Garetson Brothers v. American Warrior, Inc.

No. 117,404
IN THE COURT OF APPEALS OF THE STATE OF KANSAS
GARETSON BROTHERS
and
FORELAND REAL ESTATE, LLC,
Appellees,
v.
AMERICAN WARRIOR, INC.,
Successor in Interest to Kelly and Diana Unruh,
Appellant,
and
RICK KOEHN,
Defendant.
SYLLABUS BY THE COURT
1.
Generally, a statute operates prospectively unless (1) its language clearly indicates
the Legislature's intent that it operate retroactively or (2) the change is procedural or
remedial in nature. However, even procedural rules cannot be applied retroactively if they
eradicate a vested or substantive right that is so fixed that it is not dependent on any
future act, contingency, or decision to make it more secure.
2.
Under the doctrine of continuing jurisdiction, once subject matter jurisdiction is
acquired over a case, jurisdiction over that case continues and is not divested until all
issues are resolved.
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3.
The 2017 amendments to K.S.A. 82a-716 and K.S.A. 82a-717a, although
procedural in nature, do not apply retroactively to the owner of a vested water right who
sought and obtained injunctive relief in the district court prior to the effective date of the
amendments.
4.
The right to appeal is entirely statutory and is not contained in the United States or
Kansas Constitutions. Subject to certain exceptions, Kansas appellate courts have
jurisdiction to entertain an appeal only if the appeal is taken in the manner prescribed by
law.
5.
K.S.A. 2017 Supp. 60-2103(b) requires: "The notice of appeal shall specify the
parties taking the appeal; shall designate the judgment or part thereof appealed from, and
shall name the appellate court to which the appeal is taken." Therefore, an appellate court
only obtains jurisdiction over the rulings identified in the notice of appeal. Notices of
appeal in civil cases are more strictly construed than in criminal cases.
6.
Under the facts of this case, where the appellant has appealed only from a specific
order yet challenges on appeal rulings not part of that order without any "catch all"
language in the notice of appeal, an appellate court is without jurisdiction to consider
such issues.
7.
The law of the case doctrine prevents a party from serially litigating an issue on
appeal already presented and decided in the same proceeding. The doctrine promotes
judicial efficiency while allowing litigants a full and fair opportunity to present their
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arguments on a particular point. Once an issue is decided by the court, it should not be
relitigated or reconsidered unless it is clearly erroneous or would cause manifest
injustice.
8.
The clean hands doctrine is based upon the maxim of equity that a party who
comes into equity must come with clean hands. In other words, no party can obtain
affirmative relief in equity with respect to a transaction in which that party has been
guilty of inequitable conduct. Like other doctrines of equity, the clean hands maxim is
not a binding rule but is to be applied in the sound discretion of the court.
9.
The application of the clean hands doctrine is subject to certain limitations.
Conduct which will render a party's hands unclean so as to deny that party access to a
court of equity must be willful conduct that is fraudulent, illegal, or unconscionable.
Furthermore, the objectionable misconduct must bear an immediate relation to the subject
matter of the suit and in some measure affect the equitable relations subsisting between
the parties to the litigation and arising out of the transaction. Stated another way, the
misconduct that may justify a denial of equitable relief must be related misconduct rather
than collateral misconduct arising outside the specific transaction which is the subject
matter of the litigation before the court.
Appeal from Haskell District Court; LINDA P. GILMORE, judge. Opinion filed January 11, 2019.
Affirmed in part and dismissed in part.
Gerald O. Schultz and Zachary D. Schultz, of Schultz Law Office, P.A., of Garden City, for
appellant.
J. Michael Kennalley, Lynn D. Preheim, and Frank Basgall, of Stinson Leonard Street LLP, of
Wichita, for appellees.
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Before POWELL, P.J., ATCHESON and GARDNER, JJ.
POWELL, J.: Garetson Brothers and Foreland Real Estate, LLC (Garetson) own a
number of water rights in Haskell County, Kansas, including water right HS-003.
Garetson sought injunctive relief in the Haskell County District Court to prevent the
nearest junior water right holders, American Warrior, Inc. and Rick Koehn (American
Warrior), from impairing its water right. In accordance with the agreement of the parties,
the district court appointed the Kansas Department of Agriculture's Division of Water
Resources (DWR) as referee, and subsequently, the DWR issued a report finding that
American Warrior's junior water rights were substantially impairing Garetson's water
right. As a result, the district court entered a temporary injunction ceasing operation of
American Warrior's junior water rights 10,467 and 25,275. American Warrior brought an
interlocutory appeal, and another panel of this court affirmed the temporary injunction.
The district court then conducted a three-day trial and found that American Warrior's
junior water rights 10,467 and 25,275 were impairing Garetson's senior water right, HS-
003. The district court issued a permanent injunction prohibiting American Warrior from
exercising its junior water rights. American Warrior now appeals. After a careful review
of the record and for reasons more fully stated below, we affirm in part and dismiss in
part.
FACTUAL AND PROCEDURAL BACKGROUND
The matter now before us has been at issue for nearly 14 years. At the heart of this
dispute is Garetson's claim that American Warrior is infringing on its senior water right.
Over the course of the past 14 years, this case has involved a complaint with the DWR,
two temporary injunctions—one of which was vacated by the district court and the other
of which was affirmed by another panel of this court in Garetson Brothers v. American
Warrior, Inc., 51 Kan. App. 2d 370, 347 P.3d 687 (2015), rev. denied 303 Kan. 1077
(2016)—and, ultimately, a permanent injunction. To provide context for the subsequent
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facts, in February 2017 the district court granted Garetson's request for a permanent
injunction against American Warrior. This permanent injunction prohibits American
Warrior from utilizing its junior water rights because such use impairs Garetson's senior
water right.
History and Garetson's Complaint with the DWR
The first neighboring well at issue in this action was approved in 1964 and was
assigned appropriation water right numbered 10,467. The second neighboring well was
approved in 1976 and was given appropriation water right numbered 25,275. Both of the
neighboring wells at issue are used to irrigate crops. All of the wells are located in
Groundwater Management District 3 in southwest Kansas, overlying the Ogallala
Aquifer.
On March 14, 2005, Garetson, a Kansas general partnership, filed a complaint
with the DWR, alleging two neighboring junior water rights were impairing its senior
vested water right. At the time, Garetson owned a tract of land in Haskell County upon
which a single well was used for crop irrigation. A prior owner of Garetson's land had
filed for and received a vested water right in the well on September 12, 1950. This vested
right is numbered HS-003. HS-003 is permitted to pump 240 acre-feet at a rate of 600
gallons per minute. The DWR began investigation of the complaint upon its filing.
Garetson subsequently withdrew its complaint in 2007; however, the DWR
continued to investigate, monitor, and record data from the wells at issue and three other
neighboring wells from 2005 into the present. In 2005, the DWR installed water level
monitoring equipment that over time allowed it to determine the degree of well-to-well
interference between HS-003 and the five nearest water rights: 10,035, 10,467, 11,750,
19,032, and 25,275.
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The Lawsuit
On May 1, 2012—seven years after Garetson filed its initial complaint with the
DWR—Garetson filed the lawsuit now at issue, alleging impairment of senior water right
HS-003 by water rights 10,467 and 25,275, then owned by Kelly and Diana Unruh. The
Unruhs filed an answer on June 11, 2012, admitting they owned the two junior water
rights but denying the allegations of the impairment. For whatever reason, and
unbeknownst to Garetson and the district court, the Unruhs misrepresented their
ownership of the water rights because in reality, they had sold the property and water
rights to American Warrior on May 30, 2012—12 days prior to the filing of their answer.
American Warrior's ownership was disclosed in August 2013. American Warrior was
aware of the pending water right dispute when it purchased the property from the Unruhs.
On November 29, 2012, in a phone conference with the district court, Garetson
and the Unruhs advised that they agreed to the appointment of the DWR as a fact-finder
in the case pursuant to K.S.A. 82a-725. The district court appointed the DWR as the
agreed-upon fact-finder, directed the DWR to submit a report to the court, and set the
case for review in March 2013.
