EnerVest v. Utah State Engineer

This opinion is subject to revision before final
publication in the Pacific Reporter
2018 UT 55
IN THE
SUPREME COURT OF THE STATE OF UTAH
ENERVEST, LTD.,
Appellant,
v.
UTAH STATE ENGINEER and MICHAEL CARLSON,
Appellee.
No. 20160394
Filed September 27, 2018
On Direct Appeal
Eighth District, Duchesne
The Honorable Samuel P. Chiara
No. 560800056
Attorneys:
John H. Mabey Jr., David C. Wright, Jonathan R. Schutz,
Salt Lake City, for appellant
Justin P. Matkin, Matthew E. Jensen, Salt Lake City,
for appellee Michael Carlson
Sean D. Reyes, Att’y Gen., Stanford E. Purser, Dep. Solic. Gen.,
Norman K. Johnson, Benjamin J. Jensen, Sarah M. Shechter,
Melissa Reynolds, Asst. Att’y Gens., Salt Lake City, for appellee
Utah State Engineer
JUSTICE HIMONAS authored the opinion of the Court, in which
CHIEF JUSTICE DURRANT, ASSOCIATE CHIEF JUSTICE LEE,
JUSTICE PEARCE, and JUDGE KATE TOOMEY joined.
Due to her retirement, JUSTICE DURHAM did not participate herein;
Court of Appeals JUDGE KATE TOOMEY sat.
ENERVEST v. UTAH STATE ENGINEER
Opinion of the Court
JUSTICE PETERSEN became a member of the Court on
November 17, 2017, after oral argument on this matter
and accordingly did not participate.
JUSTICE HIMONAS, opinion of the Court:
INTRODUCTION
¶1 “Water rights in the State of Utah are of utmost public
concern. Water, in an arid state like Utah, is its life-blood,
measured in currency represented by survival itself . . . . This
court has likened a drop of water [to] a drop of gold.” Longley v.
Leucadia Fin. Corp., 2000 UT 69, ¶ 15, 9 P.3d 762 (second alteration
in original) (citations omitted) (internal quotation marks omitted).
Therefore, it is no surprise that, in Utah, water rights have been
preserved in our state constitution, codified by our legislature,
and oft-contested in our state and federal courts.
¶2 This appeal stems from just such a contest over the state
water engineer’s resolution of who owns the water rights to
Minnie Maud Creek, a tributary of the Green River. EnerVest, Ltd.
(EnerVest) 1 asks us to review the district court’s grant of summary
judgment, which upheld the state engineer’s proposed
determination that The Minnie Maud Reservoir and Irrigation
Company (Minnie Maud) is the owner of disputed water rights on
Minnie Maud Creek and rejected the objections to the proposed
determination made on those grounds. Before reaching this issue,
however, we must first decide whether we have jurisdiction over
the case.
¶3 We conclude that we do not. The district court’s
certification of its summary judgment ruling as final under Utah
Rule of Civil Procedure 54(b) was improper and thus we do not
have a final judgment before us for review. And we do not
consider whether we should treat the appeal as a petition for
interlocutory appeal under Utah Rule of Appellate Procedure 5
because we conclude that EnerVest was not aggrieved by the
__________________________________________________________
1 This case stems from a long history of ownership and
disputes over the water rights at issue. When we reference an
action taken or not taken by a party to this case, we are including
the party’s predecessors in interest.
2
Cite as: 2018 UT 55
Opinion of the Court
district court’s decision and so lacks appellate standing.
Therefore, we dismiss the appeal for lack of appellate jurisdiction.
BACKGROUND
I. GENERAL ADJUDICATION PROCESS
¶4 A general understanding of Utah’s process for
adjudicating water rights in cases like this one is helpful for
grasping the issues in this appeal. When a justified petition of
“five or more or a majority of water users” for a determination of
water rights is given to the state engineer, the engineer files an
action in the district court to determine the water rights (similar to
a quiet title action). UTAH CODE § 73-4-1 (1953). The district court
may then order a general adjudication, which will provide it
guidance in establishing water rights.
¶5 “[T]he purpose of the general adjudication process is to
prevent piecemeal litigation regarding water rights and to
provide a permanent record of all such rights by decree.” Jensen v.
Morgan, 844 P.2d 287, 289 (Utah 1992).
When a general adjudication is initiated, the state
engineer notifies all known water rights holders and
provides public notice of the adjudication by
publication. After the state engineer provides notice,
all individuals and entities are required to submit
any water rights claims within the area in question
to the state engineer. Following the submission of
water rights claims, the state engineer conducts a
hydrographic survey of the water system and
evaluates the submitted claims.
