Enervest, Ltd. v. Utah State Engineer
Enervest, Ltd. v. Utah State Engineer
Opinion of the Court
AMENDED
INTRODUCTION
¶1 "Water rights in the State of Utah are of utmost public concern. Water, in an arid state like Utah, is its life-blood, measured in currency represented by survival itself .... This court has likened a drop of water [to] a drop of gold." Longley v. Leucadia Fin. Corp. ,
¶2 This appeal stems from just such a contest over the state water engineer's resolution of who owns the water rights to Minnie Maud Creek, a tributary of the Green River. EnerVest, Ltd. (EnerVest)
¶3 We conclude that we do not. The district court's certification of its summary judgment ruling as final under Utah Rule of Civil Procedure 54(b) was improper and thus *213we do not have a final judgment before us for review. And we do not consider whether we should treat the appeal as a petition for interlocutory appeal under Utah Rule of Appellate Procedure 5 because we conclude that EnerVest was not aggrieved by the district court's decision and so lacks appellate standing. Therefore, we dismiss the appeal for lack of appellate jurisdiction.
BACKGROUND
I. GENERAL ADJUDICATION PROCESS
¶4 A general understanding of Utah's process for adjudicating water rights in cases like this one is helpful for grasping the issues in this appeal. When a justified petition of "five or more or a majority of water users" for a determination of water rights is given to the state engineer, the engineer files an action in the district court to determine the water rights (similar to a quiet title action). UTAH CODE § 73-4-1 (1953). The district court may then order a general adjudication, which will provide it guidance in establishing water rights.
¶5 "[T]he purpose of the general adjudication process is to prevent piecemeal litigation regarding water rights and to provide a permanent record of all such rights by decree." Jensen v. Morgan ,
When a general adjudication is initiated, the state engineer notifies all known water rights holders and provides public notice of the adjudication by publication. After the state engineer provides notice, all individuals and entities are required to submit any water rights claims within the area in question to the state engineer. Following the submission of water rights claims, the state engineer conducts a hydrographic survey of the water system and evaluates the submitted claims.
In re Gen. Determination of Rights to the Use of Water ,
¶6 "When the survey is complete and all of the submitted claims have been evaluated, the state engineer then prepares a proposed determination of water rights for the area." In re Gen. Determination of Rights to the Use of Water ,
II. PROCEEDINGS BELOW
¶7 In the early 1900s, several owners of water rights on Minnie Maud Creek filed articles of incorporation for Minnie Maud and transferred their water rights to the newly formed corporation. The relevant parties in this case transferred their rights to Minnie Maud in exchange for shares in Minnie Maud.
¶8 In 1956, this general adjudication, which includes Minnie Maud Creek, was initiated. The state engineer issued a proposed determination in 1964, allocating twelve water rights to Minnie Maud. In the following months, four different objections were filed, challenging a total of eight of the water rights provided to Minnie Maud. Each of the four objections raise several different challenges, but all of the objections argue that Minnie Maud could not be the owner of the water rights, either because Minnie Maud *214never legally existed or because it was a defunct corporation. EnerVest did not file an objection, and the water rights it now claims are not directly challenged by the objections.
¶9 In 2012, EnerVest filed a petition under Utah Code section 73-4-24(1) to expedite a hearing on the objections. The district court granted the petition but limited the scope of the section 24 hearing to whether the proposed determination correctly lists Minnie Maud as the owner of the water rights.
¶10 Several parties participated in the section 24 hearing, including non-objectors, EnerVest and Michael Carlson, and objectors, the Willis A. and Wilma Hammerschmid Trust (the Hammerschmid Trust) and Gary and Nancy Motte. Eventually the parties filed cross-motions for summary judgment, with EnerVest and the Hammerschmid Trust arguing that Minnie Maud could not own the water rights and Carlson arguing that the state engineer correctly deemed Minnie Maud the owner of the water rights. The district court granted Carlson's motion for summary judgment and denied EnerVest's and the Hammerschmid Trust's motions for summary judgment. At the parties' request, the district court certified its decision as final under Utah Rule of Civil Procedure 54(b). EnerVest and the Hammerschmid Trust appealed.
¶11 During the pendency of the appeal, before the briefing schedule was even set, the Hammerschmid Trust's appeal was voluntarily dismissed with prejudice. As a result, Carlson challenges EnerVest's standing to appeal.