The First Temporary Injunction
The DWR filed its preliminary fact-finder report on April 3, 2013, and it was
placed into evidence without objection. The district court granted Garetson's motion for a
temporary injunction and ordered "the defendants (Unruh), their successors, their tenets
[sic], and their agents . . . to refrain from pumping Well 10,467 and Well 25,257." The
district court also joined Cecil O'Brate, owner and CEO of American Warrior, as a
defendant. The Unruhs filed a motion to establish bond on June 3, 2013.
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On July 11, 2013, numerous procedural motions were set for hearing. At this
hearing, the Unruhs requested a continuance on their motion for bond, which the district
court granted.
On August 5, 2013, Garetson filed an amended petition naming American Warrior
and Rick Koehn, the tenant farming on American Warrior's land, as defendants. O'Brate
was dismissed as an individual defendant, and the Unruhs were no longer named
defendants. On October 14, 2013, Garetson transferred its senior water right to Foreland
Real Estate, LLC (Foreland), who joined the lawsuit as a named plaintiff.
On November 3, 2013, the district court heard numerous motions and ultimately
vacated the 2013 temporary injunction because the injunction had shut off the water
supply to Koehn's crop and he had not received notice of the proceeding. Because the
temporary injunction was vacated, the district court did not find a need to set bond.
Additionally, the district court denied American Warrior's motion to dismiss for
Garetson's alleged failure to exhaust its administrative remedies, holding that K.S.A. 82a-
717a provided that any person with a vested water right may restrain or enjoin any
diversion or proposed diversion that impairs a water right in any court of competent
jurisdiction and that the statute did not require that one must first exhaust his or her
administrative remedies to do so. The district court also ordered the DWR to continue as
the court-appointed fact-finder and directed the DWR to continue to investigate and
report any or all of the physical facts concerning the water rights referenced in this case
pursuant to K.S.A. 82a-725. Specifically, that order stated:
"The report shall set forth findings of fact in regard to the degree HS-003 is being
impaired by water rights 10,467 and 25,257. The report shall set forth the opinions the
[the DWR] regarding whether any such impairment . . . [is] a substantial impairment to
HS-003. If [the DWR] concludes substantial impairment to HS-003 exists, [the DWR]
shall advise as to recommended remedies to curtail the substantial impairment to HS-003
and explain why these remedies are recommended."
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The Second Temporary Injunction
The DWR filed a second and final report on March 31, 2014. Subsequently, the
district court considered Garetson's second motion for a temporary injunction and, on
May 5, 2014, issued a temporary injunction, set a bond, and ordered American Warrior
and its tenant to curtail use of water rights 10,467 and 25,257.
Interlocutory Appeal to This Court
American Warrior filed an interlocutory appeal, raising four issues: (1) the
admission of the DWR's report into evidence, (2) the consideration given to certain
evidence presented by American Warrior, (3) the interpretation of "impair," and (4) the
granting of the temporary injunction.
The panel hearing American Warrior's interlocutory appeal ultimately held that
temporary injunctive relief was an appropriate remedy because under the circumstances
the district court did not abuse its discretion by ordering American Warrior to stop
pumping water from the junior wells during the pendency of the action. 51 Kan. App. 2d
at 392. The panel also held that the DWR's report had been properly admitted into
evidence and that the district court properly considered all of the evidence presented. 51
Kan. App. 2d at 386-87. Finally, the panel interpreted K.S.A. 82a-716 and K.S.A. 82a-
717a, holding the Legislature did not give the word a special definition in the statute and,
therefore, the district court used the proper definition of "impair." 51 Kan. App. 2d at
388-89.
Trial and the Permanent Injunction
After the temporary injunction was affirmed by another panel of this court, the
district court held a three-day bench trial. Two witnesses testified for Garetson, including
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the chief engineer who prepared the final DWR report. American Warrior called 11
witnesses, including Dr. Kenneth Rainwater, who has his Ph.D. in civil engineering with
a specialty in water resources and environmental engineering. Koehn called two
witnesses as well.
Dr. Rainwater did not challenge the factual and statistical data in DWR's report but
disagreed with the interpretation of that data. He testified that he did not believe the
report was scientifically reliable for numerous reasons. Although Dr. Rainwater accepted
the DWR's drawdown tests at their face value and noted that the observed drawdown at
HS-003 also included both drawdown in the aquifer as well as energy losses within the
HS-003 well itself, Dr. Rainwater concluded HS-003's sizable drawdown was due to its
own construction and aquifer limitations. Yet Dr. Rainwater could not provide any
computations to determine amount of impairment by the alleged improper well
construction, nor did he suggest an alternate equation for use by the DWR and did not
state in his report how calculations should have been done.
After hearing all of the testimony, the district court made numerous findings of
fact, which we will not recount completely here but will merely summarize the relevant
findings. Importantly, the district court did not find Dr. Rainwater's testimony as credible
as Garetson's evidence and the DWR's report. The district court found:
"While Dr. Rainwater's academic credentials are noteworthy, his testimony and
opinions lacked the seasoning of someone with real life experience who is actively
engaged in the field. The court was not persuaded the water well utilized by HS 003 was
improperly constructed or a poor well site. The court found [another witness] to be a
credible witness when he discussed drilling multiple dry holes, replacing the well bowls,
and the type of screening used in the well. The court also noted Dr. Rainwater accepted
[the DWR's] draw down tests at their face value, accepted [the DWR's] factual and
statistical data, agreed [American Warrior's] water rights communicated with HS 003 and
agreed when [American Warrior's] rights are in use they affect the ability to use HS 003."
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The district court found that the rate of water extraction from the aquifer greatly
exceeded the rate of recharge to the aquifer. Specifically, the aquifer has declined about 6
feet on average each year in this area for the last 5 years. The groundwater system in the
area recharges somewhere in the range of 0.1 inch to 1.0 inch per year. The water
replenishing the area of concern is less than 100 acre-feet per year compared with
pumping that has been between 1,200 and 1,500 acre-feet per year in recent history for
the six water rights studied in the DWR's report. The imbalance between the rate of
recharge with the rate of pumping has led to substantial declines in groundwater levels
over the decades, causing reduced well yields. Scientists with Kansas Geological Survey
have found that, if recent practices continue, well operators in the area are facing the
imminent end of the productive life of the isolated compartment of aquifer that they
share.
Due to preirrigation season and early irrigation season pumping, HS-003 was not
able to pump after July 1, 2013, despite the injunction placed on American Warrior's
water rights in late May 2013. Even when American Warrior's water right 25,275 did not
operate in 2013 and 10,467 did not operate after May 26, 2013, other neighboring water
rights caused significant, and at times impairing, levels of drawdown at HS-003.
In November 2013, the DWR's step drawdown test found a maximum sustained
pumping rate of 404 gallons per minute for HS-003. While HS-003 is authorized at the
rate of 600 gallons per minute, the DWR does not believe 600 gallons per minute can be
sustained in the current hydrologic setting.
When all neighboring water rights are operating, American Warrior's water rights
account for about half of the impact to HS-003. Garetson's HS-003's total drawdown
from the well is 49%; drawdown from American Warrior's 10,467 is 16% and from
25,275 is 7%. The three other neighboring rights, which are over twice the distance from
HS-003, account for the other 28% of the drawdown. The DWR's final report found that
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American Warrior's usage of its junior water rights is more immediately impactful on
HS-003 because those water rights are closer to HS-003 than other neighboring water
rights not owned by American Warrior. Since American Warrior's wells were shut off
due to the temporary injunction, Garetson has been able to pump HS-003 longer and
pump a higher quantity of water. Although the area has been severely dewatered, the
DWR's report concluded that with careful regulation of use there may be sufficient
remaining water supply to fulfill HS-003's water right and to provide a limited supply to
one other neighborhood water rights.
The DWR concluded that American Warrior's water rights cannot operate without
impairing water right HS-003. HS-003 is worse and weakened when American Warrior's
water rights are operating. Specifically, the district court found: "The continued
operation of [American Warrior's] water rights would lessen, diminish and weaken HS-
003." Although the DWR concluded that Garetson's water right had been substantially
impaired by American Warrior's water rights and the other neighboring water rights, HS-
003 could ultimately be satisfied if the other wells in the neighborhood were not
operating.
