No. 90-468
IN THE SUPREME COURT OF THE STATE OF MONTANA
IN THE MATTER OF THE ADJUDICATION OF
THE EXISTING RIGHTS TO THE USE OF ALL
THE WATER, BOTH SURFACE AND UNDERGROUND,
WITHIN THE MUSSELSHELL RIVER DRAINAGE AREA
ABOVE ROUNDUP, INCLUDING ALL TRIBUTARIES
OF THE MUSSELSHELL RIVER ABOVE ROUNDUP
IN WHEATLAND, GOLDEN VALLEY, MEAGHER,
FERGUS, MUSSELSHELL, SWEET GRASS, PARK,
YELLOWSTONE, and STILLWATER COUNTIES,
MONTANA.
CASE NO.: 40A-48C
APPEAL FROM: The Water Courts of the State of Montana,
The Honorable Bernard W. Thomas, Judge presiding.
COUNSEL OF RECORD:
For Appellants:
Laurence R. Martin and Sol Lovas, Felt, Martin,
Frazier & Lovas, Billings, Montana
For Respondent:
John R. Christensen, Christensen & Hubble, Stanford,
Montana
For Amicus Curiae:
Faye Bergan, Legal Counsel, Dept. of Natural
Resources & Conservation, Helena, Montana
UcT 8 1992,- Submitted on Briefs: September 10, 1992
Decided: October 8, 1 9 9 2
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* ,
J Clerk
Justice Karla M. Gray delivered the Opinion of the Court.
Rueben C. and Lavone M. Pitsch appeal from an adjudication of
water right claims in Big Coulee Creek, a tributary of the
Musselshell River, by the Montana Water Court, the Honorable
Bernard W. Thomas presiding. We affirm.
We address the following issues on appeal:
1. Did the Water Court err in determining that the 1893 and
1921 water rights claimed by appellants were abandoned?
a. Should this Court expressly overrule 79 Ranch?
b. Did the Water Court err in its application of 79
Ranch?
2. Did the Water Court err in determining that the claimed
1973 water right was not perfected?
3. Are appellants entitled to a 1976 priority date for water
applied to a beneficial use?
This is the third occasion on which the water right claims of
Rueben and Lavone Pitsch have been appealed to this Court. For the
most part, the claims before us originally went to trial in 1979
and appealed. We vacated and remanded in 79 Ranch, Inc. v. Pitsch
(1981), 193 Mont. 229, 631 P.2d 690, and findings of fact,
conclusions of law and judgment on remand were entered in 1982.
The case was appealed again and resulted in our decision in 79
Ranch, Inc. v= Pitsch (1983), 204 Mont. 426, 666 P.2d 215, in which
we affirmed in part and remanded for modification. A modified
decree and judgment was entered on August 22, 1983.
Before the earlier proceedings finally had been resolved in
August, 1983, Pitschs filed five Statements of Claim pursuant to
Montana's 1973 Water Use Act. The Water Court consolidated the
claims of existing water rights in Big Coulee Creek, a tributary of
the Musselshell River, asserted by Pitschs and other parties into
Case No. 40A-48C. Claims by Eugene and Lois Schaff, Warren
Sillivan and Coulee Hill Ranch, Inc., Chris and Betty Schaff and
appellants Pitschs, as well as objections to those claims, were
tried beginning February 8, 1990.
After hearing, the Water Court ruled on the water right claims
before it. With specific regard to appellants, the court
determined that their one-third interest in the 1893 Montana Cattle
Company water right (Claim No. 45635) had been perfected for 131
acres, but abandoned by their predecessors in interest. In
addition, the court ruled that a 1921 Notice of Appropriation
(Claim No. 45634) had been perfected for 23.5 acres, but abandoned,
and that another 1921 Notice of Appropriation (Claim No. 45632) was
not perfected or, if perfected, was abandoned. The court further
determined that a 1953 irrigation right based on a reservoir right
(Claim No. 182127) was not perfected. Finally, the court
determined that appellants1 claim based on their predecessors1 1973
Notice of Appropriation (Claim No. 45633) was not perfected by
reason of lack of reasonable diligence in putting the water to
beneficial use.
