The Luskin Daughters 1996 Trust v. Young

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ADVANCE SHEET HEADNOTE
September 9, 2019
2019 CO 74No. 18SA215, The Luskin Daughters 1996 Trust v. Young—Water Law—
Personal Jurisdiction—Attorney Fees.
The Trust appealed from an order of the water court dismissing its
complaint for declaratory and injunctive relief, as well as for damages. The water
court concluded that in the absence of an application for the determination of a
water right, the Trust’s claim of interference by the Youngs with its unadjudicated
appropriative rights to springs that arise on the Youngs’ land could not proceed
before the water court. It therefore granted the Youngs’ motion, pursuant to
C.R.C.P. 12(b)(1), (2), or (5), to dismiss.
The supreme court affirmed and remanded for a determination of attorney
fees. The court held that because the water court could not provide the Trust’s
requested relief without the Trust’s first having adjudicated its water rights in
accordance with section 37-92-302, the water court properly dismissed the Trust’s
complaint. It also held that because the Youngs successfully defended the
dismissal of this tort action on appeal, they are statutorily entitled to their
reasonable appellate attorney fees, and it remanded the case to the water court for
a determination of the amount of those fees.
The Supreme Court of the State of Colorado
2 East 14th Avenue • Denver, Colorado 80203
2019 CO 74Supreme Court Case No. 18SA215
Appeal from the District Court
Weld County District Court, Water Division 1, Case No. 18CW3063
Honorable James F. Hartmann, Water Judge
Plaintiff-Appellant:
The Luskin Daughters 1996 Trust for the benefit of Lyndell Joy Luskin
Ackerman, Matthew Riley, Trustee,
v.
Defendants-Appellees:
Steve Young a/k/a Stephen W. Young and Heather Young a/k/a Heather A.
Young,
and
Appellee Pursuant to C.A.R. 1(e):
Corey DeAngelis, Division Engineer, Water Division 1.
Judgment Affirmed
en banc
September 9, 2019
Attorneys for Plaintiff-Appellant:
Alperstein & Covell, P.C.
Gilbert Y. Marchand, Jr.
Denver, Colorado
Attorneys for Defendants-Appellees:
Porzak Browning & Bushong LLP
Kevin J. Kinnear
Boulder, Colorado
No appearance by or on behalf of Corey DeAngelis, Division Engineer, Water
Division 1.
CHIEF JUSTICE COATS delivered the Opinion of the Court.
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¶1 The Trust appealed from an order of the water court dismissing its
complaint for declaratory and injunctive relief, as well as for damages. The water
court concluded that in the absence of an application for the determination of a
water right, the Trust’s claim of interference by the Youngs with its unadjudicated
appropriative rights to springs that arise on the Youngs’ land could not proceed
before the water court. It therefore granted the Youngs’ motion, pursuant to
C.R.C.P. 12(b)(1), (2), or (5), to dismiss.
¶2 Because the water court could not provide the Trust’s requested relief
without the Trust’s first having adjudicated its water rights in accordance with
section 37-92-302, the water court’s dismissal of the Trust’s complaint is affirmed.
Because the Youngs have successfully defended the dismissal of this tort action on
appeal, they are statutorily entitled to their reasonable appellate attorney fees, and
the case is remanded to the water court for a determination of the amount of those
fees.
I.
¶3 In 2018, The Luskin Daughters 1996 Trust filed a Complaint for Declaratory
and Injunctive Relief and Damages in the Water Court for Division 1, asserting
interference by Steve and Heather Young with the Trust’s right to use natural
spring water that historically arose on the Youngs’ property. The complaint
alleged that the Trust and the Youngs own adjacent parcels of land; that in 2017
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the Youngs built a house that destroyed one or more ditches that had historically
delivered spring water to the Trust’s property; and that those water rights had
been used on the Trust’s property for purposes of irrigation, animal watering,
wildlife, and recreation. The complaint conceded, however, that those water
rights had never been adjudicated.
