SUPREME COURT, STATE OF COLORADO
Case No. 84SA393
Appeal from the District Court, Water Division No. 2
OPENING BRIEF OF APPELLANT AMITY MUTUAL IRRIGATION COMPANY
IN THE MATTER OF THE APPLICATION FOR WATER RIGHTS OF AMITY MUTUAL IRRIGATION COMPANY
IN THE ARKANSAS RIVER OR ITS TRIBUTARIES IN OTERO, BENT, KIOWA, AND PROWERS COUNTIES AMITY MUTUAL IRRIGATION COMPANY,
Appellant,
vs.
THE FORT LYON CANAL COMPANY,
Appellee. Carl M. Shinn, 1302 Thomas L. Shinn, 9958 Wendy S. Shinn, 11527 SHINN LAWYERS P. 0. Box 390 Lamar, Colorado 81052 303/336-4313
TABLE OF CONTENTS
Table of Contents . . . Table of Authorities Statement of the Issues Statement of the Case . Statement of the Facts Summary of the Argument Argument: Issue I Issue II Issue III PAGE i i i 1 2 2 6 Conclus ion 18 24 26
TABLE OF AUTHORITIES
CASES PAGE
Hunger V. Uncampahgre Valley, 192 Colo. 159,
557 P.2d 289 (1976) 11
Roderick v. Colorado Springs, 193 Colo 104,
563 P.2d 3 (1977) 11
Jones V. Dressel, 623 P.2d 370 (1981) 11-12
Ginter, Jr. v. Palmer & Company, 196 Colo. 203,
585 P.2d 583 (1978) 12
Moore v. 1600 Downing Street, Ltd., 668 P.wd 16 (1983) 25 Discovery Land v. Colorado-Aspen Development Company,
40 Colo. App. 292, 577 P.2d 1101 (1977) 25
STATUTES
I.
STATEMENTS OF THE ISSUES
THE WATER COURT ERRED IN GRANTING SUMMARY JUDGMENT AGAINST
AMITY MUTUAL IRRIGATION COMPANY AND FOR FORT LYON CANAL
COMPANY BECAUSE THERE WERE GENUINE ISSUES AS TO MATERIAL
FACTS AND THE MOVANT, FORT LYON CANAL COMPANY, WAS NOT
ENTITLED TO A JUDGMENT AS A MATTER OF LAW ON THE ISSUE OF
WHETHER AMITY OWED FORT LYON MAINTENANCE COSTS.
II
THE WATER COURT ERRED IN GRANTING SUMMARY JUDGMENT AGAINST
AMITY MUTUAL IRRIGATION COMPANY AND FOR FORT LYON CANAL
COMPANY BECAUSE THERE WERE GENUINE ISSUES AS TO MATERIAL
FACTS AND THE MOVANT, FORT LYON CANAL COMPANY, WAS NOT
ENTITLED TO A JUDGMENT AS A MATTER OF LAW ON THE ISSUE OF
WHETHER DEPRECIATION OUGHT TO BE CONSIDERED AS PART OF
MAINTENANCE COSTS.
III. THE WATER COURT ERRED IN GRANTING SUMMARY JUDGMENT AGAINST
AMITY MUTUAL IRRIGATION COMPANY AND FOR FORT LYON CANAL
COMPANY BECAUSE THE MOVANT, THE FORT LYON CANAL COMPANY MOVED
FOR A DETERMINATION OF A QUESTION OF LAW PRIOR TO THE TIME INSTATEMENT OF THE CASE
This appeal stems from an Application for Change of Water
Right submitted by the Amity Mutual Irrigation Company with the
Water Court, Division No. 2. In this case the Fort Lyon Canal
Company, an objector, filed five different counterclaims against
the Amity Mutual Irrigation Company. The Water Court granted
Partial Summary Judgment granting, in part, a judgment against
Amity and for Fort Lyon on Fort Lyon's Fourth Claim of Relief and
Fifth Claim of Relief (Volume 1, Pages 47 and 49).
Amity has appealed the Order and Partial Summary Judgment of
the Water Court (Volume 2, Pages 182-183).
STATEMENT OF THE FACTS
The Amity Mutual Irrigation Company (hereinafter called and
referred to as "Amity") filed on March 31st, 1980, an Application
for Change of Water Right with the Water Court, Divison No. 2. On
May 22, 1980, the Fort Lyon Canal Company (hereinafter called and
referred to as "Fort Lyon") filed a Statement of Opposition to
Amity's Application with said Water Court.
Amity, on November 30, 1981, filed with said Water Court a
Seperate Count or Claim against Objector - the Fort Lyon Canal
Company in the same proceeding (Volume 1, Pages 24-28). In this
seperate count. Amity seeks a declaratory judgment by the Water
respons-ibilities between Amity and Fort Lyon arising out of a written contract entered into by both parties. Said written contract was executed in 1944 and was later made part of a judgment by the Bent County District Court, State of Colorado in Civil Action No. 2158, entitled The Fort Lyon Canal Company, Plaintiff, vs. The Amity Mutual Irrigation Company, Defendant (Volume 1, Pages 64-78). In
the seperate count by Amity, it also seeks a judgment requiring
Fort Lyon to perform all of its obligations and duties under this written contract.
