Appendix — American Water Development, Inc. v. City of Alamosa
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; Supreme Court, U.S.
9 PILE D
94 390 SEP - 1 1994
No. OFFICE OF THE CLERK
In The
Supreme Court of the United States
October Term, 1994
°
AMERICAN WATER DEVELOPMENT, INC.,
a Colorado corporation,
Petitioner,
CITY OF ALAMOSA, et al.,
Respondents.
+
Petition For Writ Of Certiorari
To The Colorado Supreme Court
+
APPENDIX TO PETITION FOR WRIT OF CERTIORARI
VOLUME I
(Pages A-1 through A-269)
+
JosepH M. MontTANO
Counsel of Record
HARLAN S. ABRAHAMS
Diane B. Davies
FaeGre & BENSON
2500 Republic Plaza
370 Seventeenth Street
Denver, CO 80202-4004
(303) 592-5900
Attorneys for Petitioner
American Water Development, Inc.
COCKLE LAW BRIEF PRINTING CO., (800) 225-6964
OR CALL COLLECT (402) 342-2831
| QT pi?
INDEX TO PETITIONER’S APPENDIX
VOLUME I
Opinion of Colorado Supreme Court (filed May 9,
OR iio. ce eae
Memorandum and Order of Partial Summary
Judgment Dismissing the Applicant’s Spanish
or Mexican and Federal Land Grant Claims,
ee ae. ee er ee
Transcript of July 5, 1990 Hearing of the Water
Court Ruling on Partial Summary Judgment on
ee Be Pere Tee UeETe CLOT ETT C Tee
Order Granting Applicant’s Motion to Dismiss
Tributary Claims, dated November 21, 1991,
nunc pro tunc, October 10, 1991...............
Transcript of October 10, 1991 Hearing of the
Water Court Granting Applicant’s Motion to
Dismiss Tributary Claim .........ccsesecssccess
Transcript of November 21, 1991 Water Court
Hearing Concerning Applicant’s Motion for
COR Pg oy kee s'Faabved enced seen eeasesesaess
Transcript of November 22, 1991 Water Court
Hearing Denying Applicant’s Motion for Due
2. | rer rr rr Tree et reer reer e ea ee oa
Order Denying Applicant’s Motion for Prehearing
Conference and Oral Argument on the Issue of
Entitlement, dated March 16, 1992.............
Transcript of March 16, 1992 Hearing of the Water
Court Denying Applicant’s Request for Prehear-
ing Conference and Oral Argument on the Issue
OF PI ao nb rots nav cakaeeads s sdeecisnes
Page
il
INDEX TO PETITIONER’S APPENDIX - Continued
Order of Colorado Supreme Court Denying Peti-
tion for Rehearing, dated June 6, 1994........
Application for Underground Water Rights, filed
by Applicants on December 31, 1986..........
Report of the Surveyor General of New Mexico to
Cagrens ts BEGG 600s iitsasdanvibecenes dls.
Treaty of Guadalupe Hidalgo, February 2, 1848 ..
1854 Act Implementing Provisions of Treaty of
Guadalupe Hidalgo, approved July 22, 1854...
1860 Report of Senate Committee on Private Land
CBRIIS + 0a. 000-010 anne ceiene web ieee
1860 Act to Confirm Certain Private Land Claims
in the Territory of New Mexico, approved June
Shp WOOP wasdaes eee c esc creessensccsscecccccees
1864 Act to Amend An Act to Confirm Certain
Private Land Claims in the Territory of New
Mexico, approved June 11, 1864..............
Senate Report 101-538, Concerning Baca Location
No. 1 Land Acquisition and Study Act of 1990,
Gated Octolber BB, TORO < oc occ ccascwsoccucecveus
House Report 101-783, Concerning Exchanging
Certain Lands in the State of new Mexico, dated
Cxeeomew E, BOG a <ckvbnkicescekescele eee.
Page
.A-220
ill
INDEX TO PETITIONER’S APPENDIX - Continued
Page
VOLUME II
Affidavit of Michael C. Meyer dated May 14, 1990,
Offered in Response to Objectors’ Motion for
Partial Summary Judgment on the Land Grant
ES EES FES eet oe ee eee A-270
Motion, With Recitation of Authorities, for Order
Granting Applicant Due Process in Form of
Notice, Evidentiary Hearing, and Discovery,
eg OE a ES | A-299
Applicant’s Reply Brief in Support of Motion for
Due Process, dated November 22, 1991 ........ A-307
Applicant’s Offer of Proof in Support of Reply
Brief on Motion for due Process, dated Novem-
ee airs wap ay ans e eh wha sens’ A-336
Transcript of November 22, 1991 Water Court
Hearing Concerning Applicant’s Request for
PU CONS PROOTINT oo ccc cect cece renee A-345
Applicant’s Request for Prehearing Conference
and Oral Argument on Issue of Entitlement,
dated February 18, 1992..................-e0-- A-353
Applicant’s Motion to Dismiss Tributary Claim,
dated September 26, 1991....................-. A-356
Transcript of September 26, 1991 Water Courf
Hearing Concerning Applicant’s Motion to Dis-
WOE THIDUATY CUMIN .... 2 00 eceecc eee e reese A-358
Transcript of October 10, 1991 Water Court Pre-
oe Bee A-360
[see also A-334]
Objectors’ Opposition to Applicant’s Motion to
Dismiss Tributary Claim................ssee0e- A-362
iv
INDEX TO PETITIONER’S APPENDIX - Continued
Page
Transcript of Apri] 21, 1992 Water Court Hearing
Oh. FE GE SN ieee oi ok aw eee ees, A-365
Affidavit of Alison Maynard, dated December 5, __
ig SEE ETE he ee aia a Pen EN ADLAN a acy Cres alas ate A-367
Brief of Appellant-Petitioner Before Colorado
Supreme Court, dated November 23, 1992 ..... A-371
Reply Brief of Appellant-Petitioner Before Colo-
rado Supreme Court, dated March 1, 1993..... A-375
Petition for Rehearing Before Colorado Supreme
Court ..... 1KpEne Svea cet Onea Ren eee el A-377
A-1
Supreme Court of Colorado,
En Banc.
May 9, 1994.
Rehearing Denied June 6, 1994.
Nos. 92SA141, 92SA263.
AMERICAN WATER DEVELOPMENT, INC., a
Colorado corporation, Applicant-Appellant
V.
CITY OF ALAMOSA; County of Alamosa;
Alexander Ranch; Darell Keith Alexander;
Richard Angell; Baca Grande Water & Sanita-
tion District; Fred Bauder; Harold L. Bennett;
Richard Blumenhein; Bonanza Road Water
Users, Owners and Objectors; Lena C. Chiles;
Floyd D. Chiles; Terry R. Chiles; Cyril Clayton;
Dave Collins; David P..Collins; Barbara J. Col-
lins; Colorado Division of Wildlife; Colorado
Water Conservation Board; Columbine Tele-
phone Company; Conejos Water Conservancy
District; Concerned Citizens of Crestone, Colo-
rado and Vicinity; Richard E. Conour; Eliz-
abeth A. Conour; Cotton Creek Ranch; Town of
Crestone; Fred J. Davie; Douglas M. Davie;
Michael R. Dennet; Tom Enos; Dennis L. Fel-
mlee; Oliver Powell Roemer, III, Successor
Trustee Under the Trusts Under the Will of
Avis Neal Roemer; First Pegasus Corporation;
Freel Ranch; Eugene W. Freel; Beverly Freel;
Harold L. Freel; Terry Lee Freel; Fullenwider
Ranch, Inc.; Ernest Lamar Goodwin; Haid-
akhandi Universal Ashram; Ernest T. Harer;
Grace Harer; Richard W. Hanby; Pamyla Hill;
D. Robin Hood; Town of Hooper; J. Richard
Johnston; Marty A. Johnston; L.D. Ranch;
Town of Lajara; Henry R. Lamm; Mable A.
A-2
Lamm; John N. Lawrence; KSD, Ltd.; Lazy KV
Estates Homeowners Association, Inc.; Timo-
thy N. Lovato; Lori S. Lovato; Marold Ranches;
R.G. Marold; Barbara Mertian; A & M Farms;
Pamela Bertin; Phillip Briscoe; Debra Briscoe;
Eddie Clayton; Wayne C. Davis; Maggi Des-
sain; Margarita Diaz; Melvin E. Getz; Julie
Goodnight; Greg Gosar; Margaret N. Herz-
field; Maggie Houston-Smith; Pamela L. Lunt;
Phil Martinez; Messick Farms; Richard A. Mes-
sick; Douglas G. Messick; Richard L. Messick;
Sandra J. Murray; Curtis W. Nelson; Anne Sil-
ver Philleo; Robert S. Philleo; Marlene L.
Pruitt; Robert A. Ress; Toni G. Romero; Mar-
ianne Sandstrom; Robert W. Simpson; W.E.
Sisemote; C. Kimberly Snider; Francis E.
Snider; M. Catherine Snider; Shella Snider;
Katherine Steichen; Harvey V. Sullivan; Liz
Washburn; John R. Wright; George Whitten, Jr.;
Donald E. Whitten; Karen Whitten; Betty L.
Worley; Town of Moffat; Town of Monte Vista;
Jimmy R. Moore; Mary Moore; Morfitt
Brothers Farm, Inc.; Darrel Neese; Harold
Neese; Gayle A. Nichols; Edward R. Oliver;
Otaka International; Robert A. Owens; Edwin
Pace; Howard *. Platz; Rio Grande County
Commissioners; Rio Grande County Farm
Bureau; Rio Grande Water Conservation Dis-
trict; Rio Grande Water Users Association; Rito
Alto and San Luis Ranches, Inc.; Rito Alto
Ranch, Inc.; Rito Alto Ranchers; Arthur L.
Rivale; Ileen J. Rivale; Rocky Mountain Bison,
Inc.; Thomas C. Sanderson; County of
Saguache; Town of Saguache; San Luis Valley
Irrigation Well Owners, Inc.; San Luis Valley
Water Conservancy District; Loren R. San-
tisteven; Julie A. Santisteven; Neil F. Seitz;
|
A-3
Valley View Hot Springs; Martin T. Shel-
labarger; Patricia Shellabarger; Kenneth L.
Skoglund; Mary F. Skoglund; Spiritual Life
Institute of America, Inc.; David G. Stagner;
Jeris A. Danielson, State Engineer; Steven E.
Vandiver, Division Engineer; Travelers Insur-
ance Company; Thomas F. Trim; Annabelle R.
-Trim; United States of America; Villa Grove
Area Water Users, Owners and Opposers; Wagner
Ranch, Ltd.; John H. Wagner; Weiss Ranches, Inc.;
A.L. Wood; John M. Woodard; Erwin Young;
Lynne Young, Objectors-Appellees.
AMERICAN WATER DEVELOPMENT, INC., a
Colorado corporation,
Applicant-Petitioner,
V.
RIO GRANDE WATER CONSERVATION DIS-
TRICT; San Luis Valley Irrigation Well
Owners, Inc.; The City of Alamosa; The Town
of Monte Vista; The Town of LaJara; The Town
of Crestone; Saguache County; Alamosa
County; Rio Grande County; Rio Grande Water
Users Association; San Luis Valley Water Con-
servancy District; United States of America;
State of Colorado; Colorado Division of Wild-
life; Colorado Water Conservation Board; Jeris
A. Danielson, State Engineer; Steven E. Van-
diver, Division Engineer; Conejos Water Con-
servancy District; Oasis Land & Cattle Corp.;
Oliver Powell Roemer, III, Successor Trustee
Under the Trusts Under the Will of Avis Neal
Roemer; Howard Platz; and Gayle Nichols,
Objectors-Respondents.
A-4
AMERICAN WATER DEV. v. CITY OF ALAMOSA
Cite as 874 P.2d 352 (Colo. 1994)
TABLE OF CONTENTS
I. Procedural History and Issues Presented..... 357
Il. Dismissal of the Land Grant Claims......... 360
Fi. FOCERIOE TACHI 0 56 ono esc ek sce 360
B. The Spanish and Mexican Land Grant
8 EE Pe SO EP Pre OTe 362
C. The Claim Under the Act of June 21, 1860 365
III. Challenges to the Determination that Water
Sought to be Withdrawn is Tributary ........ 366
A. Whether the Trial Court Properly Deter-
mined the Effect of AWDI’s Proposed
Pumping on Surface Streams............ 367
B. Whether the Trial Court Properly Deter-
mined the Nature of the Unconfined Aqui-
fer and the Effect of AWDI’s Proposed
Pumping on that Aquifer................ 368
1. Challenge to Natural Stream Legisla-
tion as Special Legislation ........... 368
No
Inclusion of Unconfined Aquifer in
Definition of Natural Stream......... 371
3. Requirement of Determination of Exis-
ting Aquifer Conditions at the Time of
WOTUME ADUUCONOR. bon sce cccicc scien 372
C. Whether the Trial Court Properly Pre-
cluded Challenge to Means of Deversion
of Closed Basin Project. ...-....606ce.ess 373
IV. Procedural Prejadioe. .. 2... cies ccc ckscccess 374
A. Whether the Trial Court’s Case Manage-
ment Order and its Implementation
Unfarily Prejudiced AWDI............... 374
NT
A-5
B. Whether the Trial Court’s Rulings were
CVG oko a vee tncas hvwhnes ceneanwe nee es 375
V. Excessive and Unwarranted Findings ........ 376
VI. Awards of Attorney Fees, Expenses, and
CS con ko okie see es naeeee ee haeeas 376
A. Whether AWDI can Contest the Conditions
of Dismissal of the Tributary Claim....... 377
B. Whether Section 13-17-102(5) or C.R.C.P.
11 Precludes an Award of Attorney Fees
and Expenses Incident to Dismissal of the
Tributary Claim. .......cccccsscecccceees 379
C. Whether the Special Nature of Water
Adjudiciation Proceedings Prelcudes the
Award of Fees and Expenses Incident to
Dismissal of the Tributary Claim........ 381
D. Whether the Trial Court Employed an
Incorrect Standard or Relied on Insuffi-
cient Evidence in Assessing Fees and
Expenses Incident to Dismissal of the
Tete CIO. onc cc cu cerecccceccsccnse 381
1. Correctness of Standard............. 381
2. Sufficiency of Evidence.............. 383
a. Identification of Fees and
Expenses Attributable to Tribu-
ee errr rr ere Te eres 383
b. Scope of Work Performed in
Defense of Tributary Claim...... 385
c. Reasonableness of Amounts
Charged for Fees and Expenses. . 386
i: WEE seb cans w ie xe> «000s rhea neena 388
A-6
E. Whether Excessive Costs were Awarded
Incident to Dismissal of the Nontributary
iy A A ae rer ea a hen Ata ol 388
Wii SEN re ni eda + eect ee CE eet oe 390
Justice LOHR delivered the. Opinion of the Court.
American Water Development, Inc. appeals from a
judgment of the District Court for Water Division 3 deny-
ing its application with respect to water rights for the
production of 200,000 acre feet of water per year by
proposed wells in the San Luis Valley of Colorado and
from a later judgment of that same court awarding attor-
ney fees, expenses, and costs to certain objectors who
successfully opposed the application. We consolidated
these cases for all purposes on appeal! and now affirm
both judgments.
I. Procedural History and Issues Presented
On December 31, 1986, American Water Develop-
ment, Inc. (“AWDI”) filed an “Application For Under-
ground Water Rights Or, In The Alternative, For The
Determination Of Rights To Nontributary Groundwater
' For purposes of clarity and simplicity we have listed the
cases separately in the caption of this opinion.
A-7
Outside Of Designated Groundwater Basins” in the Dis-
trict Court for Water Division 3.2 Statements of opposi-
tion were filed by numerous objectors.* After several
years of discovery and motion practice, AWDI filed an
amended application with leave of the court on August
31, 1990.4 The statements of opposition to the original
application were deemed to apply to the amended appli-
cation, and additional statements of opposition were
filed. -
In the original application, AWDI sought to establish
the right to withdraw 200,000 acre-feet of ground water
per year from proposed wells to be located on lands
owned or claimed by the applicant and containing more
2 The Baca Ranch Company and The Baca Corporation
were co-applicants with AWDI in the original application.
AWD is the sole applicant in the amended application, referred
to herein, and we make no further reference to the other appli-
cants even when discussing the original application.
3 The objectors who participated in the trial and are appear-
ing on this appeal are the United States of America; the State of
Colorado; Rio Grande Water Conservation District; Rio Grande
Water Users Association; San Luis Valley Water Conservancy
District; Conejos Water Conservancy District; Oasis Land and
Cattle Company; Oliver Powell Roemer III, Trustee; Howard R.
Platz; and Fred Bauder. These objectors acted in various combi-
nations in filing and briefing motions in the trial court and in
examining witnesses and presenting nontestimonial evidence
during pretrial hearings and at trial. For simplicity we refer in
most instances in this opinion to actions taken by “the objec-
tors” without specifying the particular objectors or noting that
others did not join.
4 Shortly thereafter, the court permitted the substitution of
an exhibit to the amended application, reflecting more current
information on replacement water rights.
A-8
than 100,000 acres in the Closed Basin drainage of the San
Luis Valley in south-central Colorado (sometimes, “the
Valley”).° The lands are made up of two noncontiguous
parcels. The smaller parcel contains approximately 4,683
acres and is situated in the vicinity of the Town of Villa
Grove in the northeastern part of the Valley. The larger
parcel consists of Baca Grant No. 4 and adjacent lands,
located approximately twenty miles to the south of Villa
Grove. The original application proposed the use of 112
wells, 2,500 feet deep and perforated between the depths
of 200 and 2,500 feet. Most of the wells were to be located
on Baca Grant No. 4.
In its original application, AWDI asserted four alter-
native claims: (1) a claim for determination of a right to
nontributary ground water pursuant to section
37-90-137(4), 15 C.R.S. (1990), subject to adjudication
under section 37-92-203(1), 15 C.R.S. (1990), (2) a claim to
water underlying Baca Grant No. 4 under Spanish and
Mexican law and the 1848 Treaty of Guadalupe Hidalgo
between the United States and Mexico, (3) a claim to
water underlying Baca Grant No. 4 under the Act of June
21, 1860, Ch. 167, 12 Stat. 71 (1860), pursuant to which
AWDI’s predecessors acquired that tract from the United
° A general description of the geographic, geologic, and
hydrologic features of the San Luis Valley and of the history of
water usage and the legal structure governing such usage
~ within the Valley is set forth in Alamosa-LaJara Water Users Pro-
tection Ass'n v. Gould, 674 P.2d 914, 916-20 (Colo.1983). Appen-
dix A to that case is a map of the Valley. Id. at 937. A description
of the features of the Closed Basin appears in Closed Basin
Landowners Ass'n v. Rio Grande Water Cons. Dist., 734 P.2d 627,
629 (Colo.1987).
