Bentley v. Hall Ranches, LLC C/W 64773/66932 ( 2016 )

IN THE SUPREME COURT OF THE STATE OF NEVADA
J.W. BENTLEY AND MARYANN No. 64773
BENTLEY TRUSTEES OF THE
BENTLEY FAMILY 1995 TRUST; JOY
SMITH; DANIEL BARDEN; AND
ELAINE BARDEN,
Appellants,
vs.
STATE OF NEVADA, OFFICE OF THE
FILED
STATE ENGINEER; DONALD S JUL 1 4 2016
FORRESTER AND KRISTINA M.
TRACE K. LINDEMAN
FORRESTER; HALL RANCHES, LLC; iCyLERO. F SUPREME COURT
THOMAS J. SCYPHERS AND DEPUTY CLERK
KATHLEEN M. SCYPHERS; FRANK
SCHARO; SHERIDAN CREEK
EQUESTRIAN CENTER, LLC; AND
RONALD R. MITCHELL AND GINGER
G. MITCHELL,
Respondents.
J.W. BENTLEY; MARYANN BENTLEY, No. 66303
TRUSTEES OF THE BENTLEY
FAMILY 1995 TRUST; JOY SMITH;
DANIEL D. BARDEN; AND ELAINE
BARDEN,
Appellants,
vs.
HALL RANCHES, LLC; THOMAS J.
SCYPHERS; KATHLEEN M.
SCYPHERS; FRANK SCHARO;
SHERIDAN CREEK EQUESTRIAN
CENTER, LLC, A NEVADA LIMITED
LIABILITY COMPANY; DONALD S.
FORRESTER; KRISTINA M.
FORRESTER; RONALD R. MITCHELL;
AND GINGER G. MITCHELL,
Respondents.
J.W. BENTLEY; AND MARYANN No. 66932
BENTLEY, TRUSTEES OF THE
BENTLEY FAMILY 1995 TRUST,
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Appellants,
vs.
THE STATE OF NEVADA STATE
ENGINEER; HALL RANCHES, LLC;
THOMAS J. SCYPHERS; KATHLEEN
M. SCYPHERS; FRANK SCHARO;
SHERIDAN CREEK EQUESTRIAN
CENTER, LLC; DONALD S.
FORRESTER; KRISTINA M.
FORRESTER; RONALD R. MITCHELL;
AND GINGER G. MITCHELL,
Respondents.
ORDER OF AFFIRMANCE
These are consolidated appeals from district court orders
denying petitions for judicial review of the State Engineer's water use
rotation schedules (Docket No. 64773) and awarding costs (Docket No.
66303) and from a district court decree affirming, as modified, the State
Engineer's order of determination (Docket No. 66932) in a water rights
matter. Ninth Judicial District Court, Douglas County; Nathan Tod
Young and David R. Gamble, Judges.
Appellants J.W. Bentley and Maryann Bentley, trustees of the
Bentley family trust (collectively, the Bentleys); Joy Smith; Daniel and
Elaine Barden; and respondents Donald S. and Kristina M. Forrester; Hall
Ranches, LLC; Thomas J. and Kathleen Scyphers; Frank Scharo; Sheridan
Creek Equestrian Center, LLC; and Ronald R. and Ginger G. Mitchell
(collectively, Intervenors) are water rights holders of equal priority of the
waters of North Sheridan Creek in Carson Valley. The North Sheridan
Creek is the northern branch of the Sheridan Creek. In 1987, a petition
was filed with the State Engineer requesting a determination of the
relative rights of the claimants to the waters of several stream systems
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flowing into the Carson Valley, including the North Sheridan Creek. In
2008, the State Engineer issued a Final Order of Determination (FOD)
regarding these stream systems and filed it with the district court. The
district court divided the proceeding into six groups based on the common
water source in each set of exceptions filed by water users protesting the
FOD, with the waters of North Sheridan Creek adjudicated under subpart
D of the overall decree. In the FOD, the State Engineer indicated that in
times of low flow from the North Sheridan Creek the water users would
have to share the shortage through the imposition of a rotation schedule.
As provided under NRS 533.170, the Bentleys filed a notice of
exceptions to the FOD with the district court, asserting that they had the
right to continuously divert water to their ponds under a 1987 diversion
agreement and, thus, could not be subjected to a rotation schedule,
whereby the use of the full flow of the North Sheridan Creek was rotated
among the water rights holders. The district court found that Intervenors
had an interest in the proceedings, were aligned with the State Engineer,
and supported the FOD against the Bentleys' exceptions. Therefore, the
district court permitted the Intervenors to intervene in the case and to
challenge the Bentleys' right to enforce the diversion agreement, as
opposed to filing exceptions to the FOD itself. The Intervenors alleged
that the Bentleys' ponds consumed excessive amounts of water, which
resulted in reduced downstream flows to their properties, and that the
diversion agreement was invalid.
In 2010, the district court imposed an interim rotation
schedule on the water users, although the record does not reflect the
details of this rotation schedule. After a trial on the Bentleys' notice of
exceptions, the district court issued its Findings of Fact, Conclusions of
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Law, Order and Judgment as to subpart D, which affirmed, as modified,
the FOD. As relevant here, the FOD was modified to (1) declare the
diversion agreement to be unenforceable, invalid, and ineffective, (2)
require the State Engineer to impose a rotation schedule upon the North
Sheridan Creek water rights holders when the flow of the creek falls below
2.0 cubic feet per second (cfs), and (3) award Intervenors their costs and
reasonable attorney fees. The district court based its decision on a finding
that whenever the North Sheridan Creek flow is below 2.0 cfs, constant
flow to the Bentleys' ponds injured other water users and a rotation
schedule was necessary to avoid that injury.
Consistent with the district court's judgment, in 2012, the
State Engineer notified the North Sheridan Creek water rights holders
that the measured flow had dropped below 2.0 cfs and that a rotation
schedule was in effect. A rotation schedule was also in effect during the
2013 irrigation season. The Bentleys, Smith, and the Bardens separately
petitioned the district court for judicial review of the 2012 rotation
schedule. In 2013, they jointly petitioned the district court for judicial
review of the 2013 rotation schedule. The 2012 and 2013 petitions were
consolidated, and on November 27, 2013, the petitions were denied by the
district court, which summarily stated that it did not find the rotation
order to be illegal and that it was not the court's function to readdress the
prior judgment entered as to subpart D. The Bentleys, Smith, and the
Bardens have appealed the district court's decision in Docket No. 64773.
The district court subsequently awarded costs to Intervenors, and the
Bentleys, Smith, and the Bardens have appealed that decision in Docket
No. 66303.