Under the written contract between Amity and Fort Lyon, Fort
Lyon is required to transport Amity water for Amity down the
so-called Western Division of the Fort Lyon canal system. At a cer
tain point on the canal system. Amity water is then split off from
Fort Lyon water, and Amity water is then delivered to various res
ervoirs in the Great Plains Reservoir system. In exchange for the transportation of Amity water by Fort Lyon, Amity is required to
pay 20% of the costs of the maintenance of this Western Division per year to Fort Lyon.
In Amity's Seperate Count or Claim against Objector - The
Fort Lyon Canal Company, Amity alleged that by virtue of this Bent County District Court judgment. Fort Lyon is obligated to trans port for Amity a portion of Amity's decree through the so called
Western Division of the Fort Lyon Canal Company. Amity further
alleges that Fort Lyon failed to perform its obligations under said judgment by refusing to furnish, to Amity records or other in
the Western Division of the Fort Lyon Canal Company.
Amity also alleges that Fort Lyon during the irrigating
season from April 1, 1981 to October 30, 1981, wrongfully used
Amity water which was diverted under said Western Division upon
Fort Lyon land. Amity also contends that Fort Lyon is obligated
under said contract to maintain the upkeep of said Western Divi
sion but that Fort Lyon has allowed said system to decline and
silt up, thereby reducing its capacity and also reducing the
amount of Amity water actually delivered. Lastly, Amity maintains
that Fort Lyon has been incorrect in its interpretations of said
judgment of the Bent County District Court and that said Water
Court should make the proper interpretations and construction of
the terms of said judgment between the parties.
Thereafter,, Fort Lyon filed a series of pleadings, which
included a Counterclaim against Amity alleging that Amity owed
Fort Lyon money for upkeep and maintenance of the Western Divi
sion, pursuant to the Bent County District Court judgment (Volume
1, Pages 36-39, 44-48). Fort Lyon alleged under its Answer and
Second Amended Counterclaim, under their Fourth Claim for Relief
that Amity owed Fort Lyon the sum of $29,912.00 for maintenance
and operating expense, together with $1,410.00 for equipment
depreciation expense, for a total of $31,322.00 for the year
ending October 31, 1982 (Volume 1, Page 47).
Fort Lyon further alleged in its Amendment to Answer and Second Amended Counterclaim, in their Fifth Claim for Relief that
operating expense, together with $3,107.00 for equipment depre
ciation expense, for a total of $41,228.00 for the year ending
October 31, 1983 (Volume 1, Page 48). Fort Lyon alleged that part
of the terms and conditions of the Bent County District Court
judgment was that Amity would pay Fort Lyon a yearly maintenance
and operating expense for the upkeep on the Western Division.
Fort Lyon alleged that the upkeep by Amity would amount to twenty
percent (20%) of the maintenance and operating expenses incurred
by Fort Lyon for said Western Division.
Fort Lyon then filed a Motion for Summary Judgment asking the
court to enter summary against Amity and for Fort Lyon on Fort
Lyon s Fourth and Fifth Claims for Relief as well as other claims
for relief alleged by Fort Lyon (Volume 1, Pages 49-50). Said
Motion for Summary Judgment was filed with the Water Court on
December 16, 1983 and oral argument was held on May 25, 1984 on
said motion.
The Water Court on July 27, 1984, granted partial summary
judgment for Fort Lyon (Volume 2, Pages 182-183), and granted
summary judgment in the amount of $29,912.00 for maintenance andoperating expenses for the year ending October 31, 1982, together
with moritory interest on said amount calculated from October 14,
1983. Further, said Court granted summary judgment in the amount
of $38,121.00 for maintenance and operating expenses for the year
ending October 31, 1983, together with moritory interest on said
amount calculated from November 21, 1983. Lastly, said Court
ordered that Fort Lyon is entitled to claim depreciation on
® ^
^ i pm Gnt whsn it C3lcul3tGS its msintsnancG and opsrating
expenses for the years ending October 31, 1981, 1982, and 1983.
Although the Court granted depreciation, it did not calculate the
method for computing depreciation but held that the method of
computation of depreciation was in dispute.
SUMMARY OF THE ARGUMENT
I. THE WATER COURT ERRED IN GRANTING SUMMARY JUDGMENT
AGAINST AMITY MUTUAL IRRIGATION COMPANY AND FOR FORT LYON CANAL
COMPANY BECAUSE THERE WERE GENUINE ISSUES AS TO MATERIAL FACTS AND
THE MOVANT, FORT LYON CANAL COMPANY, WAS NOT ENTITLED TO A JUDG
MENT AS A MATTER OF LAW ON THE ISSUE OF WHETHER AMITY OWED FORT
LYON MAINTENANCE COSTS.
Amity submits that summary judgment was improperly granted in
this case by the Water Court in that there were genuine issues as
to material facts over whether Amity owed Fort Lyon for mainten
ance and operating costs. The subject of this appeal deals with
the interpretation of a 1944 contract entered into by Amity and
Fort Lyon; said contract was later made a part of a judgment in
the District Court of Bent County, Colorado, Case Number 2158
(Volume 1, Pages 64-78).
Under the written contract between Amity and Fort Lyon, Fort
Lyon is required to transport Amity water for Amity down the
so-called Western Division of the Fort Lyon canal system. At a
certain point on the canal system. Amity water is then split off
from Fort Lyon water, and Amity water is then delivered to various
reservoirs in the Great Plains Reservoir system. in exchange for
the transportation of Amity water by Fort Lyon, Amity is required
to pay 20% of the costs of the maintenance of this Western
Division per year to Fort Lyon.