In re Gen. Determination of Rights to the Use of Water, 2004 UT 106,
¶ 6, 110 P.3d 666 (citations omitted). A party who fails to timely
file a claim “shall be forever barred and estopped from
subsequently asserting any rights, and shall be held to have
forfeited all rights to the use of the water theretofore claimed by
him.” Utah State Eng’r v. Johnson, 2018 UT App 109, ¶ 19 (citation
omitted) (internal quotation marks omitted).
¶6 “When the survey is complete and all of the submitted
claims have been evaluated, the state engineer then prepares a
proposed determination of water rights for the area.” In re Gen.
Determination of Rights to the Use of Water, 2004 UT 106, ¶ 6. “A
copy of the proposed determination is mailed to each claimant,
along with a notice that any claimant dissatisfied with the
3
ENERVEST v. UTAH STATE ENGINEER
Opinion of the Court
proposal may file a written objection within ninety days.” Johnson,
2018 UT App 109, ¶ 20. “[A] claimant who . . . fail[s] to timely
object . . . takes on the role of a defaulting party and is bound by
its failure . . . unless and until the claimant seeks leave from the
court overseeing the general adjudication to file an untimely
objection . . . .” Id. ¶ 21. “If no objection has been filed to a
proposed determination, or if all objections have been resolved,
the district court must enter judgment rendering the proposed
determination the final adjudication of water rights for the given
area.” In re Gen. Determination of Rights to the Use of Water, 2004 UT
106, ¶ 7.
II. PROCEEDINGS BELOW
¶7 In the early 1900s, several owners of water rights on
Minnie Maud Creek filed articles of incorporation for Minnie
Maud and transferred their water rights to the newly formed
corporation. The relevant parties in this case transferred their
rights to Minnie Maud in exchange for shares in Minnie Maud.
¶8 In 1956, this general adjudication, which includes Minnie
Maud Creek, was initiated. The state engineer issued a proposed
determination in 1964, allocating twelve water rights to Minnie
Maud. In the following months, four different objections were
filed, challenging a total of eight of the water rights provided to
Minnie Maud. Each of the four objections raise several different
challenges, but all of the objections argue that Minnie Maud could
not be the owner of the water rights, either because Minnie Maud
never legally existed or because it was a defunct corporation.
EnerVest did not file an objection, and the water rights it now
claims are not directly challenged by the objections. 2
¶9 In 2012, EnerVest filed a petition under Utah Code
section 73-4-24(1) to expedite a hearing on the objections. The
district court granted the petition but limited the scope of the
__________________________________________________________
2 EnerVest is claiming ownership of water rights 90-24 and 90-
196. These water rights are provided to Minnie Maud in the
proposed determination and are not at issue in the objections.
Additionally, it is unclear from the record whether EnerVest
submitted a claim to the state engineer for these water rights. We
will assume, for purposes of this appeal, it complied with the
requirements for filing a claim.
4
Cite as: 2018 UT 55
Opinion of the Court
section 24 hearing to whether the proposed determination
correctly lists Minnie Maud as the owner of the water rights.
¶10 Several parties participated in the section 24 hearing,
including non-objectors, EnerVest and Michael Carlson, and
objectors, the Willis A. and Wilma Hammerschmid Trust (the
Hammerschmid Trust) and Gary and Nancy Motte. Eventually
the parties filed cross-motions for summary judgment, with
EnerVest and the Hammerschmid Trust arguing that Minnie
Maud could not own the water rights and Carlson arguing that
the state engineer correctly deemed Minnie Maud the owner of
the water rights. The district court granted Carlson’s motion for
summary judgment and denied EnerVest’s and the
Hammerschmid Trust’s motions for summary judgment. At the
parties’ request, the district court certified its decision as final
under Utah Rule of Civil Procedure 54(b). EnerVest and the
Hammerschmid Trust appealed.
¶11 During the pendency of the appeal, before the briefing
schedule was even set, the Hammerschmid Trust’s appeal was
voluntarily dismissed with prejudice. As a result, Carlson
challenges EnerVest’s standing to appeal.
STANDARD OF REVIEW
¶12 “Whether appellate jurisdiction exists is a question of
law, which we review for correctness. Additionally, [w]hether a
district court’s judgment is final is a question of law, which we
can consider for the first time on appeal.” First Nat’l Bank v.
Palmer, 2018 UT 43, ¶ 5, __ P.3d __ (alteration in original)
(citations omitted) (internal quotation marks omitted).
¶13 “[S]tanding is jurisdictional and [a challenge] may be
brought at any” time. Brown v. Div. of Water Rights of Dep’t of Nat.
Res., 2010 UT 14, ¶ 15, 228 P.3d 747. “[T]he question of whether a
given individual or association has standing to request a
particular relief is primarily a question of law.” Alpine Homes, Inc.
v. City of West Jordan, 2017 UT 45, ¶ 10, 424 P.3d 95 (citation
omitted) (internal quotation marks omitted).