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In 2014, the district court issued a final decree regarding the
relative water rights of the Carson Valley stream systems, which included
its 2012 decision regarding North Sheridan Creek, adjudicated under
subpart D. The Bentleys have appealed the decree in Docket No. 66932,
and that appeal has been consolidated with the appeals in Docket Nos.
64773 and 66303.
On appeal, the Bentleys, Smith, and the Bardens raise the
following issues: (1) whether the district court had jurisdiction to impose a
rotation schedule; (2) whether the State Engineer had the authority to
impose a nonconsensual rotation schedule, acted arbitrarily and
capriciously in imposing a rotation schedule, and did not have substantial
evidence to support its decision to impose a rotation schedule; (3) whether
the 1987 diversion agreement is invalid and/or was breached by the
Bentleys; and (4) whether the district court abused its discretion in
awarding attorney fees and costs to Intervenors.
The proceedings were statutory in nature
There are two types of water law adjudications: statutory and
equitable. James H. Davenport, Nevada Water Law 98 (Colo. River
Comm'n of Nev. 2003). Before enactment of this State's water law, which
created the statutory adjudication process, the settlement of disputes
between competing water claimants upon the same stream or stream
system was conducted by the courts pursuant to their equitable
jurisdiction. See Bliss v. Grayson, 24 Nev. 422, 455, 56 P. 231, 241 (1899)
("[T]he foundation of the right to invoke the equity powers of the court, in
restraint of nuisances to water, before the enactment of our statute, was
based almost solely upon the infringement of riparian rights."). Equitable
jurisdiction is typically invoked by the filing of a quiet title action. See
Margrave v. Dermody Props., Inc., 110 Nev. 824, 827, 878 P.2d 291, 293
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(1994) (stating that a water rights holder invoked equity jurisdiction by a
quiet title action); see also Dermody v. City of Reno, 113 Nev. 207, 209-10,
931 P.2d 1354, 1356 (1997) (stating the same).
Statutory adjudications occur when the State Engineer files
with the district court an FOD as to a water system. Davenport, supra, at
104. The purpose of a statutory adjudication is to have water rights
"adjudicated in such a proceeding as to terminate for all time litigation
between all such water users." Ruddell v. Sixth Judicial Dist. Court, 54
Nev. 363, 367, 17 P.2d 693, 695 (1933). In the current case, the State
Engineer entered an FOD and the Bentleys filed exceptions thereto
determining the water rights of the North Sheridan Creek users and filed
the FOD with the district court pursuant to NRS 533.090 and NRS
533.165. Accordingly, this is a statutory adjudication, not an equitable
adjudication.
The district court had jurisdiction to consider the issue of whether a
rotation schedule should be imposed
NRS 533.170(2) states that "Mlle order of determination by
the State Engineer and the statements or claims of claimants and
exceptions made to the order of determination shall constitute the
pleadings, and there shall be no other pleadings in the cause." "It
is . . . settled in this state that the water law and all proceedings
thereunder are special in character and the provisions of such law not only
lay down the method of procedure, but strictly limit it to that provided."
G. & M. Props. v. Second Judicial Dist. Court, 95 Nev. 301, 305, 594 P.2d
714, 716 (1979) (quotation omitted). Therefore, the district court only has
jurisdiction in a statutory adjudication to consider issues raised in the
proper pleadings established by statute.
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In this case, the establishment of a mandatory rotation
schedule was raised in the FOD and exceptions. The FOD stated, in
relevant part, that
[t]he diversion rates for the north and south split
of Sheridan Creek are based on a spring and early
summer average stream flow of 3.5 c.f.s. Flow and
diversion rates during periods of drought and
middle to late irrigation season will generally be
less than the rates determined in the Preliminary
Order of Determination. Therefore, all parties will
have to share the water shortage during periods of
low flow. The total diversion from either the north
or south split can be used in its entirety in a
rotation system of irrigation.
(Emphasis added). By stating that "all parties will have to share the
water shortage" during times of low flow through "a rotation system of
irrigation," the State Engineer indicated that a mandatory rotation
schedule would be imposed in times of low flow.
This appears to be the Bentleys' interpretation of the FOD as
well. In their notice of exceptions, the Bentleys' Exception No. 1 argued
that their diversion rights "should not be subject to rotation" and that "the
Bentley property should be exempt from the rotation" that the "Office of
the State Engineer is likely to impose." Therefore, because the rotation
schedule was properly raised in the FOD and the Bentleys' exceptions, we
hold that the district court had jurisdiction to consider this issue.
The pre-trial stipulation did not preclude the district court
from imposing a mandatory rotation schedule
The Bentleys argue that because the parties stipulated that a
rotation schedule would not be imposed, the district court could not later
impose one. The parties stipulated, in relevant part,
that the State Engineer would not attempt to
include a rotation schedule in the Decree itself,
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but that the provisions of NRS 533.075 and the
order of this Court would be used to determine
when and if a rotation schedule is needed to
efficiently use the waters of the State of Nevada.
However, Bentley reserves all objections to the
imposition of a rotation schedule, including
objection about the statutory authority to do so.
Thus, the stipulation can be reasonably interpreted to mean that the
parties only stipulated that a specific rotation schedule, such as the times
each water rights holder would get the full stream in the rotation, would
not be put into the Decree itself, not that a rotation schedule could not be
imposed by the district court. Otherwise, the second part of the
stipulation would lack meaning and the Bentleys would have no need to
reserve objections to the imposition of a rotation schedule if the parties
had stipulated as they suggest. Therefore, we hold that the pre-trial
stipulation did not affect the jurisdiction of the district court to consider
imposing a mandatory rotation schedule. 1
'The dissent argues that the issue of the imposition of a mandatory
rotation schedule was not fully developed in the proceedings before the
district court. We disagree. Evidence was presented by the State
Engineer that he performed seepage tests on the Bentleys' ponds which
showed that the Bentleys consumed more than their proportional share of
water when they received a continuous flow. Testimony was also
presented by the Intervenors that they received reduced downstream flows
to their properties after the Bentleys' new pond was constructed, but, after
an interim rotation schedule was implemented, they were able to fully
water their properties. This clearly shows that imposition of a mandatory
rotation schedule was developed below and that a rotation schedule was
necessary for all water users to receive their apportioned share of the
water rights. To suggest otherwise is not accurate.
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The district court had jurisdiction to impose a rotation schedule
The Bentleys argue that although NRS 533.075 authorizes
water rights holders to rotate their use of a water supply to which they are
collectively entitled, it does not authorize the district court or the State
Engineer to impose a rotation schedule in a water rights adjudication
process to force nonconsenting water users to participate in rotation, nor
does any other provision in NRS Chapter 533. The Bentleys also argue
that the district court did not have jurisdiction to impose a rotation
schedule as part of a statutory adjudication. 2
NRS 533.075 does not limit the power of the district court to impose a
rotation schedule
"When a statute is clear and unambiguous, we give effect to
the plain and ordinary meaning of the words and do not resort to the rules
of construction." Cromer v. Wilson, 126 Nev. 106, 109, 225 P.3d 788, 790
(2010).