A-9
States,® and (4) a claim for determination of a water right
for tributary ground water.
The amended application proposed implementation
of pumping in phases, changed the number and location
of wells (approximately 117 to be located on Baca Grant
No. 4, and 15 to be located on AWDI’s property near Villa
Grove) and added a fifth claim pertaining to determina-
tion of injury from AWDI’s proposed withdrawals and a
proposal of methods to remedy any such injury by a plan
for augmentation and other protective measures.
The original application indicated an intent to apply
the water to various beneficial uses including agricultural
use within the Valley. The amended application made
clear for the first time that AWDI proposed to use some
_ of the water outside of San Luis Valley along the Front
Range within the State of Colorado.
As the case progressed, the parties attempted to nar-
row the issues by motions for partial summary judgment.
These included a motion by the objectors to dismiss the
land grant claims. On July 5, 1990, the court granted
partial summary judgment dismissing those claims.
A pretrial conference was held on September 26,
1991. Near the conclusion of the pretrial conference, and
without prior notice, AWDI tendered a written motion to
dismiss its fourth claim — for determination of a water
right for tributary ground water. The objectors argued
that dismissal would prejudice them unless the dismissal
© We sometimes refer to the second and third claims jointly
as the land grant claims.
A-10
order included appropriate terms and conditions, includ-
ing provision for payment of their attorney fees,
expenses, and costs for preparing to defend against the
tributary claim. At a second pretrial conference, the court
granted the motion to dismiss, without prejudice, but
imposed the condition that AWDI pay to the objectors
their reasonable attorney_fees, expenses, and costs in
opposing the tributary and related claims. The court
reserved determination of the amount of such award for
later proceedings.
Before the second pretrial conference, the State of
Colorado, one of the objectors, moved that the trial be
bifurcated if the trial court should dismiss the tributary
claim. By this motion, the state sought to defer consider-
ation of issues of injury and proposed remedies, as pre-
sented by the fifth claim, until after the trial court’s
determination of rights to nontributary ground water.
The court granted that motion to bifurcate, and the case
proceeded to trial on the nontributary claim alone.
Following a trial that began on October 15 and con-
cluded on November 22, 1991, the court denied and dis-
missed the application, based on its determination that
the ground water that AWDI sought to withdraw is tribu-
tary to natural streams, and entered judgment accord-
ingly. Thereafter, the court held an evidentiary hearing
with respect to the costs, expenses, and attorney fees to
be awarded as provided in the condition included in the
earlier order dismissing the tributary claim. Based on
evidence presented at that hearing, the court issued a
judgment awarding ten named objectors specified
amounts of attorney fees, expenses, and costs totaling
$2,709,881.70. AWDI appealed each of the judgments to
A-11
this court,”?7 and we granted a motion to consolidate the
cases for all purposes.
In this appeal, AWDI assigns the following errors, as
set forth in its briefs in the sequence here presented: (1)
the trial court’s case management order and its imple-
mentation prejudiced AWDI, and the trial court’s rulings
were not objective; (2) the trial court erred in its order
awarding fees and costs under C.R.C.P. 41(a)(2) and
54(d); (3) the trial court erred in its pretrial partial sum-
mary judgment rulings (a) dismissing the land grant
claims, (b) precluding examination of the Closed Basin
Project’s® means of diversion, and (c) holding that legisla-
tion classifying certain stream systems as natural streams
subject to appropriation did not violate the prohibition of
special legislation under Article V, Section 25, of the
Colorado Constitution; (4) the trial court erred in reject-
ing AWDI’s claim for determination of a right to non-
tributary ground water; (5) the trial court failed to
identify relevant existing aquifer conditions; and (6) the
7 We have jurisdiction over these cases by virtue of Colo.
Const. art VI, § 2, and § 13-4-102(1)(d), 6A C.R.S. (1987), which
statutorily excludes from the court of appeals’ jurisdiction
appeals from final judgments of district courts in “[w]ater cases
involving priorities or adjudications.” See also C.A.R. 1(a)(2).
AWDI is designated as Applicant-Petitioner in case no.
92SA263, involving the judgment for attorney fees, expenses,
and costs, because it filed a notice of appeal in the Colorado
Court of Appeals as well as in this court and asked that we
accept certiorari under C.A.R. 50 in the event that we deemed
the court of appeals to have jurisdiction over the appeal. We
accepted jurisdiction on direct appeal.
8 See infra at 372-373.
A-12
trial court incorporated excessive and unwarranted find-
ings in its order dismissing AWDI’s amended application.
We first address the challenged partial summary
judgment rulings on the land grant claims (Issue 3(a)),
then the combination of issues concerning rejection of
AWDI’s nontributary ground water right claim (Issues
3(b) and (c), 4, and 5), next the issues concerning the case
management order and the objectivity of the trial court’s
rulings (Issue 1), then whether the trial court’s findings
were excessive and unwarranted (Issue 6), and finally the
challenge to the award of attorney fees, expenses, and
costs (Issue 2).
II. Dismissal of the Land Grant Claims
The trial court granted the objectors’ motions for
partial summary judgment dismissing AWDI’s claims of
rights to ground water based on Spanish and Mexican
law as recognized and affirmed by the United States or, in
the alternative, on an absolute grant of title by the United
States.” These claims, in essence, are that by reason of the
manner in which AWDI’s predecessor obtained title to
Baca Grant No. 4, all right to underground water,
whether tributary or not, underlying that tract were
acquired by the original grantee and were later conveyed
to AWDI.
Standards governing appropriateness of summary
judgment are well settled. Where there is no genuine
9 These claims relate only to Baca Grant No. 4 and do not
apply to the adjacent lands or to the smaller parcel in the
vicinity of Villa Grove.
A-13
issue of any material fact and the moving party is entitled
to judgment as a matter of law, summary judgment is
warranted. C.R.C.P. 56; Greenberg v. Perkins, 845 P.2d 530,
531 (Colo.1993); Churchey v. Adolph Coors Co., 759 P.2d
1336, 1339-40 (Colo.1988); Pueblo W. Metro. Dist. v. S.E.
Colo. Water Cons. Dist., 689 P.2d 594, 600 (Colo.1984). It is
the burden of the moving party to demonstrate the
absence of a triable factual issue, and any doubts as to the
existence of such an issue must be resolved against that
party. Greenberg, 845 P.2d at 531; Elm Distrib., Inc. v. Tri-
Centennial Corp., 768 P.2d 215, 218 (Colo.1989). Although
the party resisting summary judgment is entitled to the
benefit of all favorable inferences that may be drawn
from the facts presented, the moving party’s request must
be granted where the facts are undisputed and the oppo-
sing party cannot prevail as a matter of law. Greenberg,
845 P.2d at 531; see Kaiser Foundation Health Plan of Colo. v.
Sharp, 741 P.2d 714, 719 (Colo.1987).
Applying these principles to the present case, we
conclude that the record demonstrates that there is no
genuine issue of material fact. The facts concerning the
manner in which title passed into private ownership are
undisputed. It is only the legal effect of the relevant
events and documents that is at issue. Our task, therefore,
is to determine whether the record supports the entry of
partial summary judgment in favor of the objectors as a
matter of law. We begin by presenting the salient facts
that formed the basis of the trial court’s decision.
A-14
A. Factual Background
In 1821, Luis Maria Cabeza de Baca, on behalf of
himself and a number of his male children, petitioned
Mexican governmental authorities for the grant of a tract
of land containing nearly 500,000 acres!° and known as
the Vegas Grandes in the vicinity of the present day city
of Las Vegas, New Mexico. H.R.Exec.Doc. No. 14, 36th
Cong., 1st Sess. at 3 (1860) (hereinafter, “H.R.Exec.Doc.
No. 14”). The tract was granted to Baca,!! who settled on
the land, remained for some time, and then left. See id. at
3-4. In 1835, certain other persons petitioned Mexican
governmental authorities for the same land, and the peti-
tion was granted shortly thereafter with the proviso that
persons who owned no land were to be permitted the
same privilege of settling upon the grant as the persons
who had petitioned. Id. at 44. Thereafter, several hundred
families settled on the grant. See S.Rep. No. 228, 36th
Cong., 1st Sess. at 3 (1860) (hereinafter, “S.Rep. No. 228”).
In 1848, the United States and the Republic of Mexico
entered into the Treaty of Guadalupe Hidalgo, ending
hostilities between the two nations. Treaty of Peace,
Friendship, Limits, and Settlement With The Republic of
Mexico, Feb. 2, 1848, U.S. —- Mex., 9 Stat. 922. Under
10 See Lane v. Watts, 234 U.S. 525, 527, 34 S.Ct. 965, 967, 58
L.Ed. 1440 (1914).
1! Mexico. achieved independence from Spain in 1821. See
Henry B. Parkes, A History of Mexico 170-72 (Houghton Mifflin
1988). The grant to Baca was made by the provincial deputation
of Durango on May 29, 1821, and was later ratified and con-
firmed in February 1825 by the departmental assembly of New
Mexico, then a province of the Republic of Mexico. See S.Rep.
No. 228, 36th Cong., 1st Sess. at 3 (1860).
—————————————————————
A-15
Article V of the treaty, Mexico ceded certain lands to the
United States. 9 Stat. at 926-28. Included within them was
the Vegas Grandes. Article VIII of the treaty required the
United States to respect the property of Mexican citizens
in the ceded lands. 9 Stat. at 929-30.12
In order to establish a process for determination of
land claims within the portion of the ceded lands relevant
here, Congress passed the Act of July 22, 1854, Ch. 103, 10
Stat. 308 (1854). Pursuant to that act, the surveyor general
of the Territory of New Mexico, within which the Vegas
Grandes was situated, was given the duty “to ascertain
the origin, nature, character, and extent of all claims to
lands under the laws, usages, and customs of Spain and
Mexico” and to report to Congress on the validity of such
claims so that Congress could take “such action thereon
as may be deemed just and proper, with a view to con-
firm bona fide grants, and give full effect to the treaty of
eighteen hundred and forty-eight between the United
States and Mexico... .” Id. § 8 at 309. On December 18,
1858, the surveyor general issued his report with respect
to the claims of the heirs of Baca and of the town of Las
Vegas to the Vegas Grandes. He concluded
12 Article VIII of the treaty of Guadalupe Hidalgo provided,
in relevant part: '
In [the territory in question], property of every kind,
now belonging to Mexicans not established there,
shall be inviolably respected. The present owners, the
heirs of these, and all Mexicans who may hereafter
acquire said property by contract, shall enjoy with
respect to it guaranties equally ample as if the same
belonged to citizens of the United States.
9 Stat. at 929-30.
A-16
that the land embraced in either of the two
grants is lawfully separated from the public
domain and entirely beyond the disposal of the
general government, and that in the absence of
the one the other would be a good and valid
grant; but as this office has no power to decide
between conflicting parties, they are referred to
the proper tribunals of the country for the adju-
dication of their respective claims, and the case
is hereby respectfully referred to Congress |
through the proper channel for its action in the
premises.
H.R. Exec.Doc. No. 14 at 45.
On May 19, 1860, the United States Senate Committee
on Private Land Claims issued its report. It determined
that the grant to Baca and his sons “is a genuine and
valid title,” and that later, on a petition that represented
the land to be public, the same land was granted to the
predecessors of the town of Las Vegas, the persons pre-
senting the petition were put in possession, “and several
hundred families are located on it.” S.Rep. No. 228 at 3.
The report noted that the surveyor general “has recom-
mended the confirmation of both these titles, leaving to
the respective claimants the right of adjusting their con-
flicting claims in the courts.” Id. at 3-4. The report
observed, however, that “the plunging of an entire settle-
ment of families into litigation, at the imminent hazard of
being turned out of their homes, or made to purchase a
second time, from a private owner, lands for which they
paid their government a full equivalent, in the labor, risk,
and exposure by which they have converted a wilderness,
surrounded by hostile savages, into a civilized and thriv-
ing settlement” would be a disastrous result. Id. at 4. It
A-17
then stated that an alternative involving “little loss or
cost to the government,” id., was available:
The claimants under the title to Baca, . . . re-
presented by . . . counsel, have expressed a
willingness to waive their older title in favor of
the settlers, if allowed to enter an equivalent
quantity of land elsewhere within the Territory;
and your committee cannot doubt that Congress
will cheerfully accept the proposal, which,
indeed, would undoubtedly have been acceded
to by Mexico if the Territory had remained hers,
and to whose rights and duties the United States
have succeeded.
Id.
Congress acted by adopting the Act of June 21, 1860,
Ch. 167, 12 Stat. 71 (1860), confirming, among others,
claim number 20, which embraced the competing claims
of the Baca heirs and the town of Las Vegas!3 to the Vegas
13 The competing claims were included within claim 20 in
the surveyor general’s report. Claim 20 was among the claims
confirmed, “as recommended for confirmation by said
surveyor-general in his reports,” by section 3 of the Act of June
21, 1860. We use the term “confirmed” with respect to each of
these competing claims even though Congress clearly recog-
nized the conflict between them and provided a means for its
resolution. Congress undoubtedly meant no more than to
acknowledge and approve the surveyor general’s conclusion
that in the absence of either claim the other would be a good and
valid grant. See Senate Rep. No. 228 at 3-4. (“The surveyor
general having none but ministerial duties to perform, has rec-
ommended the confirmation of both these titles, leaving to the
respective claimants the right of adjusting their conflicting
claims in the courts.”); see also Lane v. Watts, 234 U.S. at 528, 34
S.Ct. at 968 (referring to both grants as “confirmed”); but see
A-18
Grandes, and making the following provision for the
heirs of Baca:
That it shall be lawful for the heirs of Luis Maria
Baca, who make claim to the said tract of land as
is claimed by the town of Las Begas [sic], to
select instead of the land claimed by them, an
equal quantity of vacant land, not mineral, in
the Territory of New Mexico, to be located by
them in square bodies, not exceeding five in
number. And it shall be the duty of the
surveyor-general of New Mexico, to make sur-
vey and location of the lands so selected by said
heirs of Baca when thereunto required by them:
Provided, however, That the right hereby granted
to said heirs of Baca shall continue in force
during three years from the passage of this act,
and no longer.
Act of June 21, 1860, § 6, 12 Stat. 71, 72 (1860). As the
United States Supreme Court characterized it, “Congress
accommodated the dispute by a magnificent donation of
lands to the heirs of Baca, and confirmed the original
land to the town. ...” Maese v. Herman, 183 U.S. 572, 581,
22 S.Ct. 91, 95, 46 L.Ed. 335 (1902).14 Such a determination
Shaw v. Kellogg, 170 U.S. 312, 342, 18 S.Ct. 632, 644, 42 L.Ed. 1050
(1898) (speaking of the claim of the heirs of Baca to the Vegas
Grandes, the court said, “Here there had been no claim con-
firmed to any tract of land but only the grant of a right to
locate.”)
14 In Maese, the United States Supreme Court further noted,
[Wle can easily see that Congress might have exercised its
bounty to adjust a controversy to which a town was a party,
A-19
and resolution of claims arising under a treaty was within
the province of Congress. See United States v. Sandoval,
167 U.S. 278, 290, 17 S.Ct. 868, 872-73, 42 L.Ed. 168 (1897);
Tameling v. U.S. Freehold & Emigration Co., 93 U.S. 644, 661,
23 L.Ed. 998 (1876); Sanchez v. Taylor, 377 F.2d 733, 737
(10th Cir.1967).
What followed is detailed in Shaw v. Kellogg, 170 U.S.
312, 18 S.Ct. 632, 42 L.Ed. 1050 (1898). The surveyor
general of the Territory of New Mexico was directed by
proper federal authority to survey the Vegas Grandes to
determine the area of the grant, whereupon the Baca heirs
would have the right to select an equal quantity of
vacant, nonmineral land in the Territory of New Mexico
in square parcels not to exceed five. Id. at 314, 18 S.Ct. at
633. The Baca heirs selected the Baca Grant No. 4 as one
of the parcels. Id. at 315, 18 S.Ct. at 633-34. Prior to such
selection, the Territory of Colorado had been organized,
Act of February 28, 1861, ch. 59, 12 Stat. 172 (1861), and
the area embraced within Baca Grant No. 4 was included
within the boundaries of the newly formed territory. See
Shaw, 170 U.S. at 316, 18 S.Ct. at 634. Following investiga-
tion and survey, the Colorado surveyor general approved
the field notes, survey, and plat of Baca Grant No. 4. See
id. at 314-25, 18 S.Ct. at 633-38. Upon such approval, in
1864 title passed pursuant to the Act of June 21, 1860,
without the necessity for issuance of a patent. Id. at
342-43, 18 S.Ct. at 644-45. AWDI must predicate its land
when, if the contestants were individuals, they would have been
remitted to the courts to litigate their rights and priorities.
Maese, 183 U.S. at 581, 22 S.Ct. at 95.
A-20
grant claims on the foregoing facts. We now turn to an
analysis of those claims.
B. The Spanish and Mexican Land Grant Claim
AWDI first asserts that its title to Baca Grant No. 4 is
derived from a Spanish or Mexican grant!5 and has all the
attributes of such a grant, allegedly including transfer of
all underground water, whether tributary or nontributary,
underlying the granted lands. AWDI asserts that recogni-
tion of the Spanish or Mexican origin of its title is neces-
sary in order to honor the requirement of the Treaty of
Guadalupe Hidalgo that the United States respect the
property rights of Mexican citizens.
“[I]ndividual rights of property, in the territory
acquired by the United States from Mexico, were not
affected by the change of sovereignty and jurisdiction.”
Tameling, 93 U.S. at 661. “The duty of providing the mode
of securing them and fulfilling the obligations which the
treaty of cession imposed, was within the appropriate
province of the political department of the government.”
