Hughes v. Hughes, 305 P.3d 772 (Mont. 2013) (holding (i) the lower court had jurisdiction to adjudicate the alleged stock water easement; (ii) partition of land does not extinguish existing water rights on other land unless the parties intended such a result; and (iii) an implied easement was the appropriate remedy to allow continued use of the stock water right).
The Supreme Court of Montana (“Court”) reviewed four complaints Jack and Shirley Hughes (“Jack”) filed against their son, Johnny Hughes (“Johnny”). The Tenth Judicial District Court (“lower court”) consolidated Jack’s complaints, which concerned money he loaned to Johnny, an alleged stock water easement following a partition of jointly-owned land, and a disputed pasture lease. The lower court found in favor of Johnny on all matters except the water rights issue. Jack appealed the non-water issues and Johnny cross-appealed the stock water issue.
These disputes arose in the wake of a falling-out between Jack and Johnny and the subsequent referee-supervised property partition. In separate deeds dated 1984, 1985, and 1986, Jack granted Johnny an undivided 56% interest in Melby Ranch but retained a life estate in the buildings and improvements. Thus, at the time of partition in 2011, Jack and Johnny owned Melby Ranch as tenants in common. In light of their falling-out, the parties engaged three referees to partition the land. Jack and Johnny agreed that Johnny would receive the section of Melby Ranch that included Flatwillow Creek. However, they did not specify how this partition would affect Jack’s stock water right that he used to sustain his cattle business on land not subject to the partition. The parties agreed to fence their boundaries to better reflect the partition. In his complaint, Jack sought an easement either to allow his cattle access to Flatwillow Creek or to construct a pipe to bring water across Johnny’s parcel. Johnny opposed, arguing that the partition agreement did not provide for a stock water easement.
The lower court granted Jack a water gap through the fence and over Johnny’s land, but in the same order, determined that it lacked jurisdiction over the water issue. When the parties asked for clarification, the lower court stated that it did not believe it had jurisdiction to grant the water gap. Johnny thereafter appealed the original order granting Jack a water gap.
After resolving the non-water issues, the Court discussed the lower court’s jurisdiction and found it well established that district courts have jurisdiction to supervise already-adjudicated water rights. Jack possessed rights to use Flatwillow Creek for stock water through J&S Family Limited Partnership. The Court also stated that, regardless of the lower court’s jurisdiction over water rights, an easement is a legally distinct property right. For these reasons, the Court concluded the lower court possessed the jurisdiction to determine whether Jack held an implied easement to continue using Flatwillow Creek.
Jack argued he possessed an implied easement by existing use over Johnny’s part of the partitioned land. The Court first recited the three elements for the creation of an easement by existing use: (i) prior unity of ownership of the two parcels, (ii) severance, and (iii) an apparent, continuous, and reasonably necessary use for Jack’s beneficial use and enjoyment. Neither party disputed these factors, and the Court therefore held that Jack originally owned both parcels, the partition severed that ownership, and access across Johnny’s section was reasonably necessary for Jack to exercise his stock water right.
The crux of the dispute rested on whether Jack and Johnny intended for Jack’s use of Flatwillow Creek to continue after the land partition. Jack did not have access to any other source for stock water besides Flatwillow Creek. The Court observed that Johnny, at the time of the partition negotiations, knew Jack possessed the water right and had no other source from which to use it. The Court also noted that nothing in the record suggested Jack intended to stop using Flatwillow Creek for his cattle. The Court paid particular attention to the fact that if the partition excluded Jack from exercising his water rights, it would be inequitable and could not stand. As a result, the Court held that the record supported Jack’s implied easement by existing use because both he and Johnny intended the stock water use to continue after severance of the two parcels.
In opposition, Johnny further argued that Jack surrendered his water rights to Flatwillow Creek when he agreed to the partition. As Johnny argued, the partition identified and valued the two parcels of land as “dry pastureland” and “irrigated land.” Jack granted Johnny all of the available irrigated land, including Flatwillow Creek. As a result, Johnny argued that Jack consciously gave up his stock water right. However, the Court disagreed and found that Johnny’s argument overlooked the fact that Jack’s water rights benefited land not subject to the partition.
The Court therefore concluded that, by agreeing to the partition, Jack did not intend to give away his water rights used on land not included in the agreement. The Court remanded the issue to the lower court to determine the best and most equitable way to provide Jack access to Flatwillow Creek.
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