court’s judgment dismissing
Allen’s complaint for lack of subject matter jurisdiction.
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