Amity submits that it does not owe Fort Lyon 20% of the main
tenance and operating expenses for the upkeep of the Western Divi
sion of the Fort Lyon canal system inasmuch as Fort Lyon has
breached its part of the contract by repeatedly
refusing to give to Amity records and accounts of the water
diverted down this system, failing to maintain the Western
Division thereby reducing the capacity of said canal, failing to
deliver to Amity water diverted for Amity, and failing to divert
Amity water entirely. A related issue. Issue II, discussed in
this brief is whether or not depreciation of Fort Lyon equipment
and machinery should be considered as part of the maintenance and
operating costs assessed to Amity.
Amity submits that contained in the pleadings, depositions,
discovery, and oral argument are evidence which shows the
above-mentioned issues are disputed between the parties. Accordingly,
Amity submits that these issues ought to be heard at trial and
that the Water Court erred in granting summary judgment against
Amity and in favor of Fort Lyon in this matter.
II* THE WATER COURT ERRED IN GRANTING SUMMARY JUDGMENT
AGAINST AMITY MUTUAL IRRIGATION COMPANY AND FOR THE FORT LYON
CANAL COMPANY BECAUSE THERE WERE GENUINE ISSUES AS TO MATERIAL
FACTS AND THE MOVANT, FORT LYON CANAL COMPANY, WAS NOT ENTITLED TO
A JUDGMENT AS A MATTER OF LAW ON THE ISSUE OF WHETHER DEPRECIATION
OF EQUIPMENT SHOULD BE CONSIDERED AS PART OF MAINTENANCE COSTS.
Amity submits that summary judgment was improperly granted in
to material facts over whether Fort Lyon was entitled to charge
Amity the costs of depreciation. Again the subject of this appeal
deals with the interpretation of the 1944 contract entered into by
Amity and Fort Lyon; said contract was later made a part of a
judgment in the District Court of Bent County, Colorado.
For the years 1981, 1982 and 1983, Fort Lyon added a charge
of depreciation of equipment and machinery to the bill submitted
to Amity for its 20% share of upkeep and maintenance of the
Vvestern Division. The Water Court granted summary judgment
against Amity on this issue and held that Amity owed depreciation
to Fort Lyon (Volume 2, Pages 182 — 183) . However, the Water Court
stated further that the method of computation of depreciation was
in dispute, and therefore did not rule on how much depreciation
Fort Lyon was entitled.
Fort Lyon admitted during oral argument that this issue of
whether or not Fort Lyon was entitled to depreciation was in
dispute; therefore, the Water Court erred in granting summary
judgment on an issue that both parties admit is in dispute.
Further, the pleadings and oral argument show that the computations made my Fort Lyon on depreciation were in error.
Lastly, there is a question of whether or not the equipment which
Fort Lyon desires to depreciate, is depreciable property.
Accordingly, Amity submits that this issue dealing with
depreciation ought to be heard at trial and that the Water Court
erred in granting summary judgment against Amity and in favor of
III. THE WATER COURT ERRED IN GRANTING SUMMARY JUDGMENT
AGAINST AMITY.MUTUAL IRRIGATION COMPANY AND FOR FORT LYON CANAL
COMPANY BECAUSE THE MOVANT, THE FORT LYON CANAL COMPANY, MOVED FOR
A DETERMINATION OF A QUESTION OF LAW PRIOR TO THE TIME IN WHICH
THE LAST REQUIRED PLEADING WAS DUE.
Amity submits that the summary judgment was improperly
granted in this case by the Water Court in that the movant. Fort
Lyon, moved for determination of a question of law before the last
required pleading was filed. Rule 56(c) of the Colorado Rules of
Civil Procedure provide that summary judgment may be granted if
the pleadings, depositions, and answers to interrogatories, admis
sions on file, and affidavits show no genuine issue as to any
material fact. Amity submits that before they were allowed to
respond to the Fourth and Fifth Claims for Relief of Fort Lyon,
Fort Lyon moved for summary judgment. In otherwords. Water Court
considered and granted summary judgment on a matter in which Amity
had not been afforded the opportunity to respond and answer Fort
Lyon's Fourth and Fifth Counterclaims.
Accordingly, Amity submits that the Water Court erred in
granting summary judgment against Amity prior to all of the plead
ings being filed.
ARGUMENT
I. THE WATER COURT ERRED IN GRANTING SUMMARY JUDGMENT AGAINST
AMITY MUTUAL IRRIGATION COMPANY AND FOR FORT LYON CANAL COMPANY
BECAUSE THERE WERE GENUINE ISSUES AS TO MATERIAL FACTS AND THEMOVANT, FORT LYON CANAL COMPANY, WAS NOT ENTITLED TO A JUDGMENT AS
A MATTER OF LAW ON THE ISSUES OF WHETHER AMITY OWED FORT LYONMAINTENANCE COSTS.
1944 contract entered Into by A.ity and Fort Lyon. Said contract
was later made a part of a judgment in the District Court of Bent
County, Colorado in the case entiled "The Fort Lyon Canal Company,
Plaintiff vs. The Amity Mutual Irrigation, Defendant.", Case No.
2158
in the contract. Fort Lyon was reguired to transport Amitys
"Great Plains" water for Amity down the Western Division of the
Fort Lyon Canal system. At a certain point on the canal system,
this "Great Plains" water is then split off from Port Lyon water
and Amitys Great Plains water is then delivered to various
reservoirs of the Great Plains Reservoir system. I„ exchange for
the transportation of Amity water by Fort Lyon, Amity is required
to pay 20» of the costs of the maintenance of this Western
Division per year to Fort Lyon.
