Board of County Commissioners v. Park County Sportsmen's Ranch, LLP

Justice KOURLIS

specially concurring in part and dissenting in part:

Preliminarily, I would find this case to be moot because the trial court denied Applicant, Park County Sportsmen's Ranch (PCSR), its conditional water rights and found the storage plan we here address to be infeasible. As a result, we are now answering a legal question without any facts to which to moor our decision. In a context such as this where the question is important and far-reaching and where the law is unclear, I suggest that such a venture is perilous. Accordingly, I dissent from the majority's conclusion that this case is not moot, and I would await a case in which the facts are fully developed.

If I were to reach the substantive issue, I would affirm the water court's summary judgment entered on behalf of PCOSR; however, on much narrower grounds than the majority. I therefore specially concur in the balance of the majority opinion.

I.

First, it is clear that even when parties seek declaratory relief, there must be an actual controversy. "[JJurisdiction exists only if the controversy contains a currently justiciable issue or an existing legal controversy...." Constitution Assocs. v. N.H. Ins. Co., 930 P.2d 556, 561 (Colo.1996) (citing Heron v. City & County of Denver, 159 Colo. 314, 316, 411 P.2d 314, 315 (1966)). Here, there exists no current legal controversy, because the trial court dismissed PCSR's Application for water rights.

Declaratory judgment proceedings are not intended to address speculative inquiries, or uncertain or hypothetical questions. Heron, 159 Colo. at 316-17, 411 P.2d at 315. In fact, if a judicial opinion in a declaratory judgment case "will have no practical legal effect upon an existing controversy, ... [then] there is no justiciable controversy alleged as between the plaintiffs and the defendants." Crowe v. Wheeler, 165 Colo. 289, 295, 439 P.2d 50, 53 (1968) (holding action to enjoin election and for declaration of rights concerning eligibility of voters moot after election was concluded).

An applicant for a conditional water right must sometimes present evidence that it can *716and will acquire certain property rights nee-essary to its application, and the water court or the district court must determine the availability of such rights as a condition precedent to the application. See Gibbs v. Wolf Land Co., 856 P.2d 798, 802 (Colo.1993); FWS Land & Cattle Co. v. State Div. of Wildlife, 795 P.2d 837, 840-41 (Colo.1990). However, the presumption is that the applicant has satisfied the other requisites for issuance of the decree.

Here, the cireumstances are different. PCSR applied for conditional water rights under a plan that, if approved, would have permitted PCSR to store water below the Landowners' property. The water court denied the application. Thus, PCSR has no water to store in the aquifer, and the factual basis for this legal controversy is nonexistent. Unless or until PCSR obtains a conditional water right, which is hypothetical at this point, the majority's ruling here will not affect the rights of either party. The question is moot. Farmers Ins. Exch. v. Dist. Court, 862 P.2d 944, 947 (Colo.1993) (" 'Declaratory judgment proceedings may not be invoked to resolve a question which is nonexistent, even though it can be assumed that at some future time such question may arise." ") (quoting Taylor v. Tinsley, 138 Colo. 182, 183-84, 330 P.2d 954, 955 (1958)).

I differ with the majority's suggestion that the issue is generic and should be resolved in a vacuum. PCSR's application contains a confusing and all-inclusive request for storage rights. In considering the application, the water court stated, "The Applicant proposes to create storage by withdrawing 140, 000 acre-feet from the South Park Formation.... The resulting cone of depletion will constitute the 'storage vessel.'" In the application itself, PCSR states that it seeks storage in the saturated and unsaturated portions of the aquifer formation and that it seeks storage in two aquifer zones. In short, the application is all-inclusive and confusing.