Id. Congress provided the necessary procedures by
adopting the Act of July 22, 1854. Congress committed to
the surveyor general of the Territory of New Mexico the
duty of ascertaining the origin, nature, character and
'S As previously noted, Mexico achieved independence
from Spain in 1821. That was the year in which Baca petitioned
for the grant of Vegas Grandes. It is unimportant to the resolu-
tion of the issues before us whether title to Vegas Grandes was
derived under Spanish law, Mexican law, or some combination
of the two.
a |
A-21
extent and determining the validity of all such claims in
the Territory. Tameling, 93 U.S. at 662. The final action on
each claim was reserved to Congress and not subject to
judicial review. Id.
The land comprising Baca Grant No. 4 was never in
the private domain before it was granted to the Baca heirs
pursuant to the Act of June 21, 1860. It was in territory
under the sovereignty of Spain and then the Republic of
Mexico prior to the Treaty of Guadalupe Hidalgo. Under
that treaty the United States acquired sovereignty and the
land became part of the public domain.'® In order to
resolve amicably the disputed claims to the Vegas
Grandes, which was a completely different tract located
in what is now the State of New Mexico, the Baca heirs,
one of two sets of claimants to that latter tract, offered to
“waive their older title in favor of” the other group of
claimants “if allowed to enter an equivalent quantity of
land elsewhere within the Territory.” S.Rep. No. 228 at
4.17 The Act of June 21, 1860, followed, in which the
6 In Ely Real Estate & Investment Co. v. Watts, 262 F. 721, 721
(9th Cir.1920), cert. denied, 255 U.S. 564, 41 S.Ct. 374, 65 L.Ed. 788
(1921), the court referred to the effect of the Act of June 21, 1860,
as “granting to the heirs of Luis Maria Cabeza de Baca the right
to select lands in the public domain in lieu of the Las Vegas grant,
which they claimed to own.” (Emphasis added). See Lane v.
Watts, 234 U.S. at 539-40, 34 S.Ct. at 972 (Baca Grant No. 3 was
segregated from public domain); Kellogg, 170 U.S. at 338, 343, 18
S.Ct. at 643, 645 (Baca Grant No. 4 was segregated from public
domain).
17 See Lane v. Watts, 234 U.S. at 541-42, 34 S. t. at 973 (“To
accommodate conflicting claims and at the instance of the Gov-
ernment the Baca claimants gave up their rights to a definite
tract of iand, and .. . the Government therefore would naturally
A-22
United States Congress accepted the offer of the heirs of
Baca and allowed them “to select instead of the land
claimed by them, an equal quantity of vacant land,!® not
mineral, in the Territory of New Mexico.” The heirs of
Baca did select such land, part of which was Baca Grant
No. 4, and obtained title from the United States by fol-
lowing the procedures prescribed by the Act of June 21,
1860. The result was a grant of lands in which no private
rights had ever been recognized under the laws of Spain
or Mexico and a waiver of a claim to other lands under
which such rights could have been asserted by the claim-
ants. See Wise v. Watts, 239 F. 207, 225-27 (9th Cir.1917),
cert. denied, 244 U.S. 661, 37 S.Ct. 745, 61 L.Ed. 1376 (1917)
(discussing title to Baca Grant No. 3, obtained under the
same circumstances as Baca Grant No. 4).
The grant of lands, including Baca Grant No. 4, not
subject to rights under the laws of Spain and Mexico in
return for such waiver was not an abrogation of treaty
rights as AWDI contends, but rather a resolution of com-
peting claims well within the ambit of congressional
authority. See Sandoval, 167 U.S. at 290, 17 S.Ct. at 873
(“The mode in which private rights of property may be
secured, and the obligations imposed upon the United
States, by treaties, fulfilled, belongs to the political
make provision for the location of the substituted land as expe-
ditiously as possible and without expense to the Baca heirs”).
'® “Vacant land” necessarily referred to land not subject to
“claims to lands under the laws, usages, and customs of Spain
and Mexico,” for lands in the latter category previously had
been withdrawn from disposal pending final action by Congress
on such claims. Act of July 22, 1854, § 8, 10 Stat. at 308, 309.
A-23
department of the government to provide.”); Tameling, 93
U.S. at 661. The Act of June 21, 1860, itself contains no ~
suggestion that the grant of Baca Grant No. 4 involved
any intent to create rights other than those incident to
any conveyance of lands from the public domain of the
United States to a private citizen. Cf. United States v.
Roselius, 56 U.S. (15 How.) 31, 34, 14 L.Ed. 587 (1853)
(confirmation of doubtful claim by Congress on certain
terms and acceptance of those terms by claimant adjusts
the claim on the footing of compromise and forecloses
judicial review).
AWDI argues, however, that references by Congress
to “confirmation” of the claim of the Baca heirs to the
Vegas Grandes reflect an intent that the rights acquired
by the Baca heirs in the substituted lands, including Baca
Grant No. 4, were the same rights incident to their claim
under Spanish or Mexican law to the Vegas Grandes. This
argument is not well taken. The surveyor general of the
United States did indeed recommend that the title of the
Baca heirs to the Vegas Grandes be confirmed and the
disputes between the two sets of claimants be resolved in
court. Instead, however, pursuant to agreement, the Baca
heirs waived that title in return for the right to obtain
other lands from the United States. The surveyor gen-
eral’s recommended confirmation of the original title and
Congress’s ensuing confirmation of claim 20 both related
to rights in the Vegas Grandes but suggested nothing
about the nature of the title to be acquired from the
A-24
United States by a compromise grant of other lands in
that sovereign’s public domain.19
AWDI also relies on case authority to support its
argument that title to the alternative selected lands does
not lose its original character as derived under the laws
of Spain or Mexico. AWDI refres us to Henshaw v. Bissell,
85 U.S. (18 Wall.) 255, 21 L.Ed. 835 Board of County
Comm'rs of County of Pueblo v. Central Colo. Improvement
Co., 2 Colo. 628 (1874) (Nolan 1); rev'd by Central Colo.
Improvement Co. v. Board of Comm’rs, 95 U.S. 259, 24 L.Ed:
495 (1877) (Nolan II). Henshaw referred to Mexican law in
part to determine the better title under conflicting United
States patents issued upon a confirmation of grants made
by the Mexican government as floating grants within a
general tract large enough to Satisfy both. Nolan I and
Nolan II establish that when a Mexican land grant is
'? AWDI in its reply brief in this court also refers to the use
of the term “confirmation” in the Act of June 11, 1864, Ch. 123,
13 Stat. 125 (1864), which Provides for selection of substitute
lands by the Baca heirs for one of the parcels selected by them
under the Act of June 21, 1860. The Act of June 11, 1864, refers to
the lands first selected by the Baca heirs as “bodies of land
confirmed to them” by the 1860 act, then refers to one of the
substitute parcels as “confirmed to said heirs as aforesaid,” and
finally refers to the selection of substitute lands under the Act of
June 11, 1864, as “confirmed to the said heirs of the said Luis
Maria Baca.” AWDI argues that the language of confirmation
supports its argument that title to the substitute tracts is derived
under Spanish or Mexican law. As previously noted, however, it
was the claim of the Baca heirs to the Vegas Grandes that was
confirmed, and that claim was waived in order to resolve a
conflicting claim by the Town of Las Vegas. We are unable to
ascribe to the general references to confirmation in the Act of
June 11, 1864, the significance attached to them by AWDI.
a tn At, PF PaO om,
A-25
confirmed to less than all of the lands located within the
boundaries of the original grant, title relates back to and
is grounded upon the laws of Mexico. In the present case,
the claim confirmed to the Baca heirs was their claim to
the Vegas Grandes. The Baca heirs waived that claim and
accepted a grant from the United States to public domain
lands not within the boundaries of any Mexican land
grant. Neither Henshaw nor the opinions in Nolan I and
Nolan II speak to this issue. For the reasons previously
expressed, we hold that title to the Baca Grant No. 4 did
not derive from the Mexican government or its Spanish
predecessor.?°
C. The Claim Under the Act of June 21, 1860
AWDI asserts a supplemental or alternative claim to
ownership of all ground water underlying Baca Grant
20 AWDI also notes that “Baca Location No. 1,” one of the
five parcels selected by the Baca heirs under the Act of June 21,
1860, was referred to as a “Spanish Land Grant” in House and
Senate reports concerning legislation on land exchanges in 1990.
See H.R.Rep. No. 783, 101st Cong., 2d Sess., pt. 1, at 3 (1990),
Legislative History of Baca Location No. 1 Land Acquisition and
Study Act of 1990, Pub.L. No. 101-556, 104 Stat. 2762 (1990).
Certainly, rights to the parcels selected by the Baca heirs arose
indirectly from Spanish or Mexican land grants for the Vegas
Grandes and the resolution of conflicting claims to the Vegas
Grandes under such grants. Under these circumstances we
attach no weighty significance to the references to “Baca Loca-
tion No. 1” as a Spanish Land Grant in the legislative reports.
Furthermore, because title to the Baca Grant No. 4 is not
based on confirmation of a Spanish or Mexican grant of such
lands, we need not and do not express any opinion on the
incidents of title that is so based.
A-26
No. 4 based on the language of the Act of June 21, 1860.
As earlier discussed, section 3 of that Act “confirmed”
certain private land claims in the Territory of New Mex-
ico, including the competing claims of the Baca heirs and
the Town of Las Vegas to the Vegas Grandes, as recom-
mended for confirmation by the surveyor general. In
section 4 of the Act, Congress provided “[t]hat the fore-
going confirmation shall only be construed as quit-claims
or relinquishments, on the part of the United States, and
shall not affect the adverse rights of any other person or
persons whomsoever.” AWDI relies on this language of
quit claim or relinquishment as conveying to the Baca
heirs all rights of the United States in the lands selected
by them in return for waiver of their claim to the Vegas
Grandes. Such rights, according to this argument,
included all rights to water underlying Baca Grant No. 4.
As earlier noted, however, the Act of June 21, 1860,
did not confirm a claim of the Baca heirs to Baca Grant
No. 4. They had no such claim. Instead, pursuant to
section 6 of that Act and the legislation previously dis-
cussed, the Baca heirs were authorized to select alterna-
tive lands not within the boundary of the Vegas Grandes
in return for waiver of their claim to the Vegas Grandes.
Section 4 of the Act, quit claiming or relinquishing rights
of the United States to confirmed claims, had no applica-
tion to the substitute lands. AWDI’s reliance on Henshaw
v. Bissell, 85 U.S. (18 Wall.) 255, 21 L.Ed. 835 (1873), and
language in Shaw v. Kellogg, 170 U.S. 312, 331, 18 S.Ct. 632,
640, 42 L.Ed. 1050 (1898), is misplaced. Those cases con-
tain language supporting the proposition that confirma-
tion of claims under the Act of June 21, 1860, effected
relinquishment of all rights of the United States to the
Ada ee es ee Ee ee ae ee ee
ctaienetth Rontnt tae abininam atpesa nn contests kin EC eT Tee
4
!
4
A-27
premises covered by the claims. This proposition, based
on section 4 of the Act, has no application to the substi-
tute lands in the public domain, including Baca Grant No.
4, selected by the Baca heirs in return for waiver of their
claim to the Vegas Grandes, the tract to which their claim
- pertained.
Principles of construction militate against AWDI's
arguments as well. Land grants are construed favorably
to the United States government, and nothing passes
except what is conveyed in clear and explicit language.
Watt v. Western Nuclear, Inc., 462 U.S. 36, 59, 103 S.Ct.
2218, 2231, 76 L.Ed.2d 400 (1983) (lands acquired under
Stock Raising Homestead Act of 1916 do not include
gravel deposits); Andrus v. Charlestone Stone Prod. Co., 436
U.S. 604, 617, 98 S.Ct. 2002, 2009-10, 56 L.Ed.2d 570 (1978)
(water is not a valuable mineral subject to location under
Federal Mining Law of 1872); United States v. Union Pac.
R.R. Co., 353 U.S. 112, 116, 77 S.Ct. 685, 687, 1 L.Ed.2d 693
(1957) (right of way granted to railroad did not include
mineral rights); Caldwell v. United States, 250 U.S. 14,
20-21, 39 S.Ct. 397, 398-99, 63 L.Ed. 816 (1919) (right
granted by statute to railroad to take timber necessary for
construction did not extend to “tie slash” — tops of trees
not usable for making ties). Any doubts are to be resolved
in favor of the government and not against it, Western
Nuclear, Inc., 462 U.S. at 59, 103 S.Ct. at 2231; Andrus, 436
U.S. at 617, 98 S.Ct. at 2009-10; United States v. Union Pac.,
353 U.S. at 116, 77 S.Ct. at 687; Caldwell, 250 U.S. at 20-21,
39 S.Ct. at 398-99, as are any inferences, Caldwell, 250 U.S.
at 20, 39 S.Ct. at 398. The rule of narrow construction of
federal land grants has been applied with particular vigor
with respect to water where determination that a grant
A-28
carries rights to water would create inconsistencies with
the water right system that has been based on local law
and custom. See Andrus, 436 U.S. at 615-17, 98 S.Ct. at
2008-10.21
Nothing in the Act of June 21, 1860, suggests that the
land to be received by the Baca heirs by selection from
the public domain in exchange for relinquishment of their
claim under Spanish or Mexican law to the Vegas
Grandes was to have any incidents peculiar to claims
*! AWDI contends that local law and custom governed the
extent of water rights appurtenant to lands conveyed by the
United States when the Baca heirs obtained title to Baca Grant
No. 4 in 1864. See generally California Oregon Power Co. v. Beaver
Portland Cement Co., 295 U.S. 142, 154-55, 55 S.Ct. 725, 727-28, 79
L.Ed. 1356 (1935); State v. S.W. Colo. Water Cons. Dist., 671 P.2d
1294, 1304-07 (Colo. 1983) cert. denied, Young v. S.W. Colo. Water
Cons. Dist., 466 U.S. 944, 104 S.Ct. 1929, 80 L.Ed.2d 474 (1984).
AWDI argues that local law and custom in the San Luis Valley at
the relevant time presents a genuine issue of material fact pre-
cluding summary judgment. As we recognized in Coffin v. Left
Hand Ditch Co., 6 Colo. 443, 446 (1882), however, the doctrine of
priority of appropriation with respect to tributary water gov-
erned in Colorado “from the date of the earliest appropriations
of water within the boundaries of the state.”
We believe that at least after Colorado was organized as a
territory on February 28, 1861, the proper inquiry concerning
local law and custom is to be made on a territory-wide basis.
The use of the term “law” indicates that we should look to the
body empowered to make law - here the territorial legislature —
and suggests that “custom” should be examined within that
same territorial compass. Coffin therefore controls, and we find
it unnecessary to inquire into the possibility of differing custom
in particular parts of the territory or state.
:
i
7
i
§
A-29
derived under the law of those sovereigns. The Act con-
tains no mention whatsoever of rights to water underly-
ing the lands to be selected.22 There is no basis in the Act
of June 21, 1860, to support a construction that the baca
heirs acquired any rights that would have been recog-
nized under Spanish or Mexican law to substituted lands
selected by them in return for waiver of their claim to the
Vegas Grandes.?>
We hold that AWDI’s argument that it acquired rights
to water underlying Baca Grant No. 4 based on the terms
of the Act of June 21, 1860, is not well founded.
III. Challenges to the Determination that Water Sought to be
Withdrawn is Tributary
At the time of trial, AWDI’s sole remaining claim for
a right to withdraw 200,000 acre feet of water annually
from wells on lands owned or claimed by it was con-
tained in that part of its amended application seeking a
determination of rights to nontributary ground water
under section 37-92-203(1), 15 C.R.S. (1990). The trial
22 For general principles concerning the interrelation of
federal and state law concerning acquisition of rights to water,
see, e.g., S.W. Colo. Water cons. Dist., 671 P.2d at 1304-18; United
States v. City and County of Denver, 656 P.2d 1 (Colo.1983); Coffin,
6 Colo. 443.
23 For the foregoing reasons, we also are unpersuaded by
AWDI's suggestion that by reason of the obligations of the
United States under the Treaty of Guadalupe Hidalgo and by an
attempted analogy to the doctrine of federal reserved water
rights, see United States v. City and County of Denver, 656 P.2d 1,
the Baca heirs were granted by implication a right to water
underlying Baca Grant No. 4.
A-30
court determined that the water did not meet the statu-
tory definition of nontributary ground water in section
37-90-103(10.5), 15 C.R.S. (1990), and therefore denied the
claim. The court found that the water was tributary not
by a mere preponderance of the evidence but “beyond a
reasonable doubt.”24
Section 37-90-103(10.5) defines nontributary ground
water, in relevant part, as follows:
‘Nontributary Ground Water’ means that
ground water, located outside that boundaries
of any designated ground water basinsl25] in
existence on January 1, 1985, the withdrawal of
which will not, within one hundred years,
deplete the flow of a natural stream, including a
natural stream as defined in sections
7-82-101(2) and 37-92-102(1)(b), at an annual
rate greater than one-tenth of one percent of the
annual rate of withdrawal. The determination of
whether ground water is nontributary shall be
besed on aquifer conditions existing at the time
of permit application. . . .
Based on this definition, the water sought by AWDI was
nontributary ground water only if within one hundred
years the withdrawal at the rate of 200,000 acre feet per
year would not deplete the flow of a natural stream at an
annual rate of one-tenth of one percent of that amount, or
24 The state engineer had issued a determination pursuant
to § 37-92-302(2), 15 C.R.S. (1993 Supp.), that the water was
tributary, and the trial court took note of the rebuttable pre-
sumpticn created by that determination. See § 37-92-305(6), 15
C.R.S. (1993 Supp.).
2° The ground water at issue is located outside the bound-
ary of ay designated ground water basins.