The Water Court erred in granting summary judgment quoting
that Amity owed Fort Lvon 7na
Lyon 20% of the maintenance and operating
^
expenses inasmuch as there were genuine issues as to material
facts and Fort Lyon was not entitled to a judgment as a matter of
law on this issue.Rule 56(c) of the Colorado Rules of Civil Procedure provides
in part that:with"i'/
tendered
forth-genuine issue as to any material fact anH f-h t- i-io
moving party is GntiHtaa
j
that the
of law..:
entitled to a judgment as a matter
judgment may be granted there must not be a genuine issue as to
material facts. In the Colorado Supreme Court case of Bunger v.
Uncampahqre Valley, 192 Colo. 159, 557 P. 2d 389 (1976) the Colo
rado Supreme Court, in discussing summary judgments, stated that:
This Court has specifically stated concerning
C.R.C.P. 56: 'The obvious purpose to be served by
the above rule is to further prompt administration
of justice and expedite litigation by avoiding
needless trials and enable one speedily to obtain a
judgment by preventing the interposition ofunmeri-torious defenses for purpose of delay.' Blain v.
Yockey, 117 Colo. 29, 184 P.2d 1015 ( 1947)"! Where
the facts are clear and undisputed, 'or (are) so
certain as not to be subject to dispute, the court
is in position to determine the issue strictly as a
matter of law.' Morlan v. Durland Trust Co., 127
Colo. 5, 252 P.2d 98 (1952).
Similarly, in the case of Roderick v. Colorado Springs, 193
Colo. 104
, 563 P.2d 3 (1977), the Colorado Supreme Court stated:
C.R.C.P. 56(c) provides that summary judgment may
be rendered only if 'there is no genuine issue as
to any material fact and .
. . the moving party is
entitled to a judgment as a matter of law.'
Summary judgment is appropriate 'only in the
clearest of cases, where no doubt exists concerning
the facts,' Moses v. Moses, 180 Colo. 397, 505 P.2d
1302. In considering a motion for summary judg
ment, all doubts must be resolved against the movant. Abrahamsen v. Mountain States T & T, 177 Colo. 422, 4^4 P.2d 1287.
Not only have the Colorado Courts strictly applied that portion of
Rule 56(c) of the Colorado Rules of Civil Procedure which require
there be no genuine issue as to any material fact, but, also, the
courts have announced that summary judgment is a drastic remedy.
In the Colorado case of Jones v. Dressel, 623 P.2d 370 (1981)
Sumniary judgment is only granted if the pleadings, admissions, depositions, answers to interrogator ies, and affidavits establish that no genuine issue exists as to any material fact and judgment should be entered as a matter of law. C.R.C.P. 56(c). It
is, however, a drastic remedy, and should only be
granted upon a clear showing that there is no genu ine issue as to any material fact...
Also, in the case of Ginter, Jr. v. Palmer & Company, 196 Colo.
203 , 585 P.2d 583 (1978), the Colorado Supreme Court announced
tha t:
Summary judgment, however, is a drastic remedy which denies litigants their right to trial and is never warranted except on a clear showing that there is no genuine issue as to any material fact
. . . The action must proceed to trial if a genuine
issue of material fact exists. The burden of
establishing the lack of a triable issue, there fore, is upon the moving party, and all doubts must
be resolved against him. . .
Accordingly, Amity submits that the burden of showing to the Water
Court that there were no genuine issues as to any material facts fell upon Fort Lyon. Amity submits that there are genuine issues as to material facts and that the moving party is not entitled to
a judgment as a matter of law.
One genuine issue between both parties concerns whether Amity
owes Fort Lyon for 20% of the costs of upkeep and maintenance of
the Western Division. Amity submits that although Amity is resp
onsible to pay 20% of the upkeep and maintenance on the Western
Division of the Fort Lyon canal system. Fort Lyon similarly is re
sponsible to transport and deliver Amity water through the Western Division. In the paragraph "Tenth" of the 1944 contract (Volume1, Page 70, Paragraph Ten) Fort Lyon agreed to recognize and honor
Amity's perpetual right-of-way through the Western Division. Said right-of-way had been established in an 1897 contract, an attachment to the 1944 contract (Volume 1, Pages 76-78), entered into by Fort Lyon and Amity's predecessor in interest, the Great
Plains Water Storage Company. Under this 1897 contract. Amity was entitled to transport their water decree of 1,150 c.f.s. through
the Western Division (Volume 1, Page 76, Paragraph One). Paragraph "Tenth" of the 1944 contract, however, gave Fort Lyon the prior and exclusive right to divert their water decree of 933 c.f.s. through the Western Division prior to honoring Amity's water decree of 1,150 c.f.s. (Volume 1, Page 70, Paragraph Ten).
Amity submits that Fort Lyon has failed to perform its part of the contract by not transporting and delivering Amity's water
decree of 1,150 c.f.s.
One reason Amity submits that Fort Lyon has not del. iverod all of Amity's decreed 1,150 c.f.s. is because Fort Lyon has allowed the Western Division to fall in a state of disrepair so that the canal no longer has the capacity to carry both the combined decree of Fort Lyon' s 933 c.f.s together with Amity's 1,150 c.f.s.,
making a total 2,083 c.f.s.
