Oakley, David B.

English

University of Denver

Water Law Review Volume 9 Issue 1 Article 45 9-1-2005 ISG, LLC v. Ark. Valley Ditch Ass'n, 120 P.3d 724 (Colo. 2005) David B. Oakley Follow this and additional works at: https://digitalcommons.du.edu/wlr Custom Citation David B. Oakley, Court Report, ISG, LLC v. Ark. Valley Ditch Ass'n, 120 P.3d 724 (Colo. 2005), 9 U. Denv. Water L. Rev. 237 (2005). This Court Report is brought to you for free and open access by the University of Denver Sturm College of Law at Digital Commons @ DU. It has been accepted for inclusion in Water Law Review by an authorized editor of Digital Commons @ DU. For more information, please contact jennifer.cox@du.edu,dig-commons@du.edu. COURT REPORTSrequirements for a change of water right encapsulate the elements ofthe original appropriation. The court noted that because appropria-tors can only perfect water rights by actual use, all water rights have asitus that includes the point of diversion and the place where actualbeneficial use occurs. In addition, an essential element of a perfectedwater right is actual beneficial use of the water appropriated, and theactual beneficial use of a water right is the basis, measure, and limit ofan appropriation. In a change of use proceeding, the court must en-sure that the perfected water right is the one that continues in itschanged form under the new decree.Further, as a requirement of a valid appropriation of water, Colo-rado law requires a purported appropriator to have a legally vestedinterest, or a reasonable expectation of procuring such interest, in theland or facilities such appropriation will serve. Therefore, the courtheld that as a basic predicate of an application for a decree changingthe type and place of use of a water right, the applicant must suffi-ciently demonstrate an actual beneficial use at an identified location orlocations under the change decree.High Plains argued that the water court's decision would prejudiceHigh Plains's investment, because it could not enter into contracts withend users until the water court approved the change of its water rights,thereby diminishing the value of its investment. The court rejectedHigh Plains's argument of prejudice on several grounds, stating,among other things, that the purchase of shares in a mutual ditchcompany guaranteed only a proportionate interest in the water rightsheld by the mutual ditch company and continued delivery of the waterto their historic place of use. The court noted that shares in a mutualditch company are valuable assets, and High Plains could use its own-ership in the FLCC on lands under the FLCC system "to the benefit ofthe local economy and to consumers of agricultural products." Fur-ther, according to the court, basic tenets of Colorado water law, whichentitle an owner to a change of water rights, would still apply if HighPlains contracted with other entities to use its FLCC shares. Thiswould allow High Plains to seek adjudication of a change of waterrights at that time.In its disposition of the case, the court affirmed the water court'sdismissal of High Plains's applications without prejudice to considera-tion of future applications for change of the water rights owned byHigh Plains in the FLCC.Donald E. FrickISG, LLC v. Ark. Valley Ditch Ass'n, 120 P.3d 724 (Colo. 2005) (affirm-ing the water court's sua sponte summary judgment of a change decreebecause the losing party had sufficient opportunity to argue againstdismissal and the shareholder group's members will not lose decreedwater rights when making temporary changes authorized by statute).Issue IWATER LAW REVIEWIndependent Shareholders Group, LLC ("ISG") is a group of forty-five ranchers and farmers who owned shares in the largest mutualditch company along the Arkansas River. ISG proposed permanentchanges to its water rights but did not specifically identify the locationor the beneficial use of the water under the proposed change decree.Upon ISG's motion, the District Court Water Division 2 consolidatedISG's application for a change decree with another similar application.Subsequently, the Southeastern Water Conservancy District ("South-eastern") moved for summary judgment against the similar application,but not against ISG's application. The water court dismissed both ap-plications.ISG appealed the water court's summary judgment of the applica-tion directly to the Supreme Court of Colorado based on two argu-ments. First, ISG claimed that since no party moved for summaryjudgment against ISG's application specifically, the water court's suasponte dismissal on summary judgment was improper. The court af-firmed the water court's sua sponte summary judgment motion bycomparing the unusual procedure to the federal court system. Thecourt adopted the notion used in federal courts that appellate courtswill affirm a technically flawed summary judgment as long as the losingparty had an opportunity to argue against the dismissal and the losingparty is not subject to undue prejudice. Here, ISG had notice of thepossibility for summary judgment against its change decree, ISG as-serted its position on the issues in its own motion, and ISG was not un-duly prejudiced. Therefore, the court found the sua sponte summaryjudgment was not a reversible error. Additionally, the court affirmedthe water court's award of costs to Southeastern, even though South-eastern had not moved for summary judgment against ISG, becauseSoutheastern was the adverse party.ISG's second claim on appeal rests on the argument that its mem-bers could lose their historic consumption rates if they make tempo-rary changes through water leases, exchanges, or loans. The courtdismissed this theory by pointing out the numerous legislative conces-sions which allow for temporary changes to water rights without penal-izing the original water appropriator.In conclusion, the court affirmed the water court's sua sponte dis-missal of the change decree without prejudice, allowing for a re-application, because ISG had an opportunity to present its case againstdismissal and the members would not lose their consumptive rights bymaking statutorily authorized short term changes.David B. OakleyVolume 9

ISG, LLC v. Ark. Valley Ditch Ass\u27n, 120 P.3d 724 (Colo. 2005)

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ISG, LLC v. Ark. Valley Ditch Ass\u27n, 120 P.3d 724 (Colo. 2005)

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