Appeal from the District Court of Goshen County The Honorable Keith G. Kautz, Judge
The opinion of the court was delivered by: Voigt, Justice.
Before KITE, C.J., and GOLDEN, HILL, VOIGT, and BURKE, JJ.
NOTICE: This opinion is subject to formal revision before publication in Pacific Reporter Third. Readers are requested to notify the Clerk of the Supreme Court, Supreme Court Building, Cheyenne, Wyoming 82002, of any typographical or other formal errors so that correction may be made before final publication in the permanent volume.
[¶1] The three appeals consolidated for decision in this opinion all arise out of a decades-old dispute between Thomas L. Wilson and Helen L. Wilson (the Wilsons) and Lucerne Canal and Power Company (Lucerne). The casus belli is Lucerne's use of an old river channel to carry irrigation water across land owned by the Wilsons. This is the third round of the dispute that has reached this Court. We affirm in part, reverse in part, and remand to the district court for entry of an order consistent herewith.
[¶2] Before we set out the issues presently facing the Court, we will briefly present the factual context in which those issues have arisen. For more detailed recitations of the facts, see Wilson v. Lucerne Canal and Power Company, 2003 WY 126, 77 P.3d 412 (Wyo. 2003) (Wilson I) and Wilson v. Lucerne Canal and Power Company, 2007 WY 10, 150 P.3d 653 (Wyo. 2007) (Wilson II). A sketch map attached as an exhibit to the opinion in Wilson II shows the area in controversy.
[¶3] In 1893, Lucerne obtained and perfected a right to appropriate water from the North Platte River, with the point of diversion located on unpatented lands in Goshen County. The river was divided into two channels in the area, with the headgate to Lucerne's canal located at its adjudicated point of diversion on the eastern channel. In 1913, because of insufficient flow down that channel, Lucerne constructed a diversion dam upstream on the main channel, to divert water into the eastern channel. That diversion dam contains no headgate or other "check structure" that can measure or control the amount of water diverted into the eastern channel. Edwin R. Hisey obtained the patent to the land in 1908. The Wilsons purchased the property in 1964. Wilson II, 2007 WY 10, ¶¶ 4-6, 150 P.3d at 656.
[¶4] Squabbles arose over the years between the Wilsons and Lucerne, in which the Wilsons accused Lucerne of trespassing upon and damaging their property, and in which Lucerne accused the Wilsons of interfering with Lucerne's right to use its appropriated water. In 1988, Lucerne filed suit against the Wilsons, seeking damages and injunctive relief due to the Wilsons' alleged blocking of access to Lucerne's irrigation facilities. Wilson I, 2003 WY 126, ¶ 1, 77 P.3d at 413-14. This lawsuit was resolved in 1990 via a Consent Decree and Judgment that recognized Lucerne's easement and right-of-way across the Wilsons' land for the purpose of access to, and maintenance of, its irrigation facilities. Id. at ¶ 4, at 414; Wilson II, 2007 WY 10, ¶ 13, 150 P.3d at 658.
[¶5] Lucerne sought district court intervention again in 2002, this time alleging that the Wilsons had constructed an earthen berm or dike in the eastern channel that interfered with the flow of water downstream to Lucerne's headgate. Wilson I, 2003 WY 126, ¶ 16, 77 P.3d at 418; Wilson II, 2007 WY 10, ¶ 16, 150 P.3d at 659-60. The district court entered a permanent injunction prohibiting the Wilsons from interfering with Lucerne's use of its access easement and its irrigation facilities. We affirmed that decision in Wilson I, 2003 WY 126, ¶ 21, 77 P.3d at 419.
[¶6] Taking their turn as plaintiffs, the Wilsons filed suit in 2004, seeking to quiet title against Lucerne to the land underlying the old eastern channel and the land between that channel and the main western channel. They also sought trespass damages, alleging that Lucerne was transporting excessive amounts of water down the eastern channel. Wilson II, 2007 WY 10, ¶ 19, 150 P.3d at 660. After a bench trial, the district court held that the eastern channel remained a river channel, that Lucerne's use of the channel and its irrigation facilities had not changed since the 1990 settlement, and that the Wilsons' claims were barred by the doctrines of judicial estoppel, collateral estoppel, and res judicata. Id. at ¶¶ 20, 21, at 661-62.
[¶7] In Wilson II, 2007 WY 10, ¶¶ 24-28, 150 P.3d at 662-64, we affirmed the district court's application of estoppel and res judicata, insofar as those doctrines prohibited the Wilsons from contesting Lucerne's right to access and use its facilities, including the eastern channel. We disagreed with the district court, however, on the separate quiet title issue, which we did not find to be barred by the earlier lawsuits or settlement. We concluded that reliction had occurred, that the Wilsons' property line was now the thread of the western river channel, and we remanded to the district court for entry of an order quieting title to the property in the Wilsons, subject to Lucerne's easements. Id. at ¶ 35, at 667. Of special significance in the current controversy is our specific holding that the district court had erred in concluding that the eastern channel remained part of the river. Id. at ¶ 32, at 666.