During oral argument on Fort Lyon's motion for summary judg
ment, Amity stated to the Court that one reason why Amity felt justified in not paying Fort Lyon for maintenance and operation, was because Fort Lyon was not performing its end of the contract by transporting and delivering Am.ity water through the Western
it was represented to the Court by Amity that at most. Fort Lyon
is willing to only put into the Western Division 1,560 c.f.s.,
instead of the required 2,083 c.f.s. (Volume III, Page 33, Line
17-21) .
The fact that Fort Lyon has allowed the Western Division to
fall into a state of disrepair was shown in the affidavit by Lewis
Davis, Superintendent of the Amity Mutual Irrigation Canal. In
paragraph 19 of his affidavit, Mr. Davis states:
That, in addition. Affiant has inspected the West ern Division of the Fort Lyon Canal, and that he
last inspected it in February, 1984 and that the
canal was in a bad state of maintenance for the
reason that Fort Lyon has permitted its canal to
become sanded up with very much sand for approxi
mately the first 30 miles, and Affiant knows that Fort Lyon cannot carry and handle the Great Plains
water from the river to the Kicking Bird headgate, as required under the Stipulation of the parties,
and Affiant has heard the representatives of Amity
insist to the representatives of the Fort Lyon thatFort Lyon should be maintaining its canal in a much
better shape, and that representatives of Amity
think that Amity are not to pay for the maintenance of the Fort Lyon Canal when Fort Lyon Canal is not
able to run the Great Plains Decrees belonging to
Amity. That for the past several years, sinceAffiant has been the Superintendent, Fort Lyon has
been able to run only about 1,400 c.f.s in its
canal, which would leave a capacity of only about
450 c.f.s. for Great Plains, leaving the Arkansas
River at La Junta, when, in fact. Amity is entitled to a diversion of 1,150 c.f.s. at that point, as a result of which. Amity is usually always shorted of
water in periods of high river, because Fort Lyon
takes care of its decrees first, and takes care of
the Great Plains decree as a secondary requirement.
(Volume 1, Pages 124-125, Paragraph 19).
Similarly, in the affidavit by Mr. Leo Pollart, President of
the Board of Directors of Amity, he remarks in paragraphs 7, 8,
and 9 of his Affidavit of the increasing inability of the WesternDivision to deliver Amity's decreed water (Volume 1, Page 159,
Paragraphs 7, 8, and 9). Further, Mr. Pollart states that part of
the reason why Amity does not pay Fort Lyon its 20% of the upkeep
on the Western Division is because of Fort Lyon's failure to
provide Amity with Amity's decreed water. In particular, Mr.
Pollart states in the eighth paragraph that;
That Affiant has called this sand deposit and the
reduced capacity of the canal to the attention of
Fort Lyon on many occasions during this period, and
has requested Fort Lyon to correct the situation by
the removal of the sand and has indicated to Fort
Lyon that Amity does not like to pay Fort Lyon its
twenty percent (20%) share of the upkeep unless
Fort Lyon commences action to remove the sand.
(Volume 1, Page 159, Paragraph 8).
Lastly, Mr. Clifford Verhoeff, member of the Board of Direc
tors of Amity for approximately 20 years, also states in an affi
davit that he had noted the state of disrepair of the Western
Division. In paragraph 6 of Mr. Verhoeff's affidavit, he states
that:
That Affiant had not visited the head end of the
Fort Lyon diversion system until February of 1984,
at which time Affiant was shocked and surprised to
see the sorry state the Fort Lyon Canal was in from
a standpoint of maintenance, and Affiant observed
that it was plugged with a tremendous quantity of
sand for the first 30 to 35 miles which seriously
reduces the capacity of the canal. (Volume I, Page
163, Paragraph 6).
The point to be emphasized is that there is a genuine issue
as to whether Amity owes Fort Lyon this 20% upkeep and maintenance
cost. Amity submits that since Fort Lyon has failed to perform
its part of the contract in delivering Amity's decreed water,
whether Fort Lyon has materially breached its part of the contract thereby excusing Amity from paying, is a genuine issue which
should be allowed to be presented at trial.
In addition, Fort Lyon has refused to deliver to Amity water records appertaining to the water diverted by Fort Lyon into the Western Division. Amity desired to review these records to ascer
tain how much of Amity's decreed water was not being delivered
through the Western Division by Fort Lyon. Although Fort Lyon continually agreed to furnish the records to Amity, it was not until March 28, 1984 that the records were finally furnished to Amity. In the affidavit by Mr. Pollart, he states that:
. . . Amity has taken the position that it will not
pay the statements of Fort Lyon until Fort Lyon
delivers to Amity the records pertaining to the
diversion by Fort Lyon of the Great Plains water
that Affiant has requested Fort Lyon to deliver records of these diversions to Amity on many occa sions including the following specific instances . . . after the trial of a lawsuit on September 11, 1981 . . . a meeting held at the office of Carl M. Shinn, Lamar, Colorado on September 27, 1981 . . .
(Volume I, Page 160, Paragraph 12).
Similarly, Mr. Verhoeff, in Paragraph 11 of his affidavit states:
Also, the Amity board has refused to pay the bills
for further reason that, with respect to its Great
Plains Decree, which is delivered by Fort Lyon,
Amity has never been able to get the diversion records from Fort Lyon, and, although Fort Lyon has promised on numerous occasions to make the records
available. Amity has not received them until just
recently. Affiant remembers on two occasions when he was present, to-wit: September 29, 1981 and
October 13, 1981 in the offices of Fort Lyon at Las Animas, Colorado at which, time the subject of the delivery of the water records was raised, and on
records that it wanted from Fort Lyon would be
mailed to them within a day or two, but the records never did come. (Volume 1, Page 164, Paragraph
11).