NRS 533.075 states:
To bring about a more economical use of the
available water supply, it shall be lawful for water
users owning lands to which water is appurtenant
to rotate in the use of the supply to which they
2 The Bentleys also argue that the rotation schedule allows
Intervenors to use commingled water from Gansberg Spring, to which they
have no rights. The water of Gansberg Spring does not flow at the same
rate at all times of the year and generally contributes a small and variable
percentage of the total flow. The district court found that it did not justify
a water commissioner to regulate the flow separately. Because the
Bentleys provide no authority for why the district court's decision
regarding Gansberg Spring should be overturned, we decline to consider
this issue. See Schwartz v. Eliades, 113 Nev. 586, 590 n.3, 939 P.2d 1034,
1036 n.3 (1997) ("This court will not consider an issue if no relevant
authority is presented on appeal.").
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may be collectively entitled; or a single water user,
having lands to which water rights of a different
priority attach, may in like manner rotate in use,
when such rotation can be made without injury to
lands enjoying an earlier priority, to the end that
each user may have an irrigation head of at least 2
cubic feet per second.
The Bentleys argue that because NRS 533.075 only authorizes
the imposition of a rotation schedule to situations where all of the water
users agree to it, the district court had no authority to impose an
involuntary rotation schedule. However, while it is true that NRS 533.075
only explicitly authorizes voluntary rotation schedules, it also does not
limit the power of the district court to impose an otherwise involuntary
rotation schedule after the jurisdiction of the district court has been
properly invoked. As noted above, the FOD and the exceptions filed
thereto, afford the district court jurisdiction in this matter to consider the
imposition of a rotation schedule. Therefore, the Bentleys' reliance on
NRS 533.075 is misplaced.
The State Engineer acted within his capacity as an officer of the
court when he implemented the rotation schedule
In addition to challenging the district court's authority to
impose a rotation schedule, the Bentleys, Smith, and the Bardens also
challenge the State Engineer's enforcement of the district court's order. 3
Smith and the Bardens argue that the State Engineer did not have the
authority to impose a nonconsensual rotation schedule, acted arbitrarily
and capriciously in imposing a rotation schedule, and did not have
substantial evidence to support its decision to impose a rotation schedule.
3 This
was the subject of the two petitions for judicial review whose
appeals were consolidated with the current appeal.
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NRS 533.220(1) states:
From and after the filing of the order of
determination in the district court, the
distribution of water by the State Engineer or by
any of the State Engineer's assistants or by the
water commissioners or their assistants shall, at
all times, be under the supervision and control of
the district court. Such officers and each of them
shall, at all times, be deemed to be officers of the
court in distributing water under and pursuant to
the order of determination or under and pursuant
to the decree of the court.
(Emphasis added.) Thus, when the State Engineer implements an order of
determination or decree, it is acting as an officer of the court.
Here, the district court's order as to subpart D stated that
"[w]hen the combined flow from the North Diversion of Sheridan Creek
and tributaries drops below 2.0 cfs, the State Engineer shall impose a
rotation schedule." (Emphasis added.) Thus, when the North Sheridan
Creek flow fell below 2.0 cfs, the State Engineer, acting as an officer of the
court, was required to impose a rotation schedule. Smith and the Bardens
do not dispute that the State Engineer's measurement of the North
Sheridan Creek flow or the State Engineer's apportionment of water in the
rotation schedule was incorrect. Rather, they argue that the State
Engineer did not have the authority to impose a nonconsensual rotation
schedule, acted arbitrarily and capriciously in imposing a rotation
schedule, and did not have substantial evidence to support its decision to
impose a rotation schedule. These are arguments more appropriate for
challenging the validity of the district court's order, not the State
Engineer's implementation of its order. When implementing the district
court's order to impose a rotation schedule as an officer of the court, the
State Engineer was not required to ascertain whether the district court
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had the authority to impose a rotation schedule on nonconsenting water
users with equal priority of rights or whether substantial evidence
supported that decision, and its actions cannot be challenged on that
basis. Therefore, we hold that the State Engineer was not acting
arbitrarily or capriciously and there was substantial evidence in support of
his actions when he imposed a rotation schedule. 4
The diversion agreement
One of the exceptions to the FOD made by the Bentleys
asserted that they had the right to continuously divert water to their
ponds under the diversion agreement and therefore could not be forced to
participate in a rotation schedule with the other water rights holders.
That diversion agreement, which was drafted in 1986, purportedly granted
the Bentleys' predecessor-in-interest, Joseph Lodato, a continuous flow of
water for the purpose of maintaining the water level in the streams and
ponds on Lodato's property. Although the diversion agreement stated that
the Rolphs and Gerald F. and Pamela F.J. Whitmere were the owners of
the Sheridan Creek water rights and, collectively as grantors, granted the
Bentleys' predecessor-in-interest, Lodato, the right to divert some or all of
the Sheridan Creek water to maintain water levels in ponds then existing
on Lodato's property, the Rolphs never signed the agreement. At the time
when the agreement was drafted, water was diverted into only one pond
4The Bentleys also argue that they were entitled to judicial review.
Their argument on this point is unclear but appears to allege that their
petitions for judicial review were denied by the district court on the basis
of issue preclusion. However, the district court's order did not mention
issue preclusion, and our review of the order does not indicate that it was
based on issue preclusion. Therefore, the Bentleys' argument is without
merit.
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(the lower pond) located on the Lodato property. In 1987, Lodato recorded
the diversion agreement.
The Bentleys purchased the Lodato property in 2006. In 2008,
the Bentleys constructed a new, larger pond on the property (the upper
pond). The Bentleys then constructed a pipe from the water distribution
box to the upper pond and another pipe or ditch from the upper pond to
the lower pond. Lastly, they constructed a pipe to allow overflow from the
two ponds to reach their downstream neighbors. According to the
Bentleys, these actions were permissible under the diversion agreement
and did not amount to consumptive use.
The district court permitted the Intervenors to intervene in
the case to challenge the Bentleys' right to enforce the diversion
agreement. At trial, the Intervenors testified that the Bentleys' combined
ponds use significantly more water than the previous single pond,
resulting in the downstream users receiving no water during times of low
flow. The district court held that the diversion agreement was invalid
because it was not executed by the Rolphs and that, regardless, the
Bentleys violated the terms of the agreement by using the waters for a
consumptive use.