In the water case, the water court concluded that the plan was a proposal only to replace that amount of water PCSR removed from the cone of depletion, not a plan to fill space that was originally empty. On that basis, the water court found: (1) that the recharge model was not sufficiently reliable to permit a reasonably accurate determination of either the timing, amount, and location of stream depletion, or the timing and amount of aquifer recharge; (2) that the surface flow model was insufficiently reliable to determine stream flow or legal availability of water and that it overestimated the stream flows available to PCSR; and (8) that the proposal was no more than "a scheme to augment out-of-priority depletions with additional out-of-priority pumping and exacerbated depletions to the aquifer and the river system." Based on those findings, it concluded that PCSR did not meet the statutory requirements for approval of an augmentation plan and that PCSR was gambling on sufficient rainfall to replace the water deficit created by its pumping.

Therefore, I disagree with the majority's contention that this is an important "predicate to proceeding to the merits of PCSR's conditional decree application." See maj. op. at 699. There are no property rights that the water court identified as being a predicate to, or having any bearing upon, consideration of the application. Rather, the water court determined that the PCSR's plan would not work. As a result, the water court declined to grant PCSR any water rights. Therefore, the factual basis for this legal controversy is nonexistent.

Because I view it as inadvisable to address a question of this magnitude without real interests at stake and without full factual development and because "[clourts must confine their exercise of jurisdiction to cases that present a live case or controversy," Davidson v. Comm. for Gail Schoettler, Inc., 24 P.3d 621, 623 (Colo.2001), I would find the issues in this case to be moot and would decline to reach them.

IL

Were I to resolve the substantive issues, I would do so on a very limited basis. The Landowners in this declaratory judgment action sought a declaration that PCSR has no right to occupy the space beneath their lands to store water, and that any placement or storage of water on or below the surface of *717their property constitutes a trespass. The undisputed facts of the case indicate that Landowners made no showing or attempted showing that the placement of waters in the space beneath their land would in any way compromise or invade the use, enjoyment, or benefit attendant upon their ownership rights. Landowners further presented no evidence disputing PCSR's contention that the storage would occur within the natural aquifer. In my view, therefore, the Landowners in this particular declaratory judgment action have failed to set forth facts that would entitle them to a resolution in their favor.

However, I disagree with the majority that the only cireumstance in which the Landowners would have the right to pursue declaratory relief would be the circumstance wherein PCSR would propose to construct project facilities on the Landowner's properties. I suggest that there would be a material issue of disputed fact that would defeat summary judgment if the Landowners presented some evidence that PCSR's plan would injure or invade their property interests, or if the Landowners presented evidence that the proposed storage was to occur other than within the natural aquifer.

IIL

The law that deals with ground water represents an uneasy melding of water law related to surface uses, as modified by statutory provisions that govern ground water uses. Certainly, in the context of surface waters, augmentation and storage are different. Storage places water in a facility for later use under section 37-87-101(1), 10 CRS. (2001), whereas augmentation is the act of placing water in a stream system (surface or ground) to replace out-of-priority diversions. See § 37-92-108(9), 10 C.R.S. (2001). Recharge, on the other hand, is the physical act of putting water into an aquifer, and can apply either to augmentation or storage. When such injected water is used to replace out-of-priority depletions, it comprises augmentation water. In re Plan for Augmentation of City & County of Denver v. City & County of Denver, 44 P.3d 1019, at 1025, (Colo. 2002). When it is impounded and "reserved" entirely to the party that places it in storage, it is stored water. § 37-87-101(1).

Storage of water in a moving underground system, such that the stored water can be withdrawn out of priority, is a novel concept. Clearly, it has no analogue in the development of the law concerning surface water. Historically, storage has meant: "impoundment, possession, and control of water by means of a dam." § 37-92-108(10.5), 10 C.R.S. (2001). Storage rights have also historically involved property interests in land associated with that structure. § 37-87T-101(1).

Here, PCSR asserts that the underground formation it seeks to use for storage purposes

creates a water storage system capable of operation by Applicant as an underground reservoir. The unsaturated portion of the South Park Formation itself contains storage capacity which Applicant will utilize. The South Park Aquifer is contained within the saturated portions of the South Park Formation and can also be utilized as a reservoir....
... Applicant claims the right to utilize both the saturated as well as the unsaturated portions of the South Park Formation for water storage.