Further, in a letter dated October 12, 1982 from Amity's
attorney to Fort Lyon's attorney, there is a request made for the
Fort Lyon records (Exhibit "K" to Amity's response to Fort Lyon's
Motion for Summary Judgment, Page 157). Lastly, in oral argument,
it is stated by Amity's attorney that:
• . . if there were a trial to the Court, which of
course it is not at this time, but evidence would
show that Amity has made countless requests and demands on all of the people in Fort Lyon to fur
nish the water records. The evidence will further show that despite all of those demands and their frequent statement that they would furnish them immediately, the records were not obtained until March 28, 1984 when these depositions were in ses
sion. (Volume III, Page 25, Lines 7-14).
There is a genuine issue as to whether or not Amity owes Fort
Lyon the costs for upkeep and maintenance. Inasmuch as Amity can
visually see the state of disrepair of the Western Division and
inasmuch as Amity is not receiving its decreed water right of
1,150 c.f.s.. Amity submits that it has a right to withhold
payment to Fort Lyon until Fort Lyon furnished records to Amity
showing the amount of water actually deliverd to Amity.
The point to be emphasized is that this issue of withholding
payment until the records were furnished is a genuine issue which
ought to be allowed to be tried to the Water Court.
Lastly, Amity submits that there is a genuine issue as to whether Amity owes Fort Lyon maintenance costs inasmuch as Fort
of depreciation. Inasmuch as Amity discusses this issue under a separate section of this brief. Amity will not discuss this matter
in this section other than to point out that this is an additional
reason why Amity feels justified in withholding payment. Amity
again submits that this matter ought to be tried before the Water Court inasmuch as there is a genuine issue over whether or not de preciation ought to be charged by Fort Lyon to Amity.
II. THE WATER COURT ERRED IN GRANTING SUMMARY JUDGMENT
AGAINST AMITY MUTUAL IRRIGATION COMPANY AND FOR FORT LYON CANAL COMPANY BECAUSE THERE WERE GENUINE ISSUES AS TO MATERIAL FACTS AND THE MOVANT, FORT LYON CANAL COMPANY, WAS NOT ENTITLED TO A JUDGMENT AS A MATTER OF LAW ON THE ISSUE OF WHETHER DEPRECIATION
OUGHT TO BE CONSIDERED AS PART OF MAINTENANCE COSTS.
Amity submits that the Water Court erred in holding that the
Fort Lyon had a right to charge Amity depreciation, and that summary judgment on this issue was improper for four reasons.
First, Amity submits that the issue of whether depreciation
ought to be considered as part of maintenance costs is a genuine
issue which ought to be litigated at trial. Although Fort Lyon's
attorney stated in oral argument that he felt Fort Lyon ought to
be able to charge Amity depreciation costs, he admitted to the
Court that this issue was disputed between both parties when he
stated that:
It simply sets forth the claim based upon ordinary
maintenance and then adds a figure for deprecia
tion, and the reason that it is broken down is because of the problem that we have had over
whether or not depreciation should be an allowable item. (Volume 3, Page 6, Lines 14-18).
. But, at any rate, we have broken down these
claims so to set forth in separate amounts so that if the Court in its discretion then allows a Partial summary judgment for which we would ask it
to do so, without reference to depreciation
our position is that it is clear cut, that the
claim which we made for ordinary maintenance are
shown and that partial summary judgment should be
allowed as to those separate claims as broken down. (Volume 3, Page 11, Lines 11-20).
Again during oral argument the Fort Lyon attorney stated:
We submit that there is no genuine issue as to any
material fact as to the Fort Lyon claims for rou
tine maintenance operating expenses.
in all
candor, there may be an issue as to the allowance as to depreciation, since that was a hassle between
the parties on different occasions. (Volume 3,
Page 19, Lines 5-9)
Lastly, at the end of oral argument, the Fort Lyon attorney
stated that:
As I stated in my opening argument, in all candor,
there is probably an argument with regard to the
depreciation and that is why in our Motion for Sum
mary Judgment that we have set forth the separate
items. The Court, I submit, may enter summary
judgment for any of these items which are not truly
in dispute, and so that with respect to deprecia
tion, if the Court feels there is a dispute that
particular item can be deleted and become the sub
ject of a later action. . . (Volume 3, Page 36,
Lines 13-20).
a
Amity submits that this issue concerning depreciation is
genuine issue which ought to be litigated at trial; it is clear
that the opposing party also recognizes depreciation to be a
genuine issue and not subject matter for a summary judgment.
Second, Amity submits that the reason why Fort Lyon admits
that there is a genuine issue as to depreciation stems from the
wording of the 1944 contract. Paragraph "Nineteenth" of the 1944
contract (Volume 1, Page 73, Paragraph 19) states that:
There has been established over a period of years a
definite custom as to the proportion of the Super intendents' salaries, telephone expenses, and other similar expenses which are included in the annual operation and maintenance charges of the respective parties, which custom shall be continued.
