Matter of Sage Creek Drainage Area

No. 87-528
88-92
IN THE SUPREME COURT OF THE STATE OF MONTANA
IN THE MATTER OF THE ADJUDICATION OF 87-528
THE EXISTING RIGHTS TO THE USE OF ALL
THE WATER, BOTH SURFACE AND UNDERGROUND,
WITHIN THE SAGE CREEK DRAINAGE AREA,
INCLUDING ALL TRIBUTARIES OF THE SAGE
CREEK IN LIBERTY AND HILL COUNTIES, MONTANA.
IN THE MATTER OF THE ADJUDICATION OF THE
EXISTING RIGHTS TO THE USE OF ALL THE WATER,
BOTH SURFACE AND UNDERGROUND WITHIN THE BOULDER
RIVER DRAINAGE AREA INCLUDING ALL TRIBUTARIES
OF THE BOULDER RIVER, TRIBUTARY OF THE YELLOWSTONE
RIVER, IN SWEET GRASS AND PARK COUNTIES, MONTANA.
APPEAL FROM: The Water Court of the State of Montana
The Honorable W. W. Lessley, Judge presiding.
COUNSEL OF RECORD :
For Appellant:
Moore, Rice, O'Connell & Refling; David Moon argued,
Bozeman, Montana
J. David Penwell argued, Bozeman, Montana
For Respondent:
Lilly, Andriolo & Schraudner; Leanne Schraudner argued,
Bozeman, Montana
Matthew W. ~ i l l i a m s ,Bozeman, Montana
Edward Borer, Great Falls, Montana
Keith Tokerud argued, Great Falls, Montana
kenneth P. Pitt, Asst. U.S. Atty., Missoula, Montana
i3ileen Shore, Dept. Fish, Wildlife & Parks, Helena
'%inda Hickman, Water Master, Bozeman, Montana
.. !'hohn R. Hill, Jr. argued, U.S. Dept. ~ u s t i c e ,Denver,
, : ; Colorado
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Submitted: September 13, 1988
u Decided: October 11, 1988
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Filed: c-
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Clerk
Mr. Justice John C. Sheehy delivered the Opinion of the
Court.
We determine in these cases consolidated for appeal that
there is no right of appeal granted to a water right claimant
under the state water rights adjudication process [§
85-2-201, -243, MCA] , except from a final decree entered
under S 85-2-234, MCA; that the Montana Rules of Civil
Procedure are included in the rules that govern the practice
of the Water Courts [Rule 1 . 1 1 2 , Water Claims Examination
Rules]; that Rule 54 (b) of the Montana Rules of Civil
Procedure provides for and allows a water right claimant to
seek and procure from the Water Court an express direction
for the entry of a final judgment as to his water right
claim, upon the express determination of the Water Court that
there is no just reason for delay; and that such action of
the Water Court under Rule 54(b) would be and constitute a
final judgment within the meaning of 5 85-2-235, MCA,
providing for appeals from the Water Court.
In each of the above captioned cases, we were presented
with the common issue of the appealability from an
interlocutory order of the Water Court. Since we have not
before spoken on this precise issue, we consolidated the
captioned cases for disposal as to that issue, reserving
decision if need be on the remaining issues on each cause.
Oral argument was granted and heard on the common issue of
appealability and now, having fully considered the matter, we
determine that in each case the appeal must be dismissed,
subject to further proceedings in the Water Court as
hereafter discussed.
NO. 87-528 (SAGE CREEK)
Rambo Grain and Cattle Company, the Lazy DX Ranch, and
Terry and Mary Stevenson separately appeal from an order of
the Water Court, dated October 18, 1987, modifying an earlier
temporary preliminary decree entered in the Sage Creek
Drainage adjudication, holding that the doctrine of
collateral estoppel bars these appellants from claiming any
water rights different from those found in an earlier
District Court judgment outside the Water Court.
Sage Creek Colony has also appealed, and Burkhartsmeyer
Land Company has cross-appealed, though these parties appear
to be content with the October 18, 1987 order of the Water
Court.