ANALYSIS
¶14 On appeal, there are two jurisdictional issues for our
review. First, the district court certified its grant of summary
judgment to Carlson and denial of partial summary judgment to
EnerVest and the Hammerschmid Trust as final under Utah Rule
of Civil Procedure 54(b). We conclude that the district court’s
5
ENERVEST v. UTAH STATE ENGINEER
Opinion of the Court
summary judgment decisions did not meet the criteria for proper
rule 54(b) certification.
¶15 Second, Carlson challenges EnerVest’s standing to pursue
an appeal of the rejection of other parties’ objections. We agree
with Carlson and conclude that EnerVest lacks standing to appeal.
Therefore, we decline to consider whether the defects in the rule
54(b) certification could otherwise be cured by treating the appeal
as a petition for permission to file an interlocutory appeal under
Utah Rule of Appellate Procedure 5(a).
I. FINAL JUDGMENT
¶16 The first jurisdictional issue we must address is whether
this case presents a final judgment over which we have
jurisdiction on appeal. Unless one of three exceptions is met, we
lack appellate jurisdiction over a judgment that does not “end[]
the controversy between the litigants.” Copper Hills Custom Homes,
LLC v. Countrywide Bank, FSB, 2018 UT 42, ¶¶ 10, 13–15, __ P.3d __
(citation omitted) (internal quotation marks omitted). Certification
by a district court as final under Utah Rule of Civil Procedure
54(b) provides one of those exceptions. Id. ¶ 15. 3
¶17 In order to be appropriately certified as final under Utah
Rule of Civil Procedure 54(b), three requirements must be met:
(1) “there must be multiple claims for relief or multiple parties to
the action;” (2) “the judgment appealed from must have been
entered on an order that would be appealable but for the fact that
other claims or parties remain in the action;” and (3) “the [district]
court, in its discretion, must make a[n express] determination that
there is no just reason for delay.” Id. ¶ 16 (alterations in original)
(citation omitted) (internal quotation marks omitted).
Additionally, the district court must “set forth a clear rationale as
to why there is no just reason” for delay. Id. ¶ 27.
¶18 The district court’s 54(b) certification suffers from three
flaws. First, the district court did not offer a rationale for why it
determined there is no just reason for delay. This omission, in and
of itself, “functions as a practical bar to our appellate jurisdiction.”
Id.
__________________________________________________________
3 The other two exceptions are statutorily provided avenues
and interlocutory appeals under Utah Rule of Appellate
Procedure 5(a). Copper Hills, 2018 UT 42, ¶¶ 13–14.
6
Cite as: 2018 UT 55
Opinion of the Court
¶19 Second, the district court’s underlying order granted
summary judgment to Carlson and denied partial summary
judgment to EnerVest and the Hammerschmid Trust. And the
district court’s rule 54(b) certification order attempted to certify its
ruling on all three motions as final. But the denial of EnerVest’s
and the Hammerschmid Trust’s motions for partial summary
judgment is not an “order that would be appealable but for the
fact that other claims or parties remain in the action” because they
are not final. Id. ¶ 16 (citation omitted) (internal quotation marks
omitted); see also Denison v. Crown Toyota Motors, Inc., 571 P.2d
1359, 1360 (Utah 1977) (dismissing an appeal “from the denial of
[a] motion for summary judgment . . . because it is not from a final
order”).
¶20 Finally, the district court’s grant of summary judgment to
Carlson holds “that the State Water Engineer correctly determined
that the Water Rights were owned by Minnie Maud.” The nature
of a general adjudication prevents complete finality of any water
rights until the entire general adjudication has been completed. As
we have long recognized,
[i]f a court were allowed to enter final judgments of
individual rights in a suit for general adjudication
before the state engineer has made his survey,
report, determinations and recommendations as
provided for in the statute, the very purpose of the
statute, which we have shown is to avoid piecemeal
litigation, would be circumvented. Of course, as a
practical proposition the court may often be obliged
to hold hearings as between individual claimants
and enter interlocutory decrees, but no final judgment
should be entered until all the rights of all the
claimants can be adjudicated.
Watson v. Dist. Court of First Judicial Dist. in and for Cache Cty., 163
P.2d 322, 323 (Utah 1945) (emphasis added).
¶21 Therefore, this appeal is not appropriately before us
under Utah Rule of Civil Procedure 54(b). We have the discretion
under Utah Rule of Appellate Procedure 5(a) to treat an appeal
from an order certified under rule 54(b) that is not actually final
“as a petition for permission to appeal an interlocutory order.”
Because we conclude that EnerVest lacks standing on appeal, we
do not exercise this discretion here and therefore lack appellate
jurisdiction.