This appeal followed entry of judgment and certification
pursuant to Rule 54 (b), M.R. Civ.P. We note at the outset that only
the Pitschs appeal from the judgment of the Water Court and that
they do not appeal the Water Court's determination that the
asserted 1953 irrigation right was not perfected.
1. Did the Water Court err in determining that the 1893 and
1921 water rights claimed by appellants were abandoned?
Appellants argue two separate issues in support of their
contention that the 1893 and 1921 water rights were not abandoned.
First, they argue that this Court should expressly overrule 79
Ranch, Inc. v. Pitsch (1983), 204 Mont. 426, 666 P.2d 215
(hereafter 79 Ranch). Second, they argue that, in any event, the
Water Court erred in its application of 79 Ranch to the facts of
their water right claims. We will address these issues separately.
a. Should this Court expressly overrule 79 Ranch?
Appellants assert that our decision in 79 Ranch in 1983 and
our subsequent decision in E.E. Eggebrecht, Inc. v. Waters (1985),
217 Mont. 291, 704 P.2d 422, have resulted in an irreconcilable
conflict in the law of abandonment in Montana. We disagree.
79 Ranch addresses the question of abandonment of claimed
water rights. Essebrecht addresses the extent and abandonment of
an easement by grant and decides only the narrow issue of who has
standing to raise the issue of abandonment of such a grant
originally made by the United States. The two interests are
separate and distinct and the distinctions between the two form the
basis for the difference in legal approach to questions regarding
them, including the question of abandonment.
Montana law has long recognized that water rights and easement
rights such as ditch rights are distinct interests which can be
conveyed separately and abandoned separately. See McDonnell v.
Huffine (1912), 44 Mont. 411, 120 P. 792. The controlling
principle upon which water Itrights" in Montana are perfected and
continue to possess legal validity is that of beneficial use; water
rights cease when the water is no longer applied to a beneficial
use. Power v. Switzer (1898), 21 Mont. 523, 55 P. 32; 79 Ranch,
204 Mont. at 431-32. Water rights are thus inherently different
from other rights or interests not fundamentally premised or
conditioned on use of the particular right or interest;
necessarily, then, abandonment of a water right is a question
distinct from abandonment of a right created in a different manner.
In this regard, Montana's law on abandonment of water rights
has a long and evolutionary history. See, e.g., Smith v. Hope
Mining Co. (1896), 18 Mont. 432, 45 P. 632; Moore v. Sherman
(1916), 52 Mont. 542, 159 P. 966; Thomas v. Ball (1923), 66 Mont.
161, 213 P. 597; Shammel v. Vogl (1964), 144 Mont. 354, 396 P.2d
103; Holmstrom Land Co. v. Meagher Cty. Newlan Creek (1979), 185
Mont. 409, 605 P.2d 1060; 79 Ranch (1983); 85-2-404, MCA.
Appellants correctly assert that our decision in 79 Ranch was a
change in the law of abandonment of water rights. Given Smith and
Holmstrom, however, both of which held a long period of non-use of
water rights to be "strong evidencet1 intent to abandon, it was
of
not the "stunning reversalw appellants assert it to be.
Easebrecht did not relate to water rights or abandonment of
water rights. There, a reservoir right of way by grant was
acquired from the United States under federal law authorizing such
grants on public land of ground occupied by certain ditches, canals
or reservoirs. Relying on City of Billings v. O.E. Lee Co. (1975),
168 Mont. 264, 542 P.2d 97, we stated in Esaebrecht that Ifmerenon-
use of an easement bv arant, no matter how long continued, does not
constitute abandonment." Esaebrecht, 217 Mont. at 295. (Emphasis
supplied.) The statement clearly encompassed easements by grant
only; as noted above, the creation and continued existence of such
an interest is not analogous to the creation and continued
existence of a water right in Montana. If anything, the easement
by grant in Eaaebrecht might be analogous to a ditch right by
grant, rather than to a water right.
