Opinion
Case No. 2:01CV907K
April 17, 2003
ORDER
This matter is before the court on Plaintiffs' Motion for Rule 56(d) Order and Plaintiffs' Motion in Limine to Exclude Evidence of Non-Mitigable Damages. Having fully considered the motions, memoranda, and exhibits submitted by the parties and the facts and law relevant to these motions, the court enters the following Memorandum Decision and Order.
Motion for Rule 56(d) Order
Plaintiffs move under Rule 56(d) of the Federal Rules of Civil Procedure to have this court find that certain facts are "without substantial controversy." Rule 56(d) provides:
If on motion under this rule judgment is not rendered upon the whole case or for all the relief asked and trial is necessary, the court at the hearing of the motion, by examining the pleadings and the evidence before it, and by interrogating counsel, shall if practicable ascertain what material facts exist without substantial controversy and what material facts are actually and in good faith controverted. It shall thereupon make an order specifying the facts that appear without substantial controversy, including the extent to which the amount of damages or other relief is not in controversy, and directing such further proceedings in the action as are just. Upon the trial of the action the facts so specified shall be deemed established, and the trial shall be conducted accordingly.
In this case, Defendants' filed a motion for partial summary judgment, which the court denied. The court found that there were several issues of material disputed facts precluding judgment as a matter of law. In the course of making that ruling, the court recognized several facts in the record that favor Plaintiffs. Plaintiffs are now seeking to have several of those facts found to be facts to which there is no substantial controversy.
Under Rule 56(d), the court's denial of the motion does not constitute binding issues as to the merits. In Colastano v. LINA, 100 F.3d 203 210 (1st Cir. 1996), the court recognized that the district court's order denying pretrial motion for summary judgment which included the statement that "there does not appear to be any dispute" that insured failed to execute and deliver documents necessary to transfer ownership of policy did not constitute relinquishment of district court's power to adjudicate whether ownership of policy had in fact been transferred. See also Hampton v. Dillard Dep't Stores, Inc., 18 F. Supp.2d 1256, 1265-66 (D.Kan. 1998) ("An order denying a motion for partial summary judgment . . . is merely a judge's determination that genuine issues of material fact exist. It is not a judgment, and does not foreclose trial on the issues on which summary judgment was sought. It does not settle or even tentatively decide anything about the merits of the claim.").
Similarly, in this case, the court found that it did not appear that Defendants' expert disagreed on the number of water rights and that it appeared that the experts appeared to agree. These findings do not preclude Defendants from allowing their expert from making observations regarding the amount of water rights. Plaintiffs acknowledge this fact, but assert that the Court should recognize that Defendants' expert agrees regarding the amount of water for Bill and Charlene Tuttle's main farm. The court is hesitant to intervene in Defendants use of their own expert's report. The court, however, does not believe it would be appropriate for Defendants' expert to testify that the amount of water applicable to the main farm under water rights 67-137 and 67-286 is an amount other than 309.9 acres in any given year. Defendants point to the fact that Mr. Barnett prefaces his conclusion with the statement that it is "nowhere stated or defined in the water rights files." However, he reaches a conclusion based on his expertise in the water rights field and his expertise in reviewing water rights certificates and files. His report further states that the 309.9 amount "matches the total sole supply irrigation allowances from these two rights as listed presently in the State Engineer's database." Therefore, the court finds that there is no substantial controversy as to the fact that the experts in this litigation agree that water rights 67-137 and 67-286 provide for irrigation of the Tuttles' main farm in an amount of 309.9 acres in any given year. This finding does not preclude Defendants from offering evidence that Defendants were not aware of this limitation or had confusion regarding the amount. It also does not preclude Defendants from offering evidence from their expert that the evidence is not readily stated or defined in the water rights files and that there are other aspects of the water rights files that may make this amount difficult to ascertain or confusing.
Plaintiffs' remaining request for findings are with respect to whether the Diesel Well is an approved point of diversion under water right 67-287 and whether a change application needed to be approved before use of water rights 67-119 and 67-160 on lands owned by Bill and Charlene Tuttle other than Parcel 13. The court is skeptical that a Certificate of Appropriation of Water from 1968 could reference a Diesel Well to be drilled in 1982. However, to the extent that Defendants assert they have a good faith basis for making this argument and without the benefit of hearing the testimony and evidence that will be presented at trial, the court refuses to require Defendants to stipulate at this stage of the litigation. In addition, the parties appear to dispute the legal and factual bases for determining whether a change application should have been filed with respect to water rights 67-119 and 67-160. Therefore, the court refuses to find this issue to be without substantial controversy.
Motion in Limine Regarding Mitigation
Plaintiffs seek to exclude evidence and argument concerning the mitigation of damages through the possibility of appropriation of water other than what is certificated to the land on the ground that such evidence and argument will only mislead and confuse the jury and cause undue delay.
Mitigation of damages is an affirmative defense which requires the Defendants to prove the amounts by which the Ellsworths' damages could have been mitigated. Pratt v. Board of Educ., 564 P.2d 294, 297-98 (Utah 1977). Just as speculative damages may not be awarded, the duty to mitigate does not apply when the attempted mitigation is too speculative. Double D Amusement Co. v. Hawkins, 438 P.2d 811, 811-12 (Utah 1968). There is no duty to mitigate when it would require "time, energy and expense to do a possibly useless thing." Id. at 812.