A-31
200 acre feet per annum. The trial court found that the
effect of the withdrawals on three sets of natural streams
would exceed the statutory standard. First, the court
found that depletion to the surface flows of the Rio
Grande River and San Luis Creek alone would be approx-
imately 7,400 acre feet per annum. Second, the court
found that depletions of approximately 3,600 acre feet per
annum would result to the surface flow of Big Spring
Creek and that depletions to many other streams in the
Closed Basin would occur in amounts not quantified by
the evidence. Additionally, the trial court found that there
would also be depletions to the Closed basin’s uncon-
fined aquifer, which the court concluded to be part of the
water of a natural stream. We first address the findings
concerning the effect of AWDI’s proposed pumping on
surface streams and then the issues relating to the effect
on the unconfined aquifer.26 We conclude this section by
26 AWDI’s theory of nontributariness was premised princi-
pally on several related contentions, all of which were properly
rejected by the trial court. First, it argued that whether ground
water is nontributary is to be determined solely by reference to
the effect of pumping on the surface flow of natural streams
without regard to the effect on ground water tributary to such
streams. Second, it contended that there was no significant
hydraulic connection between the surface streams in the Closed
Basin and the underlying aquifers so that depletion of the
unconfined aquifer would not deplete the surface flow or cause
greater loss through streambed leakage than would otherwise
occur. AWDI also contended that the streams in the Closed
Basin lose their character as natural streams when they reach
the Closed Basin. As discussed herein, the trial court rejected
these premises based on determinations of fact from conflicting
evicence, correct rulings on the law, or a combination of the
two.
A-32
considering AWDI’s challenge to the partial summary
judgment order precluding it from challenging the means
of diversion of the Closed Basin Project.
A. Whether the Trial Court Properly Determined the
Effect of AWDI’s Proposed Pumping on Surface
Streams
The trial court’s determinations of the effects of the
proposed withdrawals on the Rio Grande River, San Luis
Creek, Big Spring Creek, and other surface streams are
findings of fact. As such, they will not be disturbed on
appeal unless wholly unsupported by the evidence. Board
of County Comm’rs v, Upper Gunnison River Water Cons.
Dist., 838 P.2d 840, 847 (Colo.1992); People v. City of Thorn-
fon, 775 P.2d 11, 19 (Colo.1989).
The trial court was presented with extensive evi-
dence, through expert testimony and voluminous
exhibits, concerning the geological and hydrologic char-
acteristics of the Valley and of the Closed Basin in partic-
ular. The evidence established, and the trial court found,
that underlying the lands in the Valley are two aquifers
having different hydrologic properties and generally act-
ing as separate hydrologic units. Separating them is a
group of clay layers referred to as the blue clay series.
The upper aquifer, called the unconfined aquifer, consists
of coarse materials with relatively high hydraulic conduc-
tivities, and is situated above the blue clays, which range
in depth from 35 feet on the west side of the Valley to 125
feet on the east. Most of the irrigation wells in the Valley
‘ ee ee
A-33 i‘
are completed in this aquifer.27 The lower aquifer is
located below the blue clays. Although hydrologically
connected at various points, the two aquifers have been
separately administered by the state engineer for well
permit purposes. The extent of the hydraulic connection
is sufficiently slight that water in the confined aquifer is
maintained under artesian pressure. The artesian condi-
tion results from a recharge of the confined aquifer by
waters entering the aquifer at higher elevations at the
edges of the Valley and the limited permeability of the
blue clays separating the two aquifers.
The evidence concerning the effects to be produced
by AWDI’s proposed withdrawals of water was sharply
conflicting in many respects. Each side attempted to
develop a comprehensive geologic and hydrologic frame-
work for use in predicting the movement of water within
the San Luis Vailey as a result of such withdrawals. For
this purpose AWDI and the objectors utilized complex
ground water flow computer models, the objectors’
model having been developed by the Colorado state engi-
neer. By introducing into the models certain data as
described to the court through expert testimony, each
side attempted to demonstrate the effect of the proposed
withdrawals on surface streams and the unconfined aqui-
ter.
In general, the court found the evidence presented by
the objectors had utilized in operating their computer
7 AWDI's proposed wells are to be perforated at depths
between 200 and 2,500 feet and therefore are to be completed in
the lower, confined aquifer
iil
A-34
model more credible than that of AWDI.28 In particular,
the court made the critical finding that the ground water
in the unconfined aquifer “is in hydraulic connection
with most surface streams in the San Luis Valley and
their alluvium for all or portions of most years.”29 As a
result, the level of the water table in the unconfined
aquifer influences gain or loss to the streams. On another
critical factual issue, the trial court found that the values
used by AWDI for streambed conductance, which
expresses the rate at which a stream will lose water to the
underlying aquifer, were not credible; AWDI’s data
greatly underestimated loss of water through streambed
leakage. The court also found that AWDI’s evapo-
transpiration data and use of that data in its computer
model materially overstated the potential for reducing
loss of water by evapotranspiration by lowering the
water table through pumping and thus eliminating vege-
tation. These are examples of some of the more important
factual findings that undermined the credibility of the
results predicted by the use of AWDI’s computer model.
The trial court also found that the State’s model was
originally created for administrative purposes and was
“far more extensive and thorough” than that of AWDI.
The court found that while not purporting to be able “to
28 After an extensive review of the evidence concerning
AWDI’s computer model and the data used in operating it the
trial court found “that the opinions of [ 4¥/DI’s] experts, based
upon its model, are not credible.”
9 AWDI acknowledges that there is a hydraulic connection
between the surface streams and the unconfined aquifer with
respect to the property near Villa Grove. The issue here relates
only to the Baca Grant No. 4 and adjacent lands.
A-35
predict with exact precision the quantity and location of
stream depletions” to be caused by AWDI’s proposed
pumping, the State’s model was adequate for a deter-
mination of whether depletion to certain streams would
exceed the statutory standard in the definition of non-
tributary water. The 7,400 acre feet per annum depletive
effect on the Rio Grande River and San Luis Creek was
directly predicted by the State’s model and provided the
basis for the trial court’s finding that this effect was
inconsistent with the statutory definition of nontributary
water.
In addition, the State’s model predicted the locations
where the water level in the unconfined aquifer would be
drawn down by AWDI’s proposed pumping. Based on
expert testimony that Big Spring Creek was in hydraulic
connection with the unconfined aquifer, the computer
model prediction that the effect of AWDI’s proposed
pumping would reduce the water level in that aquifer to
a particular extent, and an expert’s testimony concerning
the effect of such a water level reduction on Big Spring
Creek, the trial court found that the creek would be
depleted by approximately 3,600 acre feet per year by the
proposed pumping, a reduction in itself sufficient to
defeat AWDI’s claim that the water it sought to withdraw
was nontributary. The trial court also found that the
lowering of the water level in the unconfined aquifer
would adversely affect other natural streams even though
such effects could not be precisely quantified because
those streams were not included in the computer model.
All of the trial court’s findings were based on evi-
dence in the record and will not be overturned. See, e.g.,
Upper Gunnison River, 838 P.2d at 847.
A-36
B. Whether the Trial Court Properly Determined the
Nature of the Unconfined Aquifer and the Effect of
AWDI's Proposed Pumping on that Aquifer
The trial court also determined that the unconfined
aquifer was part of a natural stream, with the result that
the depletive effects of AWDI’s proposed withdrawals on
that aquifer must be taken into account as well in deter-
mining whether the water to be withdrawn is nontribu-
tary. We agree.
Under Article XVI, Sections 5 and 6, of the Colorado
Constitution, the water of every natural stream is
declared to be the property of the public and subject to
appropriation for beneficial use. The manner of imple-
mentation of that right has been delineated by the Water
Right Determination and Administration Act of 1969,
§§ 37-92-101 to -602, 15 C.R.S. (1990 & 1993 Supp.), and
extensive case law preceding and following that Act. The
right to appropriate water of every natural stream
extends to waters tributary to a natural surface stream.
§ 37-92-102, 15 C.R.S. (1990); State v. S.W. Colo. Water
Cons. Dist., 671 P.2d 1294, 1308 (Colo.1983); Whitten v.
Coit, 153 Colo. 157, 385 P.2d 131 (1963).
Nontributary ground water is subject to disposition
by the General Assembly in exercise of its plenary power
to develop a system of law governing acquisition of
rights in this resource. See S.W. Colo. Water Cons. Dist.,
671 P.2d at 1304-18 (describing interrelation of federal
and state law concerning the acquisition of rights to
water). In exercise of that power, the General Assembly
has provided for judicial determination of rights to non-
tributary ground water outside of designated ground
A-37
water basins, § 37-92-203(1), 15 C.R.S. (1990), and has
established standards and procedures concerning acquisi-
tion of such rights, § 37-90-137, 15 C.R.S. (1990 & 1993
Supp.). The right to withdraw nontributary ground water
is based on ownership of the overlying land,
§ 37-90-102(2), 15 C.R.S. (1990); § 37-90-137(4), 15 C.R.S.
(1990 & 1993 Supp.), rather than the doctrine of prior
appropriation applicable to tributary water.
Because of the two separate systems for acquisition
of rights in water in and tributary to natural streams and
nontributary ground water it became useful to define the
distinction between these two resources. The present case
implicates two sets of statutes establishing that distinc-
tion. The one is a pair of statutes having particular appli-
cation to stream systems arising and terminating in
Colorado. The other is the statute defining “nontributary
ground water.”
In 1979, the General Assembly enacted essentially
identical statutes,5° as set forth in Ch. 346, secs. 1, 4,
§ 37-82-101(2), § 37-92-102(1)(b), 1979 Colo.Sess.Laws
1366, 1366, 1367-68, which provide:
A stream system which arises as a natural
surface stream and, as a natural or man-induced
phenomenon, terminates within the state of Col-
orado through naturally occurring evaporation
30 The only difference is that § 37-82-101(2) concludes by
reference to “appropriation as provided in subsection (1) of this
section,” whereas § 37-92-102(1)(b) concludes by reference to
“appropriation as provided in paragraph (a) of this subsection
(1).” Each of the subsections to which reference is made in turn
makes reference to the constitutional right of appropriation,
although the language of the subsections is not identical.
OW
A-38
and transpiration of its waters, together with its
underflow and tributary waters, is a natural
surface stream subject to appropriation. . . .
We sometimes refer to sections 37-82-101(2) and
37-92-102(1)(b) collectively as the “natural surface stream
legislation.”
In 1985, the General Assembly adopted the definition
of nontributary ground water in effect at the time AWDI
asserted its claim and continuing to the present.
§ 37-90-103(10.5), 15 C.R.S. (1990). That statute appears
earlier in this opinion at page 34 and specifically includes
the natural streams defined in the natural surface stream
legislation among the natural streams to be considered in
applying the statutory test.
Relying on the definition of “natural surface stream”
adopted in the natural surface stream legislation, which
includes underflow and tributary waters, the trial court
found the streams flowing into the Closed Basin and the
unconfined aquifer into which those streams flow to be
natural streams. AWDI argues, first, that the natural sur-
face stream legislation is special legislation prohibited by
Article V, Section 25, of the Colorado Constitution. AWDI
also asserts that the unconfined aquifer is not part of a
natural stream within the meaning of the statute defining
nontributary ground water. In any event, AWDI argues,
the trial court’s conclusion that the water AWDI seeks to
withdraw does not satisfy the statutory standard for non-
tributary ground water cannot be sustained because the
court made no findings concerning relevant aquifer con-
ditions existing at the time of the permit application, as is
necessary to apply the definition of nontributary ground
A-39
water under section 37-10-103(10.5). We address these
issues in the order stated.
1. Challenge to Natural Stream Legislation as Spe-
cial Legislation
AWDI argues that the trial court erred in granting the
objectors’ motion for partial summary judgment declar-
ing the natural surface stream legislation to be consistent
with the constitutional prohibition of special legislation.
AWDI contends, as it did before the trial court, that
sections 37-82-101(2) and 37-92-102(1)(b), 15 C.R.S. (1990),
constitute special legislation in violation of Article V,
Section 25, of the Colorado Constitution. It asserts that
these two statutes constitute special legislation because
they apply only to stream systems in the Closed Basin
and were intended to preclude the factual determination
as to nontributariness that would otherwise be necessary
in determining whether ground water in that basin is
subject to the doctrine of prior appropriation applicable
to tributary water rather than to allocation by landowner-
ship, the statutory basis for allocating nontributary
ground water outside designated ground water basins.
See § 37-90-102(2), 15 C.R.S. (1990); § 37-90-137(4), 15
C.R.S. (1990 & 1993 Supp.).
Article V, Section 25, of the Colorado Constitution
prohibits the General Assembly from enacting special
legislation. The relevant portion of Article V, Section 25,
states simply, “where a general law can be made
EE ee
A-40
applicable no special law shall be enacted.”31 As we
stated in Curtiss v. GSX Corp. of Colorado, 774 P.2d 873
(Colo. 1989),
[t]his constitutional prohibition is directed at
“legislation that applies to some classes but not
to others without a reasonable basis for distin-
guishing between them, or legislation that
exempts some members of a class from coverage
[of the general law] without a reasonable basis
for the exemption.”
Id. at 876 (quoting City of Montrose v. Public Utilities
Comm’‘n, 732 P.2d 1181, 1190 (Colo.1987)). A law does not
violate the constitutional prohibition against special legis-
lation if it is “general and uniform in its operation upon
all in like situation.” Curtiss, 774 P2d at 876, (quoting
McCarty v. Goldstein, 151 Colo. 154, 158, 376 P.2d 691,
692-93 (1962)); Rifle Potato Growers Ass'n v. Smith, 78 Colo.
171, 176, 240 P. 937, 939 (1925); People v. Earl, 42 Colo. 238,
264, 94 P. 294, 302 (1908).
The statutes in question here provide that stream
systems that terminate in Colorado are natural surface
streams subject to appropriation. We regard this simply
as recognition that such stream systems are natural
streams within the meaning of Article XVI, Sections 5 and
6, of the Colorado Constitution and therefore subject to
the constitutional right of appropriation. The legislature
had a reasonable basis to address this particular class of
*! Article V, Section 25, of the Colorado Constitution, also
specifically prohibits special laws in twenty-two express catego-
ries, none of which is applicable here.
A-41
streams and clarify the manner of obtaining rights to
water in such stream systems.
The statutes satisfy the requirement that they be gen-
eral and of uniform application. By their terms they apply
to all stream systems in the state of Colorado that arise as
natural surface streams and terminate in Colorado. The
statutes are not limited to apply only to specific streams
or specific geographic areas. When adopting the legisla-
tion, the legislature itself was aware of at least one other
area in the state of Colorado to which the statutes would
apply. See Senate Floor Debate on S.B. 481 (April 25,
1979).
Although the legislature was apparently aware of just
two geographic regions that would be affected by the
legislation, the number of class members known to be
affected by the statutory criteria at the time of enactment
is not determinative in deciding whether the legislation
amounts to unconstitutional special legislation. In Darrow
v. People, 8 Colo. 417, 8 P. 661 (1885), we upheld the
constitutionality of legislation that created a superior
court in any town or city that had more than 25,000
inhabitants, even though Denver was the only city of that
size when the legislation was adopted. In Darrow, we
stated that
Denver, it is true, is the only city to which the
act at present applies. But the legislature clearly
intended to provide for places that may hereaf-
ter acquire the population mentioned. The law is
general, and is unlimited as to time in its opera-
tion. There is nothing unreasonable in the sup-
position that other towns and cities within the
a
A-42
state will eventually contain twenty-five thou-
sand inhabitants.
Darrow, 8 Colo. at 418-19, 8 P. at 662; cf. In re Interrogato-
ries, 146 Colo. 233, 361 P.2d 350 (1961) (a bill authorizing
annexation of a town by a city under circumstances
unique to one location and providing for automatic
repeal of annexation authority shortly after enactment
was unconstitutional as special legislation). Like the leg-
islation at issue in Darrow, the natural surface stream
legislation has an indefinite period of application. Analo-
gous to Darrow, there is nothing unreasonable in the
supposition that with the development and refinement of
knowledge of the geography and hydrology of the state,
it may be learned that there are other stream systems that
arise as natural surface streams and terminate in Colo-
rado. Therefore, in the future, this legislation may be
found to apply to such other streams.
Because the two statutes are of general and uniform
applicability, they do not constitute special legislation in
violation of Article V, Section 25, of the Colorado Consti-
tution. Accordingly, the trial court’s partial summary
judgment ruling will be upheld.%2
2. Inclusion of Unconfined Aquifer in Definition of
Natural Stream
The trial court concluded as a matter of law that “the
unconfined aquifer is water of a natural stream,” and that
the proposed pumping of 200,000 acre feet per annum
32 Summary judgment was consistent with the principles
governing the availability of such relief. See supra at 360.
A-43
would deplete the flow of that stream as well as other
natural streams in the San Luis Valley to a greater extent
than allowable in order to satisfy the criteria in the defini-
tion of nontributary ground water in section
37-90-103(10.5).
AWDI asserts first that the unconfined aquifer is not
a natural stream within the meaning of section
37-90-103(10.5) because it does not fit the definition of
“natural stream” in section 37-87-102(1)(b), 15 C.R.S.
(1990). This argument has no merit.
Section 37-87-102(1)(b) provides:
As used in this article, unless the context other-
wise requires:
* * *
(b) “Natural stream” means a place on the
surface of the earth where water naturally flows
regularly or intermittently with a perceptible
current between observable banks, although the
location of such banks may vary under different
conditions.
(Emphasis added.) The “article” referred to in the forego-
ing definition is Article 87, entitled “Reservoirs.” By its
own terms, the definition does not apply to section
37-90-103(10.5), which appears in a separate article 90,
captioned “Underground Water.” Also, section
37-90-103(10.5) specifically includes within the meaning
of “natural stream” “a natural stream as defined in sec-
tions 37-82-101(2) and 37-92-102(1)(b).” The trial court
found that the unconfined aquifer falls within these defi-
nitions as “a stream system which arises as a natural
surface stream which terminates within the state,
_ii_;;siziiit
A-44
together with its associated underflow and tributary
water.”
AWDI also argues that the amount of surface stream
depletion alone determines whether water is nontribu-
tary within the meaning of section 37-90-103(10.5). This is
incorrect. That section specifically refers to sections
37-82-101(2) and 37-92-102(1)(b) as included within the
definition of natural streams. Those sections in turn refer
to “a natural surface stream... together with its under-
flow and tributary waters.” Clearly then, the underflow
and tributary waters of streams described in the natural
stream legislation are included as part of the natural
streams referred to in section 37-90-103(10.5), and the
effect on such underflow and tributary waters must be
considered in determining whether ground water to be
withdrawn is nontributary.