7
ENERVEST v. UTAH STATE ENGINEER
Opinion of the Court
II. ENERVEST IS NOT AN AGGRIEVED PARTY
AND LACKS APPELLATE STANDING
¶22 “Merely because a party appears in the district court
proceedings does not mean that the party automatically has
standing to appeal the judgment rendered by that court.”
Scottsdale Ins. Co. v. Knox Park Constr., Inc., 488 F.3d 680, 684 (5th
Cir. 2007) (citation omitted) (internal quotation marks omitted).
On appeal, a party whose standing is challenged
must show that he or she had standing under the
traditional test in the original proceeding before the
district court. In addition, an appellant generally
must show both that he or she was a party or privy
to the action below and that he or she is aggrieved
by that court’s judgment.
Chen v. Stewart, 2005 UT 68, ¶ 50, 123 P.3d 416 (citation omitted).
Carlson does not dispute that EnerVest had standing to
participate in the proceedings below. 4 And EnerVest did
participate in the action below. Therefore, the only disputed
question of appellate standing is whether EnerVest was aggrieved
by the district court’s decision.
¶23 An aggrieved party is one “whose personal, pecuniary, or
property rights have been adversely affected . . . by a court’s
decree or judgment.” Aggrieved Party, BLACK’S LAW DICTIONARY
(10th ed. 2014). “An aggrieved party must have been affected or
prejudiced by the order . . . .” 4 C.J.S. Appeal and Error § 251 (2018).
A party may be “aggrieved by a judgment that establishes or
divests property rights,” but “[a] judgment affecting only
property does not aggrieve a party who has or claims no title or
interest in that property.” Id.
__________________________________________________________
4 In order to have standing to bring a section 24 petition, a
claimant must have a “direct interest” in the objection for which
the expedited hearing is sought. UTAH CODE § 73-4-24(1). Because
we conclude that EnerVest lacks standing to appeal, we need not
decide whether a non-objecting party, whose rights under the
proposed determination are not at issue in the objection, has a
“direct interest” in the objection for the purposes of participating
in a section 24 hearing.
8
Cite as: 2018 UT 55
Opinion of the Court
¶24 Additionally, “[i]t is hornbook law that a party may only
appeal to protect its own interests, and not those of a coparty.”
Morrison-Knudsen Co., Inc. v. CHG Int’l, Inc., 811 F.2d 1209, 1214
(9th Cir. 1987) (citation omitted) (internal quotation marks
omitted); see also Libby, McNeill, & Libby v. City Nat’l Bank, 592 F.2d
504, 511 (9th Cir. 1978) (“It is, of course, a familiar principle that
only a party aggrieved by a final judgment may appeal from it. It
follows that a party may only appeal to protect its own interests,
and not those of a coparty.” (citations omitted) (internal quotation
marks omitted)). “An indirect financial stake in another party’s
claims is insufficient to create standing on appeal.” Morrison-
Knudsen, 811 F.2d at 1214.
¶25 EnerVest fails to address why it would be aggrieved for
purposes of appellate standing. 5 However, the state engineer filed
a brief arguing that EnerVest was aggrieved for the purposes of
appellate standing because “it is entitled to less of a proportionate
interest in the disputed water rights than it would receive if the
district court had ruled in the Objectors’ and EnerVest’s favor.”
¶26 This may technically be correct—EnerVest may
ultimately benefit from another water claimant’s objection to the
proposed determination. But that does not answer the legal
question of whether EnerVest was aggrieved by the district
court’s decision and can pursue the denial of other parties’
objections to the proposed determination.
__________________________________________________________
5 Instead, EnerVest focuses a majority of its briefing on
whether it had standing to participate in the section 24 hearing. It
also appears to argue that some notions of traditional and
alternative standing apply to appellate standing, but it undertakes
no analysis on whether or how those notions apply in the context
of appellate standing. And, while it points to Utah Code section
73-4-16, which provides that “[t]here shall be a right of appeal
from a final judgment of the district court to the Supreme Court as
provided in Section 78A-3-102,” it makes no argument that this
statute somehow exempts it from the appellate standing
requirement of being an aggrieved party. “[W]e are not a
depository in which [a party] may dump the burden of argument
and research,” and we will not consider these inadequately
briefed arguments on appeal. Espenschied Transp. Corp. v. Fleetwood
Servs., Inc., 2018 UT 32, ¶ 19, 422 P.3d 829 (second alteration in
original) (citation omitted) (internal quotation marks omitted).