79 Ranch and E~~ebrecht not in conflict. Nor, given the
are
differences between water rights and easements by grant, is there
any reason that Montana law on abandonment of those interests
should be identical.
Appellants also contend that our 79 Ranch decision, insofar as
it relates to a rebuttable presumption of abandonment, violates the
Montana Constitution. heir constitutional argument is based in
large part on sweeping statements as to the extent and effect of
our holding which are simply incorrect and of other matters which
do not appear of record.
We do not address these statements in any detail. Building on
our holdings in Smith and Holmstrom that a "long period of nonuse
is strong evidence of an intent to abandon the water rights," we
went on in 79 Ranch to conclude that I1[i]n effect, such a long
period of continuous nonuse raises the rebuttable presumption of an
intention to abandon, and shifts the burden of proof onto the
nonuser to explain the reasons for nonuse.I1 79 Ranch, 204 Mont. at
432-33. We said no more than this.
Appellants quote Article IX, Section 3(1) of the 1972 Montana
Constitution, which recognizes and confirms "existing rights to the
use of any waters for any useful or beneficial purpose. . . .II
They construe that provision as prohibiting the state, whether
through the legislature or this Court, from any post-1972 actions
which could negatively impact in any way on pre-1972 water rights.
We previously have rejected similar constitutional arguments
regarding legislative changes in Montana water law since the 1972
Constitution. We reject them here as they relate to state action
via decisions of this Court.
As discussed above, valid and existing water rights in Montana
have long been premised on beneficial use. These are the "existing
rights" that the 1972 Constitution recognizes and confirms, and we
have held that that v8constitutional
recognition of water rights is
effective and will be sustained." McDonald v. State (1986), 220
Mont. 519, 722 P.2d 598. We specifically recognized that the
State's ability to affect existing and recognized water rights
survived the adoption of ~rticleIX, Section 3(1), of the 1972
Montana Constitution. Dept. of State Lands v. Pettibone (1985),
216 Mont. 361, 702 P.2d 948. Indeed, earlier this year, in
considering an abandonment issue under the 1973 Water Use Act, we
determined that the constitutional recognition of existing water
rights "does not establish that pre-1973 water rights are immune
from sovereign powers.Iv Matter of Adjudication of Yellowstone
River Water Rights (Mont. 1992), 832 P.2d 1210, 1214, 49 St.Rep.
413, 415. While those rights are "protected against unreasonable
state action[,] . . . they have not been granted indefeasible
status.Iv Id.
- We concluded that vvconsistentwith Article IX,
Section 3(1), of the Montana Constitution, the State Legislature
may enact constitutionally sound regulations including the
requirement for property owners to take affirmative actions to
maintain their water rights." -
Id.
We adopt the foregoing rationale as it applies to our
"rebuttable presumption of abandonmentvvholding in 79 Ranch.
Requiring a water right claimant to explain the reasons for a long
period of continuous non-use of water is a constitutionally
permissible affirmative action, particularly when the action
required is but an incremental change from the earlier rule that
long period of non-use is vvstrong,w
"potent," or "clearN evidence
of an intent to abandon. Indeed, 79 Ranch is akin to a caveat to
claimants that they should not rest their case without addressing
the potent evidence of intent to abandon which arises from a long
period of non-use. We hold, therefore, that our decision in 79
Ranch does not violate Montana's constitutional provision
recognizing and confirming existing water rights.
b. Did the Water Court err in its application of 79
Ranch?
The Water Court found that the 1893 Montana Cattle Company
water right was applied to irrigation via 393 acres of land between
1893 and 1912; thus, the water right was perfected. Thereafter, no
irrigation of any kind based on this water right occurred for at
least forty years. The Water Court found, under 79 Ranch, that
appellants failed to show reasonable cause for non-use of the water
for the forty year period and, thus, that the right had been
abandoned.