¶4 The Trust’s complaint actually asserted five separate claims for relief,
seeking: (1) a declaratory judgment confirming the existence of its unadjudicated
water rights, (2) a declaratory judgment confirming the existence of ditch
easements for those water rights, (3) injunctive relief from the Youngs’ interference
with those water rights, (4) injunctive relief from the Youngs’ trespass and damage
to the Trust’s ditch rights, and (5) damages.
¶5 Without answering the complaint, the Youngs filed a motion to dismiss,
premised on three different provisions of C.R.C.P. 12. First, the Youngs asserted
that the water court lacked jurisdiction over the Trust’s first claim for declaratory
relief, arguing that its claim effectively sought an application for a “determination
of a water right” under section 37-92-302(1)(a) of the 1969 Water Right
Determination and Administration Act, which on its face mandates compliance
with the resume notice and publication procedures set forth in subsection 302(3).
Second, they asserted that since the water court lacked jurisdiction to consider the
only “water matter” in the Trust’s complaint, it similarly lacked ancillary
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jurisdiction over the remaining claims. Finally, the Youngs moved to dismiss on
the alternate ground that even if the water court were determined to have
jurisdiction over the Trust’s claims, it could not provide the Trust’s requested relief
because although an unadjudicated appropriative right may be reduced to an
adjudicated water right, until it has been so adjudicated, it cannot itself be
judicially enforced against another party.
¶6 The water court granted the motion to dismiss, reasoning that by seeking a
declaration of its undecreed water rights pursuant to Rule 57, without proceeding
according to the statutorily mandated process for adjudicating such rights in the
first instance, the Trust was asking it “to operate outside the 1969 Act.” The court
ultimately concluded that it did not have the “authority” to make such a
determination. In its order granting the motion to dismiss, the water court
indicated that in the absence of an application for the determination of a water
right pursuant to the Act, it lacked the jurisdiction to grant the relief requested in
the Trust’s claims.
¶7 The Trust appealed to this court from the water court’s ruling.
II.
¶8 The 1969 Act defines a “water right” as “a right to use in accordance with
its priority a certain portion of the waters of the state by reason of the
appropriation of the same.” § 37-92-103(12), C.R.S. (2019). We have therefore
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made clear that one does not own water but merely owns a right to use water
within the limitations of the prior appropriation doctrine. Kobobel v. State Dep’t of
Nat. Res., 249 P.3d 1127, 1134 (Colo. 2011). More particularly, in Colorado a
property right in water entitles the holder “to use beneficially a specified amount
of water, from the available supply of surface water or tributary groundwater, that
can be captured, possessed, and controlled in priority under a decree, to the
exclusion of all others not then in priority under a decreed water right.” Empire
Lodge Homeowners’ Ass’n v. Moyer, 39 P.3d 1139, 1147 (Colo. 2001).
¶9 Although the right to use water is created when a person appropriates or
initiates an appropriation of unappropriated water of a natural stream of the state,
Shirola v. Turkey Cañon Ranch Ltd. Liab. Co., 937 P.2d 739, 748 (Colo. 1997), only
upon adjudication of that right is the amount and priority of the right identified,
Empire Lodge Homeowners’ Ass’n, 39 P.3d at 1148. Therefore, as we have also
previously made clear, absent an adjudication under the Act, water rights are
generally incapable of being enforced. Shirola, 937 P.2d at 749 (“Generally then, a
vested water right is not legally enforceable through the water administration
system unless it is represented by a water court decree, obtained after full
adjudication.”).
¶10 The significance of a water right’s adjudication does not end there however.
We have also indicated that an adjudication is necessary for maintaining a related
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action premised upon the existence of a claimed water right. See In re Tonko, 154
P.3d 397, 407 (Colo. 2007). Because a condemnation action involves issues such as
necessity and valuation in determining the compensation award for a ditch or
pipeline right-of-way needed for water transportation in the exercise of a water
right, we found in Tonko, that the adjudication of a water right was actually a
“prerequisite” for maintaining the private condemnation action for ditch
easements allowing for the exercise of that water right. Id.¶11 The 1969 Act outlines the exclusive method to obtain adjudication of one’s
water right. Subsection 302(3) of the Act sets forth specific resume notice and
publication procedures required for a water rights application. The purpose of
those procedures is “to give notice of the nature, scope and impact of the decree
sought,” which then serves to enable any interested person “to file a statement of
opposition and contest the factual or legal grounds for issuance of such a decree.”
