Hccd. v. State ex rel. Wyoming Atty. Gen.

221 P.3d 306

2009 WY 143

HORSE CREEK CONSERVATION DISTRICT, a Wyoming Irrigation District; and Phase 23, LLC, a Wyoming Limited Liability Company, Appellants (Defendants), v. STATE of Wyoming, ex rel., the WYOMING ATTORNEY GENERAL, Appellee (Plaintiff).

No. S-08-0200.

Supreme Court of Wyoming.

November 23, 2009.

Representing Appellants: Curtis B. Buchhammer, Buchhammer & Kehl, PC, Cheyenne, Wyoming.

Representing Appellee: Bruce A. Salzburg, Attorney General; Michael L. Hubbard, Deputy Attorney General; Ryan T. Schelhaas, Senior Assistant Attorney General; Brandi Lee Monger, Assistant Attorney General. Argument by Mr. Schelhaas.

Before VOIGT, C.J., and GOLDEN, HILL, KITE, and BURKE, JJ.

BURKE, Justice.

[¶ 1] The district court granted summary judgment in favor of the State of Wyoming ruling that, pursuant to an agreement between Horse Creek Conservation District (HCCD) and the State, the public has a perpetual right of recreational use access to HCCD property adjacent to the Hawk Springs Reservoir. On appeal, appellants claim that the district court committed a host of legal errors in arriving at its decision. We will affirm the district court's decision, though on a slightly different basis. We conclude that Wyoming statutes expressly required HCCD to grant public access to its property adjacent to the reservoir as part of the legislation appropriating funds for rehabilitation of the dam and water conveyance systems. When the project agreement is interpreted in accordance with the statutes, it provides for public access to HCCD property. Nevertheless, we remand for reformation of the agreement so that it will conform fully to the statutory language.

ISSUES

[¶ 2] HCCD and Phase 23 present a multi-faceted issue challenging the district court's summary judgment ruling:

I. In granting summary judgment to appellee, did the trial court err by:

A. Incorrectly interpreting and construing the project agreements entered into by the parties as creating a "perpetual, public recreational use access" to the Hawk Springs Reservoir and adjacent lands?

B. Incorrectly interpreting and construing W.S. §§ 41-2-216 through 41-2-218 as memorializing or creating a "perpetual, public recreational use access" to the Hawk Springs Reservoir and adjacent lands?

C. Incorrectly determining that Phase 23, LLC, was not a bona fide purchaser?

D. Incorrectly determining that petitions filed with the Eighth Judicial District Court requesting approval of the project agreements acknowledged a grant of public access and contained sufficient legal descriptions of the property subject to public access?

E. Incorrectly determining that Horse Creek Conservation District is barred by contract law, laches, estoppel and applicable statutes of limitations from challenging appellee's prior improvements at the Hawk Springs Recreation Area?

F. Failing to find that the statutory provisions of W.S. § 41-2-218(b)(ii)(G) purportedly creating a perpetual right of public access over Horse Creek Conservation District property are in violation of the Rule Against Perpetuities?

The State phrases the issues differently:

1. Did Horse Creek Conservation District, in exchange for more than $8,500,000 of taxpayers' money, grant perpetual public access to Hawk Springs Reservoir and all adjacent lands owned by it or the State of Wyoming for the purposes of hunting, fishing and general recreation?

2. Does the right of perpetual public access run with HCCD's land adjacent to the Hawk Springs Reservoir?

FACTS

[¶ 3] Hawk Springs Reservoir was originally constructed in the early 1900's and is located on Sections 9, 10, 15, 16, 21, and 22 of Township 20 North, Range 61 West, 6th P.M. in Goshen County, Wyoming. HCCD is an irrigation district organized under Wyoming law and owns much of the land covered by and surrounding the reservoir. In 1911, the State Board of School Land Commissioners granted an easement to HCCD's predecessor to allow the reservoir to inundate part of Section 16.¹ Later, HCCD received an additional grant from the State increasing the reservoir easement to encumber the entire east half of Section 16.

[¶ 4] In the late 1970s or early 1980s, Hawk Springs Reservoir was determined to be hydrologically inadequate.² In 1983, the Wyoming Legislature passed legislation to provide funding to rehabilitate the dam and water conveyance systems. Wyo. Stat. Ann. §§ 41-2-216 through 41-2-218 (LexisNexis 2007).³ Because the language of this act is critical to our decision, we will restate most of it verbatim in the discussion below. For now, we note the statute's requirement that, before funds could be released to HCCD for the reservoir construction project, a project agreement had to be made with the Department of Economic Planning and Development (DEPAD), with a provision guaranteeing perpetual public access to the reservoir and adjacent lands.