Amity submits that they have been receiving from Fort Lyon yearly statements for its share of the operation expenses of the
Western Division since 1944. Heretofore the custom has been established that Amity had never paid nor been required to pay the
charge of depreciation in any of the yearly statements. As the 1944 contract stated, there was established a definite custom as
to what costs were billed to each party. Further, in paragraph
"Twenty-first" of this 1944 contract (Volume 3, Pages 73-74), it
states that:
Prior to the first day of November, 1947, or in any
given year thereafter, in the event the relation
ship between the parties hereto, as controlled by
this stipulation, shall be in existence, they shall
consult and consider a new basis of annual expense
of maintenance and operation, . . . and shall take
into consideration all matters which may effect an equitable division of such cost and expense; it being expressly understood, however, that until a different agreement is reached, and during the
pendency of any negotiations therefore, the basis
provided in this stipulation, findings and decrees shall control to the date of the commencement of an action to obtain a court determination of said division basis.
Inasmuch as no agreement was ever reached between the parties
concerning depreciation costs. Amity submits that the basis or custom heretofore agreed upon between parties shall control. In other words, inasmuch as depreciation had never been an allowable
expense in maintenance costs. Fort Lyon should not be allowed to
unilaterally commence charging Amity for depreciation.
It is undisputed that Amity has never paid for the costs of
depreciation before. In the affidavit of Mr. Davis he states that;
That Fort Lyon now insists that the statement for
each fiscal year must contain items of deprecia
tion, and Amity refuses to pay the same for the
reason that to the knowledge of Affiant for the
year 1977-1978, and 1979-1980, the statements
contained no items for depreciation, and Affiant is advised by the directors of Amity, and Affiant has
learned from the correspondence in the files of
Amity, that Amity has always refused to pay
depreciation and Fort Lyon has accepted payment
without depreciation . . . at no time has Amity
ever agreed to accept and pay a bill containingdepreciation. (Volume 1, Page 123, Paragraphs 13
and 14) .
The Water Court in the Partial Summary Judgment stated that
Amity's attorney during oral argument admitted that Fort Lyon was
entitled to depreciation. Although Amity never intended to convey
or express to the Court that Amity was in favor of being charged
depreciation. Amity did make the following statement during oral
argument that;
. . . Mr. Lefferdink says, well, everybody has to figure depreciation because Fort Lyon takes it, the
cost of doing business, lawyers have, everybody has
it. Amity has voted to agree to that, and they are
willing to agree, but we submit, your Honor, that
if it applies to them it also applies to Amity, and
Amity has the question as to the way in which its bill should be figured for what Fort Lyon owes it,
under its agreement so if the Fort Lyon is to adopt
a new method, or either party is to adopt a new method, the two boards are supposed to sit down and adopt it . . . (Volume 3, Page 28, Lines 11-20).
Court that the terms of the 1944 contract ought to be followed in
which custom is to prevail until such time Ss the two boards meet
and agree on the new way to figure maintenance costs. Never did
Amity's attorney expressly agree that maintenance costs were to be
assessed against Amity; at most, Amity's attorney stated that both
parties should follow custom.
The point to be emphasized is that error is a genuine issue
as to whether or not depreciation ought to be an allowable cost.
Inasmuch as the custom heretofore established between both parties
did not allow for depreciation, this matter ought to be allowed to
litigated at trial; therefore, summary judgment was improperly
granted on this issue.
A third reason why Amity submits that summary judgment was
improper on the depreciation issue is because there are obvious
errors in the calculation of said depreciation.
During oral argument, Amity's attorney in referring to the
special report by Fort Lyon's auditor, Mr. Trainor, for the years
ending October 31, 1981, 1982, and 1983, stated:
Now, if the Court will notice there at the bottom
of each of those first sheets, Mr. Trainor says
that he takes into account the following schedule
of depreciation.
On the first year, that is October, '81, he
says, heavy equipment is depreciated over a period
of 7 to 20 years, and in the years '82 and '83 he
says he considers that 5 and a half years. . .
(Volume 3, Page 29, Lines 24-25, and Page 29 a.
Lines 1-6).
The Amity's attorney further pointed out other errors made by
Mr. Trainor in his special report, when he stated that:
. . . The last item 'other equipment', method,
straight line, life 5 years, and he says equipment
cost is $32,786.00, and so '81 depreciation he
figures $2,045.00 and then the year of '82, he
assigns a different life to it, he assigns a 5 to
15 year life, but he's still got the same equipment
apparently, $32,786.00, and so the '82 depreciation
for some reason is $1,296.00. I submit that if it is straight line depreciation it should be the same
figure on the same equipment year after year until
it is depreciated out and should be over the same
life period. . . . In the year '83 he changes the
cost from $32,786.00 to $35,233.00 which is an in
crease of some $325.00, but yet he has a thousand dollars worth of depreciation to it, but it is this type of figuring, your Honor, that the Fort Lyon
submits to Amity and just says "Pay it." and there
is bound to be, as I view it, something wrong with
Mr. Trainer's depreciation figures. (Volume 3,
Page 30, Lines 2-11, Lines 15-21).
Because of these accounting errors in the computation of the depreciation, summary judgment should not be granted on the issue
dealing with depreciation. Rather, the issue as to depreciation
ought to be allowed to be litigated at trial.
Lastly, the fourth reason why Amity submits that the Water
Court erred in granting summary judgment on the depreciation
issue, is because there is a genuine issue as to whether Fort Lyon
has depreciable property.It was unrefuted that Fort Lyon had old machinery. In para
graph 21 of the affidavit of Lewis Davis, he states that: . . . with respect to depreciation mentioned above,
Affiant is unable to know how Fort Lyon computes it
for the reason that, according to testimony of Mr.