PCSR claims the right to utilize water storage space in the "South Park Formation Underground Reservoir System which will be filled and refilled ... both to such reservoir system's existing storage capacity as well as to new capacities." PCSR also claims the right "to fully consume by recapture and otherwise all waters diverted into Applicant's South Park Formation Underground Reservoir System." PCSR claims 140,000 acre feet of water, all conditional, with 70,000 acre feet of volumetric storage separated into two reservoir zones; PCSR then states that the total maximum capacities of the two reservoirs equal a combined 140,000 acre-feet.1

*718The result is that PCSR seeks to use an entire basin, tributary in nature, as a repository for water that it will then withdraw out-of-priority. The question before us relates to the overlying Landowners' rights to object to that plan.

A.

To begin with the easiest precept, it is quite clear that a landowner does not own the waters traversing his property. In re Plan for Augmentation of City & County of Denver, 44 P.3d at 1024-1025, Chatfield E. Well Co. v. Chatfield E. Prop. Owners Ass'n, 956 P.2d 1260, 1268 (Colo.1998) (noting that no person owns Colorado's public water resource as a result of land ownership). Others have the right to use such water in accordance with the priority system. Empire Lodge Homeowners' Ass'n v. Moyer, 39 P.3d 1139, 1147 (Colo.2001).

It is equally clear that such use can sometimes involve the artificial augmentation of the stream with waters from another drainage. § 37-92-103(9), 10 C.R.S. (2001). Similarly, a ground water recharge plan makes use of the ground water system for transportation and augmentation. The landowner does not own the ground waters underlying his property, just as he does not own the surface waters traversing his property. Chatfield E. Well Co., 956 P.2d at 1268.

B.

However, here the clear parallels with surface water law begin to deteriorate. As to surface usage, it has also been a matter of undisputed law that one water user may not construct a storage facility on the land of another without permission or payment of just compensation. Colo. Const. art. II, § 14; § 37-87-101(1), 10 C.R.S. (2001); Mortensen v. Mortensen, 135 Colo. 167, 168-69, 309 P.2d 197, 198 (1957). It is equally irrefutable that one water user may not make use of a naturally existing water storage facility on the land of another without permission or payment of just compensation. § 37-87-101(2), 10 C.R.S. (2001); Mortensen, 135 Colo. at 168-69, 309 P.2d at 198; see also FWS Land & Cattle Co., 795 P.2d at 840-41 (finding that granting the plaintiff's motion for summary judgment was proper where the defendant did not have complete ownership of the reservoir bed nor permission to use the state lands for expanded storage purposes; because a right to use lands underlying a reservoir involves real property issues, the water court's refusal to adjudicate relative ownership interests was correct).

C.

We now arrive at the storage of water in underground aquifers. The legislature has the authority to control the use of ground water in Colorado. Upper Black Squirrel Creek Ground Water Mgmt. Dist. v. Goss, 993 P.2d 1177, 1182 (Colo.2000); State v. Southwestern Water Conservation Dist., 671 P.2d 1294, 1316 (Colo.1983). It is to the statutes, therefore, that we must look to determine the extent and parameters of any underground storage rights. The Colorado General Assembly has addressed storage in underground aquifers in only two statutory provisions. Section 37-92-305(9)(c) declares that: "No water right or conditional water right for the storage of water in underground aquifers shall be recognized or decreed except to the extent water in such an aquifer has been placed there by other than natural means by a person having a conditional or decreed right to such water." Section 37-87-101(2) provides that: "Underground aquifers are not reservoirs within the meaning of this section except to the extent such aquifers are filled by other than natural means with water to which the person filling such aquifer has a conditional or decreed right.2 *

*719It is only these two statutes 3 upon which we rely in concluding that the General Assembly has authorized the issuance of decrees for underground storage of out-of-priority water, without the constraints that would apply to a similar surface water project. Specifically, we are concluding that the impoundment requirement of the storage statute is satisfied if the applicant captures water and artificially injects it into the aquifer-with no requirement that the applicant demonstrate any subsurface impoundment of the water. Similarly, we are concluding that there are no "real property interests" associated with using an aquifer as a storage facility.