The district court found that Garetson had succeeded on the merits of its claim that
its senior water right HS-003 was being impaired by an appropriator with a later priority
of right—American Warrior—and issued the permanent injunction.
The DWR proposed two remedies to cure the impairment of HS-003. One remedy
was to rotate which of the other water rights in the neighborhood was allowed to operate
based on seniority and distance from HS-003. The second remedy was to protect and
prolong HS-003's water right by curtailing all of the other water rights in the
neighborhood. American Warrior countered that an injunction would not prevent the
irreparable injury to HS-003 because Garetson still would not have enough water due to
the drawdown caused by other neighboring water rights. Specifically, American Warrior
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argued that because HS-003 will be impaired anyway, any impairment to water right HS-
003 is not irreparable and the cessation of pumping from its water rights will not provide
a remedy that will allow Garetson to realize the authorized rate and quantity of HS-003.
The district court held that although American Warrior may be correct that
Garetson will not be able to realize the authorized rate and quantity of HS-003 even with
the shutdown of American Warrior's water rights, the irreparable harm to Garetson still
existed as its first-in-time water right is being depleted year after year as a result of
ongoing impairment from American Warrior's less senior water rights. The district court
further noted that injury resulting from American Warrior's impairment was still
irreparable even if others are contributing to that impairment and that Garetson had the
option to address the alleged impairment by other junior rights in the neighborhood in a
separate action. The district court further held that the threatened injury to Garetson's
senior water right outweighed any alleged damage the injunction could cause American
Warrior, the injunction was not adverse to the public interest, and that an action at law
would not provide Garetson an adequate remedy. Thus, the district court granted
Garetson's motion for a permanent injunction and ordered American Warrior to
discontinue utilizing its junior water rights, 10,467 and 25,275, due to the impairment to
HS-003. However, the district court left the door open for a change of circumstances in
the future and ordered: "This court does not wish to draft an order that would micro
manage future use of no. 10,467 and no. 25,275. At an unknown future time [American
Warrior's] rights may no longer impair HS-003. Should this unlikely event occur, the
court trusts a procedure exists to address this situation in the [Kansas Water
Appropriations Act]."
Finally, the district court addressed Koehn's request for damages from the first
temporary injunction in 2013 that was withdrawn by the district court because Koehn was
not properly notified of the injunction. Koehn obeyed the 2013 injunction and suffered
loss as a result. The district court recognized that, generally, all defendants who have
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been enjoined by an order wrongfully obtained, have obeyed the injunction, and who
consequently suffered loss due to their obedience to the injunction, can claim and recover
damages on a bond given for their protection. Nevertheless, the district court held that
because no bond was ever set for the 2013 temporary injunction, and Koehn had failed to
show malice in the obtaining of the injunction, damages could not be awarded. Koehn did
not appeal that ruling.
Current Appeal and Additional Background
American Warrior has timely appealed the district court's permanent injunction.
However, on July 1, 2017, while the time for American Warrior to file its brief was
pending, amendments to the Kansas Water Appropriations Act, K.S.A. 82a-701 et seq.
(KWAA), went into effect. Compare K.S.A. 82a-717a with K.S.A. 2017 Supp. 82a-717a.
Just a few days later, on July 6, 2017, American Warrior filed a motion to dismiss its own
appeal, arguing that the amendments to the KWAA divested this court of jurisdiction
because the amendments allegedly retroactively required Garetson to exhaust its
administrative remedies. On August 1, 2017, this court granted American Warrior's
motion to dismiss, which in effect left the permanent injunction intact. American Warrior
then sought to reinstate the appeal, which this court did on August 17, 2017.
Analysis
On appeal, American Warrior asserts ten points of error:
(1) The 2017 amendments to the KWAA divested this court and the district
court of subject matter jurisdiction to hear this case.
(2) The district court erred in not dismissing the case for Garetson's alleged
failure to exhaust administrative remedies.
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(3) The district court erred in appointing the DWR as fact-finder and referee as
authorized by K.S.A. 82a-725; instead, the DWR's report should be subject
to the expert evidentiary standards of K.S.A. 2017 Supp. 60-456.
(4) The district court erred by allowing the DWR not to follow the proper
procedures in preparation of its Final Report.
(5) The district court did not properly define Garetson's water right.
(6) The district court used an incorrect definition of "impairment" under the
Act.
(7) The district court erred in granting the permanent injunction when Garetson
had "grossly over-appropriated" its water right.
(8) The district court erred in not requiring the DWR to respond to the parties'
objections to the Final Report and by refusing to rule prior to trial on the
exceptions to the report filed by the parties.
(9) The district court erred in refusing to dismiss the case based on Garetson's
failure to join indispensable parties.
(10) The district court erred by requiring Koehn to prove malice in order to be
awarded damages for the first temporary injunction.
For clarity and to avoid redundancy, we have reorganized and reframed American
Warrior's issues on appeal as follows: First, American Warrior's first issue is addressed;
second, American Warrior's second, third, fourth, seventh, and ninth issues are addressed
together as one issue; third, American Warrior's fifth, sixth, and seventh issues are
addressed as one issue; and fourth, American Warrior's tenth issue is addressed.
I. DID THE 2017 AMENDMENTS TO THE KWAA DIVEST THE DISTRICT COURT—AND
US—OF SUBJECT MATTER JURISDICTION?
First, American Warrior argues that neither we nor the district court have
jurisdiction over this case. Specifically, American Warrior argues that the 2017
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amendments to K.S.A. 82a-716 and K.S.A. 82a-717a now require a party to exhaust its
administrative remedies before it may bring an action seeking injunctive relief in the
district court, thus divesting the courts of jurisdiction over this case. These amendments
became effective on July 1, 2017—five months after the district court entered the
permanent injunction. Garetson argues that the doctrine of continuing jurisdiction applies
and that because there was no requirement that it exhaust its administrative remedies
when the district court entered its final order, both the district court and this court have
jurisdiction.
Prior to July 1, 2017, K.S.A. 82a-716, the statute under which the district court
granted the permanent injunction, read:
"If any appropriation, or the construction and operation of authorized diversion
works results in an injury to any common-law claimant, such person shall be entitled to
due compensation in a suitable action at law against the appropriator for damages proved
for any property taken. Any person with a valid water right or permit to divert and use
water may restrain or enjoin in any court of competent jurisdiction a subsequent diversion
by a common-law claimant without vested rights without first condemning those
common-law rights. An appropriator shall have the right to injunctive relief to protect his
or her prior right of beneficial use as against use by an appropriator with a later priority
of right."
After July 1, 2017, K.S.A. 2017 Supp. 82a-716 read in its entirety:
"If any appropriation, or the construction and operation of authorized diversion
works results in an injury to any common-law claimant, such person shall be entitled to
due compensation in a suitable action at law against the appropriator for damages proved
for any property taken. Any person with a valid water right or permit to divert and use
water may, after first exhausting the remedies available under K.S.A. 82a-717a, and
amendments thereto, restrain or enjoin in any court of competent jurisdiction a
subsequent diversion by a common-law claimant without vested rights without first
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condemning those common-law rights. After first exhausting the remedies available
under K.S.A. 82a-717a, and amendments thereto, an appropriator shall have the right to
injunctive relief to protect his or her prior right of beneficial use as against use by an
appropriator with a later priority of right." (Emphasis added.)
At the time the district court entered its final order, K.S.A. 82a-717a read in full:
"No common-law claimant without a vested right, or other person without a
vested right, a prior appropriation right, or an earlier permit shall divert or threaten to
divert water if such diversion or threatened diversion impairs or would impair any vested
right, appropriation right, or right under a permit to appropriate water. But any common-
law claimant with a vested right, or other person with a vested right, a prior appropriation
right, or an earlier permit may divert water in accordance with any such right or permit
although such diversion or use thereunder conflicts with the diversion, use, proposed
diversion, or proposed use made or proposed by a common-law claimant who does not
have a vested right, or other person who does not have a vested right, a prior
appropriation right or an earlier permit. Moreover, any common-law claimant with a
vested right, or other person with a vested right, a prior appropriation right, or an earlier
permit may restrain or enjoin in any court of competent jurisdiction any diversion or
proposed diversion that impairs or would impair such right in the event that any such
diversion or proposed diversion is made or is threatened to be made by any common-law
claimant, or other person who does not have a vested right, a prior appropriation right, or
an earlier permit."