STANDARD OF REVIEW
¶12 "Whether appellate jurisdiction exists is a question of law, which we review for correctness. Additionally, [w]hether a district court's judgment is final is a question of law, which we can consider for the first time on appeal." First Nat'l Bank v. Palmer ,
¶13 "[S]tanding is jurisdictional and [a challenge] may be brought at any" time. Brown v. Div. of Water Rights of Dep't of Nat. Res. ,
ANALYSIS
¶14 On appeal, there are two jurisdictional issues for our review. First, the district court certified its grant of summary judgment to Carlson and denial of partial summary judgment to EnerVest and the Hammerschmid Trust as final under Utah Rule of Civil Procedure 54(b). We conclude that the district court's summary judgment decisions did not meet the criteria for proper rule 54(b) certification.
¶15 Second, Carlson challenges EnerVest's standing to pursue an appeal of the rejection of other parties' objections. We agree with Carlson and conclude that EnerVest lacks standing to appeal. Therefore, we decline to consider whether the defects in the rule 54(b) certification could otherwise be cured by treating the appeal as a petition for permission to file an interlocutory appeal under Utah Rule of Appellate Procedure 5(a).
I. FINAL JUDGMENT
¶16 The first jurisdictional issue we must address is whether this case presents a final judgment over which we have jurisdiction on appeal. Unless one of three exceptions is met, we lack appellate jurisdiction over a judgment that does not "end[ ] the controversy between the litigants." Copper Hills Custom Homes, LLC v. Countrywide Bank, FSB ,
¶17 In order to be appropriately certified as final under Utah Rule of Civil Procedure 54(b), three requirements must be met: (1) "there must be multiple claims for relief or multiple parties to the action;" (2) "the judgment appealed from must have been entered on an order that would be appealable but for the fact that other claims or parties remain in the action;" and (3) "the [district] court, in its discretion, must make a[n express] determination that there is no just reason for delay." Id. ¶ 16 (alterations in original) (citation omitted) (internal quotation marks omitted). Additionally, the district court must "set forth a clear rationale as to why there is no just reason" for delay. Id. ¶ 27.
¶18 The district court's 54(b) certification suffers from two flaws. First, the district court did not offer a rationale for why it determined there is no just reason for delay. This omission, in and of itself, "functions as a practical bar to our appellate jurisdiction." Id.
¶19 Second, the district court's underlying order granted summary judgment to Carlson and denied partial summary judgment to EnerVest and the Hammerschmid Trust. And the district court's rule 54(b) certification order attempted to certify its ruling on all three motions as final. But the denial of EnerVest's and the Hammerschmid Trust's motions for partial summary judgment is not an "order that would be appealable but for the fact that other claims or parties remain in the action" because they are not final. Id. ¶ 16 (citation omitted) (internal quotation marks omitted); see also Denison v. Crown Toyota Motors, Inc. ,
¶20 Therefore, this appeal is not appropriately before us under Utah Rule of Civil Procedure 54(b). We have the discretion under Utah Rule of Appellate Procedure 5(a) to treat an appeal from an order certified under rule 54(b) that is not actually final "as a petition for permission to appeal an interlocutory order." Because we conclude that EnerVest lacks standing on appeal, we do not exercise this discretion here and therefore lack appellate jurisdiction.
II. ENERVEST IS NOT AN AGGRIEVED PARTY AND LACKS APPELLATE STANDING
¶21 "Merely because a party appears in the district court proceedings does not mean that the party automatically has standing to appeal the judgment rendered by that court." Scottsdale Ins. Co. v. Knox Park Constr., Inc. ,
On appeal, a party whose standing is challenged must show that he or she had standing under the traditional test in the original proceeding before the district court. In addition, an appellant generally must show both that he or she was a party or privy to the action below and that he or she is aggrieved by that court's judgment.
Chen v. Stewart ,
¶22 An aggrieved party is one "whose personal, pecuniary, or property rights have been adversely affected ... by a court's decree *216or judgment." Aggrieved Party , BLACK'S LAW DICTIONARY (10th ed. 2014). "An aggrieved party must have been affected or prejudiced by the order ...." 4 C.J.S. Appeal and Error § 251 (2018). A party may be "aggrieved by a judgment that establishes or divests property rights," but "[a] judgment affecting only property does not aggrieve a party who has or claims no title or interest in that property."