AWDI also challenges factual findings upon which
the trial court relied in determining that the unconfined
aquifer constitutes associated “underflow and tributary
water” of a natural surface stream and therefore by defi-
nition is part of the natural surface stream. See
§§ 37-82-101(2) and 37-92-102(1)(b). Specifically, AWDI
contends that its evidence concerning the lack of hydrau-
lic connection between the unconfined aquifer and sur-
face streams was more weighty and credible than that of
the objectors. Similarly, AWDI contends that its evidence
concerning streambed conductance, which affects the
movement of water into and out of the subsurface sur-
rounding a stream is more persuasive. Our review of the
record, however, reveals ample evidence supporting the
trial court’s findings on these matters. Issues of cred-
ibility are to be resolved by the trial court. Consequently,
ee ee ee ee
A-45
‘the findings will not be disturbed on appeal. See Upper
Gunnison River, 838 P.2d at 847.55
For the foregoing reasons we uphold the trial court's
| determination that the uncc..cined aquifer in the Closed
Basin is part of a natural surface stream within the mean-
ing of section 37-90-103(10.5).
3. Requirement of Determination of Existing Aquti-
fer Conditions at the Time of Permit Application
Section 37-90-103(10.5) requires that a determination
that ground water is nontributary “shall be based on
aquifer conditions existing at the time of permit applica-
tion... . ” AWDI asserts that the trial court’s order is not
so based and that therefore the judgment must be
reversed and remanded with directions to apply the stat-
utory standard.
33 The trial court also found that without regard to the
natural stream legislation, the unconfined aquifer is a natural
stream within the meaning of the statutory and case law delin-
eating the reach of the constitutional right of appropriation.
AWDI has not challenged that analysis except as implicit in its
factual challenge to the trial court’s finding of a hydraulic con-
nection between the unconfined aquifer and the surface
streams. It is therefore unnecessary to address that analysis
except to say that we agree that the statutory definition of
nontributary ground water must be construed to be exclusive of
those waters subject to the constitutional right of appropriation.
See Whitten v. Coit, 153 Colo. 157, 385 P.2d 131 (1963) (doctrine of
prior appropriation is not applicable to underground waters
that are not tributary te any natural stream). There is no sugges-
tion that the trial court’s construction was not fully consistent
with that principle.
A-46
AWDIi did not present evidence directed at the condi-
tions of the aquifer as they existed in 1986 when AWDI
first filed its permit application. Rather, an expert witness
for AWDI testified that conditions during the 1970s were
representative of conditions at the time of the application.
The objectors introduced evidence that conditions in the
1970s were not representative but that such period was
untypically dry.54 The trial court held that it need not
resolve this controversy because it was satisfied, applying
the statutory standard, “that the grourid water sought by
[AWD]I] is tributary even if the period 1970-1979, or any
period thereafter is used.”35 Again, the evidence was
conflicting, the court made findings resolving the mate-
rial conflicts, and therefore the findings of the trial court
must be sustained on review.
4 The significance of this dispute relates to whether the
unconfined acquifer, under “aquifer conditions existing at the
time of the permit application” would be and remain in hydrau-
lic connection with the surface streams. Absent such a connec-
tion, the unconfined aquifer arguably would not be part of a
natural stream and any effect of AWDI’s Proposed withdrawals
on water level in that aquifer would not be relevant to deter-
mination of nontributariness as defined in § 37-90-103(10.5).
3° AWDI also argues that the trial court erred in adopting a
specuistive value for Closed Basin Project production, rather
than the iower amount actually produced during the 1980s, by
relying on the State’s computer model. As the State points out in
its brief, however, the Project is conditionally decreed 117,000
acre feet per year. The State used 75,000 acre feet per year in
running its model as an estimate of probable sustained produc-
tion based on the evidence concerning other constraints on
production included in the Closed Basin Project degree. We
cannot conclude that the trial court erred in implicitly recogniz-
ing that estimated production level as a condition existing at the
time of the permit application.
ee ee ee o >
en ee ee ee ee ee ee ee
ii... fila Dee
A-47
C. Whether the Trial Court Properly Precluded Chal-
lenge to Means of Diversion of Closed Basin Project
AWDI argues that the trial court erred in granting
\ partial summary judgment precluding AWDI from chal-
' lenging the reasonableness of the means of diversion of
j
|
;
J
wells producing from the unconfined aquifer on the basis
of a water right decreed for the Closed: Basin Project. We
| do not find it necessary to address this question on the
merits.
The Closed Basin Project is a federal reclamation
project that was authorized by the Reclamation Project
Authorization Act of 1972.36 The project was designed to
withdraw water from the unconfined aquifer of the
Closed Basin and deliver the water to the Rio Grande
River. Under normal conditions, water that flows into the
basin is collected in a sump area that is separated from
the Rio Grande River drainage by a natural hydraulic
barrier at the southern boundary of the Closed Basin.
Once trapped there, much of the water is lost to evapora-
tion and evaportranspiration. See generally Closed Basin
Landowners Ass’n v. Rio Grande Water Cons. Dist., 734 P.2d
627 (Colo.1987).
The goal of the Closed Basin project is to lower
the water table in the sump area by approx-
imately two feet through the construction and
operation of over one-hundred shallow wells,
and to reduce water losses to evaporation and
evapotranspiration. Water salvaged from the
36 Pub.L. No. 92-514, 86 Stat. 964 (1972), as amended by
Pub.L. No. 96-375, § 6, 94 Stat, 1507 (1980; Pub.L. No. 93-570, 98
Stat. 2941 (1984); and Pub. L. No. 100-516, § 22, 102 Stat. 2566,
2575 (1988).
Mey thease
A-48
sump area is to be delivered to the Rio Grande
River to help meet Colorado’s obligations to
New Mexico and Texas under the Rio Grande
Compact. See Rio Grande Compact, P.L. No. 96,
53 Stat. 785 (1939); § 37-66-101, 15 C.R.S. (1973).
Id. at 629.
In December of 1972, Rio Grande Water Conservation
District, the local sponsoring entity for this federal pro-
ject applied for determination of a conditional water
right. In April 1980, in case W-3038, the District Court for
Water Division 3 granted the application and decreed a
conditional water right to withdraw 117,000 acre feet of
water per year from 129 shallow wells situated on over
100,000 acres of lands. The wells would tap the uncon-
fined aquifer in the Closed Basin. See generally Closed
Basin, 734 P.2d at 629-31.
In the trial court, AWDI contended that in consider-
ing whether the ground water it sought to withdraw by
its proposed wells is availble for appropriate under its
tributary claim and whether withdrawals would mate-
rially injure the vested rights of others, see § 37-90-137(2),
15 C.R.S. (1993 Supp.), the court must address whether
the Closed Basin wells, which are limited by decree to
withdrawals from the unconfined aquifer, constitute a
reasonable means of diversion. See § 37-92-102(2)(b) 15
C.R.S. (1990); Alamosa-LaJara, 674 P.2d at 934-35; City of
Colorado Springs v. Bender, 148 Colo. 458, 462, 366 P.2d 552,
955 (1961).37 AWDI’s position was that any injury to the
*? The reasonable means of diversion issue, as applied to
tributary ground water, was first explained in Bender:
A-49
Closed Basin Project that might otherwise result from
AWDI’s proposed pumping should be addressed by
requiring that the Project wells be deepened to produce
water from the confined aquifer. Prior to trial, Rio Grande
Water Conservation District moved for partial summary
judgment to preclude AWDI from challenging in this
proceeding the District’s adjudicated water right for the
Closed Basin Project. The trial court granted the motion,
finding that the doctrine of res judicata barred any chal-
lenge to the Closed Basin Project decree. The court speci-
fically stated that the applicant was barred from
challenging “the reasonableness of the means of diver-
sion established for the well withdrawals decreed in the
April 21, 1980 Decree in Case No. W-3038, including the
requirement that the depth of the wells be restricted to
the unconfined aquifer.” On this appeal, AWDI asserts
that the court must consider whether the Closed Basin
... priority of appropriation does not give a right to
an inefficient means of diversion, such as a well
which reaches to such a shallow depth into the avail-
able water supply that a shortage would occur to such
senior even though diversion by others did not
deplete the stream below, where there would be an
adequate supply for the senior’s lawful demand.
t * +
The plaintiffs cannot reasonably “command the
whole” source of supply merely to facilitate the tak-
ing by them of the fraction of the entire flow to which
their senior appropriation entitles them. On the other
hand, plaintiffs cannot be required to improve their
extraction facilities beyond their economic reach,
upon a consideration of all the factors involved.
Bender, 148 Colo. at 462, 465, 366 P.2d at 555, 556.
A-50
Project’s means of diversion is reasonable. We need not
reach this question.
The central issue in the case at trial was whether the
water sought to be withdrawn was nontributary within
the meaning of section 37-90-103(10.5), as claimed by
AWDI. Reasonableness of the means of diversion of
Closed Basin Project wells had no bearing on that issue,
and AWDI did not prevail on its claim. The issue of
asonableness of means of diversion arose in connection
with AWDI’s tributary claim. AWDI, however, volun-
tarily dismissed that claim.
In general, a claimant who voluntarily dismisses a
claim cannot appeal from the judgment of dismissal, for
the judgment cannot be considered adverse as to the one
who sought it. Jensen v. Matthews-Price, M.D., 845 P.2d
542, 543 (Colo.App.1991); accord Unioil, Inc. v. E.F. Hutton
& Co., Inc., 809 F.2d 548, 555 (9th Cir.1986), cert. denied,
484 U.S. 822, 108 S.Ct. 83, 98 L.Ed.2d 45 (1987) & 484 U.S.
823, 108 S.Ct. 85, 98 L.Ed.2d 47 (1987); LeCompte v. Mr.
Chip, Inc., 528 F.2d 601, 603 (5th Cir.1976); see also 9
Charles A. Wright & Arthur R. Miller, Federal Practice and
Procedure § 2376 (1971) (hereinafter “Wright & Arthur R.
Miller”). And, as the Sixth Circuit Court of Appeals has
observed,
[e]ven in those rare jurisdictions . . . which
permit appeal from an order of voluntary non-
suit where there is a ruling of the court which
strikes at the heart of the case and precludes
recovery by plaintiff, appeal from such order
does not lie to review rulings which do not have
the effect of determining the case against plain-
tiff.
A-51
Management Investors v. United Mine Workers of Am., 610
F.2d 384, 394 (6th Cir.1979) (quoting Kelly v. Great Atlantic
& Pacific Tea Co., 86 F.2d296, 297 (4th Cir.1936)). Cf. Har-
rington v. Anderson, 87 Colo. 417, 419, 288 P. 1049, 1050
(1930) (we will not as a general rule pass on questions not
necessary to the decision); Olney Springs Drainage Dist. v.
Auckland, 83 Colo. 510, 517, 267 P. 605, 608 (1928) (same).
We do not regard the reasonable means of diversion issue
as one that strikes at the heart of the tributary claim. In
view of AWDI’s voluntary dismissal of that claim, we
hold that the partial summary judgment on the rea-
sonableness of the means of division of the Closed Basin
Project wells is not properly reviewable on this appeal.
IV. Procedural Prejudice
A. Whether the Trial Court’s Case Management Order
and its Implementation Unfairly Prejudiced AWDI
In May of 1990, three and one-half years after the
case was filed the objectors moved for the entry of a case
management order that would structure discovery and
the pretrial process, including establishment of a discov-
ery schedule and deadlines for amendments to AWDI's
water application. In July of 1990 the court entered its
case management order. Dates were set before which all
motions to amend the application had to be filed, discov-
ery had to be completed, and lists identifying all expected
testifying experts, fact witnesses, and exhibits had to be
served upon all parties. AWDI was ordered to identify its
experts and their proposed testimony as well as its fact
witnesses and exhibits before the times the objectors were
required to disclose their own witnesses and exhibits.
A-52
AWDI now asserts that the case management order
and its implementation were unfairly prejudicial. It
argues that there was no justification for the requirement
that AWDI identify its witnesses and exhibits before the
objectors and that this order unfairly enabled the objec-
tors to conduct discovery “before providing reciprocal
information.” In addition, AWDI maintains that because
the trial court allowed the objectors to introduce late-
designated evidence, there was “one-sided” enforcement
of the order and that AWDI was unfairly afforded “fewer
procedural protections” than the objectors.
Generally, pretrial discovery rulings are within the
sound discretion of the trial court. In re Marriage of Mann
655 P.2d 814, $816 (Colo.1982); Kerwin v. District Ct., 649
P.2d 1086, 1088 (Colo.1982); Cameron v. District Ct., 193
Colo. 286, 289, 565 P.2d 925, 928 (1977); see also Glisan v.
Kurth, 153 Colo. 102, 107, 384 P.2d 946, 949 (1963) (“to
make pre-trial procedure effective, appellate interference
with the trial court in this area must be kept at a mini-
mum”). The trial court’s decision to prescribe staggered
discovery was fully justified by the nature of the issues in
this case. AWDI had the burden of proof to establish its
alternative claims for tributary or nontributary rights. See
Public Service Co. of Colo. v. Board of Water Works of Pueblo,
Colo., 831 P.2d 47, 480 (Colo.1992) (relating to tributary
application). The central issue was whether the water to
be produced was tributary or nontributary. It evaluate the
application it was necessary to understand the complex
factual framework concerning the geology and hydrology
of the Valley, AWDI’s computer model, and the data that
would be used in running the model upon which AWDI
predicated its claim. It was therefore reasonable to
Tice inceneleaiuiaaiil
A-53
require AWDI to proceed first in order for the objectors to
be able to discern the facts AWDI would rely upon to
support its application in order to prepare the objectors’
own case. Particularly considering the fact that AWDI
was allowed to designate rebuttal experts after it had
completed discovery from the objectors’ expert witnesses,
we cannot say that the trial court’s decision to compel
AWDI to identify its witnesses and exhibits before the
objectors was an abuse of discretion.
As for the alleged prejudice to AWDI from the court's
“one-sided” implementation of the order, the record does
not support this claim. The trial court did modify the
management order to allow the objectors to introduce
additional evidence, but this evidence did not create
unfair surprise. The evidence consisted of another run
from a previously introduced computer model showing
the predicted results from a particular pumping scenario
proposed by AWDI, as well as related testimony, and two
demonstrative exhibits that graphically displayed data
already available to AWDI. Moreover, the court granted a
number of modifications for AWDI itself, including
allowing the presentation of rebuttal testimony from a
witness not identified until trial was underway.
A trial court has broad discretion in allowing devia-
tions from the terms of pretrial orders. Murphy v. Colorado
Aviation, Inc., 41 Colo.App. 237, 241, 588 P.2d 877, 881
(1978); Impliedly overruled on other grounds by Public Service
Co. v. District Ct., 674 P.2d 383 (Colo.1984); see C.K.A. v.
M.S., 695 P.2d 785, 788 (Colo.App.1984) (trial courts have
broad discretion in determining whether to allow late
endorsement of witnesses not listed in pretrial
~~
A-54
orders).°® AWDI has not demonstrated that the trial court
abused that discretion.
B. Whether the Trial Court’s Rulings were Objective
AWDI asserts that the trial court’s rulings were not
properly objective. In support of its position, AWDI cites
a number of pretrial motions on which the trial court
ruled in favor of the objectors by entering precisely the
form of order proposed by them. AWDiI also points out
that the decree entered by the trial court was virtually
identical to the objectors’ proposed decree.
Adoption of a prevailing party’s proposed findings
of fact and conclusions of law is not necessarily improper.
“[Flindings, if otherwise sufficient, are not weakened or
discredited because given in the form submitted by coun-
sel.” Uptime Corp. v. Colorado Research Corp., 161 Colo. 87,
93, 420 P.2d 232, 235 (1966). Even those courts that con-
demn the uncritical adoption of findings prepared by the
38 According to a treatise on the Federal Rules of Civil
Procedure:
“Rule 16, . . . permitting pretrial procedures, can
achieve its purpose of improving the quality of justice
only if the pretrial requirements entered at the discre-
tion of the trial court are applied with intelligent
flexibility, taking into full consideration the exigen-
cies of each situation. The trial judge must be permit-
ted wide latitude in guiding a case through its
preparatory stages.”
3 James Wm. Moore et al., Moore's Federal Practice J 16.19 (2d ed.
1993) (quoting Davis v. Duplantis, 448 F.2d 918, 921 (5th
Cir.1971)).
A-55
prevailing party are unwilling to reverse unless the find-
ings themselves are inadequate. Id. at 92, 420 P.2d at 235.
On appeal, the court will assume that the trial
judge examined the proposed findings and
agreed that they correctly stated the facts as he
himself found them to be; otherwise, he would
not have adopted them as his own. It is only
when the findings themselves are inadequate
and do not indicate the basis for the trial court’s
decision that the judgment will be reversed.
Id. at 93, 420 P.2d at 235 (citations omitted). The findings
are sufficient and indicate the basis for the trial court’s
decisions. Therefore, they will be sustained despite the
fact that the trial judge adopted the language of the
prevailing party’s proposed findings and conclusions as
his own.
V. Excessive and Unwarranted Findings
AWDl asserts that the trial court’s 104 page Findings
of Fact, Conclusions of Law, Judgment and Decree con-
tains “a multitude of findings and conclusions irrelevant
to the character of the water [as tributary or nontribu-
tary]” and requests that these findings and conclusions be
excised from the decree. AWDI expresses concern that
some of these findings may have a collateral estoppel
effect in the event a tributary claim is reasserted in the
future. We believe this concern is ill founded.
Collateral estoppel bars relitigation of an issue only
under the following conditions:
|
A-56
(1) The issue precluded is identical to an issue
actually litigated and necessarily adjudicated in
the prior proceeding;
(2) the party against whom estoppel is sought
was a party to or was in privity with a party to
the prior proceeding;
(3) there was a final judgment on the merits in
the prior proceeding; and
(4) the party against whom the doctrine is
asserted had a full and fair opportunity to liti-
gate the issue in the prior proceeding.
Denver v. Consolidated Ditches Co., 807 P.2d 23, 32
(Colo.1991); accord, e.g., Pomeroy v. Waitkus, 183 Colo. 344,
350-51, 517 P.2d 396, 399 (1973). To the extent that any of
the findings and conclusions of the trial court were not
necessarily adjudicated or actually litigated under cir-
cumstances where AWDI had a “full and fair opportunity
to litigate,” they can have no collateral estoppel effect.