Similarly, the Water Court found that the claimed water right
based on a March 22, 1921, Notice of Appropriation filed by Claude
Hill, appellantsv predecessor in interest, was put to beneficial
use. The court further found, however, that the water was not used
for a period of some forty years and that appellants failed to show
reasonable cause for non-use over that period. Finally, as to
appellants1 claimed water right based on a Notice of Appropriation
filed in September, 1921, by Claude Hill and others, the court
found that appellants failed to prove that the water was ever put
to beneficial use on the sections specified in the Notice of
Appropriation. In the alternative, the court found that, if the
water ever had been put to beneficial use, the right was abandoned
through non-use for more than forty years and appellants' failure
to establish reasonable cause for the non-use.
Appellants assert that they presented sufficient evidence to
explain the reasons for non-use under 79 Ranch. According to
appellants, the Water Court erred in concluding that we had held
"that broad claims such as [ditches blowing shut, lack of money,
the depression, the war, the need for cooperation to restore the
ditches and the lack of water], unsupported by specific evidence,
are not sufficient to rebut the pre~umption.~~
Appellants are technically correct. We did not have before us
in 79 Ranch the variety or number of Itbroad claimsN subsequently
presented to the Water Court at the trial of this case; thus, it
might be said that the Water Court characterized our statement in
79 Ranch too broadly. Nevertheless, the Water Court correctly
applied the thrust of 79 Ranch to the facts before it.
In 79 Ranch, the only evidence before us in rebuttal of the
presumption of abandonment was Pitschvs argument that his
predecessors in interest did not have sufficient funds to irrigate.
We concluded that vv[s]uch a broad claim, unsupported by more
specific evidence, is not sufficient to rebut the presumption of
abandonment." 79 Ranch, 204 Mont. at 433. We relied on In re CF
& I Steel Corporation v. Purgatoire River Water conservation
District (Colo. 1973), 515 P.2d 456, for the principle that some
fact or condition excusing long periods of non-use must be
established to rebut the presumption, not mere expressions of
desire or hope. a. With specific regard to ~itsch's Iflack of
sufficient fundsvvargument, we also found the Colorado Court's
reasoning persuasive:
"Considering the large demands for all of the
appropriatable water in this state .. ., it might be
said that nearly every abandoned water right could have
its non-use justified by the economics that might prevail
sometime in the future for use of this water. ... This
gleam-in-the-eye philosophy is not consistent with the
protection and preservation of existing water rights.Iv
79 Ranch, 204 Mont. at 433-34; citing CF & I, 515 P.2d at 458.
With 79 Ranch clearly before us, we have scrutinized the
entirety of the record in the case. Appellants presented general
evidence of a variety of negative factors in an effort to span a
period of non-use from at least the 1920s to 1976: dry conditions
in the 1920s; the Itdustbowl yearsu of the 1930s; the depression;
World War 11; blown-in ditches; lack of water; lack of money; and
the need for cooperation to restore a lengthy series of ditches to
operating condition. As presented, the evidence generally
encompassed the Big Coulee area and was not specific to the acreage
to which the claimed water rights related. In addition, the
evidence was nearly all conclusory in nature; that is, the evidence
was that certain spans of years were Itpretty dry," "most peopletg
did not have sufficient funds to reopen ditches, and so on.
Specific evidence explaining or excusingthe long period of non-use
of the particular water rights on the specific property was
lacking. In addition, evidence was presented by other parties that
sufficient water was available for irrigation from Big Coulee in
some years, that portions of the blown-in ditches were easily
opened and thereafter utilized, and that at least one property was
irrigated from Big Coulee Creek every year there was water from
1941 to 1990.
We agree with appellantsg argument that a person cannot put
water to beneficial use when there is no water available. The
record here reflects, however, that some quantity of water was
available for irrigation from Big Coulee Creek for many, if not
most, of the years at issue here. The overall impression from the
record is that much farming in the Big Coulee area was dry land
farming and that the farmers there were little interested in
irrigation. In any event, appellants presented no specific
evidence establishing any fact or condition sufficient to excuse
the long period of non-use, as required by 79 Ranch.