The 2017 amendments drastically altered K.S.A. 82a-717a; it now reads in full:
"(a) No common-law claimant without a vested right, or other person without a
vested right, a prior appropriation right, or an earlier permit shall divert or threaten to
divert water if such diversion or threatened diversion impairs or would impair any vested
right, appropriation right, or right under a permit to appropriate water. But any common-
law claimant with a vested right, or other person with a vested right, a prior appropriation
right, or an earlier permit may divert water in accordance with any such right or permit
although such diversion or use thereunder conflicts with the diversion, use, proposed
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diversion, or proposed use made or proposed by a common-law claimant who does not
have a vested right, or other person who does not have a vested right, a prior
appropriation right or an earlier permit.
"(b)(1) Any common-law claimant with a vested right, or other person with a
vested right, a prior appropriation right, or an earlier permit may, in accordance with
this subsection, obtain an order from the chief engineer that limits, curtails or prevents
any diversion or proposed diversion that impairs or would impair such right in the event
that any such diversion or proposed diversion is made or is threatened to be made by any
common-law claimant, or other person who does not have a vested right, a prior
appropriation right, or an earlier permit.
(2) Any common-law claimant with a vested right, or other person with a vested
right, a prior appropriation right, or an earlier permit who claims impairment of such right
by any other person without a prior right to the same water shall submit a complaint to
the chief engineer in accordance with rules and regulations of the chief engineer.
(A) Within two weeks of receiving a complaint of impairment, the chief
engineer shall initiate an investigation of such complaint and provide notice of
such investigation to the complainant and the allegedly impairing party or
parties. As part of the investigation, the chief engineer shall provide an
opportunity for the parties to submit any relevant information, including
submission of an engineering study that meets standards designated by the chief
engineer through rules and regulations.
(B) Following the investigation, the chief engineer may issue an order,
consistent with K.S.A. 82a-706b, and amendments thereto, and rules and
regulations of the chief engineer, that limits, curtails or prevents the diversion
and use of water by any person without a prior right to the same water or that
otherwise disposes of the complaint.
(C) The chief engineer shall complete any investigation initiated
pursuant to this subsection within 12 months of the date the complaint was
submitted to the chief engineer, provided that the chief engineer may extend the
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investigation for good cause by notifying the parties in writing of the amount of
time needed to complete the investigation.
(3) Concurrent with submission of a complaint under paragraph (2), or during
the pendency of the chief engineer's investigation pursuant to the complaint, the
complainant may petition the chief engineer to issue a temporary order, to be effective
until a final order is issued under paragraph (2)(B), that limits, curtails or prevents the
diversion and use of water by any person without a prior right to the same water upon a
finding by the chief engineer that a substantial likelihood exists that impairment is
occurring or will occur and that an order limiting, curtailing or preventing diversion and
use of water by any person without a prior right to the same water would not be adverse
to the public interest.
(4) Any order issued by the chief engineer pursuant to this subsection is subject
to review in accordance with the Kansas judicial review act." (Emphasis added.)
Clearly, the 2017 amendments to K.S.A. 82a-716 and K.S.A. 82a-717a that
became effective on July 1, 2017—while this appeal was pending before us—require a
litigant now to exhaust its administrative remedies with the DWR before seeking judicial
review of the DWR's order. However, there was simply no such requirement when the
district court entered its final order in this lawsuit. Therefore, we must determine if the
2017 amendments to K.S.A. 82a-716 and K.S.A. 82a-717a apply retroactively to divest
the district court of subject matter jurisdiction after it entered its final order.
Whether a statute should be applied retroactively is an issue of statutory
interpretation over which we exercise unlimited review. See State v. Brownlee, 302 Kan.
491, 508-09, 354 P.3d 525 (2015). Generally, a statute operates prospectively unless (1)
its language clearly indicates the legislature's intent that it operate retroactively, or (2) the
change is procedural or remedial in nature. White v. State, 308 Kan. 491, 499, 421 P.3d
718 (2018).
18
Here, there is no clear language reflected in the statute that the Legislature
intended for it to operate retroactively, but the statute is procedural and not substantive
because it regulates the process for having access to the district court to enforce one's
senior vested water right. However, even procedural rules cannot be applied retroactively
if they eradicate a vested or substantive right that is "'so fixed that it is not dependent on
any future act, contingency or decision to make it more secure.'" State v. Dupree, 304
Kan. 43, 52, 371 P.3d 862 (2016) (quoting Board of Greenwood County Comm'rs v.
Nadel, 228 Kan. 469, 474, 618 P.2d 778 [1980]).
A vested water right is a real property right. Garetson, 51 Kan. App. 2d at 381.
There is no dispute in this case that Garetson has a vested water right under K.S.A. 2017
Supp. 82a-701(d), and that this right was awarded in 1950. Here, Garetson needs no
additional decision or future act to make its vested water right more secure. Further, at
the time this action was filed in 2012 until the entry of its final order, the district court
held subject matter jurisdiction to enter this order. It was not until five months after the
entry of the district court's final order in this case that the 2017 amendments went into
effect. Under K.S.A. 82a-716 and K.S.A. 82a-717, Garetson was not required to exhaust
administrative remedies at any point in time during the district court's jurisdiction over
the case. Accordingly, at the time both the petition and the district court's final order in
this action were filed, the district court had subject matter jurisdiction to issue the
permanent injunction protecting Garetson's vested right.
Under the doctrine of continuing jurisdiction, once subject matter jurisdiction is
acquired over a case, jurisdiction over that case continues and is not divested until all
issues are resolved. State ex rel. Owens v. Hodge, 230 Kan. 804, 813, 641 P.2d 399
(1982); see also Freeport-McMoRan, Inc. v. K N Energy, Inc., 498 U.S. 426, 428, 111 S.
Ct. 858, 112 L. Ed. 2d 951 (1991) ("We have consistently held that if jurisdiction exists
at the time an action is commenced, such jurisdiction may not be divested by subsequent
events."); Farha v. Signal Companies, Inc., 216 Kan. 471, 478, 532 P.2d 1330 (1975)
19
("'Jurisdiction is not a light bulb which can be turned off or on during the course of the
trial. Once a court acquires jurisdiction over an action it retains jurisdiction over that
action throughout the proceeding.'"); Walker v. McNutt, 165 Kan. 533, 541, 196 P.2d 163
(1948) ("'It is a familiar principle that when a court of competent jurisdiction acquires
jurisdiction of the subject matter of a case, its authority continues, subject only to the
appellate authority.'").
American Warrior rests its divestiture of jurisdiction position, in part, on
Merryfield v. Kansas Dept. of SRS, 43 Kan. App. 2d 1, 238 P.3d 743 (2009). However,
that case does not involve the exhaustion of administrative remedies. Rather, in
Merryfield, the petitioners sought review of their civil confinement under the Kansas
Judicial Review Act (KJRA), K.S.A. 77-601 et seq. There, the Legislature amended the
KJRA while the case was pending on appeal and completely exempted petitioners' claim
from review under the KJRA under any circumstances. Stated differently, the amendment
completely did away with the petitioners' cause of action. Because the petitioners' cause
of action on appeal no longer existed under the KJRA, the claim was dismissed. The
panel affirmed the district court's dismissal of the case, albeit for different grounds,
without prejudice so the petitioners could refile the claims on another jurisdictional basis.