9
ENERVEST v. UTAH STATE ENGINEER
Opinion of the Court
¶27 Despite EnerVest not filing its own objection, it is now
argued that EnerVest is aggrieved by the district court’s rejection
of other parties’ objections and determination that the state
engineer correctly deemed Minnie Maud the owner of the water
rights in question. This cannot be the case. Concluding that
EnerVest has a sufficient interest in another party’s objection to be
aggrieved by the rejection of that objection would run against
EnerVest’s status as a defaulting party, conflict with the
requirement of filing a timely objection, and undercut one of the
main purposes of general adjudication lawsuits.
A. EnerVest is a Defaulting Party and Cannot Be Aggrieved
¶28 First, EnerVest cannot be aggrieved by the district court’s
decision here because it failed to object to the proposed
determination and its rights under the proposed determination
have not been altered. Water claimants who are dissatisfied with
the water rights given to them in the proposed determination are
required to file an objection to the proposed determination with
the court within ninety days of receiving notice of the proposed
determination. UTAH CODE § 73-4-11. 6 For almost a century we
have stated that “if [a] claimant makes no objection [to the
proposed determination], he, by his silence, does in legal effect
precisely what every other person who is sued and makes default
does, namely, confesses the statements contained in the engineer’s
proposed determination of his water rights.” Eden Irrigation Co. v.
Dist. Court of Weber Cty., 211 P. 957, 960 (Utah 1922); see also Butler,
Crockett & Walsh Dev. Corp. v. Pinecrest Pipeline Operating Co., 2004
UT 67, ¶ 22, 98 P.3d 1 (“A claimant who fails to file a timely
objection to the proposed determination demonstrates
acquiescence to the state engineer’s delineation of water rights.”);
U.S. Fuel Co. v. Huntington-Cleveland Irrigation Co., 2003 UT 49,
__________________________________________________________
6 Prior to 2013, Utah Code section 73-4-11 did not explicitly
provide a requirement to file an objection within ninety days. 2013
Utah Laws 1149. Instead, the law merely provided that the
engineer must give each claimant “notice that any claimant
dissatisfied therewith may within ninety days of [the mailing of the
proposed determination] file with the clerk of the district court a
written objection thereto.” Butler, Crockett & Walsh Dev. Corp. v.
Pinecrest Pipeline Operating Co., 2004 UT 67, ¶ 22, 98 P.3d 1
(citation omitted). We have long recognized parties as defaulting
parties under that language. Id.
10
Cite as: 2018 UT 55
Opinion of the Court
¶ 19, 79 P.3d 945 (“[T]he fate of a water right claimant who fails to
object to a proposed award [is] similar to that of a defaulting party
in a lawsuit. [I]f the claimant makes no objection, he, by his
silence, . . . confesses the statements contained in the engineer’s
proposed determination of his water rights, and thus a judgment
may legally be entered in accordance with the proposed
determination of the engineer.” (third and fourth alterations in
original) (citation omitted) (internal quotation marks omitted)).
Therefore, a claimant’s “failure to file an objection within the
statutory period prevents him from . . . contesting the disposition”
of water rights. Butler, Crockett & Walsh, 2004 UT 67, ¶ 23.
¶29 After its ninety-day period to object expired, EnerVest
became a defaulting party that “confesse[d] the statements
contained in the engineer’s proposed determination of [its] water
rights” and thereby acquiesced to the rights provided it under the
proposed determination. Id. ¶ 22 (citation omitted) (internal
quotation marks omitted). That proposed determination remains
intact after the district court’s ruling; EnerVest’s rights have not
changed from those to which it acquiesced it was entitled decades
ago.
¶30 The proposed determination awarded the water rights at
issue to Minnie Maud. EnerVest failed to file an objection within
the ninety-day period provided and thereby, in legal effect,
confessed to Minnie Maud’s ownership of these water rights.
EnerVest cannot now, on appeal, retract its confession to the
statements contained in the proposed determination, undo its
default, and argue that it is entitled to greater water rights than
provided it under the proposed determination. Its “failure to file
an objection within the statutory period prevents [it] from now
contesting the disposition” of the water rights, id. ¶ 23, and makes
it “incapable of claiming [the water rights]” “as a matter of law,”
id. ¶ 28.
¶31 Therefore, EnerVest has no interests in the water rights—
at least no interests it can champion as a defaulting party—that
have been adversely affected by the district court’s decision that
leaves the proposed determination intact. Additionally, because
EnerVest is “incapable of claiming [the water rights],” id., it
cannot be aggrieved by the district court’s judgment, see 4 C.J.S.
Appeal and Error § 251 (2018) (“A judgment affecting only property
does not aggrieve a party who has or claims no title or interest in
that property.”).