The Bentleys argue that the district court erred in declaring
the diversion agreement invalid because the Rolphs were not necessary
parties to the agreement, and the Bentleys' use of the water is for a
nonconsumptive use.
Intervenors' response and objections to the Bentleys' notice of
exceptions was a proper pleading
As a preliminary matter, the Bentleys contend that NRS
533.170 prohibits any pleadings in response to exceptions filed to the
FOD. Therefore, because the Intervenors argued that the diversion
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agreement was invalid in a reply to the Bentleys' exception, the district
court erred by not dismissing it as an improper affirmative defense.
"Even parties who fail to take exceptions to an adjudication
when reviewed upon appeal are entitled to participation in consideration
of the adjudication." Davenport, supra, at 110. "An adjudication is not a
separable controversy between a few claimants." Id. "[A]l1 claimants or
water users in [a water rights] adjudication proceeding under the [water
statutes] are adverse." In re Water Rights in Silver Creek Sz Its
Tributaries, 57 Nev. 232, 238, 61 P.2d 987, 989 (1936).
NRS 533.170(2) states that "[t]he order of determination by
the State Engineer and the statements or claims of claimants and
exceptions made to the order of determination shall constitute the
pleadings, and there shall be no other pleadings in the cause." "The
purpose of the law is to limit the questions to be decided in the
adjudication proceedings to issues raised by exceptions duly filed."
Carpenter v. Sixth Judicial Dist. Court, 59 Nev. 42, 46, 73 P.2d 1310, 1311
(1937). Thus, contrary to the Bentleys' assertions, NRS 533.170 does not
prohibit any further pleadings—it simply limits the scope of all further
pleadings to the issues raised by the exceptions while encouraging
complete resolution of questions raised by the claimants.
Here, the Bentleys filed an exception stating that they should
not be subject to any rotation schedule because the diversion agreement
gave them the right to divert the North Sheridan Creek for use in their
ponds. Intervenors were permitted to intervene and challenge the
Bentleys' right to enforce the diversion agreement and thus their right to a
continuous flow from the North Sheridan Creek at the Intervenors'
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expense. Because the Intervenors' pleading was not outside the scope of
the Bentleys' exception, we hold that it was a proper pleading.
The district court had jurisdiction to consider whether the diversion
agreement was valid
The Bentleys argue that because statutory water
adjudications are limited in scope to determining the relative rights of the
claimants, the district court did not have jurisdiction to determine
whether the diversion agreement was valid.
As previously stated, the purpose of a statutory adjudication is
to have water rights "adjudicated in such a proceeding as to terminate for
all time litigation between all such water users." Ruddell, 54 Nev. at 367,
17 P.2d at 695.
The Bentleys' argument is without merit. The validity of a
diversion agreement, which the Bentleys purport grants them the right to
divert water from the North Sheridan Creek in perpetuity, is within the
scope of an adjudication to determine the relative water rights of the
North Sheridan Creek. Furthermore, the failure to resolve the
enforceability of the diversion agreement would invite immediate further
litigation between the North Sheridan Creek water rights holders.
Therefore, we hold that the district court had jurisdiction to consider the
validity of the diversion agreement. 5
5 The Bentleys also argue that the district court's Findings of Fact,
Conclusions of Law, Order and Judgment was not incorporated into the
district court's final decree. However, as the final decree specifically
references the Findings of Fact, we hold that it was incorporated into the
decree.
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The Bentleys breached the agreement by using the water in a
consumptive manner by diverting it into the upper pond
"Contract interpretation is a question of law and, as long as no
facts are in dispute, this court reviews contract issues de novo, looking to
the language of the agreement and the surrounding circumstances."
Redrock Valley Ranch, LLC v. Washoe Cty., 127 Nev. 451, 460, 254 P.3d
641, 647-48 (2011). "A basic rule of contract interpretation is that [e]very
word must be given effect if at all possible." Bielar v. Was/toe Health Sys.,
Inc., 129 Nev., Adv. Op. 49, 306 P.3d 360, 364 (2013) (alteration in
original) (internal quotations omitted). "A court should not interpret a
contract so as to make meaningless its provisions." Id. (internal
quotations omitted). "A contract should not be construed so as to lead to
an absurd result." Reno Club, Inc. v. Young Inv. Co., 64 Nev. 312, 325, 182
P.2d 1011, 1017 (1947).
The diversion agreement states, in relevant part:
This grant is specifically made on the condition
that the water will be used by Grantee in a non-
consumptive fashion, to maintain water levels in a
series of streams and ponds on the Exhibit "A"
property, after which time it will be re-diverted to
the irrigation ditches of Grantors.
The agreement does not otherwise define "nonconsumptive fashion," and
the referenced "Exhibit A" only describes the boundaries of the property,
not the streams and ponds found on it.
The State Engineer performed seepage tests on each of the
Bentleys' ponds and found that the ponds lost water from seepage,
evaporation, and transpiration. Basing its holding on the seepage test
results, the district court held that because the Bentleys' ponds
"consumed" water, the Bentleys violated the terms of the diversion
agreement.
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The Bentleys argue that because the diversion agreement
specifically allows the grantee to maintain the water level in a series of
streams and ponds on the property, the Bentleys' use to maintain the
water level in the ponds, including the upper pond, is not a consumptive
use as described by the agreement. The Bentleys are at least partially
correct. By specifically stating that the purpose of the diversion
agreement was to maintain water levels in the streams and ponds on the
Bentleys' property, the drafters of the diversion agreement contemplated
that the ponds would consume some water—otherwise, the diverted water
would be unnecessary. Likewise, although the ponds consumed some
water, the diversion agreement considered such usage to be
nonconsumptive, as that term is used by the agreement. If this was
considered to be a consumptive use violating the terms of the agreement,
then the agreement would be invalid on its face. As this would be an
absurd result, we hold that maintaining water levels in the streams and
ponds existing on the Bentleys' property in 1987 is not a consumptive use
as contemplated by the diversion agreement.
However, this court must also give effect to the requirement in
the agreement that the diverted water must be used in a nonconsumptive
manner and that after such use, the water must be "re-diverted to the
irrigation ditches of Grantors." See Bielar, 129 Nev., Adv. Op. 49, 306
P.3d at 364. The agreement appears to contradict itself by granting the
Bentleys the right to use North Sheridan Creek for the undoubtedly
consumptive use of maintaining their pond but also requiring that the use
be "non-consumptive" and re-divert water to the irrigation ditches of
downstream water rights holders. These two contradictory statements
can be reconciled by interpreting the agreement's scope of nonconsumptive
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uses to only apply to the maintenance of the streams and ponds on the
Bentleys' property as they existed at the time of the agreement. Otherwise
the agreement could be construed to permit the absurd result of allowing
the Bentleys to construct as many ponds as they wished and completely
consume the water of the North Sheridan Creek, even in times of high
flow, and nonetheless have it count as a nonconsumptive use.