[¶8] In the first of the three consolidated cases now under consideration, Docket No. S-10-0054, the Wilsons are the appellants, the State Engineer is an appellee, and Lucerne, who intervened below, is also an appellee. The case began on April 11, 2007, when the Wilsons' attorney sent a letter to the superintendent of Water Division No. 1, asking the superintendent to require Lucerne to construct a headgate at its diversion dam on the North Platte River.*fn1 Relying upon this Court's holding in Wilson II that the eastern channel was no longer part of the river, the Wilsons cited Wyo. Stat. Ann. § 41-3-613 (LexisNexis 2009) for the proposition that "Lucerne has no choice but to construct a substantial headgate" at the diversion dam. Section 41-3-613 provides in pertinent part as follows:
The owner or owners of any ditch or canal shall maintain, to the satisfaction of the division superintendent of the division in which the irrigation works are located, a substantial headgate at the point where the water is diverted, which shall be of such construction that it can be locked and kept closed by the water commissioner; and such owners shall construct and maintain, when required by the division superintendent, flumes or other measuring devices at such points along such ditch as may be necessary for the purpose of assisting the water commissioner in determining the amount of water that is to be diverted into said ditch from the stream, or taken from it by the various users. . . .
[¶9] In a letter dated April 20, 2007, the division superintendent denied the Wilsons' request. His reasoning may be summarized as follows: (1) this Court's opinion in Wilson II did not change his belief that Lucerne's "appropriation is being diverted at a properly recorded point of diversion"; (2) the continued use of the upper diversion dam was supported by this Court's holding that title to the property at issue was quieted in the Wilsons, subject to Lucerne's continued right to transport water from the diversion dam to its headgate; and (3) the district court had determined that the eastern channel continues to be a river channel, and the "Supreme Court did not reverse this finding in its opinion[.]"
[¶10] On May 9, 2007, the Wilsons appealed the decision of the division superintendent to the State Engineer. In that appeal, the Wilsons presented three inter-related arguments:
(1) Lucerne's adjudicated point of diversion no longer was on the river; (2) the point at which Lucerne diverts water-the diversion dam-is not its adjudicated point of diversion; and (3) Wyo. Stat. Ann. § 41-3-613 requires Lucerne to maintain a headgate at the diversion dam.
[¶11] The State Engineer confirmed the decision of the division superintendent in a letter to the Wilsons' attorney dated May 23, 2007. Citing Wilson II, the State Engineer concluded that this Court had approved Lucerne's continued use of the diversion dam and the eastern channel to deliver water to its properly recorded point of diversion, where a lockable control structure was located. Specifically relevant to the issues we now consider, the State Engineer "[did] not find in the Supreme Court decision any direction that the diversion (including the [eastern] channel) is to be used in any fashion different from its historic operation."
[¶12] On June 22, 2007, the Wilsons filed in the district court a notice of appeal of the decision of the State Engineer. After considerable procedural wrangling, the district court allowed the Wilsons to amend that pleading, and an Amended Petition for Review was filed on May 23, 2008. Generally, the Wilsons alleged that the decisions of the division superintendent and the State Engineer were contrary to law, were unsupported by the evidence, and were arbitrary and capricious.
[¶13] The district court issued its Order Affirming State Engineer's Action on November 24, 2009. Preliminarily, the district court concluded that the Wilsons had failed to prove that Lucerne's historic two-part diversion was contrary to law, or that the division superintendent and State Engineer had acted arbitrarily or capriciously in refusing to order Lucerne to change that historic use.*fn2 The district court also concluded that, by virtue of the 1990 stipulation, the Wilsons were judicially "estopped from now attempting to force a significant change in the diversion and headgate." The Wilsons' appeal of this order is the case now before us in Docket No. S-10-0054.
[¶14] This appeal is the successor in interest to Wilson II, wherein this Court remanded the case to the district court for entry of an order quieting title to the underlying property in the Wilsons, subject to Lucerne's right to an easement to transport water from its diversion dam to its headgate, which easement was to be identified and located. Wilson II, 2007 WY 10, ¶ 35, 150 P.3d at 667. Subsequent to the remand, the parties were unable to agree upon the form of a quiet title order, and were unable to agree upon a description of Lucerne's easement. Consequently, the district court set a hearing to determine the location of the easement.