Paul Converse (Superintendent of Fort Lyon) in a deposition taken between the parties, all of the machinery belonging to Fort Lyon, other thanpossibly a few motor vehicles, is a vintage of 15
to 20 years old, and should have been depreciated out a long time ago. (Volume 1, Page 125,t
similarly. Amity's attorney stated during oral argument that:
. Mr. Converse testified that every piece of
major equipment of the Fort Lyon canal was almost
as old as the hills, your Honor - - I have forgot ten - - a big old dragline or something like, I think 30 or 40 years old; the more recent additions to their dragline, I have forgotten the number of
years, but, anyway, they're way beyond the period that you ordinarily figure on depreciatin . . . and
then when you account it, his figures there,
coupled with Mr. Converse's deposition, in which he indicates that except for a motor vehicle or two,
pickup or two or three, that Fort Lyon absolutely
has no equipment at all, except a Case manufactured machine and as Amity understands the deal, that is
on some kind of a lease-purchase deal, so that
depreciation shouldn't figure in at all. But the
point is, that if the machinery is as old as Mr.
Converse testified it is, it would have been depre
ciated out under some 20 year period, 10 years, 5 years, whatever, long ago depreciated out before Mr. Trainor ever got into the picture. But it is
this type of accounting to which Amity has always
objected to Fort Lyon . . . (Volume 3, Page 29,
Lines 3-9, Page 30, Lines 21-25, Page 31, Lines
1-7). .
Amity submits that the equipment which Fort Lyon wishes to
depreciate, is nondepreciable property. In any event, this issue of whether or not depreciation ought to be charged to Amity should
be litigated at trial and that it was improper for the Water Court to grant summary judgment on this issue.
III. THE WATER COURT ERRED IN GRANTING SUMMARY JUDGMENT AGAINST AMITY MUTUAL IRRIGATION COMPANY AND FOR FORT LYON CANAL COMPANY BECAUSE THE MOVANT, THE FORT LYON CANAL COMPANY, MOVED FOR A DETERMINATION OF A QUESTION OF LAW PRIOR TO THE TIME IN WHICH THE LAST REQUIRED PLEADING WAS DUE.
On January 17, 1984 Fort Lyon filed with the Water Court an Amendment to Answer and Second Amended Counterclaim of the Fort Lyon Canal Company as to the Fifth Claim for Relief.
B t
Three days later on January 30 , 1984 , Fort Lyon filed with the Water Court its Motion for Summary Judgment which is the sub
ject of this appeal. The Court subsequently granted partial sum
mary judgment on Fort Lyon's Fifth Claim for Relief.
Amity submits that it was improper for the Water Court to
grant summary judgment in this matter before Amity had the oppor
tunity to file an answer to Fort Lyon's Fifth Claim for Relief.
In otherwords, the Water Court erred in granting summary judgment
before all parties had an opportunity to respond to the pleadings.
Rule 56(c) of the Colorado Rules of Civil Procedure states in
part that;
. • . The judgment sought shall be rendered forth with if the pleadings, depositions, answers to
interrogatories, and admissions on file, together
with the affidavits, if any show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter
of law.
In the Colorado Court of Appeals case of Moore v. 1600
Downing Street, Ltd., 668 P.2d 16 (1983) the Court states: Moore's final argument is that he fairly and ade quately represents the partnership members
similarly situated. We hold that the record has
not been adequately developed on this issue; thus, summary judgment was not proper. . .
In addition, the Colorado Court of Appeals case of Discovery Land v. Colorado-Aspen Development Company, 40 Colo. App. 292, 577
P.2d 1101 (1977) the Court stated:
"...However, until the disputed issues of fact are resolved as to the relationship between the
four-defendants, no legal determination can be made as
to whether the parent corporations are liable for
p
k
subsidiaries. Thus, entry of summary judgment on
this claim was improper.
In the same vein. Amity submits that until they had an opportunity to answer Fort Lyon's counterclaims, and until they
had an opportunity to adequately develop the record in this matter, it was improper for the VJater Court to grant summary judgment against Amity. The attorney for Fort Lyon stated during oral argument that further pleadings would be forthcoming when he stated that;
Well, this is just the supplement, I believe, your Honor, and I guess there isn't much point in getting into it now, but we will have to file
another amendment because the Amity has amended its
petition again to which we haven't had an opportun ity to respond. (Volume 3, Page 11, Line 7-11)
Accordingly, Amity submits that it was improper for the Water
Court to grant summary judgment before Amity had an opportunity to answer and develop the issues.
CONCLUSION
The Water Court improperly granted summary judgment against
Amity for three reasons. First, there were genuine issues as to
material facts on the issue of whether Amity owed Fort Lyon maintenance costs. Second, there were genuine issues as to material facts on the issue of whether depreciation ought to be considered as part of maintenance costs. Third, the motion for
summary judgment was filed before Amity had an opportunity to
respond to Fort Lyon's counterclaim. Accordingly, for these reasons the summary judgment of the Water Court should be rever sed.
Respectfully submitted,
CARL M. SHINN, Reg. No. 1302 THOMAS L. SHINN, Reg. No. 9958 WENDY S. SHINN, Reg. No. 11527
P. 0. Box 390
Lamar, Colorado 81052 303/336-4313
Attorneys for Appellants-Amity