¶23 Additionally, "[i]t is hornbook law that a party may only appeal to protect its own interests, and not those of a coparty." Morrison-Knudsen Co., Inc. v. CHG Int'l, Inc. ,
¶24 EnerVest fails to address why it would be aggrieved for purposes of appellate standing.
¶25 This may technically be correct-EnerVest may ultimately benefit from another water claimant's objection to the proposed determination. But that does not answer the legal question of whether EnerVest was aggrieved by the district court's decision and can pursue the denial of other parties' objections to the proposed determination.
¶26 Despite EnerVest not filing its own objection, it is now argued that EnerVest is aggrieved by the district court's rejection of other parties' objections and determination that the state engineer correctly deemed Minnie Maud the owner of the water rights in question. This cannot be the case. Concluding that EnerVest has a sufficient interest in another party's objection to be aggrieved by the rejection of that objection would run against EnerVest's status as a defaulting party, conflict with the requirement of filing a timely objection, and undercut one of the main purposes of general adjudication lawsuits.
A. EnerVest is a Defaulting Party and Cannot Be Aggrieved
¶27 First, EnerVest cannot be aggrieved by the district court's decision here because it failed to object to the proposed determination and its rights under the proposed determination have not been altered. Water claimants who are dissatisfied with the water rights given to them in the proposed determination are required to file an objection to the proposed determination with the court within ninety days of receiving notice of the proposed determination. UTAH CODE § 73-4-11.
¶28 After its ninety-day period to object expired, EnerVest became a defaulting party that "confesse[d] the statements contained in the engineer's proposed determination of [its] water rights" and thereby acquiesced to the rights provided it under the proposed determination. Id. ¶ 22 (citation omitted) (internal quotation marks omitted). That proposed determination remains intact after the district court's ruling; EnerVest's rights have not changed from those to which it acquiesced it was entitled decades ago.
¶29 The proposed determination awarded the water rights at issue to Minnie Maud. EnerVest failed to file an objection within the ninety-day period provided and thereby, in legal effect, confessed to Minnie Maud's ownership of these water rights. EnerVest cannot now, on appeal, retract its confession to the statements contained in the proposed determination, undo its default, and argue that it is entitled to greater water rights than provided it under the proposed determination. Its "failure to file an objection within the statutory period prevents [it] from now contesting the disposition" of the water rights, id. ¶ 23, and makes it "incapable of claiming [the water rights]" "as a matter of law," id. ¶ 28.
¶30 Therefore, EnerVest has no interests in the water rights-at least no interests it can champion as a defaulting party-that have been adversely affected by the district court's decision that leaves the proposed determination intact. Additionally, because EnerVest is "incapable of claiming [the water rights]," id. , it cannot be aggrieved by the district court's judgment, see 4 C.J.S. Appeal and Error § 251 (2018) ("A judgment affecting only property does not aggrieve a party who has or claims no title or interest in that property.").
B. EnerVest Cannot Use an Appeal of Another Party's Objection to Circumvent the Requirement to Object
¶31 Second, concluding that EnerVest has a sufficient interest in another party's objection to be aggrieved by the denial of that objection is contrary to the individual requirement to file an objection found in Utah Code section 73-4-11 and the process for extending the time to file an objection in Utah Code section 73-4-10. We have previously noted that "claimants should be immediately aware of any possible objection as soon as they see the proposed determination" because they are aware of the water claims they submitted and can determine if the proposed determination "does not match the contours of [their] submitted claim[s]." In re Gen. Determination of Rights to the Use of Water ,
*218¶32 A district court has the ability to extend the objection period "upon due cause shown." UTAH CODE § 73-4-10(1). In interpreting that section, we said that "the existence of the time limitation contained in section 73-4-11, coupled with the laudable goal of certainty, reveals that the legislature did not intend section 73-4-10 to provide an escape hatch for water claimants that simply neglect to pursue their claims." In re Gen. Determination of Rights to the Use of Water ,
¶33 Allowing EnerVest to pursue another party's objection on appeal, without itself ever filing an objection, would undermine both the time limitation in section 73-4-11 and the requirement of proving due cause to get an extension for filing an objection set forth in section 73-4-10. There is nothing in our case law or the statutory text to warrant such a result.