43 Kan. App. 2d at 2-3.
The situation in Merryfield is similar to another case on which American Warrior
relies—Amer. Foundries v. Tri-City Council, 257 U.S. 184, 42 S. Ct. 72, 66 L. Ed. 189
(1921). In that case, after the district court entered an injunction and while the appeal was
pending, the United States Congress passed the Clayton Act, which barred the type of
injunction previously entered by the district court. As in Merryfield, because the
petitioners' cause of action no longer existed, the United States Supreme Court remanded
the case to the district court for modification of the decree consistent with the opinion.
See 257 U.S. at 213.
20
Garetson agrees that an ongoing injunction is always susceptible to be dissolved
based on changing circumstances or substantive changes in the law; yet those are not the
facts presented in this case. See 42 Am. Jur. 2d, Injunctions § 287 (stating that an
injunction is susceptible to modification or dissolution at any time, including after an
appeal, based on a change in the law).
This case is more like Jernigan v. State, No. 114,529, 2016 WL 4736064 (2016),
aff'd in part and vac'd in part 306 Kan. 1318 (2017). In that case, the petitioner was a
physician who was served with a subpoena after the Board of Healing Arts lodged a
complaint against him. Dr. Jernigan filed a petition in the district court requesting that it
quash the subpoena issued by the Board under K.S.A. 65-2839a(b)(3). After the district
court held a hearing but before the district court entered its decision, the 2014
amendments to K.S.A. 65-2839a(b)(3) became effective, requiring a person subpoenaed
by the Board to exhaust his or her administrative remedies before seeking relief from the
district court. See L. 2014, ch. 131, § 14. Before the amendment, exhaustion of
administrative remedies was not required. See K.S.A. 65-2839a(b)(3).
The district court denied Jernigan's request to quash the subpoena. It found that the
amendment should be applied retroactively because it was procedural in nature and,
because Jernigan had not exhausted his administrative remedies, it lacked subject matter
jurisdiction. But another panel of this court disagreed with the district court and, applying
the doctrine of continuing jurisdiction, held that because the district court had jurisdiction
when the petition was filed, a subsequent amendment requiring exhaustion of
administrative remedies would not retroactively apply to strip the district court of subject
matter jurisdiction. 2016 WL 4736064, at *4.
The case at hand is similar to Jernigan, yet the application of the doctrine of
continuing jurisdiction is even more obvious in this case. Here, the district court had
jurisdiction throughout the lawsuit's entire pendency in the district court while, in
21
Jernigan, the amendment requiring exhaustion of administrative remedies occurred while
the case was still pending before the district court. Here, the district court without a doubt
had subject matter jurisdiction when this case began and ended, and we will not
retroactively strip the district court of such subject matter jurisdiction when there was no
legislative intent to do so reflected in the statute. The district court had subject matter
jurisdiction to enter its permanent injunction under the doctrine of continuing
jurisdiction; therefore, this court also has jurisdiction to hear this appeal. See Hodge, 230
Kan. at 813.
II. DO WE HAVE JURISDICTION OVER RULINGS NOT SPECIFIED IN THE NOTICE OF
APPEAL?
American Warrior's brief raises several issues that relate to the district court's prior
rulings throughout the case but were not included in the district court's permanent
injunction decision. These arguments include: (1) Did the district court err in not
dismissing the case for Garetson's alleged failure to exhaust administrative remedies? (2)
Did the district court err in appointing the DWR as fact-finder and referee as authorized
by K.S.A. 82a-725? (3) Did the district court err in allegedly allowing the DWR to
prepare its Final Report out of compliance with the DWR's procedures? (4) Did the
district court err in not requiring the DWR to respond to the parties' objections to the
Final Report and by refusing to rule prior to trial on the exceptions to the report filed by
the parties? (5) Did the district court err in not dismissing the case based on Garetson's
alleged failure to join indispensable parties?
Garetson argues we only have jurisdiction over the judgments identified by the
notice of appeal. We agree. Whether jurisdiction exists is a question of law over which
we exercise unlimited review. In re Care & Treatment of Emerson, 306 Kan. 30, 34, 392
P.3d 82 (2017).
22
American Warrior's notice of appeal reads in full:
"COMES NOW American Warrior, Inc. by and through Gerald O. Schultz and
Zachary D. Schultz of Schultz Law Office, P.A. and gives notice of appeal to the Court of
Appeals of the State of Kansas of the Permanent Injunction Decision filed with the Clerk
of the District Court of Haskell County, Kansas on February 1, 2017.
"This is an appeal of right under K.S.A. 60-2102(a)(2) and 60-2102(a)(4)."
American Warrior's motions to dismiss the case because of Garetson's failure to
exhaust its administrative remedies and its alleged failure to join indispensable parties
were denied on December 2, 2013. By agreement of the parties, the DWR was appointed
as fact-finder and referee as permitted by K.S.A. 82a-725 on November 29, 2012.
Further, American Warrior's motion to strike the DWR as the fact-finder and referee in
this case was also denied on December 2, 2013. Finally, American Warrior's objections
to the district court's admission of the DWR's report on the grounds argued on appeal
were denied in a pretrial order on October 17, 2016.
The right to appeal is entirely statutory and is not contained in the United States or
Kansas Constitutions. Wiechman v. Huddleston, 304 Kan. 80, 86-87, 370 P.3d 1194
(2016). Subject to certain exceptions, Kansas appellate courts have jurisdiction to
entertain an appeal only if the appeal is taken in the manner prescribed by law. 304 Kan.
at 86-87.
K.S.A. 2017 Supp. 60-2103(b) requires: "The notice of appeal shall specify the
parties taking the appeal; shall designate the judgment or part thereof appealed from, and
shall name the appellate court to which the appeal is taken." (Emphasis added.) "'It is a
fundamental proposition of Kansas appellate procedure that an appellate court only
obtains jurisdiction over the rulings identified in the notice of appeal.'" Associated
Wholesale Grocers, Inc. v. Americold Corporation, 293 Kan. 633, 637, 270 P.3d 1074
23
(2011), cert. denied 568 U.S. 928 (2012); In re N.U., 52 Kan. App. 2d 561, 567, 369 P.3d
984 (2016).
In criminal cases, the Kansas Supreme Court has given a very liberal construction
to notices of appeal. For example, in State v. Wilkins, 269 Kan. 256, 7 P.3d 252 (2000),
Wilkins' notice of appeal indicated he was appealing from the "'judgment of sentence.'"
Before the Supreme Court, Wilkins argued that the notice of appeal should have read
"judgment and sentence," that the word "'of'" was a typographical error, and that the
appellate file showed that it was always his intention to challenge the judgment rather
than his sentence. The Supreme Court held it had jurisdiction to consider Wilkins'
argument, finding that the notice of appeal "'should not be overly technical or detailed,'"
did not prejudice the State, and encompassed the substantive trial issues Wilkins raised in
his brief on appeal. 269 Kan. at 270.
Recently in State v. Rocheleau, 307 Kan. 761, 763, 415 P.3d 422 (2018), the
Kansas Supreme Court considered whether Rocheleau's notice of appeal was "fatally
flawed" when it only stated he was appealing his sentence but in his brief argued that his
lifetime registration requirement under the Kansas Offender Registration Act (KORA),
K.S.A. 22-4901 et seq., was unconstitutional. At the time of Rocheleau's appeal, there
was conflicting caselaw as to whether KORA registration requirements were part of a
defendant's sentence. Our Supreme Court has recently resolved that conflict by declaring
that KORA registration was not a part of a sentencing appeal. See State v. Marinelli, 307
Kan. 768, 790-91, 415 P.3d 405 (2018). The Supreme Court held that, given the
conflicting caselaw, Rocheleau simply listing he was appealing from his sentence was
sufficient to give the court appellate jurisdiction but warned post-Marinelli appellants
pursuing KORA challenges "not to recite in the notice of appeal that the defendant is
appealing only sentencing issues." Rocheleau, 307 Kan. at 762.
24
Criminal cases also focus on whether the State was prejudiced by the notice of
appeal. For example, in State v. Griffen, 241 Kan. 68, 69, 734 P.2d 1089 (1987), the State
argued that Griffen's notice of appeal, which stated that he was appealing from "his
conviction and sentence," was insufficient to encompass his argument concerning the
trial court's ruling on his motion to modify his sentence. The Supreme Court rejected this
argument and held that there had been "no showing that the notice of appeal misled the
State or that anyone was surprised or prejudiced by the issues on appeal." 241 Kan. at 70.