In 1974, Burkhartsmeyer, Rambo, Stevenson (now Lazy DX
Ranch) and Black Butte Ranch (not a party to the appeal)
filed a complaint in the District Court, Twelfth Judicial
District, Hill County, under § 85-2-406(2), MCA, against Sage
Creek Colony. The plaintiffs in that case claimed that Sage
Creek Colony was interfering with their water rights in Sage
Creek. All of the parties relied on notices of appropriation
to establish their respective water rights. The Hon. W. W.
Lessley, sitting in 1982 as a district judge in that case,
made findings of fact and conclusions of law. The court
determined that Sage Creek Colony had the earliest priority
dates established in 1890 and 1891. Rambo and Burkhartsmeyer
were accorded one early right each, with a priority date of
1898. Other water rights claimed by Rambo, Burkhartsmeyer
and Stevenson were denied by the District Court because the
alleged current places and uses of the waters failed to match
the land described in the prior notices.
No appeal by any party was taken from the District Court
judgment entered under S 85-2-406(2), MCA. Later, in the
Water Court proceedings adjudicating the Sage Creek Drainage
area, a preliminary decree was issued on December 29, 1983 by
the Water Court. The preliminary decree was ordered changed
by the Water Court on August 27, 1984, to a "temporary
preliminary decree." Objections to the temporary preliminary
decree were filed by Burkhartsmeyer, Rambo, Sage Creek
Colony, and other parties. Burkhartsmeyer objected that the
water rights accorded the parties by the 1982 decree in the
District Court action had not been included in the temporary
preliminary decree of the Water Court. After hearing, the
water master prepared a report and Judge Lessley, by order,
adopted the report on October 18, 1987, which conformed the
parties' rights to water in Sage Creek pursuant to the 1982
District Court decree. The Water Court held that collateral
estoppel applied to these parties as between themselves
because of the 1982 decree in the District Court action, and
that the rights of the parties as between themselves had
there been finally adjudicated.
Sage Creek appealed from the Water Court order; Rambo
followed suit, as did the Stevensons. Burkhartsmeyer also
filed a notice of appeal.
Rambo and Stevenson both contend that appeal in this
case should lie. Sage Creek and Burkhartsmeyer each contend
that an appeal does not lie.
Sage Creek argues that the Water Court order of October
18, 1987 is clearly interlocutory and settles a very narrow
issue, whether collateral estoppel bars these parties from
further litigating their water rights in the Water Court. It
contends that the only appeal permitted in Water Court
proceedings is from a final decree entered under B 85-2-234,
PICA, for which the right of appeal is granted in S 85-2-235,
MCA.
Burkhartsmeyer likewise contends that an appeal does not
lie from an interlocutory order. It cites Bostwick v.
Department of Highways (1980), 188 Mont. 313, 613 P.2d 997,
and distinguishes our earlier decisions in State ex rel.
Greely v. Water Court (Mont. 19841, 691 P.2d 833, 41 St.Rep.
2373; and Esther McDonald v. State of Montana (Mont. 19861,
722 P.2d 598, 43 St.Rep. 1397. Burkhartsmeyer further
contends that S 85-2-235, MCA, is not ambiguous and that no
appeal lies in Water Court proceedings except from a final
decree.
On the other hand, Rambo argues that an appeal should
lie in this case because as to these parties, the decision of
the Water Court applying collateral estoppel is a "final
decree" of their water rights, since they cannot litigate any
further. Rambo also argues that a literal reading of 5
85-2-235, MCA, makes no sense now and will cause backlogs in
the Supreme Court when final decrees are finally entered in
the various basins of Montana.
Stevensons and the Lazy DX Ranch also argue that their
rights are now definitely resolved by the Water Court, that
the objection deadlines for water rights in the temporary
preliminary decree for Sage Creek is now over and hence there
can be no subsequent attack on these particular uses.
Stevensons then argue that unless an appeal is now allowed,
the result would be waste, duplication of effort, and overall
uncertainty which cannot be the legislative intent under S
85-2-234, MCA.
NO. 88-092 (BOULDER RIVER DRAINAGE)
In the Boulder River Drainage adjudication, Don C.
Cowles appeals from an order of the Water Court, dated
January 13, 1988 by the Hon. . W. Lessley, Chief Water
Judge, holding that water rights claimed by Cowles for
certain mining rights ". . . have been abandoned and such
shall be removed from the temporary preliminary decree of
existing water rights in the Boulder River, tributary of the
Yellowstone River Basin."
