Yellow Jacket Water Conservancy Dist. v. Livingston

Yellow Jacket Water Conservancy Dist. v. Livingston, 2013 WL 6800619 (Colo. 2013) (holding the Water Conservancy Act’s holdover provision, containing neither temporal nor reasonableness requirements, allowed district’s holdover directors to remain in office past their original term as de jure officers with authority to act on behalf of the district).

The Yellow Jacket Water Conservancy District (“Yellow Jacket”) held conditional water rights to several bodies of water located in northwest Colorado. Yellow Jacket’s board of directors met on September 29, 2009, and authorized the filing of diligence applications with the water court. On the date of the meeting, Yellow Jacket’s board of directors, normally a nine-member panel, had one vacancy as well as four directors whose terms had expired but who were still performing their official duties pending appointment of qualified replacements. After reviewing Yellow Jacket’s diligence applications, several parties (hereinafter “Livingston”) objected to the board’s authority to approve the filing these documents. Livingston argued that Yellow Jacket could not have assembled a valid quorum because only three of the nine directors were serving unexpired terms on the date of the board meeting. Livingston filed for summary judgment asking the Rout County District Court, Water Division 6 (“water court”) to cancel Yellow Jacket’s conditional water rights.

While the water court recognized that the WCA contained a holdover provision, the court relied on case law from other states in finding that the four holdover directors had remained in their positions for an unreasonable amount of time past the expiration of their terms. The four holdover directors’ terms expired on October 18, 2008, nearly one year before the board meeting. Consequently, the court found that Yellow Jacket’s board had not assembled a valid quorum and lacked the authority to approve the filing of the diligence applications. As a result, the water court granted Livingston’s motion for summary judgment, deeming Yellow Jacket’s conditional water rights abandoned and cancelled.

On appeal, the Colorado Supreme Court (“Court”) began its analysis by reviewing the purpose and procedure of Colorado’s Water Conservancy Act (“WCA”). In order to maintain a conditional water right, the holder is required to file an application for a finding of due diligence every six years. These applications help ensure that the holder is continuing to work toward completion of the project that initially led to the conditionally decreed appropriation. The water court then publishes the applications, allowing interested parties to contest the continuation of these conditional water rights.

The Court next examined the holdover provision of the WCA. Looking at the plain language of the statute and construing that language according to rules of grammar and common usage, the Court found that the WCA unambiguously allows a director to hold office for the original term, as well as any interim term, without limitation, pending the appointment of a duly qualified successor. The Court noted its longstanding position that when a statute provides that an incumbent may remain in office until a successor is duly qualified, the incumbent remains as a de jure officer, with all the authority vested in such position. Finding no legislative intent to impose temporal or reasonableness requirements on holdover terms, the Court declined to read either limitation into the statute.

The Court held that the water court had erred in its reliance on a standard of reasonableness, rather than the plain language of the holdover provision of the WCA. Accordingly, the Court reversed the water court’s decision to cancel Yellow Jacket’s conditional water rights and remanded the case for further proceedings.

 

The title picture is of the White River, which flows through the Yellow Jacket Water Conservancy District.