And in State v. Ransom, 268 Kan. 653, 654-56, 999 P.2d 272 (2000), our Supreme Court
held that the language "'from the judgment and sentence of the District Court of
McPherson County, Kansas on November 6, 1997'" was sufficient to confer jurisdiction
over the defendant's appeal of the district court's order certifying him to stand trial as an
adult when there was only one issue to be appealed, both sides knew what that issue was,
and the State could not have been prejudiced.
Kansas appellate courts have more strictly construed the notices of appeal in civil
cases than in criminal cases. Nevertheless, the modern code of civil procedure was not
designed to make the notice of appeal requirements more technical and burdensome, and
a liberal construction is called for in order "to secure the just, speedy and inexpensive
determination of every action and proceeding." K.S.A. 2017 Supp. 60-102; Tullis v.
Pittsburg State Univ., 28 Kan. App. 2d 347, 348-49, 16 P.3d 971 (2000). For example, in
Anderson v. Scheffler, 242 Kan. 857, 858-61, 752 P.2d 667 (1988)—which involved two
plaintiffs, James and Jacob—the Kansas Supreme Court considered whether the notice of
appeal filed by Jacob conferred jurisdiction to consider the grant of summary judgment
against James when the notice of appeal did not refer to James and the summary
judgment decision did not affect James. Although the Supreme Court focused first on
James' failure to file his own notice of appeal, it held that its review was limited to those
rulings specified in the notice of appeal and it lacked jurisdiction because the notice of
appeal filed by Jacob failed to specify that James was appealing the entry of summary
judgment against him. 242 Kan. at 860-61.
25
Yet in Key v. Hein, Ebert & Weir, Chtd., 265 Kan. 124, 129-30, 960 P.2d 746
(1998), the Kansas Supreme Court construed a civil notice of appeal to confer jurisdiction
over all the issues raised on appeal when it was drafted by a pro se litigant and included
"catch-all" language. Key's notice of appeal stated he was appealing from the December
19, 1996 order. An order granting Key's motion for summary judgment was issued in
December 1995, and an order denying Key's motion to amend that decision was issued in
December 1996. On appeal, the defendants argued that the notice of appeal failed to
identify the trial court's order from December 1995.
In rejecting this argument, our Supreme Court noted a liberal construction of the
notice of appeal was particularly appropriate because it was drafted by a pro se litigant.
The Supreme Court held that the language "'grant[ing] the defendant Memorandum
Decision order'" in the notice of appeal could be construed to include references to both
the December 1995 and 1996 orders, and noted that the "catch-all" language in his notice
of appeal—"'And from each and every order entered [contrary] to plaintiff'"—
encompassed the 1995 summary judgment order, and found that the defendants had not
been prejudiced by the notice of appeal. 265 Kan. at 129-30.
Although Key more liberally construed the notice of appeal to include the issues
raised by the appellant on appeal, that case does not address the exact situation presented
here. In this case, the notice of appeal specifies a particular judgment but does not contain
any additional language that could include the trial court's other rulings. Additionally, the
notice of appeal in this case was not drafted by a pro se litigant. Under the Supreme
Court's reasoning in Ransom, 268 Kan. at 656, the notice of appeal in this case should be
liberally construed to include all of the issues raised by American Warrior on appeal.
However, Ransom is a criminal case and, as pointed out in Tullis, 28 Kan. App. 2d at
349, "there may be stronger public policy reasons for allowing criminal defendants more
latitude in framing their appeals than parties in civil disputes."
26
Similar to the facts presented here is the case of In re Marriage of Lay v.
Sternadori, No. 91,701, 2004 WL 2384238 (2004) (unpublished opinion). There,
appellant's notice of appeal stated: "'Notice is hereby given that Appellant Rich
Sternadori appeals the Division 8 Court's January 2, 2004 decision in the above case.'"
2004 WL 2384238, at *6. Applying the Supreme Court's decision in Key, the Lay panel
determined that the liberal construction approach did not apply because the notice of
appeal did not reference any earlier decisions by the district court nor did it contain any
"catch-all" language. Therefore, the Lay panel determined it only had jurisdiction to
address the issues in the January 2004 decision. 2004 WL 2384238, at *6. See also Gates
v. Goodyear, 37 Kan. App. 2d 623, 627-29,155 P.3d 1196 (where notice of appeal
referenced only specific order and did not contain "catch all" language, no appellate
jurisdiction over issues outside referenced order), rev. denied 284 Kan. 945 (2007); In re
J.D.D., 21 Kan. App. 2d 871, 873, 908 P.2d 633 (1995) (appellate court jurisdiction
limited to rulings specified in notice of appeal); Raney-Neises v. HCA Health Service of
Kansas, Inc., No. 93,740, 2006 WL 1460614, at *9 (Kan. App. 2006) (unpublished
opinion) (same).
In the case at hand, Garetson does not claim it was prejudiced by the notice of
appeal. However, in light of the above authority, we decline American Warrior's
invitation to ignore K.S.A. 2017 Supp. 60-2103(b) and hold that American Warrior's
notice of appeal is insufficient to confer jurisdiction on this court concerning the issues
not addressed in the district court's permanent injunction order entered on February 1,
2017. We lack jurisdiction to consider American Warrior's five issues which were ruled
upon prior to trial because there is no "catch-all" language in the notice of appeal to cover
the additional rulings it argues were erroneous. Accordingly, those issues are dismissed.
27
III. DID THE DISTRICT COURT ERR IN GRANTING THE PERMANENT INJUNCTION?
American Warrior also makes three specific arguments on appeal regarding the
entry of the permanent injunction order: (1) The district court incorrectly defined
Garetson's water right; (2) the district court used the incorrect definition of "impairment"
under the Act; and (3) the district court erred in granting the permanent injunction when
Garetson "grossly over-appropriated" its water right. As we see it, these three arguments
can be distilled into one overarching issue: Did the district court err in granting the
permanent injunction? Each specific argument will be addressed in turn.
A. Did the district court incorrectly define Garetson's water right?
First, American Warrior argues the district court incorrectly defined Garetson's
water right and, thus, the permanent injunction was improperly entered. Specifically, it
argues that the district court did not consider water right 8,157, which shares a place of
use and point of diversion with HS-003, when defining Garetson's water right.
Although American Warrior attempts to raise this issue as a matter of statutory
interpretation under the Act, when the actual argument in its brief is examined, American
Warrior is arguing that the district court was incorrect in finding that HS-003 was
impaired by American Warrior. The finding that HS-003 was impaired is a factual
finding by the district court, and this court reviews such factual findings for substantial
competent evidence. See Schoenholz v. Hinzman, 295 Kan. 786, 792-93, 289 P.3d 1155
(2012). "Substantial competent evidence is such legal and relevant evidence as a
reasonable person might regard as sufficient to support a conclusion." Hodges v. Johnson,
288 Kan. 56, 65, 199 P.3d 1251 (2009).
Garetson's water right overlaps with its neighbor's water right 8,157 in place of use
and point of diversion. An overlapping point of diversion means that all the water could
28
be taken out of either one or both wells simultaneously or exclusively up to the limits.
Here, an overlapping place of use means that water use from both of the wells has been
granted for use on Section 36.
American Warrior essentially asserts that because HS-003 overlaps with 8,157,
HS-003 cannot be deemed impaired unless Garetson presented evidence that it cannot
obtain HS-003's authorized rate or volume from the authorized point of diversion from
the neighboring water right 8,157. American Warrior does not cite any legal support for
this proposition.
The Moore family originally owned and controlled both HS-003 and 8,157. The
DWR granted the family's request to overlap the point of diversion and the place of use
of both water rights. This overlap allows the water authorized for HS-003 to be pulled
from 8,157 and vice versa, and all of the combined water can be used on Section 36.
Garetson now owns the north half of Section 36 and Moore owns the south half.