United States of America, as appellee, has moved to
dismiss the appeal of Cowles to this Court for lack of
jurisdiction. The United States contends that a temporary
preliminary decree is but a preliminary step to the final
adjudication of water rights in the Boulder River Basin.
Water Court Rule No. 1. I1 (7) provides that any decree of the
Water Court which is not a final decree under 5 85-2-234,
MCA, shall be considered a temporary preliminary decree or
interlocutory decree. The United States contends that a
party may not appeal from an interlocutory or non-final
order. Blevins v. Kramer (1978), 179 Mont. 193, 587 P.2d 28.
It argues that absent an express determination by the Water
Court of no just reason for delay or an express direction for
the entry of a final judgment, this Court lacks jurisdiction
to entertain an appeal. Knoepke v. Southwestern Railway
Company (1979), 182 Mont. 74, 595 P.2d 376. The federal
government relies particularly upon Roy v. Neibauer (19801,
188 Mont. 81, 610 P.2d 1185 for its contentions that a
temporary preliminary decree is not a final judgment
appealable under the Montana Rules of Appellate Civil
Procedure; that when premature appeals are brought in this
Court, it is the duty of the parties to bring the lack of
jurisdiction to the attention of the Court, and that if the
appeal is now allowed, it might again face the same issue
when a final decree is entered in the Boulder River basin.
DISCUSSION
A right of appeal exists only by statute or rule, and
without a supporting statute or rule, there can be no appeal.
State ex rel. Adamson v. District Court, Fourth Judicial
District, Lake County (1955), 128 Mont. 538, 279 P.2d 691;
McClurg v. Flathead County Commissioners (19781, 179 Mont.
518, 587 P.2d 415. The right of appeal is purely statutory.
Sheridan County Electric Coop v. Anhalt (19531, 127 Mont. 71,
257 P.2d 889.
The statutory provision for the entry of a final decree
in water right claims adjudication is found in S 85-2-234,
MCA. The only right of appeal expressed in the statutes
pertaining to Water Court adjudications is found in S
85-2-235, MCA. We offer that statute for examination:
A person whose existing rights and priorities are
determined in the final decree may appeal the
determination only if:
(1) he requested a hearing and appeared and
entered objections to the preliminary decree; or
(2) his rights as determined in the preliminary
decree were altered as the result of a hearing
requested by another person.
An interlocutory order is normally not appealable unless
there is a specific provision making it so. State ex rel.
Kesterson v. District Court, Fourth Judicial, Missoula County
(1980), 189 Mont. 20, 614 P.2d 1050; Schultz v. Adams (19731,
161 Mont. 463, 401 P.2d 530.
Under the Water Court rules, which we have promulgated,
we have defined "final decree," "temporary preliminary
decree," and "preliminary decree."
"Final Decree" means the final Water Court
determination of existing water rights within a
basin or subbasin, as described in S 85-2-234, MCA.
(Rule 1 111 2 , Montana Water Right Claims Examinations
Rules. 1
"Temporary Preliminary Decree" means a water court
decree, prior to the issuance of the preliminary
decree, as necessary for the orderly administration
of existing water rights pursuant to Section
85-2-231, MCA.
(Rule 1. I11 (511, Rules, supra.)
"Preliminary Decree" means the preliminary water
court determination of existing water rights within
a basin or subbasin or described in section
85-2-231, MCA, which precedes the final decree.
(Rule 1,111 ( 4 3 ) , Rules, supra.)
The Rules contemplate that the Water Court, by an order,
can designate a temporary preliminary decree to assume the
effect of a preliminary decree:
The Water Court may order that any temporary
preliminary decree or other interlocutory decree
heretofore or hereafter entered in any action
pending before the Water Court, as amended by the
inclusion of a determination of Indian or Federal
Reserved water rights, shall be and constitute a
preliminary decree in accordance with 85-2-231,
MCA, and the procedures related to preliminary
decrees set forth in S S 85-2-231, 85-2-232,
85-2-233, 85-2-234, shall thereafter occur with
respect to such preliminary decree.
Rule 1.11(7), Rules, supra-)
The parties contending here for a right of appeal point
to State ex rel. Greely v. Water Court and Esther McDonald v.