S. Ute Indian Tribe v. King Consol. Ditch Co., 250 P.3d 1226, 1234 (Colo. 2011). While
the notice requirements of the Act are generally consistent with those applicable
to proceedings in rem, the procedures of the statutory adjudication process itself
are unique, involving a division engineer’s consultation report, a referee’s
investigation, discovery, and a trial to resolve contested issues involving the
claimed water rights. In re Tonko, 154 P.3d at 407. We have therefore characterized
water right adjudications as special statutory proceedings, as to which C.R.C.P.
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81(a) limits the applicability of the civil rules to situations in which they are not
inconsistent or in conflict with the statute. See Groundwater Appropriators of S. Platte
River Basin, Inc. v. City of Boulder, 73 P.3d 22, 25 (Colo. 2003); see also Am. Water Dev.,
Inc. v. City of Alamosa, 874 P.2d 352, 381 (Colo. 1994) (quoting introductory note
preceding Uniform Local Rules for all State Water Court Divisions).
¶12 Prior to passage of the 1969 Act, adjudications historically occurred on a
piecemeal, haphazard basis. James N. Corbridge, Jr. & Teresa A. Rice, Vranesh’s
Colorado Water Law 139 (rev. ed. 1999). The 1969 Act was the General Assembly’s
attempt to provide a “comprehensive, integrated scheme of adjudication and
tabulation of water rights.” Id. And in this way, the uniform adjudication process
promotes our water law system’s objectives of security, reliability, and flexibility.
See Empire Lodge Homeowners’ Ass’n, 39 P.3d at 1147. Allowing for any other
method to adjudicate one’s water right would not comport with the General
Assembly’s intent to provide a comprehensive and specialized scheme to that end.
III.
¶13 It is undisputed that the Trust did not file an application for an adjudication
of its water rights or otherwise follow the resume notice and publication
procedures required of such applications; and in the absence of such an
application, the water court resolved that it lacked the jurisdiction to grant the
declaratory and injunctive relief requested by the Trust. While the water court did
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not more particularly describe in its order the nature of the jurisdictional defect it
perceived, it discussed law concerning subject matter jurisdiction earlier in its
ruling, and therefore the Trust characterizes and disputes its ruling as one
premised on a lack of subject matter jurisdiction.
¶14 Although we have not always used the term with the same degree of
precision, see, e.g., Dallas Creek Water Co. v. Huey, 933 P.2d 27, 38 (Colo. 1997) (“The
filing of a diligence application, and notice thereof published in the water division
resume, confers subject matter jurisdiction on the water court . . . .”), we have
nevertheless often explained that subject matter jurisdiction concerns the court’s
authority to deal with the class of cases in which it renders judgment. See, e.g.,
Closed Basin Landowners Ass’n v. Rio Grande Water Conservation Dist., 734 P.2d 627,
636 (Colo. 1987). By statute, water courts have exclusive subject matter jurisdiction
over “water matters,” § 37-92-203(1), C.R.S. (2019), and we have previously noted
that a water matter is implicated by the claim of a right to use water acquired by
appropriation, as distinguished from the ownership of a water right. Humphrey v.
Sw. Dev. Co., 734 P.2d 637, 640–41 (Colo. 1987). Because the Trust claimed a right
to use water acquired by appropriation, it clearly raised a water matter, over which
the water court had subject matter jurisdiction.
¶15 By the same token, in the absence of notice published in the water division
resume, the water court nevertheless lacked the jurisdiction to adjudicate a water
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right in favor of the Trust. Rather than “subject matter” jurisdiction, however, the
jurisdictional shortcoming is more appropriately categorized as a matter of
“personal” jurisdiction. See generally 4 Charles A. Wright et al., Federal Practice and
Procedure § 1063 (4th ed. 2019) (“The concept[] of subject matter jurisdiction . . .
should be distinguished from the principle that the court must have jurisdiction
over the defendant’s person, his property, or the res that is the subject of the suit.”).