Appellants1 reliance on Hallenbeck v. Granby Ditch and
Reservoir Company (Colo. 1966), 420 P.2d 419, is misplaced. In
Hallenbeck, the issue was whether the Granby Ditch and Reservoir
Company had made a sufficient showing to rebut the presumption of
abandonment of storage rights in a number of reservoirs. The
Colorado Court stated that 'a reasonable justification for non-use
l
may very well exist where it can be shown that economic, financial
or legal difficulties or natural calamities prevented the storing
of all the water that was originally decreed.If Hallenbeck, 420
P.2d at 426 (citations omitted). The evidence showed that Granby
was unable to keep the reservoirs in peak operating condition
during the depression, but that it did keep parts of the reservoir
system operating with specifically-proved expenditures of money.
Evidence also indicated that material and engineering shortages
during the war hampered operations, but that all of the reservoirs
save one were used until 1945. Repairs on a dam on one of the
reservoirs were prohibitively expensive as a result of U.S.
Forestry requirements. However, increasingly larger amounts were
spent on the remaining system from 1945 until 1961. On these
facts, the Colorado Supreme Court affirmed the trial courtls
finding of insufficient facts to show intent to abandon.
Hallenbeck is distinguishable from the case before us. There,
Granby continued to use portions of its storage rights throughout
the period. In addition, it presented specific evidence as to its
continuing efforts to maximize operation of its reservoir system
and its storage rights as well as specific evidence of the economic
financial or legal difficulties or natural calamities which
hampered its efforts.
Appellants presented no evidence of any effort whatsoever by
their predecessors in interest to apply the claimed water rights to
beneficial use. Nor did they present any specific evidence of
obstructions to their ability to do so. When this case was last
before us, we stated that Pitsch's argument that his predecessors
did not have sufficient funds to irrigate was too broad a claim,
unsupported by more specific evidence, to rebut the presumption of
abandonment. Appellants did not add any specific evidence in that
regard. Overall, they presented merely a series of conclusory
statements concerning a variety of negative factors spanning nearly
fifty years. Based on the record before us and upon which the
Water Court made its findings, we cannot say the Water Court erred
in its findings or in its application of 79 Ranch.
2. Did the Water Court err in determining that the claimed
1973 water right was not perfected?
Appellants filed a Statement of Claim for an irrigation right,
claiming 325.80 acres of irrigation use in sections 35 and 36, T5N,
R19E, with a 1973 priority date. Appellants' claim was based on a
Notice of Appropriation for irrigation use filed May 30, 1973, by
their predecessors in interest Bert and Victoria Schaff. The water
was claimed by the Schaffs for use on the NW1/4 of section 35 and
the NW1/4 of section 36, T5N, R19E and was never put to beneficial
use by them.
Appellants purchased sections 35 and 36, T5N, R19E, including
all water rights, from the Schaffs in August 1975. They first put
water to beneficial use in July 1976, principally on land in the
NE1/4 and S1/2 of section 35, T5N, R19E. The Water Court found, on
these facts, that appellants failed to prove reasonable diligence
on the part of their predecessors in interest in applying the 1973
water right to a beneficial use. Appellants argue that the court Is
finding of lack of reasonable diligence is error. As a result,
according to appellants, the pre-1973 Water Use Act appropriation
was perfected and their priority date relates back to the date of
filing.
"'What constitutes due diligence is a question of fact to be
determined by the court in each case.'I1 Mont. Dept. of Nat. R. &
C. v. Intake Water Co. (1976), 171 Mont. 416, 434, 558 P.2d 1110,
1120 (citation omitted). Thus, our standard of review is whether
the court's finding of fact is clearly erroneous. Interstate
Production Credit v. DeSaye (1991), 250 Mont. 320, 323, 820 P.2d
In Intake Water Co., we cited Clark, Waters & Water Rights,
Vol. 6, § 514.1, pp. 308, 309, as follows:
I1Diligence does not require unusual or extraordinary
effort, but it does require a steady application of
effort--that effort that is usual, ordinary and
reasonable under the circumstances. * * * So long as the
applicant prosecutes the construction of works in good
faith with a steady effort, he should be held to have
prosecuted with diligence.I1
171 Mont. at 434. In that case, we determined that the applicant
had met the diligence requirement. Appellants herein assert that
that case is apposite here and mandates a reversal of the Water
Court's finding. Appellants fail to take into account the
significant factual differences between the two cases.
