ELR Citation: ELR 21461
No(s). s. 89SA209, 89SA302 (Colo. Jan 14, 1991)

The court rules that a Colorado irrigation district holds an easement under an 1891 grant to land underlying a reservoir, and that the owners of the land underlying the reservoir who hold the servient estate may not use the waters of the reservoir for recreational and fishing purposes that interfere with the rights of the district. Historically, the district, the owners of the land underlying the reservoir, and the general public used the reservoir for recreation and fishing purposes while the district operated the reservoir to supply irrigation water to the water district. The expanding commercial use of the reservoir, caused by the landowners selling commercial memberships for recreational use of the reservoir and the district leasing rights to private clubs for recreational and fishing purposes, led the district to seek a declaratory judgment that it had the right under the grant to prohibit or control all use of the reservoir by the landowners. After the district court held that the landowners had the right in common with the district to reasonably use the reservoir's surface waters, and that the district had the right to operate, maintain, and control water diverted and stored in the reservoir for recreational and fishing purposes, the district brought this appeal.

The court first holds that the district court had jurisdiction in the declaratory judgment action to rule on the right to use the surface water stored in the reservoir, even though Colorado law places exclusive jurisdiction of water matters with water law judges. Unlike an action for the ownership or use of a water right, an action to determine the nature and scope of interests in land, such as in this case, is not committed to the exclusive jurisdiction of a water judge but is within the general jurisdiction of the district courts of Colorado. Moreover, that the legal rights and burdens incident to the various interests in a reservoir site may preclude a particular beneficial use of water at that location does not convert the determination of such rights and burdens into a "water matter."

The court next holds that the 1891 grant for the creation of the reservoir is best construed as an easement, not a limited fee interest. Both federal agency regulations concerning grants under the 1891 Act and later U.S. Supreme Court decisions provide compelling authority for holding that the 1891 Act authorized grants of easements, not limited fees. Thus, the court holds that the irrigation district holds an easement to the land underlying the reservoir, which makes the owners of those lands the servient estate holders of that easement. The court also holds that the landowners' right to use the surface of the reservoir follows from finding that the irrigation district holds an easement.

The court next holds that the landowners' interests in the land underlying the reservoir do not include the right to use the overlying appropriated water for recreational purposes. The extent of the landowners' interests as owners of the servient estate is limited by the scope of the district's rights under its easement. The 1891 Act provides that the purpose of waters appropriated under its grant of rights-of-way is only for irrigation. The general principle is that unless the grant conveying an easement specifically characterizes the easement as exclusive, the grantor retains the right to use the property in common with the grantee. However, this principle is limited to circumstances in which use of the property by the owner of the servient estate is consistent with the rights of the easement holder, and the holder of the servient estate may not unreasonably interfere with the superior right of the person owning the easement. The court concludes that recreational use of the reservoir is inconsistent with the right of the district to store water, since the lowering and raising of the water level in the reservoir over a short period of time to maximize beneficial use of the water can create hazards for recreational users of the reservoir, and create potential liability for damage caused by waters escaping from the reservoir as the result of negligence. Thus, it is essential for purposes of public protection and liability control that the reservoir owner have control of the reservoir's use.

The court next holds that the landowners failed to make the necessary showing to support a claim of estoppel, based on the irrigation district's historical acquiescence in the landowners' use of the reservoir. The district court did not rule on this issue and the facts are insufficient to establish a claim of estoppel. However, as to the landowners' challenges to the water court's decree granting the district's application for a change of water rights to recognize recreational and fishing uses of the stored water by the district, the court holds that such uses of the stored water would overburden the easement and intrude on the rights of the landowners of the servient estate. Because such uses would exceed the scope of the easement as granted, the district is precluded from obtaining a change of its water storage rights in the reservoir for such purposes.

Counsel for Plaintiff-Appellant
Donald F. McClary, Andrew F. McClary
Epperson, McClary, Zorn & McClary
P. O. Box 597, Ft. Morgan CO 80701
(303) 867-5621

Counsel for Defendants-Appellees
Wayne B. Schroeder
Calkins, Kramer, Grimshaw & Harring
1 United Bank Ctr., 1700 Lincoln St., Ste. 3800, Denver CO 80203
(303) 839-3800

Thomas E. Hellerich
Dinner, Hellerich & Lazar
630 Greeley National Plaza, Greeley CO 80631
(303) 352-2081