Garetson is currently in a year-to-year lease with Moore to farm the south half of Section
36. Jay Garetson testified that significantly more water is available from 8,157 than from
HS-003. Accordingly, for the benefit of Moore, Garetson usually plants corn, which
requires more water and is more profitable, on the south half of the section owned by
Moore. Then, if additional water is available through HS-003, Garetson plants crops on
the north half of Section 36 and uses HS-003 for irrigation.
American Warrior argues that the DWR and the district court should have
considered that because HS-003 and 8,157 have an overlapping place of use and point of
diversion, Garetson should be required to pull water from Moore's water right and use it
on its own property. There are three problems with this argument.
29
First, each senior water right has an authorized rate of use and volume. Under the
KWAA, if a junior water right is impairing the senior water right—preventing it from
fulfilling its authorized rate or volume—the senior water right may bring a cause of
action for an injunction. K.S.A. 82a-716 and K.S.A. 82a717a. American Warrior does not
cite to any regulation, statute, or caselaw that mandates that an impaired senior water
right is no longer impaired if the senior water right holder has permission to pull from a
third party. "A failure to support an argument with pertinent authority or to show why it
is sound despite a lack of supporting authority or in the face of contrary authority is akin
to failing to brief an issue. Therefore, an argument that is not supported with pertinent
authority is deemed waived and abandoned." Friedman v. Kansas State Bd. of Healing
Arts, 296 Kan. 636, Syl. ¶ 4, 294 P.3d 287 (2013).
Second, as a practical matter, Garetson is in a year-to-year lease with Moore to
farm the south half of Section 36. If Garetson were to do as American Warrior proposes
the law requires, albeit without support, and use all of Moore's water from 8,157 on
Garetson's own land and for its own crop, it is likely the goodwill between Moore and
Garetson would be spoiled and Moore could terminate the relationship. Further, it is
speculation on the part of American Warrior that Garetson could use Moore's water
however it chooses as Moore was not called to testify at trial and there was no evidence
presented establishing that Garetson was free to use Moore's water right.
Third, American Warrior's argument asserts that even if Moore terminated the
lease and refused to give Garetson permission, Garetson could continue to use 8,157 to
compensate for any impairment of HS-003 by junior water rights. However, this would
require Garetson to trespass onto Moore's property and take water from Moore's water
right. American Warrior cites no support for this assertion, and nothing in the Act appears
to give Garetson the ability to trespass onto another's property and utilize another water
right to compensate for a senior water right's impairment by other junior water rights.
30
The district court's ruling is supported by substantial competent evidence.
B. Did the district court use the incorrect definition of "impairment" under the
KWAA?
Second, American Warrior argues that the permanent injunction is erroneous
because the district court used the incorrect definition of "impairment" under the KWAA
in its order. Specifically, American Warrior argues that the district court erred in using
the definition of "impairment" approved of by the previous Garetson panel.
Resolution of this issue involves interpretation of a provision within the KWAA.
"This court interprets the KWAA de novo just as it does all other statutes." Clawson v.
Kansas Dept. of Agriculture, 49 Kan. App. 2d 789, 796, 315 P.3d 896 (2013).
The version of K.S.A. 82a-717a in effect at the time of the permanent injunction
decision, states that "any common-law claimant with a vested right . . . may restrain or
enjoin in any court of competent jurisdiction any diversion or proposed diversion that
impairs . . . such right." K.S.A. 82a-716, the statute under which the district court issued
the permanent injunction, does not provide a definition of "impairment." American
Warrior invites us to examine K.S.A. 82a-711(c) again to form a definition of
"impairment." K.S.A. 82a-711(c) reads, in part:
"With regard to whether a proposed use will impair a use under an existing water
right, impairment shall include the unreasonable raising or lowering of the static water
level or the unreasonable increase or decrease of the streamflow or the unreasonable
deterioration of the water quality at the water user's point of diversion beyond a
reasonable economic limit."
The district court used the following definition of impairment: "diminishes, weakens, or
injures the prior right." American Warrior argues this was an incorrect definition and
31
suggests that we should borrow and add the language "beyond a reasonable economic
limit" from K.S.A. 82a-711(c), read it into K.S.A. 82a-717a, and define "impairment" as
diminishes, weakens, or injures the prior right beyond a reasonable economic limit.
The problem is that American Warrior previously raised this same argument in its
interlocutory appeal before another panel of this court. See Garetson, 51 Kan. App. 2d at
387-89. That panel analyzed the issue as follows:
"Specifically, [American Warrior] would have us interpret K.S.A. 82a-717a to
mean that some impairment of a senior or vested water right by diversion is acceptable,
so long as it is not 'beyond a reasonable economic limit'—a phrase found in K.S.A. 2014
Supp. 82a-711(c). In response, [Garetson] contends that it was appropriate for the district
court to use the definition of the word 'impair' found in Black's Law Dictionary. Also,
[Garetson] asserts that K.S.A. 2014 Supp. 82a-711 does not apply to the circumstances
presented in this case.
"We must first attempt to discern the legislature's intent through the language
used in the statutes by giving common words their ordinary meanings. As a general rule,
we employ the canons of statutory construction only when the language is ambiguous.
When statutory language is plain and unambiguous, we are not to speculate as to
legislative intent. Likewise, we are not to read into the statutes words not readily found
there. In re A.M.M.-H., 300 Kan. at 535.
"Both K.S.A. 82a-716 and K.S.A. 82a-717a afford prior senior water right
holders the right to seek injunctive relief against a junior water right holder who is
diverting water from the same source. See Williams, 190 Kan. at 335. But [American
Warrior] does not even mention K.S.A. 82a-716 in its brief. This is significant for several
reasons. First, the district court relied upon K.S.A. 82a-716—not K.S.A. 82a-717a—in
granting the temporary injunction in this case. Second, the word 'impair' is not used in
K.S.A. 82a-716. Third, like K.S.A. 82a-717a, the phrase 'beyond a reasonable economic
limit' is not found in K.S.A. 82a-716.
32
"In its decision granting the temporary injunction, the district court expressly
found that K.S.A. 82a-716 'clearly provides authority for [Garetson] to request a
temporary injunction to protect [its] first in time water right.' [American Warrior's] failure
to brief the court on this statute or otherwise argue that the district court inappropriately
applied the statute here arguably results in AWI's abandonment of this issue, meaning it
is not properly before us. See Superior Boiler Works, Inc. v. Kimball, 292 Kan. 885, 889,
259 P.3d 676 (2011). Nonetheless, K.S.A. 82a-716 provides—in part—that a senior
water right holder 'shall have the right to injunctive relief to protect his or her prior right
of beneficial use as against use by an appropriator with a later priority of right.' We do
not find this language to be either unclear or ambiguous.
"Even if the district court had relied upon K.S.A. 82a-717a in granting the
temporary injunction in this case, we do not find the word 'impair' to be unclear or
ambiguous. The common definition of the word 'impair' is 'to cause to diminish, as in
strength, value, or quality.' The American Heritage Dictionary 878 (4th ed. 2006). This
definition is similar to the definition of impair used by the district court, which looked to
Black's Law Dictionary 752 (6th ed. 1990) to define 'impair' to mean 'to weaken, to make
worse, to lessen in power, diminish, or relax or otherwise affect in an injurious manner.'
See Humana Inc. v. Forsyth, 525 U.S. 299, 309-10, 119 S. Ct. 710, 142 L. Ed. 2d 753
(1999). Thus, using the ordinary definition of impair, we conclude that the legislature
intended that the holder of a senior water right may seek injunctive relief to protect
against a diversion of water by a holder of a junior water right when that diversion
diminishes, weakens, or injures the prior right.
"Because K.S.A. 82a-717a is clear and unambiguous, we decline [American
Warrior's] invitation to add the 'beyond a reasonable economic limit' language used in
K.S.A. 2014 Supp. 82a-711(c). Had the legislature desired to give the word 'impair' a
special definition, it could have done so either by adding the definition to the text of
K.S.A. 82a-717a or including it in the definition section of the [Act] located in K.S.A.