11
ENERVEST v. UTAH STATE ENGINEER
Opinion of the Court
B. EnerVest Cannot Use an Appeal of Another Party’s
Objection to Circumvent the Requirement to Object
¶32 Second, concluding that EnerVest has a sufficient interest
in another party’s objection to be aggrieved by the denial of that
objection is contrary to the individual requirement to file an
objection found in Utah Code section 73-4-11 and the process for
extending the time to file an objection in Utah Code section
73-4-10. We have previously noted that “claimants should be
immediately aware of any possible objection as soon as they see
the proposed determination” because they are aware of the water
claims they submitted and can determine if the proposed
determination “does not match the contours of [their] submitted
claim[s].” In re Gen. Determination of Rights to the Use of Water, 2004
UT 106, ¶ 27, 110 P.3d 666. Therefore, we find it “difficult to see
how actions taken by a subsequent claimant could cause a
previously nonexistent objection to suddenly come into
existence.” Id.
¶33 A district court has the ability to extend the objection
period “upon due cause shown.” UTAH CODE § 73-4-10(1). In
interpreting that section, we said that “the existence of the time
limitation contained in section 73-4-11, coupled with the laudable
goal of certainty, reveals that the legislature did not intend section
73-4-10 to provide an escape hatch for water claimants that simply
neglect to pursue their claims.” In re Gen. Determination of Rights to
the Use of Water, 2004 UT 106, ¶ 41.
¶34 Allowing EnerVest to pursue another party’s objection on
appeal, without itself ever filing an objection, would undermine
both the time limitation in section 73-4-11 and the requirement of
proving due cause to get an extension for filing an objection set
forth in section 73-4-10. There is nothing in our case law or the
statutory text to warrant such a result.
¶35 Hearings on an objection occur in one of two ways. First,
a water claimant with a “direct interest” in a “valid, timely
objection” may file a petition under section 73-4-24 for an
expedited hearing on that objection. UTAH CODE § 73-4-24(1)
(emphasis added). A court should grant that petition if it “will
facilitate a reasonably prompt resolution of the matters raised in the
objection.” Id. § 73-4-24(4) (emphasis added). If no section 24
petition is filed, the court will eventually hear the objection as a
matter of course as part of the general adjudication. Before a
hearing on an objection, the court must give all claimants notice of
when “the matter will be heard.” Id. § 73-4-13 (emphasis added).
12
Cite as: 2018 UT 55
Opinion of the Court
This language does not suggest that a water claimant participating
in a hearing on an objection has the right to make or pursue an
objection that it did not itself timely lodge. Instead, the hearing is
on the objection that was filed.
¶36 EnerVest would have known of its potential objection
immediately upon the proposed determination’s release. At that
time, it had the option of objecting to the proposed determination
or acquiescing in its allocation. EnerVest chose the latter and has
not argued that there is due cause to excuse its failure to file an
objection. The right to participate, if any, 7 in a hearing on the
objection under sections 73-4-13 or 73-4-24 does not serve as an
“escape hatch for water claimants that simply neglect to pursue
their claims.” In re Gen. Determination of Rights to the Use of Water,
2004 UT 106, ¶ 41. And the right to be heard is not always
coterminous with the ability to be aggrieved. See Wash. Cty. Water
Conservancy Dist. v. Morgan, 2003 UT 58, ¶ 15, 82 P.3d 1125.
__________________________________________________________
7 In 1935, we interpreted a previous statutory requirement to
provide notice “to all claimants” regarding when and where the
objection would be heard. Plain City Irrigation Co. v. Hooper
Irrigation Co., 51 P.2d 1069, 1072 (Utah 1935). We concluded that
the intent of the statute is to require notice to all
adverse claimants, or all claimants whose rights
would be affected or drawn in question. It would
also seem that if a claimant or claimants have
objections or their rights could be affected adversely,
such claimant or claimants are entitled to notice as
required by the statute . . . .
Id. We have not had the opportunity to revisit this holding under
the current statutory framework or to consider whether a
claimant’s status as a defaulting party impacts whether they have
rights that could be adversely affected, and therefore are entitled
to notice of and to participate in the section 13 hearing. Nor have
we had the opportunity to consider which parties are entitled to
petition for or participate in a section 24 hearing. These questions
may rest on a “notion of ‘standing’” that is “not the traditional
sense of that term.” State v. Brown, 2014 UT 48, ¶ 15 n.2, 342 P.3d
239. In a sense, they are questions of “party status”: to be “legally
eligible—or in this sense to have standing—to participate in certain
proceedings, a person or entity must also qualify as a proper
party.” Id.
13
ENERVEST v. UTAH STATE ENGINEER
Opinion of the Court
¶37 In this case, the section 24 hearing was held on objections
other parties had filed challenging Minnie Maud’s existence.
