Summary 2011 WY 121

Summary of Decision August 24, 2011

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Case Name: Rageth v. Sidon Irrigation Dist.

Citation: 2011 WY 121

Docket Number: S-10-0141, S-10-0184

URL: http://wyomcases.courts.state.wy.us/applications/oscn/DeliverDocument.asp?CiteID=464173

Appeals from the District Court of Big Horn County: No. S-10-0141 – The Honorable Dan Spangler, Retired, Judge; No. S-10-0184 – The Honorable Steven R. Cranfill, Judge

Representing Appellants (Plaintiffs): Kara Brighton and Harriet M. Hageman of Hageman & Brighton, P.C., Cheyenne, Wyoming. Argument by Ms. Brighton.

Representing Appellee (Defendant): Mary Helen Reed of McCarty, Reed and Earhart, Attorneys at Law, L.C., Cody, Wyoming.

Date of Decision: August 24, 2011

Facts: Appellants purchased acres situated adjacent to the Appellee irrigation district with adjudicated water rights diverted from a creek at a structure built and maintained by Appellee and conveyed through Appellee’s canal (irrigating ditch). The Appellee irrigation district was organized and existing under pertinent provisions of Wyo. Stat. Ann. Title 41, Chapter 7 (LexisNexis 2011). Appellants are not members of the Appellee district, and their irrigated acreage is not located within Appellee’s boundaries

District and previous owners of Appellants’ land had agreements establishing their payments for delivery of their water through the canal, but these agreements had expired before Appellants’ purchase of their land. After Appellants purchased the land, they and Appellee negotiated without success to reach agreement establishing a delivery fee. In 2008, Appellee billed Appellants a sum representing 75% of the gross assessment for Appellee’s members. In 2009, Appellee billed a sum representing 100% of the gross assessment for Appellee’s members. Appellants paid these bills under protest, and Appellee delivered their water throughout the irrigation seasons.

Appellants commenced an action against Appellee seeking a declaration of their conveyance rights in the canal, reimbursement of water delivery fees paid to the district under protest for several past irrigation seasons, and the establishment of a reasonable annual water delivery fee in future years. The parties executed a stipulation, approved by the district court, that Appellants have the perpetual right, as defined by their adjudicated water rights, to divert water from Appellee’s diversion structure and convey such water through the canal to their property, subject to an annual payment to Appellee to be determined by subsequent court order, and that Appellants’ perpetual conveyance right does not include any ownership interest in Appellee’s facilities.

Appellee moved for summary judgment as to Appellants’ claims for reimbursement of past water delivery fees and establishment of a reasonable annual water delivery fee going forward, which Appellants opposed. Following a hearing on that motion, the district court granted Appellee’s motion. Appellants timely appealed the summary judgment order. The district court also entered its order awarding Appellee’s costs as the prevailing party in the latter case. Appellants timely appealed that order also. The Court consolidated the appeals for this decision.

Issues: In No. S-10-0141, the central issue presented was, in the absence of an agreement, what water delivery fee may an irrigation district charge a non-member who has a perpetual right to convey that non-member’s adjudicated appropriation to that non-member’s land outside the irrigation district’s boundaries using the irrigation district’s canal and related facilities. In No. S-10-0184, with respect to the award of costs to Appellee, the resolution of that appeal turns on the outcome of the central issue presented in No. S-10-0141.

Holdings: The Court agreed with the parties that the Wyoming statutes applicable to irrigation districts, Wyo. Stat. Ann. Title 41, Chapter 7, and case law pertaining to those statutes did not apply to the dispute and were not authority to govern Appellants’ legal relationship with Appellee. The Court found that the statutory provisions at §§ 41-5-102 and 103 and § 41-6-303, contemplate the type of analysis appropriate to determine the expenses requisite to the proper operation, maintenance, and repair of the diversion and canal, as separate from all business expenses Appellee incurred in operating the entire irrigation district system. Pursuant to these statutory provisions, it is the burden of the Appellee, as owner of the diversion and canal that is seeking payment from Appellants, as a user of those irrigation works, to establish and justify those requisite itemized expenses.

The Court found there existed genuine issues of material fact that must be determined only after a full evidentiary hearing. Appellants’ proportionate share of the requisite expenses must be based on an equitable apportionment determined after consideration of the various relevant factors. The Court reversed the district court’s orders in No. S-10-0141 and No. S-10-0184 and remanded for further proceedings consistent with this opinion.

J. Golden delivered the opinion for the court.