2014 Supp. 82a-701. However, it chose not to do so. Thus, we decline [American
Warrior's] invitation to read additional language into the statute." 51 Kan. App. 2d at 388-
89.
33
Although neither party addresses this point on appeal,
"[t]he doctrine of law of the case prevents a party from serially litigating an issue
already presented and decided on appeal in the same proceeding. The doctrine promotes
judicial efficiency while allowing litigants a full and fair opportunity to present their
arguments on a point—the first bite of the proverbial apple." State v. Parry, 51 Kan. App.
2d 928, 928, 358 P.3d 101 (2015), aff'd 305 Kan. 1189, 390 P.3d 879 (2017).
"[O]nce an issue is decided by the [appellate] court, it should not be relitigated or
reconsidered unless it is clearly erroneous or would cause manifest injustice." State v.
Collier, 263 Kan. 629, Syl. ¶ 3, 952 P.2d 1326 (1998).
This issue has already been litigated before us. See Garetson, 51 Kan. App. 2d at
387-89. In the present case, American Warrior does not claim that the holding was clearly
erroneous or that its application would result in manifest injustice. Although American
Warrior does make arguments as to why the prior decision was incorrect, a review of
American Warrior's brief in its prior appeal reveals the arguments here are the same as
those it initially advanced and were rejected in its first appeal. In fact, the analysis section
in both briefs is verbatim. The law of the case doctrine applies here, and the district court
did not err in using the definition of "impair" and "impairment" approved by this court in
the prior appeal.
C. Did the district court err in granting the permanent injunction when
Garetson allegedly "grossly over-appropriated" its water right?
Third, American Warrior argues that the permanent injunction was improperly
granted because Garetson "grossly over-appropriated" its water right and, therefore, has
unclean hands.
34
"The clean hands doctrine is based upon the maxim of equity that he who comes
into equity must come with clean hands." Fuqua v. Hanson, 222 Kan. 653, Syl. ¶ 3, 567
P.2d 862 (1977). The application of the doctrine of clean hands is reviewed for abuse of
discretion. See 222 Kan. at 657. A judicial action constitutes an abuse of discretion if (1)
no reasonable person would take the view adopted by the trial court; (2) it is based on an
error of law; or (3) it is based on an error of fact. Wiles v. American Family Life
Assurance Co., 302 Kan. 66, 74, 350 P.3d 1071 (2015). The party asserting the district
court abused its discretion bears the burden of showing such abuse of discretion. Gannon
v. State, 305 Kan. 850, 868, 390 P.3d 461 (2017).
In substance the clean hands doctrine provides that
"no person can obtain affirmative relief in equity with respect to a transaction in which he
has, himself, been guilty of inequitable conduct. It is difficult to formulate a general
statement as to what will amount to unclean hands other than to state it is conduct which
the court regards as inequitable. Like other doctrines of equity, the clean hands maxim is
not a binding rule, but is to be applied in the sound discretion of the court. The clean
hands doctrine has been recognized in many Kansas cases. The application of the clean
hands doctrine is subject to certain limitations. Conduct which will render a party's hands
unclean so as to deny him access to a court of equity must be willful conduct which is
fraudulent, illegal or unconscionable. Furthermore the objectionable misconduct must
bear an immediate relation to the subject-matter of the suit and in some measure affect
the equitable relations subsisting between the parties to the litigation and arising out of
the transaction. Stated in another way the misconduct which may justify a denial of
equitable relief must be related misconduct rather than collateral misconduct arising
outside the specific transaction which is the subject-matter of the litigation before the
court.
"It should also be emphasized that in applying the clean hands maxim, courts are
concerned primarily with their own integrity. The doctrine of unclean hands is derived
from the unwillingness of a court to give its peculiar relief to a suitor who in the very
controversy has so conducted himself as to shock the moral sensibilities of the judge. It
35
has nothing to do with the rights or liabilities of the parties. In applying the unclean hands
doctrine, courts act for their own protection, and not as a matter of 'defense' to the
defendant. [Citations omitted.]" Green v. Higgins, 217 Kan. 217, 220-21, 535 P.2d 446
(1975).
Here, the district court specifically considered the doctrine of clean hands and held
that it was not applicable in this case. The district court stated:
"The clean hands doctrine does not bar the plaintiff from obtaining an equitable
injunction against the defendant for impairment of their senior water right. The court does
not find the conduct of plaintiff was willful conduct that is fraudulent, illegal or
unconscionable, nor does it shock the moral sensibilities of the court. The doctrine of
clean hands does not bar Plaintiff from the relief sought."
American Warrior argues that Garetson over-appropriated HS-003 more than half
of the years since 1955 and, therefore, acted illegally. However, the historic well records
were not based on just HS-003 but also on water right 8,157, another water right which
has an overlapping place of use and point of diversion with HS-003. When HS-003's
volume limit of 240 acre-feet is combined with 8,157's volume limit of 960 acre-feet, the
total volume limit is 1,200 acre-feet per year. When using the combined water rights total
volume limit (because they share a place of access and point of diversion) those
combined water rights have exceeded their permitted total volume limit only twice from
1955 through 2015. Moreover, American Warrior's expert confirmed that there was no
evidence the wells were actually metered when there was alleged over-appropriation of
the water right, so it is unknown if the early readings were accurate.
Notably, while American Warrior carries the burden to show an abuse of
discretion, see Gannon, 305 Kan. at 868, it fails to assert exactly how the district court
abused its discretion. We find no abuse of discretion when the district court declined to
apply the doctrine of clean hands. The district court's ruling is supported by substantial
36
competent evidence, the district court applied the correct definition of "impairment," and
the doctrine of clean hands does not apply. Therefore, the district court did not err in
entering the permanent injunction.
IV. DID THE DISTRICT COURT ERR BY REQUIRING KOEHN TO PROVE MALICE IN
ORDER TO BE AWARDED DAMAGES FOR THE FIRST TEMPORARY INJUNCTION?
Finally, American Warrior argues that the district court erred by requiring it to
prove malice in order to be awarded damages for the original wrongfully-issued
temporary injunction.
As previously discussed, the district court entered the 2013 temporary injunction
on May 22, 2013. Thereafter, the Unruhs filed a motion seeking a bond on June 3, 2013.
The motion was set for hearing on July 11, 2013, at which the Unruhs requested and the
district court granted a continuance. The Unruhs were later removed from the case in
August through the filing of an amended petition because they no longer owned the land
in question. Subsequently, Koehn filed a motion to establish a bond on September 9,
2013, along with a motion to vacate the temporary injunction. Multiple motions were
heard on November 5, 2013, and a decision to vacate the injunction was filed November
26, 2013. In the midst of multiple changes of counsel, the addition of multiple parties, the
assignment of the case to three different judges, and the dismissal of the 2013 injunction,
a bond ultimately was never set in regard to the 2013 injunction.
Before the district court, Koehn counterclaimed for damages from the entry of the
2013 temporary injunction—ultimately withdrawn by the district court—because he was
not properly notified of the injunction. The district court held that because no bond was
ever set for the 2013 temporary injunction and Koehn showed no malice on Garetson's
part in obtaining the injunction, damages could not be awarded.
37
The fatal flaw in American Warrior's argument—and one that American Warrior
fails to address on appeal—is that Koehn never filed a notice of appeal in this case. The
only notice of appeal contained in the record on appeal was filed by American Warrior. A
notice of appeal must specify the parties taking the appeal. See Walker v. Regehr, 41
Kan. App. 2d 352, 354, 202 P.3d 712, rev. denied 289 Kan. 1286 (2009). The party
taking the appeal must be directly named or named by inference. See Anderson, 242 Kan.
at 861. There is no mention in American Warrior's notice of appeal that Koehn is joining
the appeal. American Warrior and Koehn have been represented by different counsel and
have filed separate motions and other such filings with the district court throughout the
course of this litigation. In addition, Koehn called his own witnesses and presented his
own exhibits at trial. Therefore, Koehn is not a party to this appeal, and American
Warrior lacks standing to argue Koehn's alleged error on appeal. We have no jurisdiction
to consider this issue and it is therefore dismissed.
Affirmed in part and dismissed in part.
38