Both this court and the United States Supreme Court have remarked that water
adjudications, although unique, are in the nature of in rem proceedings, Nevada v.
United States, 463 U.S. 110, 143–44 (1983); S. Ute Indian Tribe, 250 P.3d at 1234; and
just as with Fed. R. Civ. P. 12(b)(2), we conclude that C.R.C.P. 12(b)(2) is the more
appropriate vehicle for challenging adequacy of notice, even for in rem
proceedings. See Wright, supra, § 1351 (“Although Rule 12(b)(2) only refers to ‘lack
of personal jurisdiction,’ the provision presumably is sufficiently elastic to
embrace a defense or objection that the district court lacks in rem or quasi-in-rem
jurisdiction, admittedly a subject that rarely arises in contemporary practice.”). To
the extent the Trust’s pleadings are properly construed to seek a determination of
water right with regard to the Trust’s use of water from the Youngs’ springs, the
water court lacked jurisdiction over the res of the action.
¶16 The Trust asserts, however, that it does not seek the determination of a water
right at all. Rather than an adjudication of its right to use a specific amount of
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water, in priority, from a designated structure, capable of being legally enforced
through the water administration system, the Trust asserts that it merely seeks a
declaration that it has a right to use water rising on the Youngs’ property that is
superior to any right of the Youngs to interfere with that use. While we have
elsewhere suggested that some “water matters,” over which the water court has
subject matter jurisdiction, might require personal service because of the one-on-
one nature of the claim, see S. Ute Indian Tribe, we have never suggested that
priority over another’s use of water could be established without having first
adjudicated a water right according to the resume notice process prescribed by the
1969 Act.
¶17 In Southern Ute Indian Tribe, despite holding that personal service is required
in only limited circumstances in water cases and that the application for
declaratory review in that case actually involved a “determination of water right,”
subject to the statutory resume notice process, we offered that some instances of
“party versus party litigation in water court . . . come under the personal service
requirements of C.R.C.P. 4 and 19,” including “injunction and declaratory
judgment actions where relief is sought against a named party.” 250 P.3d at 1235.
The examples we gave to support that proposition, as we noted at the time,
however, were all very limited claims concerning the ownership or administration
of already adjudicated water rights, and most did not mention or deal with service
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requirements at all. See N. Sterling Irrigation Dist. v. Simpson, 202 P.3d 1207 (Colo.
2009) (declaratory judgment action against state engineer regarding
administration of “the one fill rule”); Archuleta v. Gomez, 200 P.3d 333 (Colo. 2009)
(injunctive relief involving ownership of existing water right through adverse
possession); City of Golden v. Simpson, 83 P.3d 87 (Colo. 2004) (motion to
temporarily restrain state engineer from barring further diversions in breach of
agreement among water rights holders); Gardner v. State, 614 P.2d 357 (Colo. 1980)
(proceeding to determine whether adjudicated water right should be considered
abandoned). Our statement in Southern Ute Indian Tribe was therefore not
intended, nor could it be reasonably understood, to sanction a failure to comply
with the statutory resume notice procedure for the determination of a water right
by merely requesting declaratory or injunctive relief against a particular party.
¶18 While appropriation by diverting a specific amount of water and applying
it to a beneficial purpose may entitle the appropriator to adjudicate a water right,
according to the provisions of the 1969 Act, and may even have consequences for
priority of use among water rights adjudicated in the same year, it cannot afford a
priority of use, even with respect to another specific user, without formal
adjudication of a water right, in a specific amount, for a specific purpose, and
relative to a specific structure for diversion. To the extent the Trust’s first claim
for relief seeks to enjoin the Youngs from interfering with its use of water from
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springs rising on the Youngs’ property, without an adjudicated right to the use of
that water, as the Trust asserts, it simply fails to state a claim for relief the water
court is empowered to grant.
IV.
¶19 The Youngs request trial and appellate attorney fees under section
13-17-201, C.R.S. (2019), for successfully defending this action.