Here, the evidence shows that the Bentleys not only used the
North Sheridan Creek water to maintain the streams and ponds existing
on their property when the agreement was signed, they also dug a new,
larger pond and used the North Sheridan Creek to maintain the water in
that pond. The State Engineer's seepage tests of the Bentleys' ponds show
that the Bentleys consumed twice as much water after the second pond
was constructed as they did prior to that time. Therefore, we hold that the
Bentleys breached the diversion agreement when they constructed a
second pond on their property and used the North Sheridan Creek to
maintain its water levels.
The district court's finding that the diversion agreement was not a
valid contract is not clearly erroneous and is supported by
substantial evidence
"[W]hether a contract exists is [a question] of fact, requiring
this court to defer to the district court's findings unless they are clearly
erroneous or not based on substantial evidence." Certified Fire Prot., Inc.
v. Precision Constr., Inc., 128 Nev. 371, 378, 283 P.3d 250, 255 (2012)
(alterations in original) (internal quotations omitted). "Substantial
evidence is evidence that a reasonable mind might accept as adequate to
support a conclusion." Whitemaine v. Aniskovich, 124 Nev. 302, 308, 183
P.3d 137, 141 (2008).
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"Basic contract principles require, for an enforceable contract,
an offer and acceptance, meeting of the minds, and consideration."
Certified Fire Prot., 128 Nev. at 378, 283 P.3d at 255 (internal quotations
omitted). "A meeting of the minds exists when the parties have agreed
upon the contract's essential terms" Id.
Here, the diversion agreement stated that the Rolphs and the
Whitmeres were the owners of the Sheridan Creek water rights and,
collectively as grantors, granted the Bentleys' predecessor-in-interest,
Lodato, the right to divert some or all of the Sheridan Creek water to
maintain water levels in ponds then existing on Lodato's property.
However, only the Whitmeres and Lodato signed the agreement. The
signature lines for the Rolphs are blank.
The Bentleys argue that because the Whitmeres, not the
Rolphs, had the rights to North Sheridan Creek, the diversion agreement
is valid as to the waters of North Sheridan Creek, even though the Rolphs
did not sign it. 6 However, in order for there to be a valid contract
formation, there must be a meeting of the minds. See id. The agreement
acknowledges that the Whitmeres and the Rolphs own the water rights to
the Sheridan Creek and their agreement to grant Lodato the right to
divert Sheridan Creek onto existing streams and ponds on Lodato's
property. The agreement was between four grantors (the two Rolphs and
the two Whitmeres) and one grantee, Lodato, as to the Sheridan Creek
6 The State Engineer and the Intervenors dispute whether the
Whitmeres received the water rights to North Sheridan Creek from the
Rolphs at the time the diversion agreement was signed. However, because
we conclude that the agreement would be invalid even if the Whitmeres
had the water rights at the time the diversion agreement was signed, we
need not reach that issue.
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water rights. Only two of the grantors signed it. The agreement does not
contemplate any additional, separately held water rights by the two
grantors who signed the agreement and thus the Bentleys' arguments in
that regard are unsupportable. Therefore, the district court properly
determined that it fails, and we hold that its finding that the diversion
agreement was not a valid contract is not clearly erroneous and is
supported by substantial evidence.
The doctrine of laches does not apply
The Bentleys argue that because the Intervenors did not
challenge the diversion agreement from the time it was created in 1987
until the Bentleys filed their exceptions to the FOD in 2008, the
Intervenors should be barred from challenging the diversion agreement by
the doctrine of laches. Specifically, the Bentleys argue that the
Intervenors' delay in challenging the diversion agreement prejudiced the
Bentleys because they purchased the property with the belief that the
property carried with it the right to a continuous flow of water from the
North Sheridan Creek.
Laches is an equitable doctrine which may
be invoked when delay by one party works to the
disadvantage of the other, causing a change of
circumstances which would make the grant of
relief to the delaying party inequitable. To
determine whether a challenge is barred by the
doctrine of laches, this court considers (1) whether
the party inexcusably delayed bringing the
challenge, (2) whether the party's inexcusable
delay constitutes acquiescence to the condition the
party is challenging, and (3) whether the
inexcusable delay was prejudicial to others.
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Miller v. Burk, 124 Nev. 579, 598, 188 P.3d 1112, 1125 (2008) (citation
omitted) (internal quotations omitted).
The diversion agreement was recorded with the county
recorder's office. Accordingly, the Intervenors had constructive notice of
the agreement. See Allen v. Webb, 87 Nev. 261, 270, 485 P.2d 677, 682
(1971) (holding that purchasers of realty have constructive notice of
recorded deeds in the chain of title). However, evidence was also proffered
that prior to the construction of the Bentleys' second pond, the Bentleys
and their predecessors in interest never attempted to enforce the diversion
agreement. Lastly, the Bentleys testified that whileS they were unaware of
the diversion agreement at the time they purchased the property, their
belief that the property had the rights to a continuous flow from North
Sheridan Creek was an important factor in their decision to purchase the
property.
Because the diversion agreement was not enforced prior to the
Bentleys' purchase of their property, we hold that the Intervenors did not
inexcusably delay challenging the diversion agreement and that any delay
did not constitute acquiescence to the diversion agreement's validity.
Furthermore, as the Bentleys were unaware of the diversion agreement at
the time they purchased the property, any delay by the Intervenors in
challenging the agreement was not prejudicial to the Bentleys. Therefore,
we hold that the doctrine of laches does not apply to the current case. 7
7 We also note that the doctrine of laches would only apply as to the
Intervenors' arguments that the diversion agreement is invalid. Here, the
district court also found that the Bentleys breached the diversion
agreement by using the water for a nonpermissible consumptive use.
Therefore, even if the doctrine of laches applied, it would not apply to the
continued on next page...
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The statute of limitations had not run
The Bentleys argue that because the statute of limitations to
quiet title is five years in Nevada, the Intervenors were time-barred from
challenging the validity of the diversion agreement.
NRS 11.070 states:
No cause of action or defense to an action, founded
upon the title to real property, or to rents or to
services out of the same, shall be effectual, unless
it appears that the person prosecuting the action
or making the defense, or under whose title the
action is prosecuted or the defense is made, or the
ancestor, predecessor, or grantor of such person,
was seized or possessed of the premises in
question within 5 years before the committing of
the act in respect to which said action is
prosecuted or defense made.