In Intake Water Co., the Notice of Appropriation was filed on
June 8, 1973 and the water had not been put to beneficial use--
indeed, construction of the diversion works had not begun--by the
time the DNRC1sdeclaratory judgment action was tried. The record
reflected that the contemplated multi-million dollar project was of
great complexity and magnitude which would require several years to
complete even after the project was physically under way. The
company was progressing toward removal of both actual and legal
constraints arising out of the Yellowstone River Compact and
several Montana statutes. In addition, actual construction of the
diversion project could not begin until National Environmental
Policy Act requirements were met and federal government approval
was obtained. Under these facts, we held that the statutory
language did not require wcommencement of actual on-site excavation
or construction of the diversion works, but that it encompasses the
steady on-going effort in good faith by Intake to prosecute the
construction of the project. ... Intake Water Co., 171 Mont. at
436.
In the case before us, appellants1 predecessors in interest
filed the Notice of Appropriation in May, 1973. Bert Schaff
ordered an irrigation system that year, laid out pipe in the fields
and bulldozed a site for his pump. Necessary parts for the
irrigation system were not delivered. By the time he sold the
property to appellants in August, 1975, Schaff had undertaken no
additional efforts to obtain the parts to complete the irrigation
system. Appellants subsequently put the claimed water to
beneficial use in July, 1976, more than three years after the
notice had been filed.
The record reflects no complexity, legal barriers or
justifiable actual barriers regarding the contemplated irrigation
project for which the 1973 Notice of Appropriation was filed, such
as were present in Intake Water Co. Appellants1 predecessors did
not proceed with any steady on-going effort toward completion of
their irrigation project after initial steps were taken.
Substantial, credible evidence supports the Water Court's finding
that appellants failed to prove reasonable diligence on the part of
their predecessors in interest in applying the claimed 1973 water
right to beneficial use. In addition, the court did not
misapprehend the law; nor are we left with the conviction that a
mistake has been committed. We hold that the Water Court Is finding
of lack of reasonable diligence is not clearly erroneous. Absent
perfection of the 1973 Notice of Appropriation, appellants cannot
now claim an existing pre-1973 water right. Holmstrom, 185 Mont.
430.
3. Are appellants entitled to a 1976 priority date for water
applied to a beneficial use?
Appellants1 final contention is that they are entitled to a
1976 priority date for the water they utilized under the 1973
Notice of Appropriation. We addressed this precise issue in 79
Ranch and address it again here only because of its importance in
the on-going water rights adjudication and permit processes.
The Water Court determined that appellants acquired a
different type of sprinkler system to put the water to beneficial
use; further, they changed both the place of diversion and the
place of use stated in the 1973 Notice of Appropriation. The court
noted that these significant changes were "all indicative of a new
appropriationw in 1976. Appellants1 argument for a 1976 priority
date apparently is based on this determination. They misapprehend
the effect of the determination vis-a-vis the 1973 Water Use Act.
In essence, and notwithstanding the failure of their claim
under the 1973 Notice of Appropriation, appellants1 argument is
that their claim still must be adjudicated under pre-1973 law. To
accept this argument would be to ignore both the thrust and the
specific requirements of the 1973 Water Use Act regarding new
appropriations of water and to revert to pre-1973 law.
All new appropriations of water must be established through a
water use permit system. Section 85-2-302, MCA. IIA right to
appropriate water may not be acquired by any other method. ...
The method prescribed by this chapter is exclu~ive.~
Section 85-2-
301(3), MCA. These statutes are perfectly clear and clearly negate
appellants1 argument. In addition, this precise issue was
addressed and decided in 79 Ranch. We refused to affirm the 1976
priority date established by the court for a new "useI1 right,
noting the 1973 Act's "emphatic" statement that it contained the
exclusive procedures for post-1973 acquisition of water rights and
the absence of record support for compliance with those procedures.
79 Ranch, 204 Mont. at 436.
AFFIRMED.
We concur: 4%.
Q.
.
\r,
we Justices