Once the tributary claim had been dismissed and the
injury and mitigation issues eliminated by bifurcation,
the issues necessarily adjudicated were those required for
determination of whether the water sought to be with-
drawn met the statutory definition of nontributary
ground water. Therefore, to the extent the trial court’s
findings and conclusions go beyond those necessary for
such a determination, they can have no collateral estop-
pel effect in future litigation. Under these circumstances,
we consider it unnecessary to make a determination of
which, if any, of the findings and conclusions are not
necessary or to excise any such findings or conclusions
from the Findings of Fact, Conclusions of Law, Judgment
and Decree.
A-57
VI. Awards of Attorney Fees, Expenses, and Costs
Having rejected AWDI’s objections to the merits of
the trial court’s judgment, we now turn to AWDI’s objec-
tion to the awards of attorney fees, expenses, and costs. A
summary of the proceedings leading up to the awards is
necessary to an understanding of AWDI’s objections.
On September 26, 1991, almost five years after AWDI
filed its application and following extensive discovery
conducted by both AWDI and the objectors, a pretrial
conference was held in preparation for a trial scheduled
to begin on October 15, 1991. Prior to the pretrial confer-
ence, AWDI's land grant claims had been dismissed by
partial summary judgment. As a result, AWDI’s alterna-
tive claims for nontributary and tributary water rights
were the only remaining bases for its asserted right to
withdraw 200,000 acre feet of water per year by its pro-
posed wells. Near the conclusion of the pretrial confer-
ence and without prior notice to the objectors, AWDI
moved to dismiss, without prejudice, its application for
determination of tributary water rights, taking the posi-
tion that as a result of the trial court’s rulings in this
action, and other circumstances, it no longer had a “rea-
sonable likelihood of prevailing on the claim.” The objec-
tors sought and were granted the opportunity to respond.
In briefs, they took the position that if the court exercised
its discretion to dismiss under C.R.C.P. 41(a)(2), the order
of dismissal must be conditioned upon the award of all
fees and expenses incurred by the objectors in defending
against the tributary claim. The court held a nonevidenti-
ary hearing and thereafter entered a written order dis-
missing the tributary claim without prejudice but
A-58
requiring AWDI to pay to the objectors “all of their
attorneys’ fees, expert witness fees and costs, and other
fees and expenses related to the Tributary Claim.” The
court ordered that a hearing to determine the amounts to
be awarded would be held immediately following the
trial on the nontributary claim, at which time the court
would “consider the reasonableness of those fees and
costs and the necessity of those expenditures.”
Foilowing the trial and resulting dismissal of the
nontributary claim, the objectors sought recovery of
attorney fees, expenses, and costs pursuant to the order
dismissing the tributary claim under C.R.C.P. 41(a)(2) and
also sought costs under C.R.C.P. 54(d) incident to the
judgment of dismissal of the nontributary claim. AWDI
opposed the requested awards. The court then held a
three day evidentiary hearing to determine the amounts
to be awarded to the objectors. At the conclusion of the
hearing the court made findings and entered a judgment
for the objectors in amounts totaling $2,236,790.40 for
attorney fees, expenses including expert witness fees, and
costs incurred in defending against the tributary claim, as
well as $473,091.31 for other costs incident to the litiga-
tion resulting in dismissal of the nontributary claim.%9
AWDI challenges the awards on several bases. First,
it asserts that a court cannot condition voluntary dis-
missal of a claim on the payment of attorney fees,
expenses, and costs under C.R.C.P. 41(a)(2), for to do so
would violate section 13-17-102(5), 6A C.R.S. (1987), and
39 The court detailed the nature and amounts of the awards
to each of the individual objectors who received such awards.
A-59
C.R.C.P. 11. Second, AWDI argues that because of the
unique nature of water adjudication and based upon
Colorado Uniform Water Court Rule 5(b), Rule 41(a)(2) is
not applicable to litigation concerning water rights.
Third, AWDI contends that the awards were improper
and excessive because the court employed an incorrect
standard in evaluating the C.R.C.P. 41(a)(2) claims, and
the evidence adduced in support of those claims was
legally insufficient. Finally, AWDI challenges the amount
of the costs awarded to the objectors under C.R.C.P. 54(d)
as an abuse of discretion, lacking in sufficient evidentiary
support, and not based on sufficient findings.
The objectors assert that AWDI cannot contest the
awards made under C.R.C.P. 41(a)(2) because they were
ordered incident to the dismissal of the tributary claim,
which AWDI requested. We first address this threshold
issue and then consider AWDI’s objections to the awards.
A. Whether AWDI can Contest the Conditions of Dis-
missal of the Tributary Claim
The objectors contend that having asked for and
enjoyed the benefit of voluntary dismissal without preju-
dice, AWDI cannot now be heard to complain about the
terms imposed as a condition of the dismissal by the
court. The terms were imposed pursuant to C.R.C.P.
41(a)(2), which provides in relevant part:
[Subject to an exception not applicable here], an
action shall not be dismissed at the plaintiff's
instance save upon order of the court and upon
such terms and conditions as the court deems
proper. . . . Unless otherwise specified in the
A-60
order, a dismissal under this subsection (2) is
without prejudice.
Fed.R.Civ.P. 41(a)(2) is virtually identical, so federal pre-
cedent will be helpful in resolving this issue. See United
States v. Bell, 724 P.2d 631, 645 n. 18 (Colo.1986); Harding
Glass Co., Inc. v. Jones, 640 P.2d 1123, 1125 n. 3 (Colo.1982);
United Bank of Denver Nat'l Assoc. v. Shavlik, 189 Colo. 280,
282, 541 P.2d 317, 318 (1975).
Generally, a plaintiff may not appeal from an order
granting its request for voluntary dismissal. Jensen v.
Matthews-Price, M.D., 845 P.2d 542, 543 (Colo.App.1992);
accord Unioil, Inc. v. E.F. Hutton & Co., Inc., 809 F.2d 548,
555-56 (9th Cir.1986), cert. denied, 484 U.S. 822, 108 S.Ct.
83, 98 L.Ed.2d 45 (1987) & 484 U.S. 823, 108 S.Ct. 85, 98
L.Ed.2d 47 (1987); LeCompte v. Mr. Chip, Inc., 528 F.2d 601,
603 (5th Cir.1976); see also 9 Wright & Miller § 2376. This
rule is premised on the rationale that “such a dismissal
cannot be characterized as an involuntary adverse judg-
ment against the plaintiff.” Jensen, 845 P.2d at 543; see also
5 James Wm. Moore et al., Moore’s Federal Practice
Y 41.05[3] (2d ed. 1993). As the United States Court of
Appeals for the Fifth Circuit has noted, when such a
dismissal is granted,
the plaintiff has acquired that which he sought,
the dismissal of his action and the right to bring
a later suit on the same cause of action, without
adjudication of the merits. The effect of this type
of dismissal is to put the plaintiff in a legal
position as if he had never brought the first suit.
LeCompte, 528 F.2d at 603.
A-61
In the present case, however, the dismissal was con-
ditioned on terms imposed by the court under C.R.C.P.
41(a)(2) and to which AWDI never assented. The Colo-
rado Court of Appeals has stated that rather than accept
the terms and conditions of dismissal, “if a trial court
places ‘terms and conditions’ upon a dismissal under
C.R.C.P. 41(a)(2) which are unacceptable to plaintiff,
plaintiff is entitled to elect to proceed with the litigation.”
Powers v. Professional Rodeo Cowboys, 832 P.2d 1099 1104
(Colo.App.1992); accord, e.g., Marlow v. Winston & Strawn,
19 F.3d 300 (7th Cir.1994); Unioil, 809 F.2d at 554; see also 9
Wright & Miller § 2366. We have not previously been
required to decide whether a piaintiff who disagrees with
the legal or factual basis for terms or conditions imposed
in an order dismissing a claim on the plaintiff’s motion
may choose not to proceed with litigation of the claim
and yet preserve a right to challenge the terms and condi-
tions on appeal.
The federal circuits have not adopted a single consis-
tent analytic approach in deciding whether a plaintiff can
appeal conditions imposed upon it under Fed.R.Civ.Proc.
41(a)(2) pursuant to a voluntary dismissal without preju-
dice. Cauley v. Wilson, 754 F.2d 769, 770 (7th Cir.1985); see
also discussion in Unioil, 809 F.2d at 555-56. Some cases
have held that conditions imposed in voluntary dismissal
orders can be chalienged on appeal only if they amount
to legal prejudice. Unioil, 809 F.2d at 555-56; LeCompte, 528
F.2d at 603. The condition of payment of the opposing
party’s costs and expenses has been stated to constitute
prejudice in a practical sense but not legal prejudice.
Unioil, 809 F.2d at 555-56; LeCompte, 528 F.2d at 603. The
A-62
same court that decided LeCompte, however, has sug-
gested that there will be cases
in which the amount of money set as the price of
a voluntary dismissal without prejudice is so
clearly unreasonable as to amount to appealable
‘legal prejudice’. . .. We will examine each case
to ensure that the terms and conditions accom-
panying the grant of a plaintiff’s Rule 41(a)(2)
motion are not so outrageous as to demand a
full appellate review.
Yoffe v. Keller Indus., Inc., 580 F.2d 126, 131 (5th Cir.1978),
cert. denied, 440 U.S. 915, 99 S.Ct. 1231, 59 L.Ed.2d 464
(1979); see also Mortgage Guaranty Ins. Corp. v. Richard
Carylon Co., 904 F.2d 298, 300-01 (5th Cir. 1990); Scholl v.
Felmont Oil Corp., 327 F.2d 697, 700 (6th Cir.1964). This
approach tends to intermingle the issue of entitlement to
review and that of the reasonableness of the payment
imposed. The Seventh Circuit Court of Appeals in Cauley
adopted a more direct approach and permitted review of
a condition to voluntary dismissal in order to assess
abuse of discretion. The court explained:
[A] plaintiff may understand that the dismissal
without prejudice is conditioned on paying
attorneys’ fees yet disagree with the amount of
fees awarded. Thus an order awarding attor-
neys’ fees may qualify as an involuntary
adverse judgment even though the plaintiff
requested and received the Rule 41(a)(2) dis-
missal.
Cauley, 754 F.2d at 771; see GAF Corp. v. Transamerica Ins.
Co., 665 F.2d 364, 367-68 (D.C.Cir. 1981).
A-63
We adopt the approach in Cauley and also consider it
appropriate to take cognizance of challenges to the legal
propriety of imposing terms and conditions of dismissal,
which we view as an assertion of “legal prejudice.” See
Unioil, 809 F.2d at 555-56; LeCompte, 528 F.2d at 603. Of
course, it must also be shown in order to challenge a term
or condition of dismissal on appeal that the party seeking
dismissal did not actually acquiesce in imposition of the
condition. Mortgage Guaranty, 904 F.2d at 300.
In the present case AWDI was aware that terms and
conditions would be imposed incident to its voluntary
dismissal. When the trial court orally granted AWDI’s
motion to dismiss on October 10, 1991, the court stated
that the dismissal was subject to the condition that AWDI
pay to the objectors “all attorney fees and expert witness
fees and other fees and expenses incurred by the objec-
tors that are otherwise appropriate during the pendency
of this litigation which relate to the tributary claim.”
AWDI then proceeded to trial on October 15, 1991, on the
nontributary claim alone.
Although aware of the terms and conditions
imposed, AWDI never acquiesced to them. AWDI
asserted in proceedings before the trial court that such
terms and conditions were not legally permissible and
has consistently maintained this position in the trial court
and on appeal. The court in LeCompte determined that the
plaintiff had not acquiesced to the conditions of dismissal
where he not only objected to the inclusion of the defen-
dant’s proposed conditions in the dismissal order, but
vigorously renewed his objections after the court issued
its order, and ~ failing to obtain relief - then brought an
appeal. The fact that the plaintiff never sought to have
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the voluntary dismissal set aside was not considered
dispositive. LeCompte, 528 F.2d at 604.
We hold that a party such as AWDI that obtains a
voluntary dismissal of its claims subject to terms and
conditions to which it consistently maintains its objec-
tions may challenge those terms and conditions as legally
impermissible or as an abuse of discretion on appellate
review. We consider it especially appropriate to address
the challenge to the amount of the fees and expenses
imposed here, because the amount had not been quan-
tified at the time AWDI decided to go forward with the
nontributary claim alone.
B. Whether Section 13-17-102(5) or C.R.C.P. 11 Pre-
cludes an Award of Attorney Fees and Expenses inci-
dent to Dismissal of the Tributary Claim
AWDI asserts that a requirement for payment of
attorney fees and expenses as a term or condition of an
order granting voluntary dismissal of a claim cannot be
imposed in the absence of evidence and findings satisfy-
ing the requirements of section 13-17-102(5), 6A C.RS.
(1987), and C.R.C.P. 11 - provisions which have no ana-
logs in the federal statutes or rules. We disagree.
As earlier noted, C.R.C.P. 41(a)(2) provides that, with
exceptions not pertinent here, “an action shall not be
dismissed at the plaintiff’s instance save upon order of
the court and upon such terms and conditions as the
court deems proper.” Section 13-17-102(5) provides:
No attorney fees shall be assessed if, after filing
suit, a voluntary dismissal is filed as to any
claim or action within a reasonable time after
A-65
the attorney or party filing the dismissal knew,
or reasonably should have known, that he
would not prevail on said claim or action.
C.R.C.P. 11 provides, in pertinent part:
Reasonable expenses, including a reasonable attor-
ney’s fee, shall not be assessed if, after filing, a voluntary
dismissal or withdrawal is filed as to any claim, action or
defense, within a reasonable time after the attorney or
party filing the pleading knew, or reasonably should have
known, that he would not prevail on said claim, action, or
defense.
AWDI argues that the trial court could not impose
attorney fees as a term or condition of dismissal under
C.R.C.P. 41(a)(2) in the absence of a finding that AWDI
did not move to dismiss within a reasonable time after it
knew or reasonably should have known that it would not
prevail on its tributary claim, as required by section
13-17-102(5) and C.R.C.P. 11. AWDI asserts that both
those provisions are applicable whenever payment of
attorney fees is imposed upon a party incident to dis-
missal of a claim, including dismissals under C.R.C.P.
41(a)(2).
Preliminarily, we note that AWDI offers no case sup-
port for its assertion that section 13-17-102(5) and Rule 11
apply to limit a trial court’s discretion to impose terms
and conditions on a grant of voluntary dismissal under
Rule 41(a)(2). The limited number of Colorado cases that
have interpreted the latter rule have never mentioned any
limitation of that kind. See Tillery v. District Ct., 692 P.2d
1079, 1084 (Colo.1984) (trial court may award costs and
fees to defendant as a term and condition of voluntary
A-66
dismissal); Powers v. Professional Rodeo Cowboys, 832 P.2d
1099, 1102 (Colo.App.1992) (same).
More importantly, the purpose of Rule 41 is different
than the objectives of section 13-17-102(5) and Rule 11.
The language of both section 13-17-102 and Rule 11
expresses an intention to sanction a party who has contin-
ued to pursue a claim after the party or its attorney knew
or should have known that the party would not prevail,
i.e., that the claim is not meritorious.49 No such language
is present within Rule 41(a)(2).41 Rule 41(a)(2) is intended
to give the plaintiff the right to dismiss a claim that may
later become viable or may be asserted later in a different
forum, provided the court can ensure the defendant will
not be unfairly prejudiced. Tillery, 692 P.2d at 1084; accord
McCall-Bey v. Franzen, 777 F.2d 1178, 1184 (7th Cir.1985)
(terms and conditions imposed pursuant to Rule 41(a)(2)
are the “quid pro quo” of allowing plaintiff to dismiss a
potentially meritorious claim without being prevented by
the doctrine of res judicata from bringing the same suit
40 In fact, article 17, part 1, of the statute, in which
§ 13-17-102 appears, is captioned “Frivolous, Groundless, or
Vexatious Actions,” and is commonly known as the “frivolous
and groundless litigation statute.” 17 Colo.Law 465 (1988). See
also § 13-17-101, 6A C.R.S. (1987) (legislative declaration that
statute addresses claims that are “substantially frivolous, sub-
stantially groundless, or substantially vexatious”); Shaw v.
Baesemann, 773 P.2d 609, 611 (Colo.App.1989) (“Both the title
and purpose of the statute evince an intent to apply it only to
frivolous, groundless, or vexatious actions.”).
41 In its reply brief in this court, AWDI acknowledges that
“Rule 41(a)(2) is not intended to punish the party voluntarily
dismissing a claim, nor to serve any purpose other than reim-
bursements.”
A-67
again); GAF Corp., 665 F.2d at 369 (“[n]o matter how
conscientious and diligent [plaintiff] may have been,
[defendant] suffered some costs by defending this action
.. and [defendant] is entitled to such reimbursement of
those costs as the court may order”); LeCompte, 528 F.2d at
604 (Rule 41(a)(2) “allows the plaintiff to withdraw his
action from the court without prejudice to future litiga-
tion”); 9 Wright & Miller § 2362. According to Tillery, a
plaintiff’s Rule 41(a)(2) motion to dismiss voluntarily
without prejudice “generally should be granted,” Tillery,
692 P.2d at 1085, but the court must first determine that
any harm to the defendant may be avoided by imposing
terms and conditions of dismissal.
Thus, a court’s focus when determining appropriate
terms and conditions under C.R.C.P. 41(a)(2) is neces-
sarily on a remedy for the defendant, not punishment of
the plaintiff. Rule 41(a)(2) provides a means for preserv-
ing a potentially meritorious claim for another day or
another forum provided that conditions of dismissal can
be devised to protect the defendants from prejudice. Sec-
tion 13-17-102(5) and Rule 11, on the other hand, are
intended to protect a plaintiff from imposition of attorney
fees upon dismissal of an unmeritorious claim provided
that the plaintiff seeks dismissal promptly after learning
that the claim cannot prevail.
Although AWDI asserts that allegedly erroneous pre-
trial rulings by the trial court destroyed the prospects for
success in establishing the tributary claim, AWDI has
never conceded or suggested that such a claim was not
meritorious or that it will not reassert such a claim in the
future. We therefore reject AWDI’s argument that imposi-
tion of a requirement of payment of attorney fees as a
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condition of voluntary dismissal without prejudice of a
claim under C.R.C.P. 41(a)(2) violates either section
13-17-102(5) or C.R.C.P. 11.