Under Utah Code Annotated Section 73-1-11, water rights "appurtenant" to the land in addition to rights explicitly passed by deed are conveyed to the purchaser. Utah Code Ann. § 73-1-11(1) (Supp. 2002). A water right evidenced by any of the following documents is appurtenant to the land: 1) a court decree; 2) a certificate of appropriation issued under Section 73-3-17; 3) a diligence claim filed pursuant to Section 73-5-13; 4) a water user's claim for general determination of water rights proceedings; 5) an approval for an application to appropriate water under Section 73-3-10; 6) an approval for an application to permanently change the place of use of water under Section 73-3-10; and 7) an approval for an application exchange water issued under Section 73-3-20. See id. § 73-1-11(5)(b) (Supp. 2002). "[T]he land to which a water right is appurtenant is the authorized place of use of water as described in the" applicable document or certificate evidencing the water right. Id. § 73-1-11(5)(c).
Plaintiffs argue that they received only certificated water rights from Defendants and there were no decreed water rights, no diligence claims, no water user's claims, and no approved applications in existence. Defendants argue that the Ellsworths could have tried to mitigate their damages by (1) attempting to appropriate more water for the property; (2) suing the State Engineer on an equitable estoppel theory and compelling the State Engineer to give them more water; (3) filing a change application to utilize water that has not been used in twenty years; and (4) filing a diligence claim on the premise that some water rights may have been used prior to 1935.
Plaintiffs rely, in part, on a Utah Supreme Court case stating that where the party having the primary duty for performance has the same opportunity to perform and the same knowledge of the consequences of nonperformance as to the party to whom the duty is owed, a plaintiff has no obligation to mitigate damages by taking action that the defendants themselves refused to take. Alexander v. Brown, 646 P.2d 692, 695 (Utah 1982). Plaintiffs argue that the facts in this case show that there is no additional water to appropriate and none of the change applications or diligence claims were brought by Defendants and, therefore, appurtenant to the land, before the property was sold. Defendants do not appear to argue that there is additional water to appropriate. Rather, Defendants argue that Plaintiffs could have filed change applications and diligence claims to cure the problems.
Plaintiffs argue that the mitigation efforts Defendants argue Plaintiffs should have attempted — bringing a change application for water that has not been used for twenty years, bringing a diligence claim to appropriate water that may have been in existence before 1935, and bringing an equitable estoppel claim against the State Engineer to compel more water rights — are all barred because they were not pursued and in place (and therefore appurtenant to the land) when Plaintiffs bought the property, they each require extensive efforts in the state administrative process that would not ultimately be effective until years later, and the likelihood of successfully obtaining water from these measures is too speculative.
In Double D Amusement, the Utah Supreme Court, addressing a defendant's argument that the plaintiff should be required to rent leased personal property in the future to mitigate damages, held that when it cannot be determined whether a mitigative measure is ultimately effective until years latter, the possible mitigation is too speculative to recognize. 438 P.2d at 812. The court stated that the "[plaintiff] would have to wait for the remainder of the five-year term before he could file suit and account to his defaulter for what damages he was entitled to after mitigation. This makes not much sense. There may be a duty to mitigate until time of suit, but to say one must mitigate for four years into the future is more speculative than the damages sought to be proved." Id.
Plaintiffs argue that to seek a change application for water that has not been used for twenty years, in light of Utah Code Annotated Section 73-1-4(3) stating that "when an appropriator or appropriator's successor in interest abandons or ceases to use all or a portion of a water right for a period of five years, the water right ceases and the water reverts to the public," is a futile act. Further they argue that even if they could succeed in restoring these water rights in a forfeiture proceeding, the process would take so many years that it is analogous to Double D Amusement, in which the court found it was not necessary to mitigate into the future. However, Defendants appear to dispute the fact that this water has not been used for twenty years and assert that their expert believes that a change application to obtain use of the additional water rights under 67-119 and 67-309 is possible. Although these water rights may not have been appurtenant to the land at the time of Plaintiffs' purchase because Defendants' had not pursued a change application with respect to these water rights, the court believes that there is enough evidence supporting possible mitigation that could have occurred once Plaintiffs were in possession of the property and aware of the alleged water shortfall on this issue that evidence regarding mitigation through a change application can be presented to the jury.
As to Defendants' argument that Plaintiffs should have filed a due diligence claim to use water that may have been claimed or put to use prior to the enactment of modern statutes and procedures for appropriating water in 1935, Plaintiffs argue that the record is void of any such evidence. Defendants opposition does not provide evidence to support a diligence claim. Because Defendants have not provided some evidence that would support a diligence claim, they should not be allowed to give an inference to the jury that it should have been pursued as mitigation. Furthermore, Defendants never pursued a diligence claim with respect to any alleged water use before 1935, a diligence claim was not appurtenant to the property when the sale to Plaintiffs occurred, and the likelihood of Plaintiffs prevailing on establishing such alleged historical water use is far too speculative given that Plaintiffs know of no evidence and Defendants have provided no evidence that would support such a claim. Therefore, Defendants are precluded from asserting that Plaintiffs should have pursued a diligence claim.
Finally, Defendants' arguments that Plaintiffs could succeed on an equitable estoppel claim against the State Engineer based on the "Dear Water User" letter is too speculative. The court's previous ruling regarding such a claim demonstrates that the outcome of any litigation with the State on an equitable estoppel claim is too speculative, should have been and could be pursued by Defendants, and was unnecessary. Therefore, Defendants are precluded from asserting this as a basis for mitigation.
Defendants opposition raises several issues with respect to mitigation that do not appear to be the basis for Plaintiffs' motion in limine, such as whether Plaintiffs should have challenged or appealed the Division of Water Rights determination of water rights. This order is not intended to preclude evidence or arguments regarding mitigation efforts, such as this, which were not moved on by Plaintiffs.
CONCLUSION
For the reasons stated above, Plaintiffs' Rule 56(d) motion is GRANTED IN PART AND DENIED IN PART and Plaintiffs' Motion in Limine to Exclude Evidence of Non-Mitigable Damages is GRANTED IN PART AND DENIED TN PART.