Although I agree with the basic premise that conjunctive use is anticipated and that underground storage of water is legislatively permitted, without any blanket need for overlying landowner approval, I read the statutes to pose as many questions as they answer.

For example, I am unclear as to how the General Assembly suggests that storage capacity of an aquifer be determined. Section 87-87-102(4), 10 C.R.S. (2001), specifically prohibits raising the waters of a natural stream used for transportation above the ordinary high water mark. In this case, PCSR in its application for water rights specifically states that it intends to use both the saturated and the unsaturated portions of the underground formation. Because of the statutory prohibition against raising the water levels of a stream above its natural high watermark, I question whether the use of unsaturated portions of the formation would do just that. I would permit landowners to raise that issue in a declaratory judgment context, and to obtain relief upon a showing of some injury or invasion of use or enjoyment rights. I would also permit a mineral owner to make a similar showing and seek similar relief if the use of underground formations would intrude upon or damage mineral use, preservation, or extraction. Similarly, the Landowners might be entitled to relief if PCSR were to propose a use that might damage some portion of the Landowners' property rights, an activity potentially prohibited by section 37-87-102(4), the statute that authorizes transportation of water across privately owned land. Although the legislature has allowed the transportation of water across privately owned streambeds, it has not authorized the flooding or damaging of dry portions of a landowner's property without payment of just compensation; in fact, it has expressly prohibited it. § 37-87-101.

Furthermore, although I agree that the Landowners here made an insufficient showing to defeat summary judgment, I do not dismiss their claims of ownership in the absolutist manner in which the majority does. I could envision a cireumstance in which there would be a segregated underground storage cavern, unrelated to the aquifer and self-contained-as to which overlying landowners would retain ownership interests. It is clear in the law that landowners retain the right to the physical ownership of their properties, absent reservations, easements, or other reductions in the "bundle of sticks." The legislature has specified that "land" should be defined broadly to include a coextensive meaning with "the terms 'land," 'tenements,' and 'hereditaments' and as embracing all mining claims and other claims, and chattels real." § 88-30-150, 10 C.R.S8. (2001). For as long as Colorado has been a state, this court has recognized that "(land has an indefinite extent upward and downward from the surface of earth, and therefore includes whatever may be erected upon it, and whatever may lie in a direct line between the surface and the center of the earth." Walpole v. State Bd. of Land Comm'rs, 62 Colo. 554, 557, 163 P. 848, 849-50 (1917) ("Land is the soil of the earth, and includes everything ... buried beneath it.... A grant of lands therefore, without any qualification, conveys not only the soil, but everything which is attached to it, or which constitutes a part of it, the buildings, mines, trees, growing crops, etc.") (internal quotation marks omitted); Bogart *720v. Amanda Consol. Gold Mining Co., 32 Colo. 32, 35-36, 74 P. 882, 883 (1903) (observing that under common law, ownership of the property surface carries with it the ownership of everything beneath and above it; this prima facie ownership continues until rebutted by a showing of severance); Wolfley v. Lebanon Mining Co., 4 Colo. 112, 114 (1878) (except as otherwise modified by statute, the common law mandates that "a grant of land carries with it all that lies beneath the surface down to the center of the earth. At his pleasure the owner of the soil may apply to his own purposes whatever is included in the segment of the earth carved out by his descending exterior boundary lines.... [Dlownward whatever is in a direct line, between the surface of any land and the center of the earth, belongs to the owner of the surface ...."); see, eg., 2 Herbert Thorn-dike Tiffany, Real Property § 585 (8d ed. 1939 & Supp.2001) ("The owner of the surface of land is prima facie the owner of the soil or mineral deposits to the center of the earth, and any underground encroachment by an adjoining owner is trespass or nuisance."); 8 American Law of Mining § 86.01[2l[a] (Rocky Mountain Mineral Law Foundation 2d ed., 2001) (noting that, prior to severance, the surface owner is vested with ownership of the surface and the subsurface).