C. Whether the Special Nature of Water Adjudication
Proceedings Precludes the Award of Fees and
Expenses Incident to Dismissal of the Tributary
Claim
AWDI also contends that the condition concerning
payment of fees and expenses that was included in the
court’s C.R.C.P. 41(a)(2) order of dismissal of the tribu-
tary claim fails to take account of and is inconsistent with
the unique nature of water right adjudication. We dis-
agree.
AWDI notes that, unlike typical civil cases, once an
application for determination of a water right or a right
to nontributary ground water is filed, any person who
wishes may file a statement of opposition, without com-
plying with traditional standing requirements. See
§ 37-92-302(1)(b), 15 C.R.S. (1990); Bunger v. Uncompahgre
Valley Water Users Assn, 192 Colo. 159, 165, 557 P.2d 389,
392 (1976). Thus, an applicant has no control over the
number of objectors who participate in an action, or the
fees and expenses they may generate. AWDI asserts that
for this reason the imposition of fees and expenses in a
water case can quickly become unfairly burdensome on
the applicant. Every potential applicant, regardless of
financial resources, would have to consider the possi-
bility of future payment of objectors’ fees and expenses in
the event the applicant should later wish to dismiss its
application. AWDI asserts that Colorado Uniform Water
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Court Rule 5(b)4? reflects this distinction between water
court proceedings and other civil actions in its provision
for voluntary dismissals. Rule 5(b) requires court
approval for withdrawal of a water rights application if a
statement of opposition has been filed, but makes no
provision for the imposition of “terms and conditions.”
A note at the beginning of the Uniform Local Rules
For All State Water Court Divisions provides in relevant
part, “[e]xcept as expressly provided in these rules, the
Colorado Rules of Civil Procedure . . . shall apply to
water court practice and procedure.” Rule 5(b) contains
no indication that C.R.C.P. 41 is not fully applicable to
water cases. The fact that the number of objectors who
need protection from prejudice by terms and conditions
in an order of voluntary dismissal is large provides no
persuasive reason to permit an applicant to obtain dis-
missal of a claim without providing such protection. We
reject the contention that C.R.C.P. 41(a)(2) does not apply
to water right adjudications.
D. Whether the Trial Court Employed an Incorrect Stan-
dard or Relied on Insufficient Evidence in Assessing
Fees and Expenses incident to Dismissal of the Tribu-
tary Claim
AWDI asserts that even if the trial court could award
fees and expenses as a condition of voluntary dismissal of
42 Rule 5(b) provides:
An application against which a statement of Opposi-
tion has been filed shall not be withdrawn or dis-
missed except by order of the court.
Rule 5(b), Uniform Local Rules For All State Water
Court Divisions, 7B C.R.S. (1993 Supp.).
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a claim, the court erred by employing an incorrect stan-
dard in determining the extent to which the fees and
expenses are allowable. Furthermore, AWDI contends,
evidence adduced in support of the amounts assessed
was legally insufficient.
1. Correctness of Standard
We first address whether the court used the correct
standard in determining attorney fees and expenses.
AWDI argues that the trial court did not properly limit
the award to those fees and expenses for activities that
were rendered useless by the dismissal. Such a criterion,
it contends, is the correct standard for assessing the limits
of a permissible award of fees and expenses incident to a
voluntary dismissal under C.R.C.P. 41(a)(2).
Tillery contains some guidance concerning the proper
standard:
The district court could require the costs and
fees to be reimbursed as a condition of granting
the motion to dismiss, although consideration
should be given to the fact that the defendants
may recoup some of the fees if they prepare an
answer to the petitioner’s complaint in federal
court.
Tillery, 692 P.2d at 1085. Because C.R.C.P. 41(a)(2) is “iden-
tical to the corresponding federal rule and the rules
adopted by several other states,” Tillery, 692 P.2d at 1084,
it will also be helpful to look to the standards applied in
cases outside this jurisdiction for guidance. Federal
courts have consistently limited reimbursement under
Fed.R.Civ.P. 41(a)(2) to expenses for work that will not be
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useful in future litigation of the same claim. Lau v. Glen-
dora Unified School District, 792 F.2d 929, 932 (9th Cir.1986)
(Reinhardt, J., concurring) (defendant “not entitled to
reimbursement of costs and legal fees incurred in prepar-
ing work product that may be useful in continuing litiga-
tion”); McCants v. Ford Motor Co., Inc., 781 F.2d 855, 860
(11th Cir.1986) (where a subsequent similar suit between
the parties is contemplated, expenses awarded might be
limited to those incurred in discovering information that
will not be useful in the later suit); Cauley, 754 F.2d at 772
(trial court found to have abused its discretion in award-
ing fees for work product which could be useful in
defending same claim in state court where claim was
being pursued); McLaughlin v. Cheshire, 676 F.2d 855,
856-57 (D.C.Cir.1982) (no entitlement to reimbursement
for expenses in preparing work product that will be use-
ful in continuing litigation in another forum); GAF Corp.
665 F.2d at 369 (same); Brown v. Zackert, 10 Kan.App.2d
466, 701 P.2d 711, 714 (1985) (“while the conditions of
dismissal are within the discretion of the court, the range
of that discretion is confined to terms which relieve the
defendant from the potential waste occasioned by the
dismissal”). These cases are consistent with Tillery and
provide helpful elaboration of the standard that we sug-
gested in that case.
AWDI asserts that the trial court failed to apply this
Standard in the present case. In issuing the payment
order, the trial court noted that dismissal of the tributary
claim had previously been conditioned on the applicant’s
payment to the objectors of “all of their attorney fees,
expert witness fees, costs, fees, and other expenses
related to the tributary claim.” AWDI contends that the
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words “related to” sweep too broadly and asserts that
this language is evidence that the trial court improperly
ordered the payment to the objectors of all expenses
having anything to do with the tributary claim, including
those incident to gathering information also useful in
litigating the nontributary claim or that could be used
against AWDI in future litigation of the tributary claim.
The remainder of the trial court’s order, however,
indicates that the court properly considered the danger of
overlap with the nontributary claim and the possibility
that work expended on the tributary claim would be
useful in future litigation of the latter claim. The court
rejected the possibility that work devoted to the tributary
claim would be useful in future litigation of that claim,
stating:
Depending on when a new tributary claim may
be filed, much of the material discovered by
Objectors prior to September 1991 will be out-
dated, if not useless, in any hearing concerning
a “new” tributary claim. Any benefit from this
earlier discovery is speculative at best.
In addition, the trial court expressly recognized the
necessity of avoiding reimbursement of expenses
incurred in gathering information useful in litigation of
the nontributary claim. Out of concern about the possi-
bility of “overlap,” among other things, the court dis-
counted the award of attorney fees and expense claims by
ten percent.
Other than the court’s use of the phrase “related to
the tributary claim,” AWDI offers no support for its con-
tention that the trial court failed to apply the proper
standard limiting its award of attorney fees and costs
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under Rule 41(a)(2) to expenses for work that it deter-
mined was not useful in defending against the nontribu-
tary claim or would not be of use in future litigation of a
renewed tributary claim. We reject the contention that the
trial court used the wrong standard in awarding fees and
expenses.
2. Sufficiency of Evidence
AWDI asserts that even if the court used the proper
standard, the evidence was insufficient to identify the
fees and expenses incurred for work useful only on the
tributary claim, failed to establish that the scope of the
work on that claim was reasonable, and failed to show
the reasonableness of the amounts charged for such work.
We disagree with each of these assertions.
a. Identification of Fees and Expenses Attribu-
table to Tributary Claim
AWDI as well as the objectors understood that deter-
mining an appropriate award might be difficult due to
the possibility of overlap between the work performed
and information gathered by the objectors to defend
against the nontributary claim which went to trial and the
efforts directed to defend against the tributary claim
which was dismissed. This difficulty occurred in part
because until AWDI unexpectedly moved to dismiss the
tributary claim, the objectors had no reason to distinguish
carefully between the two claims in maintaining their
records of work performed and expenses incurred.
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The party requesting an award of attorney fees bears
the burden of proving by a preponderance of the evi-
dence its entitlement to such an award. Kinsey v. Preeson,
746 P.2d 542, 551-52 (Colo.1987) (citing Board of County
Comm'rs v. Auslaender, 745 P.2d 999, 1001-02 (Colo.1987));
see § 13-25-127, 6A C.R.S. (1987) (burden of proof in any
civil action, except claim for exemplary damages or body
execution, “shall be by a preponderance of the evi-
dence”); Spensieri v. Farmers Alliance Mutual Ins. Co., 804
P.2d 268, 271 (Colo.App.1990) (“If the attorney provides a
reason and rational basis for the work done, he or she
should be compensated accordingly. ... ”); see also Blum
v. Stenson, 465 U.S. 886, 897, 104 S.Ct. 1541, 1548, 79
L.Ed.2d 891 (1984) (when the fee claimant has carried his
burden of showing that the claim rate and number of
hours are reasonable, the product is presumed to be the
reasonable fee contemplated by 42 U.S.C. § 1988). Coun-
sel is not required “to record in great detail how each
minute of his time was expended. But at least counsel
should identify the general subject matter of his time
expenditures.” Hensley v. Eckerhart, 461 U.S. 424, 437 n.
12, 103 S.Ct. 1933, 1941 n. 12, 76 L.Ed.2d 40 (1983). This
was done.
In this case the objectors’ attorneys introduced time
records kept contemporaneously with work done. The
extent of the information varied, and the records kept by
the private attorneys were generally more detailed than
those of the government attorneys, but all included the
;
|
’
:
:
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date, the attorney, the time expended, and a general
statement of work done.43
In addition, attorneys for the objectors testified as to
the manner in which they allocated fees and expenses
between the tributary and nontributary issues for the
purpose of their claims under C.R.C.P. 41(a)(2). For
instance, the lead attorney for the United States testified
that virtually all of his time was devoted to the tributary
claim, “but we decided to make the figure 85 percent,
which is, I think, a very conservative estimate.” The
attorney for Oliver Powell Roemer III and Howard Platz
testified that the concerns of both of those clients were
limited to the tributary claim. He averred, “By definition,
if the water was nontributary, it could not affect their
water rights. Only tributary claims could affect their
water rights.” Accordingly, the’ fees and expenses
incurred on behalf of those clients were limited to the
tributary claim.
In response to AWDI’s assertion that the objectors’
work defending against the tributary claim must have
been used in litigating the nontributary claim, an attor-
ney for Rio Grande Water Users Association and San Luis
Valley Water Conservancy District stated:
* The attorneys’ time records introduced into evidence
contained excisions for time spent on portions of the case other
than the tributary claim. Although AWDI objected to such exci-
sions, we fail to see how they inhibited the trial court’s ability to
evaluate the unexcised portions and determine whether they
applied to the tributary claim.
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There’s a big difference between trying a tribu-
tary claim and a nontributary claim. In a non-
tributary claim, all you’ve got to show is impact
on any stream of one-tenth of 1 percent. In a
tributary claim, you’ve got to know which
stream systems are impacted and what amounts
with a good deal of greater precision... .
This attorney also testified, “[Y]ou spend a lot of time on
a whole broad range of issues related to - on a tributary
case that would never come up in a nontributary setting.”
In order to allocate accurately the time spent on each
claim, this counsel reviewed all of his firm’s billing state-
ments, covering attorney fees and expenses, and
went through line by line, item by item, for
every month and every year since the inception
of this litigation and made a determination of
what time I felt was fairly attributable to our
work on the tributary claim and excluded all
remaining time and used that to come up with a
total number of hours and a total amount of
expenses.
As a result of this review, he determined that fifty-eight
percent of the attorney fees was attributable to the tribu-
tary claim. The attorney for Rio Grande Water Conserva-
tion District testified that he too went through the bills
submitted by his firm to the District from 1987 through
1991 in order to identify those attorney fees and expenses
related to the tributary claim.
Expert witness fees and expenses were allocated in a
similar fashion. The objectors’ attorneys testified that
those experts involved in aspects of both the tributary
and the nontributary claims were asked to itemize their
monthly bills and provide a breakdown of costs they
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considered attributable to the tributary and nontributary
claims, and that they did so. In most instances, docu-
ments in the form of letters, bills, and/or affidavits from
expert witnesses were admitted to support the attorney
testimony.
Although all these allocations were made after the
fact, they nonetheless provide support for the court’s
award determinations. The trial court was provided with
an adequate evidentiary basis to find as it did that the
objectors’ allocations were adequate. The Tenth Circuit
Court of Appeals, in a case involving an application for
attorney fees and costs under the Civil Rights Attorney’s
Fees Award Act, recognized:
[S]ome lawyers will not have kept contempora-
neous time records. We do not forbid, retrospec-
tively, the use of reconstructed time records and
do not demand that the reconstructed hours be
arbitrarily reduced.
Ramos v. Lamm, 713 F.2d 546, 553 n. 2 (10th Cir.1983). In a
number of other cases as well, reconstructed time records
have been held adequate to establish time expended. See
Pawlak v. Greenawalt, 713 F.2d 972, 978 (3d Cir.), cert.
denied, 464 U.S. 1042, 104 S.Ct. 707, 79 L.Ed.2d 172 (1984);
Bonnette v. California Health & Welfare Agency, 704 F.2d
1465, 1473 (9th Cir.1983); Johnson v. University College, 706
F.2d 1205, 1207 (11th Cir.1983), cert. denied, 464 U.S. 994,
104 S.Ct. 489, 78 L.Ed.2d 684 (1983); Weber v. Weinberger,
651 F.Supp. 1379, 1393 (W.D.Mich.1987). Here, the con-
temporaneous time records existed and were presented to
the court; only the relevant allocations had to be supplied
in part by estimates. None of the objectors realized at the
time the records were kept that AWDI would later be
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required to pay the attorney fees and expenses and that
division by issue would be necessary, and AWDI claims
no bad faith on the part of the objectors in this case.
“It is elementary that the trier of fact can look to
either testimony or exhibits which have been admitted
into evidence for the facts upon which to base his deci-
sion.” Hartman v. Freedman, 197 Colo. 275, 280, 591 P.2d
1318, 1321 (Colo.1979). Based on our own review of the
record, we conclude that the evidence, including billing
records and testimony concerning allocation of time and
expenses, was sufficient to permit the trial court, apply-
ing the proper standard, to allocate fees and expenses
between those that were allowable and those that were
not. We therefore sustain the trial court’s allocation.
b. Scope of Work Performed in Defense of Trib-
utary Claim
AWDI contends that some of the attorney fees and
expenses incurred by the objectors and attributable to the
defense of the tributary claim were unnecessary or exces-
sive. As principal support for that contention, it pre-
sented the testimony of two experienced natural resource
attorneys at the fees hearing. The first expressed the
opinion that some of the matters the objectors investi-
gated, in particular the issue of potential injury to vested
water rights, should have been deferred until after the
court determined whether the water was tributary. Fur-
thermore, in that expert’s opinion, the objectors are not
entitled to recover any costs of initiated discovery. He
asserted that because the burden of proving absence of
injury and sufficiency of water supply is on the applicant,
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the objectors’ role is simply to stand back and take issue
with what an applicant has presented, or request more
information. Accordingly, any investigation beyond this
would be inappropriate or a luxury and should not be the
subject of compensation.
The trial court, however, did not accept this view of
the scope of activity reasonably to be conducted by objec-
tors to an application for determination of water rights.
The trial court properly rejected this passive model of an
objector’s role, pointing out the need for evidence from
both sides in order to arrive at a correct resolution and
the practical need or advantage for an objector to resist
an adjudication of a water right in the first instance by
demonstrating that an applicant cannot satisfy the criteria
for establishment of such a right.
AWDI's second expert witness on the excessive scope
issue asserted that the amount of fees and expenses to be
reimbursed should be reduced because the objectors
failed to mitigate those fees and expenses. He contended
that the objectors realized early in the litigation that no
water contracts had been entered into between AWDI and
any prospective beneficial users of the water. According
to that expert, because such a defect is fatal to the appli-
cation for determination of a tributary water right in this
case,#4 the objectors should have moved for summary
4 In order to obtain a decree for a conditional water right,
an applicant must demonstrate an intent to appropriate. Where
the applicant is seeking to appropriate for the future needs and
uses of others, it must present sufficient evidence to demon-
strate their commitment to actual beneficial use of the water.
“[M]ere negotiations with other municipalities clearly do not
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judgment on the tributary claim, and they should not
now be compensated for the “unnecessary” fees and
expenses incurred subsequent to the date at which this
motion should have been made. The water contracts
issue, however, was not relevant to some of the beneficial
uses claimed by AWDI.45 The trial court considered the
expert’s opinion and in its written order for attorney fees
and expenses specifically found that “there would have
been genuine material fact [sic] at issue that would have
required the Court to deny a motion for partial summary
judgment on the tributary claim.”46 On this record, we
cannot say that the objectors incurred unnecessary
expenses because they did not seek partial summary
judgment on the tributary claim.
Lastly, AWDI contends that the number of experts -
hired by the objectors to analyze and review the State’s
ground water computer modeling was excessive and
therefore wasteful. Based upon our review of the record
of the fees hearing, we are satisfied that the trial judge
rise to the level of definite commitment for use required to
prove the intent here required.” Colo. River Water Cons. Dist. v.
Vidler Tunnel Water Co., 197 Colo. 413, 417, 594 P.2d 566, 568
(1979).
45 The expert’s testimony does not take account of the fact
that AWDI proposed to use some of the water to be produced
for irrigation of its own lands in the Valley, a use not subject to
the Vidler requirements.
4¢ Moreover, the witness himself testified that the date on
which it should have been clear to the objectors that no con-
tracts existed was no sooner than November of 1990, four years
after the start of litigation and well after most of the attorney
fees and expenses at issue had been incurred.
AEDT Aa tae i .
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adequately considered the reasonableness and the neces-
sity of the services provided by those experts.
For the foregoing reasons, and because our own
review of the record discloses no suggestion that the
objectors sought recovery for work not necessary to their
defenses, we affirm the trial court’s rejection of AWDI’s
arguments that the objectors incurred unnecessary fees
and expenses by reason of the scope of their efforts in
defending against the tributary claim.
c. Reasonableness of Amounts Charged for Fees
and Expenses
The United States Supreme Court has stated that
while “ ‘there is no precise rule or formula’ for determin-
ing attorney’s fees,” Evans v. Jeff D., 475 U.S. 717, 735-36,
106 S.Ct. 1531, 1542, 89 L.Ed.2d 747 (1986) (quoting
Hensley, 461 U.S. at 436, 103 S.Ct. at 1941), the proper
starting point for determining the amount of a reasonable
fee is the number of hours reasonably expended on the
litigation multiplied by a reasonable hourly rate. Hensley,
461 U.S. at 433, 103 S.Ct. at 1939 (considering fee to be
awarded under 42 U.S.C. § 1988); accord Ramos, 713 F.2d
at 552 (same); Spensieri, 804 P.2d at 270 (estimate of a
reasonable attorney fee involves a calculation of the
“lodestar” amount, which represents the number of hours
reasonably expended multiplied by a reasonable hourly
rate); see Mau v. E.P.H. Corp., 638 P.2d 777 (Colo.1981).