State of Montana, supra., wherein, because of exigent
circumstances, we accepted jurisdiction of cases involving
the Water Court before entry of a final decree. In those
cases, however, we had problems of statewide impact and our
jurisdiction was founded upon our power of supervisory
control of the Water Courts. Moreover, those decisions
affected many adjudications and not the narrowly defined
issues that are presented in the cases before us now.
We recognize, too, the difficulties faced by the
proposed appellants in these consolidated cases. In Cowles'
case, a final determination as to his water rights for his
mining claims is essential to him. In the Sage Creek
drainage case, if appeal is not allowed now, objections to
the collateral estoppel doctrine are postponed until a final
decree is entered on Sage Creek. In water adjudication
matters, final decrees may yet be a long way off.
However, we have no jurisdiction to entertain these
appeals, and if we accepted them, we would open the door to
appeals from every interlocutory order made by the Water
Courts in the thousands of adjudications being made there.
We are helped to a final disposition of these proposed
appeals by our decision in Hill v. Ferrimac Cattle Company,
Inc. (1984), 211 Mont. 479, 687 P.2d 59, 65. In that case,
an original action was brought in the District Court, Tenth
Judicial District, Judith Basin County by Merrimac against
Hill, alleging trespass and seeking injunctive relief and
damages for Hill's actions. Hill had already filed an action
in Water Court to determine the priorities of the rights of
the parties to the streams in question. The Water Court
determined their respective water rights first, while the
trespass and damage claims were reserved in the separate
District Court action until the final determination of the
water rights litigation. In that case, Merrimac argued on
appeal from the Water Court adjudication between the parties
that we had no jurisdiction because there was no final decree
under 5 85-2-235, MCA. We retained jurisdiction, however,
and decided the appeal, because the Water Court had entered a
Rule 54(b) certification, because the dispute involved only
two parties who had to know their water allowances, and
because the remaining issues pending in the District Court
could not be decided until the Water Court issues had been
determined, which affected the parties' right to a speedy
trial.
The Montana Rules of Civil Procedure are a part of the
rules governing the practice in the Water Courts:
Application of other rules; admissibility - -
of DNRC
Data. ~xce~t-as where specifically provided for in
these rules, the Montana Rules of Civil Procedure
(M. R.Civ.P. , the Montana Rules of Evidence
(M.R.Evid.) and the Supreme Court of Montana,
Uniform Court Rules for Local District Courts
govern the practice of the water courts.
Rule 1.11(2), Water Claims Examination ~ u l e s .
Under the rules therefore, a water right claimant who is
a litigant before the Water Court has the right to move in
the Water Court for a Rule 54(b) certificate when the
litigant is adversely affected by an interlocutory order or a
temporary preliminary decree of the Water Court. Rule 54(b),
M.R.C~V.P., provides:
Judgment upon multiple claims or involvinq multiple
parties. When multiple claims for relief or
multiple parties are involved in an action, the
court may direct the entry of a final judgment as
to one or more but fewer than all the claims or
parties only upon the express determination that
there is no just reason for delay and upon an
express direction for the entry of judgment. In
the absence of such determination and direction,
any order or form of decision, however designated,
which adjudicates less than all the claims or
rights of liabilities of all the parties shall not
terminate the action as to any of the claims or
parties, and the order or other form of decision is
subject to revision at any time before the entry of
judgment adjudicating all the claims and rights and
liabilities of all the parties.
From the provisions of Rule 54 (b), we can see that its
purpose is to retain jurisdiction in the District Court and
in this case, the Water Court, with power to revise the
judgment at any time before the entry of final judgment
adjudicating all of the claims therein involved. In those
cases where the court determines that there is no just reason
for delay and that its determination is in effect and fact
final, the court may permit an appeal by granting a Rule
54 (b) certificate.
In discussing the use and purpose of Rule 54 (b) in its
federal version, the United States Supreme Court said in
Sears, Roebuck and Company v. Nackey (1956), 351 U.S. 427,
In this form, it does not relax the finality
required of each decision, as an individual claim,
to render it appealable, but it does provide a
practical means of permitting an appeal to be taken
from one or more final decisions on individual
claims, in multiple claims actions, without waiting
for final decisions to be rendered on all the
claims in the case. The amended rule does not
apply to a single claim action nor to multiple
claims actions in which all of the claims have been
finally decided. It is limited expressly to
multiple claims actions in which "one or more but
less than all" of the multiple claims have been
finally decided or are therefore otherwise ready
for appeal. (Emphasis in original.)