EnerVest cannot use that hearing as a mechanism to lodge its own
objection on those grounds. While a non-objecting party’s
interests may ride an objector’s coattails as far as the objector
wishes to go, the non-objecting party cannot drag the objector
across the finish line against the objector’s will. To allow this
would undermine the individual requirement of filing a timely
objection, UTAH CODE § 73-4-11, or excusing the failure to timely
file an objection for due cause, id. § 73-4-10(1). Therefore, EnerVest
does not have a sufficient interest in another party’s objection to
be aggrieved by a district court’s denial of that objection.
C. Allowing EnerVest to Pursue Another Party’s Objection
Would Undermine the Goals of General Adjudications
¶38 Third, deeming EnerVest sufficiently interested in
another party’s objection to be aggrieved by the district court’s
decision would undermine “[o]ne of the key goals of the general
adjudication process[:] to remove doubts about the validity of
water rights.” In re Gen. Determination of Rights to the Use of Water,
2004 UT 106, ¶ 41. Challenges to water rights allocated under a
proposed determination must initiate within the general
adjudication. U.S. Fuel Co. v. Huntington-Cleveland Irrigation Co.,
2003 UT 49, ¶¶ 18–20, 79 P.3d 945. If no challenge to a water right
is filed, Utah Code “section 73-4-12 requires the court to enter
judgment consistent with uncontested elements of a proposed
determination.” Id. ¶ 12. As a result, a water claimant that receives
rights under an uncontested portion of a proposed determination
receives a right to obtain a judgment that provides it the water
rights allocated to it under the proposed determination. Id. ¶ 20. A
non-objecting party cannot mount a collateral attack on this right
outside of the general adjudication proceeding. Id. ¶ 18. 8
__________________________________________________________
8 Conversely, “[o]nce an objection to a proposed determination
of water rights has been properly filed in a general adjudication
proceeding, the objecting party is at liberty to pursue separate
adjudication of private claims.” U.S. Fuel, 2003 UT 49, ¶ 18. This
option for objecting parties also supports the conclusion that
EnerVest lacks a sufficient interest in the objections to be
aggrieved by their denial.
(continued …)
14
Cite as: 2018 UT 55
Opinion of the Court
¶39 If an objection is filed, the district court must hold a
hearing on the objections and “enter[] judgment on the contested
claims.” Murdock v. Springville Mun. Corp., 878 P.2d 1147, 1150
(Utah 1994) (citations omitted); see also UTAH CODE § 73-4-15. But
those hearings are limited to the objections that are filed. See supra
¶ 35. By the end of the ninety-day objection period, a water user
with rights under the proposed determination will know whether
his or her rights are challenged and, if so, which rights and by
whom. This allows “subsequent appropriators [to] rely upon
[these recorded water rights] before making their investments.” In
re Gen. Determination of Rights to the Use of Water, 2004 UT 106, ¶ 41
(citations omitted) (internal quotation marks omitted).
¶40 Accordingly, the requirement of objecting to a proposed
determination “furthers the goal of certainty by reassuring water
claimants that their rights are, in large part, immune from attacks by
claimants that have allowed their ninety-day objection period to expire.”
Id. (emphases added). 9 But EnerVest is attempting to do just that
on appeal—attack Minnie Maud’s rights under the proposed
determination despite allowing its ninety-day objection period to
expire more than half a century ago.
__________________________________________________________
Both a party receiving water rights under the proposed
determination and an objecting party have the ability to litigate
that dispute in a private suit. Id. Therefore, the objecting party
must, out of necessity, have the ability to control its objection and
withdraw the objection if that party settles with the party
receiving water rights. EnerVest wants us to determine that a non-
objecting party’s potential indirect benefit from an objection
creates an interest in the objection substantial enough to be
aggrieved by, and appeal, its denial without the objecting party’s
involvement. This would undermine and be contrary to the right
to litigate the objection outside of the general adjudication
without the non-objecting party’s involvement.
9 The exception we recognized in that case was the district
court’s “authority [under Utah Code section 73-4-10] to grant a
retroactive extension to the objection period . . . when a water
claimant can show due cause justifying the objection’s
untimeliness.” In re Gen. Determination of Rights to the Use of Water,
2004 UT 106, ¶ 41.
15
ENERVEST v. UTAH STATE ENGINEER
Opinion of the Court
¶41 It is clear from the record, and EnerVest does not dispute,
that EnerVest’s predecessor in interest did not file an objection to
the proposed determination. Therefore, EnerVest is a claimant
that allowed its time period to lapse. However, EnerVest’s
position might doubly undermine the goal of certainty. EnerVest
is only claiming two of the twelve water rights allocated to Minnie
Maud, water rights 90-24 and 90-196. According to EnerVest, it
“owns all the lands comprising the authorized places of use for”
those two water rights. It is unclear whether objections were ever
filed that directly challenge Minnie Maud’s rights to those two
water rights, 10 especially given that EnerVest’s predecessors in
interest—the landowners with interests in receiving those two
water rights associated with their land—never filed an objection.