Here, although the diversion agreement was recorded in 1987,
it was not enforced until 2008 when the Bentleys built their second pond
and prevented water from flowing to the Intervenors. Therefore, the
Bentleys did not seize or possess the North Sheridan Creek water until
2008 and the statute of limitations did not begin to run until that time.
Because the current action began with the State Engineer's filing of the
FOD with the district court in 2008, we hold that the challenge was
appropriately brought within the statute of limitations period. 8
...continued
district court's finding that the agreement was unenforceable due to
breach by the Bentleys.
8 Similarlyto the Bentleys' argument regarding laches, we note that
the Bentleys' statute of limitations argument would also only apply as to
the issue of whether the diversion agreement is invalid. Here, the district
court also found that the Bentleys breached the diversion agreement by
continued on next page...
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Attorney fees
The order for attorney fees was incorporated in the final judgment
The Bentleys argue that the Intervenors' claim for attorney
fees is based on an order entered on January 4, 2013, approximately 21
months prior to the entry of the final decree on September 29, 2014. The
Bentleys further argue that this decree made no reference to attorney fees,
costs, or the January 4, 2013, order and, therefore, Intervenors are
precluded from arguing that the 2013 order somehow became final upon
entry of the decree and is thus enforceable. The Bentleys also argue that
the interlocutory order did not affect the final judgment, and thus,
pursuant to the Third Circuit Court of Appeals case of In re Westinghouse
Securities Litigation, 90 F.3d 696, 706 (3d Cir. 1996), the order awarding
attorney fees did not merge into the final decree.
This court need not go as far as the Third Circuit Court of
Appeals, as we have long held that prejudgment orders merge into the
final judgment on appeal. Consol. Generator-Nevada, Inc. v. Cummins
Engine Co., 114 Nev. 1304, 1312, 971 P.2d 1251, 1256 (1998). Our caselaw
does not recognize an exception to the merger rule for interlocutory orders
that do not affect the final judgment, and we decline to adopt such a rule
here. Therefore, the Bentleys' argument is without merit.
...continued
using the water for a nonpermissible consumptive use. Therefore, even if
the statute of limitations applied, it would not apply to the district court's
finding that the agreement was unenforceable due to the breach by the
Bentleys.
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Intervenors were a prevailing party
The Bentleys contend that the Intervenors are not the
prevailing party because all five of the Bentleys' exceptions were resolved
prior to trial in the Bentleys' favor and because the Intervenors only
prevailed on three of their six claims, having abandoned the rest. The
Bentleys further argue that it was actually the Bentleys who were the
prevailing party.
"A party can prevail under NRS 18.010 if it succeeds on any
significant issue in litigation which achieves some of the benefit it sought
in bringing suit." Valley Elec. Ass'n v. Overfield, 121 Nev. 7, 10, 106 P.3d
1198, 1200 (2005) (internal quotations omitted). "To be a prevailing party,
a party need not succeed on every issue," but the action must proceed to
judgment. Las Vegas Metro. Police Dep't v. Blackjack Bonding, Inc., 131
Nev., Adv. Op. 10, 343 P.3d 608, 615 (2015). Voluntary dismissal of some
claims does not preclude a finding of a prevailing party for the remaining
claims. See Semenza v. Caughlin Crafted Homes, 111 Nev. 1089, 1096,
901 P.2d 684, 688 (1995).
The fact that the Intervenors abandoned half of their claims
before proceeding to trial does not negate the fact that they prevailed on
the remaining claims. See id. By voluntarily dismissing three of their
claims, the Intervenors merely refined their action against the Bentleys.
See id. Since these claims proceeded to judgment, the district court did
not abuse its discretion in finding that the Intervenors were the prevailing
party.
Additionally, the Bentleys' argument that they are the
prevailing party because their exceptions were resolved by stipulation is
unpersuasive. Because stipulations as to a claim result in neither party
being considered a prevailing party, the Bentleys cannot be deemed to be a
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prevailing party. See Dimick v. Dimick, 112 Nev. 402, 404-05, 915 P.2d
254, 255-56 (1996). Furthermore, the Bentleys' exception on the
enforceability of the diversion agreement actually went to trial, with the
district court ruling in favor of the Intervenors by determining that the
diversion agreement was invalid. Therefore, we hold that the district
court did not abuse its discretion by finding that the Intervenors were the
prevailing party. 9
The district court did not abuse its discretion in awarding attorney
fees
NRS 18.010(2)(b) allows a district court to award attorney fees
to a prevailing party when the court finds that the claim of the opposing
party "was brought. . . without reasonable ground or to harass the
prevailing party." "To support such an award, . . . there must be evidence
in the record supporting the proposition that the complaint was brought
without reasonable grounds or to harass the other party." Khan v. Morse
& Mowbray, 121 Nev. 464, 479, 117 P.3d 227, 238 (2005) (internal
quotations omitted). Thus, "[s]uch an analysis depends upon the actual
circumstances of the case." Semenza, 111 Nev. at 1095, 901 P.2d at 688(internal quotations omitted). However, "Nile decision to award attorney
fees is within the sound discretion of the district court and will not be
overturned absent a manifest abuse of discretion." Khan, 121 Nev. at 479,
117 P.3d at 238 (internal quotations omitted).
9 The Bentleys also argue that the district court abused its discretion
by failing to apportion attorney fees between causes of action that it found
colorable and those that were groundless. However, there is no indication
that the district court found any of the Bentleys' causes of action colorable.
Therefore, we hold that the district court did not abuse its discretion by
not apportioning attorney fees between causes of action.
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Here, the district court's decision to award attorney fees was
grounded on the following findings and conclusions:
F. ATTORNEY FEES:
44. Mr. Bentley, through intimidation and
threat, attempted to bully the Intervenors, acting
in a manner to harass and financially exhaust the
Intervenors.
45. [The] Bentleys brought and maintained
their Exception No. 1 relating to the Diversion
Agreement without reasonable grounds.
46. The Diversion Agreement contains a
clause that allows attorney fees to the prevailing
party in the event a lawsuit is brought to enforce
or interpret the Agreement.
47. [The] Bentleys asserted that the
Agreement dated August 5, 1986, and the letter
recorded August 6, 1986, granted an additional
right to divert the flow of Sheridan Creek through
the ponds. (Exhibit 7.) However, those documents
did not grant any additional rights and are
invalid.
48. The Bentleys proceeded in this matter
under an erroneous theory and under an
erroneous thought process, and therefore, their
action was maintained by them without
reasonable grounds.
CONCLUSIONS OF LAW
20. The Intervenors are adjudged to be the
prevailing parties for purposes of an award of
attorney fees to be supported by a separate motion
or memorandum for the same pursuant to NRCP
54(d) and NRS 18.010.