¶20 Given the nature of the proceedings below, we decline to address the
Youngs’ entitlement to their fees incurred specifically at trial. After the water court
entered judgment dismissing the Trust’s complaint and after the Trust filed its
notice of appeal, the Youngs filed a motion with the water court for attorney fees
and costs. The water court deferred ruling on that motion pending the outcome
of this appeal. As the court of appeals has previously held, such an issue remains
within the jurisdiction of the trial court. See Koontz v. Rosener, 787 P.2d 192, 199
(Colo. App. 1989) (“[T]he filing of the notice of appeal of the merits judgment did
not divest the trial court of its continuing jurisdiction to determine the issues posed
by the cost bills and requests for attorney fees.”); Roa v. Miller, 784 P.2d 826, 830
(Colo. App. 1989) (“[A] trial court may address the issue of the award of attorney
fees for services rendered in connection with the underlying litigation on a post-
trial basis . . . .”). Therefore we do not reach the Youngs’ entitlement to fees that
may have been incurred below. See Kreft v. Adolph Coors Co., 170 P.3d 854, 859
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(Colo. App. 2007) (holding that the issue of attorney fees under section 13-17-201
was “not ripe for appellate review” because that issue was still pending before the
trial court).
¶21 We can conclude, however, that the Youngs are entitled to their attorney
fees incurred on appeal under section 13-17-201 and C.A.R. 39.1.
¶22 Section 13-17-2011 mandates an award of attorney fees to a prevailing
defendant where the plaintiff’s tort action is dismissed under C.R.C.P. 12(b).
Crandall v. City of Denver, 238 P.3d 659, 663 (Colo. 2010). In determining whether
an action lies in tort, we concur with prior determinations of the court of appeals
that the analysis should focus on the manner in which the claims are pleaded. See
Castro v. Lintz, 2014 COA 91, ¶ 16, 338 P.3d 1063, 1067. Where a plaintiff has
pleaded both tort and non-tort claims, the question of statutory attorney fees
1 The statute provides, in part:
In all actions brought as a result of a death or an injury to person or
property occasioned by the tort of any other person, where any such
action is dismissed on motion of the defendant prior to trial under
rule 12(b) of the Colorado rules of civil procedure, such defendant
shall have judgment for his reasonable attorney fees in defending the
action.
§ 13-17-201.
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properly turns on the question “whether the essence of the action was one in tort.”
Id., 338 P.3d at 1068.
¶23 Here, the Trust’s claims requesting declaratory and injunctive relief and
damages were “occasioned by” the Youngs’ alleged interference and trespass
against the Trust’s water and ditch rights. Among other particulars, the Trust’s
complaint alleged “interference with [the Trust’s] right to use natural spring
water” and “trespass upon and damage to [the Trust’s] ditch easements.” Those
allegations clearly alleged tortious conduct on behalf of the Youngs. See Roaring
Fork Club, L.P. v. St. Jude’s Co., 36 P.3d 1229, 1238 (Colo. 2001) (concluding that
trespass is committed for nonconsensual, unilateral alterations of ditches because
they jeopardize valuable vested property rights both in the ditch easement and the
water rights exercised by means of the ditch). Although two of the Trust’s claims
for relief sought declaratory judgments of the Trust’s water and ditch rights, those
claims only attempted to establish the property rights for which relief could lie
from the Youngs’ alleged tortious conduct. Therefore, the “essence” of the Trust’s
action sounded in tort, see Castro, ¶ 16, 338 P.3d at 1068, and because we affirm the
water court’s dismissal of that action pursuant to C.R.C.P. 12(b), the Youngs are
statutorily entitled to their appellate attorney fees.
¶24 We direct the water court on remand to determine the amount of those fees.
See C.A.R. 39.1.
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V.
¶25 Because the water court could not provide the Trust’s requested relief
without the Trust’s first having adjudicated its water rights in accordance with
section 37-92-302, the water court’s dismissal of the Trust’s complaint is affirmed.
Because the Youngs have successfully defended the dismissal of this tort action on
appeal, they are statutorily entitled to their reasonable appellate attorney fees, and
the case is remanded to the water court for a determination of the amount of those
fees.
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