If no objections filed actually challenge Minnie Maud’s right to
water rights 90-24 and 90-196, not only would Minnie Maud be
subject to attack by a claimant who allowed its objection period to
expire, but also subject to attack on otherwise uncontested water
rights. 11 Opening up water right owners to these types of attacks
undercuts the objective of establishing certainty through a general
adjudication, so we decline to recognize EnerVest as having such
an interest in another party’s objection. And therefore EnerVest
cannot be aggrieved for purposes of appeal.
¶42 For these three reasons, EnerVest cannot have a sufficient
interest in another party’s objection to be aggrieved by the denial
of that objection for the purposes of appellate standing. While it
may technically be the case that EnerVest would benefit from the
district court granting the objections and stripping Minnie Maud
of its water rights under the proposed determination, EnerVest, as
a defaulting party, lacks the legal ability to argue that it is entitled
to more rights than those to which it acquiesced when it failed to
object to the proposed determination. And, without the
__________________________________________________________
10 For example, the Hammerschmid objection challenges the
state engineer’s determination that Minnie Maud was the owner
of water rights 90-188 and 90-189—rights associated with land
being sold to the Hammerschmids.
11 We have never considered whether an objection can be used,
either by the objector or by another claimant, to attack otherwise
uncontested water rights under a proposed determination. While
we need not decide that issue today, we flag it for future cases.
16
Cite as: 2018 UT 55
Opinion of the Court
participation of the objector, it cannot champion the objection on
appeal.
¶43 This does not mean, as EnerVest suggests, that a
non-objecting party could never appeal a district court’s ruling on
an objection. 12 There will often be times that claimants receive
exactly that which they request and the proposed determination
directly reflects the entirety of the claim they filed. In that case,
such claimants will have no reason to object and will become, in a
sense, defaulting parties. However, if an objection is made on the
water rights they receive under the proposed determination, and
the court grants the objection in a way that negatively impacts the
water rights the defaulting party is to receive under the proposed
determination, those claimants will be aggrieved by the district
court’s decision and can appeal. A party would also have
standing to challenge a district court’s decision deeming it a
non-objecting (defaulting) party. See VP Props. & Devs., LLP v.
Seneca Specialty Ins. Co., 645 F. App’x 912, 915 (11th Cir. 2016)
(noting that a defaulting party has “standing to appeal the default
judgment against it”).
¶44 Similarly, if a claimant timely objects to a proposed
determination and the district court does not grant the objection
__________________________________________________________
12 Specifically, EnerVest notes that, “[a]ccording to [Carlson],
had the court granted EnerVest’s motion, he—as a claimant and
not an objector—would have no appellate standing.” EnerVest
could be right. Carlson has been acting on his own behalf, and not
derivatively on Minnie Maud’s behalf. See Torian v. Craig, 2012 UT
63, ¶ 16, 289 P.3d 479 (recognizing that a shareholder can only sue
individually, rather than derivatively, if it can show “an injury to
him- or herself that is distinct from that suffered by the
corporation” (citation omitted)); cf. Richardson v. Ariz. Fuels Corp.,
614 P.2d 636, 638–39 (Utah 1980) (“A class action and a derivative
action rest upon fundamentally different principles of substantive
law; to ignore those differences is not a minor procedural
solecism. . . . Suits which are said to be derivative . . . are those
which seek to enforce any right which belongs to the corporation
and is not being enforced . . . .” (citation omitted) (internal
quotation marks omitted)). Carlson would have to show that he
was personally injured by the district court’s modification to the
rights in the proposed determination in order to have standing to
appeal.
17
ENERVEST v. UTAH STATE ENGINEER
Opinion of the Court
(and the corresponding water rights) in its entirety, that claimant
will likewise be aggrieved and able to appeal. But EnerVest does
not fit into any of these categories and therefore is not aggrieved
by the district court’s decision.
CONCLUSION
¶45 EnerVest failed to file a timely objection to the proposed
determination. While EnerVest may technically benefit from other
parties’ objections, it became a defaulting party that lacks a
sufficient interest in those objections to be aggrieved by their
denial for the purpose of appellate standing. It may be that a
non-objecting party’s interests can piggyback on another party’s
objection, but only as far as the objecting party is willing to travel.
Once the objecting party chooses to end its objection’s journey, the
non-objecting party cannot take over.
¶46 The district court’s rule 54(b) certification was insufficient
to confer appellate jurisdiction upon this court because the
requirements for certification were not met, and therefore there is
no final judgment for our review. Having determined that
EnerVest lacks appellate standing because it is not an aggrieved
party, we decline to exercise our discretion to treat this appeal as a
petition for interlocutory appeal. We therefore dismiss the appeal
for lack of appellate jurisdiction.
18