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The Bentleys maintained that the diversion agreement was
valid despite it not being signed by two of the parties necessary to the
execution of the agreement. The Bentleys further attempted to strike the
Intervenors' opposition to the Bentleys' exceptions as an improper
pleading, despite the fact that, as an adverse party in a statutory
adjudication of a water system, the Intervenors had the right to oppose the
Bentleys' exceptions. While it is arguable as to whether the Bentleys'
contentions had merit, in our view, they were not so clearly meritorious as
to render the district court's finding that they were unreasonable and
brought for the purpose of harassment, to be a manifest abuse of
discretion. Therefore, we hold that the district court did not abuse its
discretion by awarding attorney fees to the Intervenors.
Sufficient evidence supported the district court's finding that
the Intervenors incurred fees
The Bentleys argue that the Intervenors' obligation for
attorney fees was illusory and not actually incurred because "Hall
Ranches was a self-represented entity, with Tom Hall as its owner and
attorney." Therefore, because Hall Ranches was one of the Intervenors in
this case and Thomas Hall was the Intervenors' attorney, Thomas Hall
was a pro se litigant not entitled to recover attorney fees. The Bentleys
cite to Sellers v. Fourth Judicial District Court, 119 Nev. 256, 259, 71 P.3d
495, 497-98 (2003), and Lisa v. Strom, 904 P.2d 1239, 1243 (Ariz. Ct. App.
1995), for this proposition.
Sellers and Strom are inapposite here, as both deal with an
attorney representing himself pro se. See Sellers, 119 Nev. at 259, 71 P.3d
at 497-98 ("[A]n attorney pro [se] litigant must be genuinely obligated to
pay attorney fees before he may recover such fees."); see also Lisa, 904
P.2d at 1243 ("[A]n additional, indispensable requirement to an award of
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attorney[ ] fees to pro se attorneys [is] a genuine financial obligation on
the part of the litigants to pay such fees."). Here, the record indicates that
Thomas J. Hall, Esq., disclosed to the district court that he was a minority
owner of Hall Ranches, LLC. Although Hall is a minority owner, the
record does not reflect that he represented himself in pro se; rather, he
represented Hall Ranches, LLC, an existing and valid limited liability
company in Nevada, holding water rights V-06340 and V-06341, as well as
the other Intervenors. Furthermore, the Bentleys provide no evidence in
support of their contention that the Intervenors were not genuinely
obligated to pay attorney fees to Hall. Accordingly, we hold that the
district court did not abuse its discretion in awarding attorney fees to the
Intervenors.°
Conclusion
The district court had jurisdiction to consider the imposition of
a rotation schedule on the North Sheridan Creek water rights holders.
Furthermore, the State Engineer acted within his capacity as an officer of
the court in enforcing the district court's order imposing a rotation
schedule and did not act arbitrarily and capriciously. Next, the district
court's finding that the diversion agreement proffered by the Bentleys was
invalid was not clearly erroneous and is supported by substantial
evidence. Even if the diversion agreement was valid, the agreement was
°Because we are affirming the district court's orders denying the
petitions for judicial review, we also affirm the district court's order
awarding Intervenors costs in those actions.
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breached by Bentley. Lastly, the district court did not abuse its discretion
in awarding the Intervenors attorney fees. Therefore,
ORDER the judgment of the district court AFFIRMED.
C.J.
Parraguirre
J.
Hardest
J.
J.
J.
Gibbons
PICKERING, J., concurring in part and dissenting in part:
I dissent from the foregoing order to the extent that it affirms
the imposition of mandatory rotation schedules on holders of equal
priority vested water rights in the North Diversion of Sheridan Creek.
This issue was not part of the proceedings before the State Engineer that
culminated in the final order of determination (FOD). The footnote on
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page 199 of the 235-page FOD on which the majority relies to deem
mandatory rotation fairly in play in the proceedings below says only that,
"all parties will have to share the water shortage during periods of low
flow. The total diversion from either the north or south split can be used
in its entirety in a rotation system of irrigation." Although this footnote
permits water rights holders to agree to rotation schedules during periods
of low flow—"the total diversion .. . can be used. . . in a rotation
system"—I do not read it to say the rights may be subjected to mandatory
or forced rotation, over the objection of a vested, equal-priority, water-
rights holder. Confirming this reading, Paragraph XIV of the FOD, "Duty
of Water," states:
3. Rotation and Use of Water
Claimants of vested water rights and those owners
of water rights acquired through the appropriative
process from a common supply may rotate the use
of water to which they are collectively entitled
based on an agreement, so as to not injure
nonparticipants or infringe upon their water
rights, which is subject to approval by the State
Engineer. The purpose is to enable irrigators to
exercise their water rights more efficiently, and
thus to bring about a more economical use of
available water supplies in accordance with their
dates of priority. NRS 4'533.075.
(emphasis added). The foregoing paragraph of the FOD—text, not
footnote—says that water rights holders may agree to rotation schedules,
not that rotation schedules may be forced on nonconsenting water rights
holders. And, indeed, this is what NRS 533.075, which the FOD cites,
says too: "To bring about a more economical use of the available water
supply, it shall be lawful for water users owning lands to which water is
appurtenant to rotate in the use of the supply to which they may be
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collectively entitled, . . . to the end that each user may have an irrigation
head of at least 2 cubic feet per second."
The mandatory rotation orders at issue on this appeal
originated in a statutory water rights adjudication undertaken pursuant
to NRS 533.090 through NRS 533.435. After years of administrative
proceedings, the State Engineer filed his FOD with the district court,
whereupon a hearing date was set as per NRS 533.160(6). The FOD
"defin[ed] the several rights to the waters of' North Diversion of Sheridan
Creek, NRS 533.160(1); pursuant to NRS 533.170(1), "exceptions" to the
FOD by "all parties in interest who are aggrieved or dissatisfied with" it
were due 5 days before the scheduled district court hearing. By law, "[t]he
[POD] and the statements or claims of claimants and exceptions made to
the [FON shall constitute the pleadings, and there shall be no other
pleadings in the cause." NRS 533.170(2) (emphasis added).
Insofar as is relevant to these appeals, the FOP defined the
water rights in North Diversion of Sheridan Creek as vested, with equal
priority dates of 1852. Notwithstanding the footnote on page 189 of the
FOD on which the majority relies, I submit, for the reasons set out above,
that the FOP did not give these vested water rights holders fair notice
that their adjudicated water rights were or properly could be subject to
mandatory, non-consensual rotation schedules if they did not file
exceptions to the FOD. Nor do I agree that the exceptions the Bentleys
filed, and the intervenors' responses thereto, made mandatory rotation an
issue in the district court proceeding. To be sure, the Bentleys referenced
rotation in their exceptions. But, by later stipulation and order, all parties
agreed that only the Bentleys' Diversion Agreement, not mandatory
rotation, was being litigated. Compare NRS 533.170(5) (providing that
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proceedings under NRS 533.170, "shall be as nearly as may be in
accordance with the Nevada Rules of Civil Procedure"), with NRCP 16
(stating that a pretrial conference "order shall control the subsequent
course of the action unless modified by a subsequent order" and then,
"only to prevent manifest injustice").
