Robert and Carol Hurd

06/21/2022
DA 21-0661
Case Number: DA 21-0661
IN THE SUPREME COURT OF THE STATE OF MONTANA
2022 MT 120ROBERT N. HURD AND CAROL L. HURD,
Claimants and Appellants.
APPEAL FROM: Montana Water Court, Case No. 43Q-6006-A-2021
Honorable Russ McElyea, Chief Water Judge
COUNSEL OF RECORD:
For Appellants:
Margaret C. Weamer, Nicholas VandenBos, Tarlow Stonecipher
Weamer & Kelly, PLLC, Bozeman, Montana
Submitted on Briefs: June 1, 2022
Decided: June 21, 2022
Filed:
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__________________________________________
Clerk
Chief Justice Mike McGrath delivered the Opinion of the Court.
¶1 Robert and Carol Hurd appeal a December 1, 2021 order by the Water Court. The
order denied the Hurds’ motion to amend their water right for a groundwater well, finding
that the untimeliness of the motion meant that the Water Court lacked jurisdiction to
adjudicate the requested modification.
¶2 We restate the issue on appeal as follows:
Did the Water Court err in concluding that the Hurds’ failure to timely file a claim
for their exempt groundwater right precluded them from invoking the Water Court’s
jurisdiction?
¶3 We affirm.
FACTUAL AND PROCEDURAL BACKGROUND
¶4 The Hurds have rights in a groundwater well in Yellowstone County for stockwater
or individual use, water right 43Q 30022461. The well dates to 1950, and the Hurds
acquired the property and the water right in 1983.
¶5 In 1963, the Hurds’ predecessors-in-interest filed a “Declaration of Vested
Groundwater Rights” regarding the well and its use for livestock and domestic purposes.
Under the law in effect at the time, the Montana Groundwater Code of 1961, beneficial
uses of groundwater became recognized as water rights, and filing such a declaration
served as prima facie evidence of any such right. Section 89-2913(h), RCM (1961).
¶6 The 1973 Water Use Act substantially revised Montana’s system for claiming and
adjudication of water rights. This law required that water rights holders newly file a
statement of claim no later than June 30, 1983, or else forfeit their right through
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presumptive abandonment (the deadline was later extended to 1996). Section 85-2-221(1),
MCA; In re Yellowstone River, 253 Mont. 167, 832 P.2d 1210 (1992). These timely filed
claims filter into a basin-by-basin adjudication of water rights and priorities across the
state. Significant to this matter, certain types of water rights were exempt from the
requirement of filing a new statement of claim. These “exempt rights” included
groundwater used for livestock and domestic purposes, like the Hurds’ well. Section
85-2-222(1), MCA; 1979 Mont. Laws ch. 697, § 11.
¶7 The Hurds and their predecessors did not file a statement of claim for the water right
at issue here. In 2006, the Hurds did file a Form 627, a “Notice of Water Right,” with the
Department of Natural Resources and Conservation (DNRC). An “important note”
included at the top of this form described how stock and domestic groundwater rights were
exempt from the claim filing requirement and described the purpose of the form as follows:
A person who claims to have a water right that is exempt may file this form
for the purpose of receiving notice from the Department of permit
applications, change authorizations, or reservations that may affect the
owner’s water right. Filing this notice does not relieve a person of the
responsibility of establishing the existence of a water right. Acceptance of
this form by the Department does not constitute a recognition by the State of
Montana that the right is a valid existing water right.
¶8 Thus, the utility of Form 627 is that it provides people with exempt rights in
groundwater, like the Hurds, notice of the proceedings in their basin even if they lack one
of the duly-filed statements of claim pending in that basin’s adjudication. The form is not
a substitute for a statement of claim but provides a means for holders of exempt rights to
receive relevant information from DNRC.