[¶15] The hearing was set for November 9 and 10, 2009. On September 14, 2009, the Wilsons filed a pre-trial disclosure statement that listed Cotton Jones as a "may call" witness. Lucerne responded with a motion in limine, seeking to prevent Jones from testifying because the Wilsons had not complied with the requirements of W.R.C.P. 26(a)(2) for the disclosure of expert testimony. The district court heard arguments on the motion prior to the start of the hearing and took the matter under advisement. During the trial, the issue was again discussed, this time at an unreported bench conference, after which the district court granted the motion. At the end of the hearing, the Wilsons submitted an offer of proof, outlining Jones' proposed testimony. The gist of that testimony was that Jones, a licensed surveyor, had surveyed the eastern channel and had prepared a report containing the survey.
[¶16] Lucerne's two key witnesses at the hearing were Robert W. Taylor, the licensed surveyor who prepared the survey and easement submitted by Lucerne, and Gordon W. Fassett, a former Wyoming State Engineer. Without delving into the details of their testimony, suffice it to say that they both agreed that a rather well-delineated bank on the eastern side of the eastern channel permitted a relatively definitive description, but the low flat lands on the western side of the channel were not conducive to such a description, with a good deal of fluctuation as to the water's edge on that "bank" at any given time. A focal point of contention during the hearing was Taylor's inclusion in the easement of a three-foot vertical "freeboard" above the surveyed channel, the purpose of which was to provide for unexpected high water events.
[¶17] The district court entered its Order on Location of Easement on November 24, 2009. The essential findings and conclusions of that order, which is the subject of this appeal, may be re-stated as follows:
1. The doctrines of res judicata and judicial estoppel bar the Wilsons from contesting Lucerne's right to continue its historic use of the eastern channel to carry water between its diversion dam and its headgate, and to operate its irrigation system as it historically has done, with the same flows.
2. Lucerne has historically used the eastern channel as a naturally occurring river channel, irregular in size and shape, and with the amount of flow determined only by the amount of water coming down the river toward Lucerne's diversion dam.
3. The eastern channel, as historically used, has no significant bank or boundary on its west side.
4. Lucerne's water delivery system requires the diversion of more water down the eastern channel than Lucerne's appropriation, to account for loss and to assure a sufficient flow to operate the downstream headgate.
5. The location of the eastern channel is readily recognized on the ground, but if a written easement is necessary to show the area of Lucerne's permitted use, the Taylor survey submitted into evidence adequately describes the area.
6. The three-foot freeboard area included in the Taylor survey is a necessary "buffer area" for use during unforeseen high-water flows, although Lucerne may not intentionally use the freeboard area to convey water.
[¶18] In this third appeal, the Wilsons challenge the district court's award of costs to Lucerne in the case now pending in Docket No. S-10-0055. The Wilsons' contentions revolve around the sequence of filings that resulted in the award of costs, which they argue violated U.R.D.C. 501. The Wilsons recite that sequence as follows:
1. The Order on Location of Easement was filed on November 24, 2009.
2. Lucerne filed its certificate of costs on January 5, 2010, forty-two days later.
3. The district court signed the order approving Lucerne's certificate of costs on January 6, 2010, one day after it was filed.
4. The Wilsons filed a response to the certificate of costs, with detailed objections, on January 18, 2010.
5. The order approving the certificate of costs was filed, without hearing, on April 27, 2010.
[¶19] The Wilsons complain that (1) the certificate of costs was not timely, inasmuch as U.R.D.C. 501(a)(1) requires that it be filed within twenty days after entry of the final judgment allowing costs; (2) costs were awarded without the court hearing the Wilsons' objections, in violation of U.R.D.C. 501(a)(2); and (3) some of the costs awarded are not allowable under the U.R.D.C. 501.
[¶20] Lucerne responds to the Wilsons' contentions by noting first that the November 24, 2009, order was not seen at the time it was filed as the final judgment, and it did not address costs. Both parties subsequently filed proposed judgments, and the district court set a hearing to consider the proposed judgments. During that hearing, which took place on December 17, 2009, the district court ruled that the November 24, 2009, order would serve as the final judgment and then permitted Lucerne to submit a certificate of costs. Lucerne filed its certificate of costs nineteen days later. Beyond that, Lucerne contends that there was no abuse of discretion in the award of costs.
[¶21] 1. Was the decision of the State Engineer that Lucerne's headgate at its adjudicated point of diversion satisfies the requirements of Wyo. Stat. Ann. § 41-3-613 contrary to law?
2. Was the decision of the State Engineer that Lucerne is not required to install a headgate at its diversion dam arbitrary and capricious?
3. Did the district court fail to follow the mandate of the Supreme Court upon remand?
4. Are the district court's findings of fact clearly erroneous?
5. Did the district court abuse its discretion by excluding the testimony of the Wilsons' ...