Predictably, given the pleadings, the evidence at trial focused
on the Diversion Agreement and the impact the Bentleys' construction of a
second pond in reliance thereon had on the intervenors' water rights.
That evidence showed that the Bentleys' construction of a second pond
adversely impacted downstream users during periods of low water flow.
Citing this evidence, the State Engineer's lawyer orally asked, in closing
argument, that the court direct the State Engineer to impose rotation
schedules on persons holding vested water rights in North Diversion of
Sheridan Creek when the flow drops below 2.0 cfs (this is the level NRS
533.075 references in declaring voluntary rotation agreements
"lawful. . . to the end that each user may have an irrigation head of at
least 2 cubic feet per second"). With no amendment to the pleadings, the
district court accepted the State Engineer's lawyer's suggestion: In
addition to invalidating the Bentleys' Diversion Agreement, the district
court's findings of fact and decree affirming the FOD respecting North
Sheridan Creek,n directs that "[w]hen the combined flow from the North
Diversion of Sheridan Creek and tributaries drops below 2.0 cfs, the State
"As the majority recites, the FOD encompassed rights to more than
just the North Diversion of Sheridan Creek, so the decree did not become
final and appealable immediately. For simplicity's sake, proceedings not
related to North Diversion of Sheridan Creek water rights are not
discussed in this dissent.
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Engineer shall impose a rotation schedule." In both 2012 and 2013, the
flow dropped below 2.0 cfs and the State Engineer imposed a rotation
schedule. The Bentleys, the Bardens, and Joy Smith then petitioned for
judicial review. Citing its earlier findings of fact and decree, the district
court rejected the petitioners' legal and factual challenges to the
mandatory rotation schedules imposed on them. These consolidated
appeals followed.
The majority upholds the mandatory rotation schedules.
Given the procedural history set forth above, this result is insupportable.
"It is . . settled in this state that the water law and all proceedings
thereunder are special in character and the provisions of such law not only
lay down the method of procedure, but strictly limit it to that provided."
G. & M Props. v. Second Judicial Dist. Court, 95 Nev. 301, 305, 594 P.2d
714, 716 (1979) (quoting Application of Filippini, 66 Nev. 17, 27, 202 P.2d
535, 540 (1949) (citing Ruddell v. Sixth Judicial Dist. Court, 54 Nev. 363,
17 P.2d 693 (1933) and In re Water Rights in the Humboldt River Stream
Sys., 49 Nev. 357, 246 P. 692 (1926))). Here, the pleadings, as defined in
NRS 533.170(2), gave no notice that the vested rights dating back to 1852
determined by the State Engineer were sought to be abridged by imposing
a mandatory rotation schedule on their holders. On the contrary, in
paragraph XIV of the FOD, reprinted above, the State Engineer abjures
authority to mandate rotation schedules, citing NRS 533.075, which limits
its authorization of rotation schedules to agreed-upon schedules, not
mandated ones. 12 If the district judge wanted to consider mandatory
12 0f
note, the State Engineer does not, even in his briefs on appeal,
assert direct authority to impose mandatory rotation schedules on
nonconsenting vested water rights holders. Rather, the State Engineer
continued on next page...
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rotation schedules, he could and should have referred the matter back to
the State Engineer pursuant to NRS 533.180 ("The court may, if
necessary, refer the case or any part thereof for such further evidence to
be taken by the State Engineer as it may direct, and may require a further
determination by the State Engineer, subject to the court's instructions."),
but he did not. Without having been developed in the proceedings before
the State Engineer, or in district court, and hence fully vetted both
factually and legally by all interested persons, the mandatory rotation
schedules the district court ordered were not fairly made a part of the
special statutory proceedings authorized by NRS 533.090 through NRS
533.435.
The procedural deficiencies give rise to related legal and
evidentiary deficiencies. As noted, NRS 533.075 authorizes water users to
agree among themselves to rotation schedules but it does not, by its plain
terms, authorize the State Engineer or the courts to mandate them over
objection—indeed, the State Engineer does not argue otherwise. While
other jurisdictions have, on occasion, imposed mandatory water rotation
schedules, it is not clear that it is appropriate to do so in Nevada, where
our water law rests on the prior appropriation doctrine, not riparian
rights. Cf. Colorado v. New Mexico, 459 U.S. 176, 179 n.4 (1982)
...continued
defends his actions by relying on the district court's findings of fact and
conclusions of law, which the State Engineer argues require him to impose
rotation schedules, without regard to whether, independent of the court's
order, he has the authority to so require. See Answering Brief of the State
Engineer, at 19 ("Smith and Barden argue throughout their brief that the
State Engineer imposed the rotation schedules by []his own authority.
However, ... the State Engineer only implemented rotation schedules in
compliance with orders of the decree court.").
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("Appropriative rights are fixed in quantity; riparian rights are variable
depending on streamflow and subject to reasonable uses of others.").
Further complicating matters, the record suggests some of the water
rights holders in the North Diversion of Sheridan Creek use the water for
irrigation, while others use theirs for domestic and stock and wildlife
watering purposes, which do not as readily lend themselves to rotation.
Cf. Union Mill & Mining Co. v. Dangberg, 81 F. 73, 122 (C.C.D. Nev. 1897)
(allowing rotation under the riparian rights doctrine for purposes of
irrigation and milling but noting that, "The respondents are also entitled
to a decree allowing them, and each of them, at all times, to take and use a
sufficient quantity of water from the river for their household and
domestic purposes, and for watering their stock.") (emphasis added).
Legal and factual issues as complex and important as these deserve full
development before the State Engineer and the district court, with input
from all affected water rights holders.
For these reasons, while I agree with the majority in its
decision affirming the district court's invalidation of the Diversion
Agreement, I respectfully dissent. I would reverse and remand to the
district court with instructions to refer the matter to the State Engineer to
determine, in the first instance, whether the law or the evidence supports
imposing a mandatory rotation schedule on the holders of vested water
rights in the North Diversion of Sheridan Creek.
J.
Pickering
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cc: Hon. Nathan Tod Young, District Judge
Dyer, Lawrence, Penrose, Flaherty, Donaldson & Prunty
Matuska Law Offices, Ltd.
Attorney General/Carson City
Law Offices of Thomas J. Hall
Douglas County Clerk
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