Additionally, citing the common-law rule, this court has held that it is the general rule of property law in Colorado that "the land underlying non-navigable streams is the subject of private ownership and is vested in the proprietors of the adjoining lands." People v. Emmert, 198 Colo. 137, 140, 597 P.2d 1025, 1027 (1979). Thus, although the public owns the water flowing across the land, the landowner has exclusive ownership of the streambed itself. Id.

Courts around the nation have also held that the owner of a mineral estate (or where the estates are unsevered, the owner of the surface estate) also owns the empty space created by the removal of the minerals and any use of that space constitutes trespass. 6 American Low of Mining, supro, § 203.01[8]; Comment, Interests Created by Grants of Coal Apart from the Surface, 31 Yale L.J. 747 (1921-22).

Some courts, in early jurisprudence, addressed ownership based on theories of adverse possession and location of entrance and exit. Those courts reached the conclusion that, where severance has not occurred, the portion of the subterranean cavern underneath a surface owner's land belongs entirely to the surface owner. E.g., Marengo Cave Co. v. Ross, 212 Ind. 624, 10 N.E.2d 917, 922-23 (1937) (holding that when dealing with an underground cavity, absent severance of the mineral estate, a landowner's title extends from the surface of the earth downward to all land and caverns underlying the surface); Edwards v. Sims, 232 Ky. 791, 24 S.W.2d 619, 620 (1929) ("[The owner of realty, unless there has been a division of the estate, is entitled to the free and unfettered control of his own land above, upon and beneath the surface. So, whatever is in a direct line between the surface of the land and the center of the earth belongs to the owner of the surface."); City of Kingston v. Knaust, 287 A.D.2d 57, 733 N.Y.S.2d 771, 773 (N.Y.App.Div.2001) (reconfirming the long-established principle that a conveyance of real property encompasses all subterranean rights including ownership of mines, caves, and caverns).

Hence, although a landowner does not own a moving creek or river-be it on the surface or underground, the landowner may own subterranean caverns and caves under his land. I could envision cireumstances in which overlying landowners might well have the right to demand compensation for the use of underground facilities used for storage of water and would not preclude consideration of such a case by operation of today's judgment.

IV.

In summary, I would first decline to address this case on mootness grounds, Were I to reach the substantive issues, I would affirm the trial court on a very narrow factual premise. On the other hand, I would not prevent other landowners from asserting similar claims in cireumstances in which they could demonstrate injury, invasion of use, or *721even in which they could demonstrate that the applicant intended to use a natural, self-contained cavern that was not part of an underground aquifer for storage purposes. I advocate a cautious, case-by-case approach to this area of the law because of the importance of these issues and because of the incomplete and sometimes contradictory expression of legislative intent.

Thus, I respectfully dissent in part and specially concur in part.

I am authorized to state that Justice COATS joins in this special concurrence and dissent.

. I note that these specifics come from the record relating to the application for a conditional *718decree, which the water court denied and which is now on appeal.

. I note that the "section'" to which 37-87-101(2) refers includes the general language of 37-87-101(1) that outlines the general legal principles governing operation and acquisition of a storage facility. For example, 37-87-101(1) requires that an individual or entity proposing to store water of a natural stream for later application to beneficial use must acquire such interests in real property as are reasonably necessary for the construction, maintenance, or operation of the storage facility.

. The majority also cites one additional statute that refers to "underground water storage": this statute grants the State Soil Conservation Board the authority to study underground water storage projects. § 35-70-103(6)(a) 10 CRS. (2001). The other two statutes to which the majority refers relate only to increasing underground reserves and do not mention storage.