351 U.S. at 435, 76 S.Ct. at 899, 100 L.Ed at 1306.
In the federal system, as in Montana's, an appeal is
permitted from a district court to the United States Court of
Appeals only from a final order or judgment. 28 U.S.C. §
1291. In Sears, Roebuck and Company, supra, the Supreme
Court decided that under a Rule 54(b) certificate a
preliminary order became a final judgment within the meaning
of § 1291. That Court stated:
... The District Court cannot in the exercise of
its discretion treat as "final" that which is not
final within the meaning of 5 1291. But the
District Court may by the exercise of its
discretion of the interest of sound judicial
administration, release for appeal final decisions
upon one or more, but less than all claims of
multiple claims actions. The timing of such a
release is, with good reason, vested by the rule
primarily in the discretion of the District Court
as the one most likely to be familiar with the case
and with any justifiable reasons for delay. With
equally good reason, any abuse of that discretion
remains reviewable by the court of appeals.
Rule 54 (b), in its amended form, is a comparable
exercise of the rulemaking authority of this Court.
It does not supersede any statute controlling
appellate jurisdiction. It scrupulously recognizes
the statutory requirement of a "final decision"
under § 1291 as a basic requirement for an appeal
to the court of appeals. It merely administers
that requirement in a practical manner in multiple
claims actions and does so by rule instead of by
judicial decision. By its negative effect it
operates to restrict in a valid manner the number
of appeals in multiple claims actions.
Me reach a like conclusion as to the validity of
the amended rule where the District Court acts
affirmatively and thus assists in properly timing
the release of final decisions in multiple claims
actions. The amended rule adapts the single
judicial unit theory so that it better meets the
needs of judicial administration. Just as Rule
54 (b) in its original form resulted in the release
of some decisions in claims in multiple claims
actions before they would otherwise be released, so
amended Rule 54 (b) now makes possible the release
of more of such decisions subject to judicial
supervision. The amended rule preserves historic
federal policy against piecemeal appeals in many
cases more effectively than did the original rule.
(Emphasis in original.)
351 U.S. at 437-438, 76 S. Ct. 900-901, 100 L. Ed. 1307.
The objectives of Rule 54(b) which were approved by the
United States Supreme Court in Sears, Roebuck, are the same
objectives of Rule 54(b) of the Montana Rules and are
similarly approved by us. In Water Court adjudications,
therefore, in proper cases, the Water Court may exercise its
jurisdiction to determine to release for appeal certain of
its interlocutory orders or decrees by issuing a Rule 54 (b)
certificate.
We must regard the provisions of 5 85-2-235, MCA,
providing only for appeals from a final decree as an
expression of state policy against piecemeal appeals. It
follows that Rule 54 (b) orders should not be entered
routinely or as a courtesy or accommodation to counsel.
Panichella v. Pennsylvania Railroad Company (3d Cir. 1958),
252 F.2d 452, 455. On the other hand, the "harsh case" test
is neither workable nor entirely reliable as a benchmark for
appellate review as noted by the Supreme Court in
Curtiss-Wright Corporation v. General Electric Company
(1980), 446 U.S. 1, 100 S. Ct. 1460, 64 L. Ed. 2d 1. As that
Court stated, "because the number of possible situations is
large, we are reluctant either to fix or sanction narrow
guidelines for the [water] courts to follow." 446 U.S. at
10-11, 100 S.Ct. at 1466.
In the status of the present cases before this Court,
where no Rule 54 (b) certificates were sought or granted, we
hold that we have no jurisdiction to hear these appeals. We
therefore dismiss each of these appeals and remand the causes
to the Water Court, but without prejudice to the respective
parties seeking Rule 54(b) certificates, a matter we leave to
the reasonable discretion of the Water Courts.
Dismissed. No costs to any party. Let remittitur
issue forthwith.
Justice
We Concur:
sitting f o r M r . Justice
F r e d J. W e b e r , who was
u n a b l e to sit