AWDI has not challenged the amount of time spent
by attorneys for the objectors on particular tasks as exces-
sive. Instead, it has contended that the usefulness of the
tasks themselves was not limited to the tributary claim
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and that the scope of the work performed was not reason-
able. These objections were rejected earlier in the imme-
diately preceding sections of this opinion.
AWDI also has not objected to the reasonableness of
the hourly rate charged by attorneys from private law
firms. It has stipulated that $100 per hour, the rate
charged, was a reasonable rate for those attorneys. Nor
has AWDI objected to the rates charged by lawyers for
the United States, who were on the staff of the United
States attorney. AWDI does object to the rates at which
the State’s attorneys, who were on the staff of the State
attorney general, billed their time. The State claimed, and
the court awarded, $100 per hour for attorney time and
$50 per hour for the time of legal assistants. AWDI objects
to this award because the interdepartmental billings for
services of attorneys and legal assistants on the staff of
the State attorney general at the relevant time were based
on hourly rates of $40.75 and $27.44 respectively. AWDI
argues that the state employees cannot be awarded more
than these hourly rates. We disagree.
Rule 41(a)(2) expressly gives the court power to grant
a motion for dismissal under the rule upon such terms
and conditions as the court deems proper. Thus, deter-
mination of the terms and conditions of dismissal under
41(a)(2) is discretionary with the trial court and will not
be disturbed on review absent an abuse of that discretion.
Stevedoring Servs. of America v. Armilla Int'l, 889 F.2d 919,
921 (9th Cir.1989); Moore v. C.R. Anthony Co., 198 F.2d 607,
608 (10th Cir. 1952); Bishop v. W. American Ins. Co., 95
F.R.D. 494, 495 (N.D.Ga.1982); see American Cyanamid Co.
v. McGhee, 317 F.2d 295, 298 (5th Cir.1963) (trial court has
discretion to impose terms and conditions); see also
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Powers, 832 P.2d at 1102. Typically, courts impose as a
term and condition of dismissal a requirement that the
plaintiff pay the defendant the expenses incurred in
defending the suit, which usually include reasonable
attorney fees. Marlow v. Winston & Strawn, 19 F.3d 300
(7th Cir.1994); Mortgage Guaranty, 904 F.2d at 300:
LeCompte, 528 F.2d at 603; Bath Iron Works Corp. v. Parmatic
Filter Corp., 736 F.Supp. 1175, 1178 (D.Me.1990). The
award of attorney fees must be reasonable, and “[t]he
determination of reasonableness is a question of fact for
the trial court and will not be disturbed on review unless
it is patently erroneous and unsupported by the evi-
dence.” Harman uv. Freedman, 197 Colo. 275, 281, 591 P.2d
1318, 1322 (1979) (fees awarded pursuant to § 8-4-114,
C.R.S. (1973)); accord Rifkin v. Steele Platt, 824 P.2d 32, 35
(Colo.App.1991); Spensieri, 804 P.2d at 270; Greeley Nat’l
Bank v. Sloan, 677 P.2d 409, 412 (Colo.App.1983). The trial
judge considered the reasonableness of fees issue and
expressly determined that “[one] hundred dollars an
hour by water lawyers... is an extremely minimum rate
and eminently reasonable, whether it be in the public or
the private sector.”
We have previously held that attorneys are entitled to
an award of reasonable attorney fees at market rates for
attorneys of comparable skill, experience and reputa-
tion:47
” As for legal assistants, see Missouri v. Jenkins, 491 U.S.
274, 287-88, 109 S.Ct. 2463, 2471-72, 105 L.Ed.2d 229 (1989), in
which the Supreme Court concluded that the district court prop-
erly compensated the work of paralegals at market rates rather
than at their cost to attorneys.
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If the fee requested is reasonable in light of
community standards and the other criteria to
be considered by the court, it is not appropriate
for a court to take into consideration what a
major client may pay the attorney on an hourly
basis or the possible absence of overhead
expenses comparable to those borne by lawyers
in private practice.
Mau, 638 P.2d at 780 (attorney fees awarded to tenant’s
attorney pursuant to section 38-12-103(3)(a), 16A C.R.S.
(1973) (citation omitted)); see also Spensieri, 804 P.2d at 271
(“The criterion for the court is not what the parties
agreed, but what reflects reasonable value for services
rendered.”). Numerous other courts have held that fees
awarded are to be “based on reasonable billing rates in
the relevant community, not net hourly earnings.” Ham-
ilton v. Daley, 777 F.2d 1207 (7th Cir.1985) (fees awarded to
government attorneys defending against frivolous civil
rights suit; fact that attorneys are public servants who
will not personally receive any fees awarded makes no
difference).48 Therefore, we find that the hourly rate
awarded to the State of Colorado for attorney fees and
paralegal services was not an abuse of discretion.
AWDI also contends that the amounts allowed for
expert witnesses and consultants were unreasonable or
48 See cases involving the federal civil rights statute, 42
U.S.C. § 1988 (1982). The federal courts have consistently held
that public interest attorneys are entitled to an award of reason-
able attorney fees based upon the market rate within the com-
munity. See Blum v. Stenson, 465 U.S 886, 892-96, 104 S.Ct. 1541,
1545-48, 79 L.Ed.2d 891 (1984); Ramos v. Lamm, 713 F.2d 546 (10th
Cir.1983); see also Oten v. Colorado Bd. of Social Services, 738 P.2d
37, 42 (Colo.App. 1987).
A-85
unsubstantiated. AWDI points to no particular bills as
unreasonable in amount. The objectors documented these
fees with billing records, expert testimony summaries,
and testimony by attorneys and state personnel as to the
nature of the work performed, the method of allocation of
expenses between the tributary and nontributary claims
and the reasonableness of the fees charged. There was
evidence, although general in nature, that the fees were
reasonable for the services performed.
The trial court did not simply award to the objectors
all attorney fees and expenses requested. Instead, it
examined the claims made and assessed the reasonable-
ness and substantiation given for the claims. The trial
judge disallowed: (1) the state’s claim for reimbursement
of $9,000 for court reporter fees; its claim of $173,818 for
compensation for nonlegal employees of the Division of
Wildlife and the State and Division Engineers’ Offices;
and its claim of $1300 for a bat detector; (2) the “unsub-
Stantiated or unverified claims of Cotton Creek Ranch,
_ Dennis Felmlee and Timothy Lovato; (3) compensation
for time and attorney fees spent post-trial in preparing
the fee application; and (4) certain room and board
expenses. In addition, the trial court, “out of an abun-
dance of caution and so as to preclude any concerns
about vagueness, overlap, possible redundancy or ques-
tionable expense,” discounted the attorney fee and
expense claims under Rule 41(a)(2) by ten percent.
In similar cases with voluminous fee applica-
tions, courts have recognized that it is unrealis-
tic to expect a trial judge to evaluate and rule on
every entry in an application. See Copeland v.
Marshall, 641 F.2d 880, 903 (D.C.Cir.1980) (en
A-86
banc) (22% cut); Ross v. Saltmarsh, 521 F.Supp.
753, 761-62 (S.D.N.Y.1981) (5% and 10% cuts),
aff'd mem., 688 F.2d 816 (2d Cir.1982); Kane v.
Martin Paint Stores, Inc., 439 F.Supp. 1054, 1056
(S.D.N.Y.1977) (10% cut), aff'd mem., 578 F.2d
1368 (2d Cir. 1978). These courts have endorsed
percentage cuts as a practical means of trim-
ming fat from a fee application.
New York Ass‘n for Retarded Children v. Carey, 711 F.2d 1136
(2d Cir.1983). We sustain the trial court’s determination of
the amounts to be awarded for attorney fees and
expenses attributable to defenses of the tributary claim.
3. Summary
The trial judge concluded that most of the attorney
fees and expenses incurred by the objectors in defending
the tributary claim “were both necessary and reason-
able.” Having participated in each stage of the proceed-
ing, the trial judge was capable of understanding what
was reasonably expended in attorney fees. San Juan Prod-
ucts, Inc. v. San Juan Pools of Kansas, Inc., 849 F.2d 468, 476
(10th Cir.1988); see also Mares v. Credit Bureau of Raton, 801
F.2d 1197, 1201 (10th Cir.1986) (since the trial court saw
attorney’s work first hand, it has far better means of
knowing what is just and reasonable than does the appel-
late court). It also heard the testimony of expert wit-
nesses, and was familiar with much of their work product
in the form of exhibits.
A determination of reasonableness is a question
of fact for the trial court and ‘will not be dis-
turbed on review unless it is patently erroneous
and unsupported by the evidence.’ If . . . the
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Statute pursuant to which an award of attorney
fees is made, does not provide a specific defini-
tion of ‘reasonable,’ then such compensation
should be determined in light of all circum-
stances for the time and effort reasonably
expended by the prevailing party’s attorney.
Spensieri, 804 P.2d at 270 (citations omitted).
The trial judge made findings and conclusions to
support his determinations. The attorneys for the objec-
tors testified that they coordinated efforts among them-
selves so as to minimize duplication of effort and
expenses. The trial judge found that they “were very
careful to minimize expenses and eliminate duplication of
effort.” The trial court also found that many of the early
expenses incurred by the objectors were the result of
AWDI’s failure of timely and complete compliance with
discovery requests. All these findings, though general,
are sufficient and supported by the record.
We conclude that AWDI’s challenge to the amount of
attorney fees, expenses, and costs awarded as a condition
to voluntary dismissal of the tributary claim under
C.R.C.P. 41(a)(2) must fail.
E. Whether Excessive Costs were Awarded Incident to
Dismissal of the Nontributary Claim
AWDI also challenges the amount of costs awarded
to the objectors under C.R.C.P. 54(d), taking issue with
the sufficiency of the evidence and the judge’s findings,
and asserting abuse of discretion in setting the amount of
the award.
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C.R.C.P. 54(d) provides, “costs shall be allowed as of
course to the prevailing party unless the court otherwise
directs. .. . ” Section 13-16-122 lists those items includ-
able as costs.49 The objectors submitted bills of costs
under C.R.C.P. 54(d) of $473,091.31 for costs related to the
nontributary claim, and the trial court awarded that
entire amount.
The principal costs claimed under Rule 54(d) were
for expert witness fees. “[C]harges for expert witnesses
approved pursuant to section 13-33-102(4)” are expressly
allowed as costs under section 13-16-122(1)(e). Section
13-33-102(4), 6A C.R.S. (1987), provides:
Witnesses in courts of record called to testify
only to an opinion founded on special study or
experience in any branch of science or to make
scientific or professional examinations and state
49 Section 13-16-122, 6A C.R.S. (1987), provides:
Items includable as costs. (1) Whenever any court of this
state assesses costs pursuant to any provision of this
article, such as costs may include:
(a) Any docket fee required by article 32 of this title
or any other fee or tax required by statute to be paid
to the clerk of the court;
+ +. *
(e) The witness fees, including subsistence pay-
ments, mileage at the rate authorized by section
13-33-103, and charges for expert witnesses approved
pursuant to section 13-33-102(4);
(f) Any fees for exemplification and copies of papers
necessarily obtained for use in the case;
* * *
(j) Any item specifically authorized by statute to be
included as part of the costs.
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the result thereof shall receive additional com-
pensation, to be fixed by the court, with refer-
ence to the value of the time employed and the
degree of learning or skill required.
Rio Grande Water Conservation District claimed
$257,227.00 in expert witness fees, the United States
claimed $126,640.13, and the State claimed $65,810.94.
AWDI contends that the award of these fees was
improper because “there was no evidence of the rea-
sonableness or necessity of the work or the expert testi-
mony.” This is not so.
AWDI presented a set of expert witnesses who
offered opinions, supplemented by numerous exhibits,
concerning the complex geologic and hydrologic features
of the San Luis Valley, including the movement of under-
ground water, and the effect of pumping underground
water on surface streams and waters tributary thereto.
This testimony was complemented by a computer model,
and expert testimony was offered concerning the design,
operation, and results achieved by use of the model. All
of this evidence was offered in support of AWDI’s claim
that the withdrawal of underground water in the quan-
tities sought in its amended application would not pro-
duce effects inconsistent with the classification of the
water as nontributary under the Statutory definition in
section 37-90-103(10.5) 15 C.R.S. (1990). In response to
this evidence, the objectors introduced experts and a
computer model developed by the State in an effort to
discredit the picture of the geologic and hydrologic char-
acteristics of the Valley drawn by AWDI’s experts and the
validity of AWDI’s computer analysis, all directed to
showing that the statutory test for nontributariness was
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not satisfied. The evidence was highly technical and in
many instances sharply conflicting. Ultimately, the trial
judge concluded that AWDI had not successfully estab-
lished that the test for nontributariness had been met.
The judge was present at the trial and therefore could
evaluate first hand the necessity of each witness’s testi-
mony. See Leadville Water Co. v. Parkville Water Dist., 164
Colo. 362, 367, 436 P.2d 659, 661 (1967). Furthermore,
during the three day evidentiary hearing, billing state-
ments and testimony were offered to demonstrate that
the witness fees requested were both necessary and rea-
sonable. Because of the existence of all the above support,
the Fenton case, relied upon by applicants for their con-
tention that a claim for “lump sum witness fees” is
improper, is inapposite. See Fenton v. Fibreboard Corp., 827
P.2d 564, 569 (Colo.App.1991) aff'd in part and rev'd in part
on other grounds by Fibreboard Corp. v. Fenton, 845 P.2d
1168 (Colo.1993). The party requesting fees in Fenton
provided no documentation indicating a reasonable basis
upon which the sums requested were calculated, nor
were the actual sums expended for the witnesses’ ser-
vices shown. Fenton, 827 P.2d at 569.
Pursuant to section 13-33-102(4), 6A C.R.S. (1986),
courts may grant witness fees to experts, testifying as
such, in such amounts as they deem proper. Denver Joint
Stock Land Bank v. Board of County Comm'rs, 105 Colo. 366,
372, 98 P.2d 283, 287 (1940); accord Lamont v. Riverside Irr.
Dist., 179 Colo. 134, 142, 498 P.2d 1150, 1154 (1972)
(assessment of expert witness fees is addressed to the
sound discretion of the trial court) (1972); Leadville Water
Co., 164 Colo. at 367, 436 P.2d at 661 (1967) (same). The
court is authorized, in fixing an expert’s fee, to consider
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not only the time spent in court but also the time spent by
the expert in preparation for trial, Yeager Garden Acres,
Inc. v. Summit Constr. Co., 32 Colo.App. 242, 245-46, 513
P.2d 458, 460 (1973). In addition, allowances awarded any
include travel, ordinary witness fees, food, and lodging
expenses. Leadville Water Co., 164 Colo. at 366, 436 P.2d at
661. The trial judge here determined that the entire
amount requested by the objectors under Rule 54(d)
should be awarded. This was not an abuse of discretion.
The award was amply supported by billing statements
and expert testimony summaries, as well as testimony
concerning the nature and purpose of the services upon
which the witness fees were based and the manner by
which they were determined. “When we have before us
the finding of a trial judge who had the opportunity to
evaluate the services of the experts based upon all the
evidence before him and arrive at a fair conclusion of
their reasonable worth, we do not interfere with his find-
ing.” Leadville Water Co., 164 Colo. at 367, 436 P.2d at 661.
Some of the miscellaneous expenses that the court
awarded as costs are not listed in section 13-16-122.
AWDI asserts that any items not included within the
definition of costs under that section or otherwise
allowed by statute or rule may not be awarded, and
insists that the trial court’s award to the United States of
$16,873.52 for setting up an office in Alamosa, including
leasing office furniture and equipment, was therefore
unauthorized. It also asserts that the court’s award to the
Rio Grande Water Users of $5,000 for photocopying
expenses and $1,500 “for postage, for messengers, for
mileage, and telephone,” was improper for the same rea-
son. As to “miscellaneous” expenses, we have held that:
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The list of expenses that may be awarded as
costs under section 13-16-122 . . . is illustrative
and not exclusive. Church v. American Standard
Ins. Co. of Wisconsin, 764 P.2d 405, 406
(Colo.App.1988). In general, absent a specific
prohibition, the trial court has discretion over
the awarding of costs. Id.; see Rossmiller v.
Romero, 625 P.2d 1029, 1030 (Colo. 19981).
Cherry Creek School District #5 v. Voelker, 859 P.2d 805, 813
(Colo.1993) (quoting Ferrell v. Glenwood Brokers, Ltd., 848
P.2d 936, 940 (Colo.1993)). See also 6 James Wm. Moore et
al., Moore’s Federal Practice { 54.70[5] (2d ed. 1993):
In an action tried to the court, the court has a
large discretion in admitting in evidence all per-
tinent matters which in the court’s view would
expedite the trial and which would give the
court and the parties a clear conception of the
points in issue; and may allow as costs the
actual and reasonable expenses attendant
thereto, although no express statutory enact-
ment so provides.
Given logistical difficulties presented by the location and
duration of the trial and the extensiveness of the exhibits,
we conclude the trial court was within its discretion in
allowing costs to the United States for establishing a
temporary office in Alamosa. We also affirm the award to
Rio Grande Water Users for photocopying and other mis-
cellaneous expenses.50
°° AWDI cites a decision of the Colorado Court of Appeals,
Shultz v. Linden-Alimak, Inc., 734 P.2d 146 (Colo.App.1986), in
which the court disallowed the award of expenses incurred for
photocopies, blueprints, long distance phone calls, and postage
as costs because “[t]here is no statutory authorization for
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In summary, we reject AWDI’s challenges to the
award of costs under C.R.C_P 54(d).
VII. Conclusion
For the foregoing reasons the judgments of the Dis-
trict Court for Water Division 3 are affirmed.
SCOTT, J., does not particip
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