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¶9 In 2017, the Montana Legislature again updated certain water rights statutes,
establishing a June 30, 2019 deadline for exempt water rights holders to file a statement of
claim. Section 85-2-222(2), MCA; 2017 Mont. Laws ch. 338, § 3. The 2017 amendments
provided that “the department may not accept any statements of claim submitted or
postmarked after June 30, 2019. The department shall notify a person who files a claim
after June 30, 2019, that the person’s claim will not be accepted.” Section 85-2-222(7),
MCA. Following the passage of the 2017 statute, DNRC mailed out a notice to all Montana
property owners, explaining the opportunity to file for exempt rights and describing the
2019 deadline. The notice made explicitly clear that rightsholders like the Hurds, who had
filed a Form 627, did not have a statement of claim: “The 627 was only for noticing
purposes and isn’t considered a valid water right filing. If you have one of these filings
you may consider filing an Exempt Statement of Claim at this time.”
¶10 Unlike the deadline for non-exempt rights from the 1973 law, a failure to meet the
2019 deadline does not result in forfeiture of an exempt right, but that right is subordinate
in priority to all the rights for which formal claims have been timely filed. Section
85-2-222(5), MCA. Thus, the new law made it necessary to file a statement of claim for
exempt rights to secure their priority relative to any other filed claims. The 2019 deadline
passed, and the Hurds did not file a statement of claim for their exempt water right.
¶11 In 2021, the Hurds filed a motion in the Water Court citing § 85-2-233(6), MCA,
which describes the process for a “motion to amend a statement of claim” after a temporary
preliminary decree or preliminary decree has been issued for a basin, as is the case in Basin
43Q encompassing the Hurds’ property. What the Hurds requested was essentially to
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transform the DNRC filing describing their “exempt notice” status (from the Form 627)
into a claim-backed right with an enforceable 1950 priority date, as if they had filed a
statement of claim. A Water Master at the court prepared a report regarding their request
and recommended that the motion be denied. The Water Court issued an order on
December 1, 2021, adopting the Water Master’s report. The Water Court concluded that
it had no jurisdiction to modify a statement of claim for the Hurds because the Hurds had
no properly filed claim to amend.
¶12 The Hurds appeal. No response brief was filed.
STANDARD OF REVIEW
¶13 When the Water Court issues an order reviewing the factual and legal conclusions
in a Water Master’s report, we review the Water Court’s order de novo, “to determine
whether it correctly applied the clear error standard of review to the Master’s findings of
fact and whether its conclusions of law were correct.” Skelton Ranch, Inc. v. Pondera Cty.
Canal & Reservoir Co., 2014 MT 167, ¶¶ 25-26, 375 Mont. 327, 328 P.3d 644. We also
review a court’s conclusions as to its jurisdiction de novo. Scott Ranch, LLC, 2017 MT
230, ¶ 10, 388 Mont. 509, 402 P.3d 1207.
DISCUSSION
¶14 Did the Water Court err in concluding that the Hurds’ failure to timely file a claim
for their exempt groundwater right precluded them from invoking the Water Court’s
jurisdiction?
¶15 The crux of the issue underlying the Hurds’ appeal is the distinction between a
“water right” and a “statement of claim” that the Water Court can adjudicate. The Hurds
conflate the two, but they are distinct.
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¶16 Water rights like those for the groundwater in the Hurds’ 1950 well vested upon
beneficial use and persist as long as the beneficial use does. 79 Ranch v. Pitsch, 204 Mont.
426, 431, 666 P.2d 215, 217 (1983). Under the 1973 statutory scheme, their right is an
“exempt right” because it is a right for livestock or individual use that was not forfeited if
it lacked a formal statement of claim.
¶17 A statement of claim is a different instrument—born of our statutory scheme since
1973—that describes a water right, serves as prima facie evidence of that right, and entitles
the holder of that right to participation in the Water Court’s adjudicative processes. Exempt
rights like the Hurds’ do not need a statement of claim in order to exist, but as noted, under
the 2017 amendments to the Water Use Act, they do need a statement of claim in order to
avoid being subordinate to the pertinent water rights that do have a filed claim. Section
85-2-222(5), MCA. Without a valid, timely filed statement of claim, the Hurds still have
a water right, but the priority date of that right is subordinate to other rights that do have a
statement of claim.