[¶ 5] The parties executed the first project agreement on November 7, 1983. The agreement recitals referred to the enabling legislation and indicated that State funding was provided to accomplish a number of goals, including repairing the dam and water delivery systems and constructing "facilities for public benefit." The agreement iterated the legal description of the reservoir and recited the funding apparatus, which included grants and loans from the State to HCCD. The agreement also provided that HCCD could not deny the public access to the reservoir and "adjacent public lands designated for recreational use."

[¶ 6] An additional appropriation of funds was needed to complete the project. Consequently, the parties entered into a second project agreement on April 1, 1985. The second project agreement expressly superseded the first project agreement. Given that the relevant provisions of the project agreements are virtually identical, however, we will not distinguish between the two except where specificity is required.

[¶ 7] HCCD petitioned the district court for approval prior to entry into each project agreement. Pursuant to the petition process, the members of HCCD were given notice and the opportunity to object to the agreements. No HCCD member objected to the project agreements, and the district court entered orders approving them. HCCD and DEPAD also executed mortgages and promissory notes to secure the loans from the State.

[¶ 8] Using State funds totaling more than $8,500,000, HCCD made the repairs to the dam and water conveyance system. In addition, the State constructed various improvements next to the reservoir, including camping facilities, restrooms, and a boat ramp. Most of the improvements were located on HCCD lands in Section 9. The rest of the public facilities were located immediately to the south on State land in Section 16.

[¶ 9] On September 11, 2006, HCCD entered into a contract for deed to sell forty acres in Section 9 to Phase 23, LLC. The forty acres included many of the public improvements constructed by the State. The only members of Phase 23 were Ronald and Dorothy Buchhammer. The Buchhammers were members of HCCD when the project agreements were submitted to the district court for approval, and they offered no objections to the agreements. In addition, at the time Phase 23 entered into the contract for deed, Mr. Buchhammer was employed by HCCD as its superintendent. After the contract for deed was executed and notice was given to the State that the property had been sold, Mr. Buchhammer put up a gate and no trespassing signs, thereby terminating public access to the recreation area.

[¶ 10] The State filed this action seeking a judgment declaring that the public had the right to perpetual access to HCCD lands adjacent to the reservoir. It also filed a motion for injunctive relief to require HCCD and Phase 23 to restore public access to the area. HCCD and Phase 23 responded and counterclaimed for declaratory relief and monetary damages for the State's use of HCCD property. The district court granted the State's motion for injunctive relief, and dismissed all of HCCD's claims except for the declaratory judgment claim, concluding that the dismissed claims were barred by the Wyoming Governmental Claims Act, Wyo. Stat. Ann. § 1-39-101 et seq. and Wyo. Const. art. 16, § 7.⁴

[¶ 11] The State then filed a motion for summary judgment. After considering the parties' voluminous filings, the district court granted summary judgment in favor of the State. It ruled that the project agreement granted the State perpetual public recreational use access to Hawk Springs Reservoir and HCCD's land adjacent to the reservoir. The district court stated that HCCD's attempts to challenge the State's improvements on HCCD lands were barred by contract law, laches, estoppel and the applicable statutes of limitations. The district court also ruled that Phase 23 was not a bona fide purchaser and could not, therefore, challenge the State's public access interest. HCCD and Phase 23 filed a timely notice of appeal.

STANDARD OF REVIEW

[¶ 12] Our standard for reviewing summary judgment orders is well known:

Summary judgment is appropriate when there are no genuine issues of material fact and the moving party is entitled to judgment as a matter of law. W.R.C.P. 56(c); Metz Beverage Co. v. Wyoming Beverages, Inc., 2002 WY 21, ¶ 9, 39 P.3d 1051, 1055 (Wyo.2002). "A genuine issue of material fact exists when a disputed fact, if it were proven, would establish or refute an essential element of a cause of action or a defense that the parties have asserted." Id. Because summary judgment involves a purely legal determination, we undertake de novo review of a trial court's summary judgment decision. Glenn v. Union Pacific R.R. Co., 2008 WY 16, ¶ 6, 176 P.3d 640, 642 (Wyo.2008).

Jacobs Ranch Coal Co. v. Thunder Basin Coal Co., LLC, 2008 WY 101, ¶ 8, 191 P.3d 125, 128-29 (Wyo.2008). We view the facts from the vantage point most favorable to the party opposing the motion, and give that party the benefit of all favorable...