¶34 Hearings on an objection occur in one of two ways. First, a water claimant with a "direct interest" in a "valid, timely objection" may file a petition under section 73-4-24 for an expedited hearing on that objection. UTAH CODE § 73-4-24(1) (emphasis added). A court should grant that petition if it "will facilitate a reasonably prompt resolution of the matters raised in the objection ." Id . § 73-4-24(4) (emphasis added). If no section 24 petition is filed, the court will eventually hear the objection as a matter of course as part of the general adjudication. Before a hearing on an objection, the court must give all claimants notice of when "the matter will be heard." Id . § 73-4-13 (emphasis added). This language does not suggest that a water claimant participating in a hearing on an objection has the right to make or pursue an objection that it did not itself timely lodge. Instead, the hearing is on the objection that was filed.
¶35 EnerVest would have known of its potential objection immediately upon the proposed determination's release. At that time, it had the option of objecting to the proposed determination or acquiescing in its allocation. EnerVest chose the latter and has not argued that there is due cause to excuse its failure to file an objection. The right to participate, if any,
¶36 In this case, the section 24 hearing was held on objections other parties had filed challenging Minnie Maud's existence. EnerVest cannot use that hearing as a mechanism to lodge its own objection on those grounds. While a non-objecting party's interests may ride an objector's coattails as far as the objector wishes to go, the non-objecting party cannot drag the objector across the finish line against the objector's will. To allow this would undermine the individual requirement of filing a timely objection, UTAH CODE § 73-4-11, or excusing the failure to timely file an objection for due cause,
C. Allowing EnerVest to Pursue Another Party's Objection Would Undermine the Goals of General Adjudications
¶37 Third, deeming EnerVest sufficiently interested in another party's objection to be aggrieved by the district court's decision would undermine "[o]ne of the key goals of the general adjudication process[:] to remove doubts about the validity of water rights." In re Gen. Determination of Rights to the Use of Water ,
¶38 If an objection is filed, the district court must hold a hearing on the objections and "enter[ ] judgment on the contested claims." Murdock v. Springville Mun. Corp. ,
¶39 Accordingly, the requirement of objecting to a proposed determination "furthers the goal of certainty by reassuring water claimants that their rights are, in large part, immune from attacks by claimants that have allowed their ninety-day objection period to expire ." Id . (emphases added).
¶40 It is clear from the record, and EnerVest does not dispute, that EnerVest's predecessor in interest did not file an objection to the proposed determination. Therefore, EnerVest is a claimant that allowed its time period to lapse. However, EnerVest's position might doubly undermine the goal of certainty. EnerVest is only claiming two of the twelve water rights allocated to Minnie Maud, water rights 90-24 and 90-196. According to EnerVest, it "owns all the lands comprising the authorized places of use for" those two water rights. It is unclear whether *220objections were ever filed that directly challenge Minnie Maud's rights to those two water rights,
¶41 For these three reasons, EnerVest cannot have a sufficient interest in another party's objection to be aggrieved by the denial of that objection for the purposes of appellate standing. While it may technically be the case that EnerVest would benefit from the district court granting the objections and stripping Minnie Maud of its water rights under the proposed determination, EnerVest, as a defaulting party, lacks the legal ability to argue that it is entitled to more rights than those to which it acquiesced when it failed to object to the proposed determination. And, without the participation of the objector, it cannot champion the objection on appeal.
¶42 This does not mean, as EnerVest suggests, that a non-objecting party could never appeal a district court's ruling on an objection.
¶43 Similarly, if a claimant timely objects to a proposed determination and the district court does not grant the objection (and the corresponding water rights) in its entirety, that claimant will likewise be aggrieved and able to appeal. But EnerVest does not fit into any of these categories and therefore is not aggrieved by the district court's decision.
CONCLUSION
¶44 EnerVest failed to file a timely objection to the proposed determination. While *221EnerVest may technically benefit from other parties' objections, it became a defaulting party that lacks a sufficient interest in those objections to be aggrieved by their denial for the purpose of appellate standing. It may be that a non-objecting party's interests can piggyback on another party's objection, but only as far as the objecting party is willing to travel. Once the objecting party chooses to end its objection's journey, the non-objecting party cannot take over.