¶18 The Hurds filed a motion in the Water Court pursuant to a statute regarding how to
“amend a statement of claim.” Section 85-2-233(6), MCA. Although the Water Court’s
jurisdiction generally covers “all matters relating to the determination of existing water
rights,”1 the Hurds have invoked the Water Court’s jurisdiction to amend something they
do not have. If the Hurds had filed a statement of claim any time between 1983 and 2019,
the filing would have put other water users in their basin on notice of their groundwater
1
See § 3-7-224(2), MCA.
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right and brought them within the ambit of the Water Court’s basin-wide adjudication. But
after the Hurds failed to file such a claim before the statutory deadline created in 2017
passed, they lost their opportunity to invoke the Water Court’s jurisdiction to adjudicate
their priority as if they had filed one. The Hurds repeatedly refer to their right,
43Q 30022461, for which DNRC keeps an “exempt notice” file, as “Claim No.”
43Q 30022461, but this is a misleading and inaccurate label. The Hurds never submitted
the filing that would transform this right into a claim for the purposes of adjudicating the
basin-wide decree. They did not file the statement-of-claim form provided by DNRC, nor
did they pay the filing fees required by § 85-2-225, MCA. Section 85-2-222(5)(b), MCA,
now governs the priority of their right, subordinating it to those that do carry statements of
claim. The Water Court cannot ignore this law to enforce a priority date for the Hurds as
if they had followed the claims procedure when they have not.
¶19 In 2017, we issued a decision reflecting a similar standard for non-exempt
rightsholders who missed the statutory deadline for filing a statement of claim.
See Scott Ranch, ¶ 20. That case involved a rightsholder with both exempt and non-exempt
rights. We noted the then-upcoming 2019 deadline to file statements of claim for exempt
rights and encouraged the claimant, Scott Ranch, as well as others similarly situated, to
timely file their claims to avoid subordinating them to other rights. Regarding Scott
Ranch’s non-exempt rights, however, we held that the Water Court “lacked jurisdiction to
adjudicate Scott Ranch’s claims” because the 1996 deadline for filing these statements of
claim had already passed. Scott Ranch, ¶ 20. We noted that the law creating the deadline
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stated explicitly that DNRC “and the district courts may not accept any statements of
claim” after the deadline. Scott Ranch, ¶ 14 (citing § 85-2-221(4), MCA).
¶20 The Hurds point out that the law creating the 2019 deadline for exempt rights lacks
the “and the district courts” language cited above. It states only that “[t]he [DNRC] may
not accept any statements of claim submitted or postmarked after June 30, 2019.” Section
85-2-222(7), MCA. The Hurds argue that this distinction should change our jurisdictional
analysis, but it does not. Regardless, the Hurds did not follow the process required by law
to submit a claim. See § 85-2-222, MCA.
¶21 The Hurds essentially acknowledged their understanding of their exempt status
when they filed the notice form in 2006. This form made clear that its purpose was to
provide them notice of water rights activity but was not the equivalent of a statement of
claim for their right, and their use of the form makes apparent that the Hurds understood
that they lacked a statement of claim. We cannot allow the Hurds to bootstrap a statement
of claim into existence out of their 1963 declaration because, as the Water Court pointed
out in its order, this would contradict the Water Use Act and undermine the structured
adjudication process for which it was passed. It would create a mechanism for an untold
number of other rights holders who neglected the explicit statutory requirements but
retained some unconsidered pre-1973 evidence to belatedly insert themselves into the
adjudication process. All the rightsholders who duly followed the statutory rules and
provided notice of their rights, through timely filed statements of claim, would suddenly
lack the security and certainty that the claim-filing process was enacted to create.
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CONCLUSION
¶22 We conclude that the Water Court was correct to deny the Hurds’ motion for lack
of jurisdiction. The December 1, 2021 order by the Water Court is affirmed.
/S/ MIKE McGRATH
We Concur:
/S/ LAURIE McKINNON
/S/ BETH BAKER
/S/ INGRID GUSTAFSON
/S/ DIRK M. SANDEFUR
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