¶45 The district court's rule 54(b) certification was insufficient to confer appellate jurisdiction upon this court because the requirements for certification were not met, and therefore there is no final judgment for our review. Having determined that EnerVest lacks appellate standing because it is not an aggrieved party, we decline to exercise our discretion to treat this appeal as a petition for interlocutory appeal. We therefore dismiss the appeal for lack of appellate jurisdiction.
By petition for rehearing, the parties ask us to remove ¶ 20 of our original opinion. In support, they argue that the decision in Watson v. Dist. Court of First Judicial Dist. In and for Cache Cty. ,
This case stems from a long history of ownership and disputes over the water rights at issue. When we reference an action taken or not taken by a party to this case, we are including the party's predecessors in interest.
EnerVest is claiming ownership of water rights 90-24 and 90-196. These water rights are provided to Minnie Maud in the proposed determination and are not at issue in the objections. Additionally, it is unclear from the record whether EnerVest submitted a claim to the state engineer for these water rights. We will assume, for purposes of this appeal, it complied with the requirements for filing a claim.
The other two exceptions are statutorily provided avenues and interlocutory appeals under Utah Rule of Appellate Procedure 5(a). Copper Hills ,
In order to have standing to bring a section 24 petition, a claimant must have a "direct interest" in the objection for which the expedited hearing is sought. Utah Code § 73-4-24(1). Because we conclude that EnerVest lacks standing to appeal, we need not decide whether a non-objecting party, whose rights under the proposed determination are not at issue in the objection, has a "direct interest" in the objection for the purposes of participating in a section 24 hearing.
Instead, EnerVest focuses a majority of its briefing on whether it had standing to participate in the section 24 hearing. It also appears to argue that some notions of traditional and alternative standing apply to appellate standing, but it undertakes no analysis on whether or how those notions apply in the context of appellate standing. And, while it points to Utah Code section 73-4-16, which provides that "[t]here shall be a right of appeal from a final judgment of the district court to the Supreme Court as provided in Section 78A-3-102," it makes no argument that this statute somehow exempts it from the appellate standing requirement of being an aggrieved party. "[W]e are not a depository in which [a party] may dump the burden of argument and research," and we will not consider these inadequately briefed arguments on appeal. Espenschied Transp. Corp. v. Fleetwood Servs., Inc. ,
Prior to 2013, Utah Code section 73-4-11 did not explicitly provide a requirement to file an objection within ninety days.
In 1935, we interpreted a previous statutory requirement to provide notice "to all claimants" regarding when and where the objection would be heard. Plain City Irrigation Co. v. Hooper Irrigation Co. ,
the intent of the statute is to require notice to all adverse claimants, or all claimants whose rights would be affected or drawn in question. It would also seem that if a claimant or claimants have objections or their rights could be affected adversely, such claimant or claimants are entitled to notice as required by the statute ....
Conversely, "[o]nce an objection to a proposed determination of water rights has been properly filed in a general adjudication proceeding, the objecting party is at liberty to pursue separate adjudication of private claims." U.S. Fuel ,
Both a party receiving water rights under the proposed determination and an objecting party have the ability to litigate that dispute in a private suit.
The exception we recognized in that case was the district court's "authority [under Utah Code section 73-4-10 ] to grant a retroactive extension to the objection period ... when a water claimant can show due cause justifying the objection's untimeliness." In re Gen. Determination of Rights to the Use of Water ,
For example, the Hammerschmid objection challenges the state engineer's determination that Minnie Maud was the owner of water rights 90-188 and 90-189-rights associated with land being sold to the Hammerschmids.
We have never considered whether an objection can be used, either by the objector or by another claimant, to attack otherwise uncontested water rights under a proposed determination. While we need not decide that issue today, we flag it for future cases.
Specifically, EnerVest notes that, "[a]ccording to [Carlson], had the court granted EnerVest's motion, he-as a claimant and not an objector-would have no appellate standing." EnerVest could be right. Carlson has been acting on his own behalf, and not derivatively on Minnie Maud's behalf. See Torian v. Craig ,
Reference
- Full Case Name
- ENERVEST, LTD. v. UTAH STATE ENGINEER and Michael Carlson
- Cited By
- 5 cases
- Status
- Published