Metro. Water Dist. of Salt Lake & Sandy v. Questar Gas Co., 20140050–CA.

361 P.3d 709

2015 UT App 265

METROPOLITAN WATER DISTRICT OF SALT LAKE & SANDY, Appellant,

v.QUESTAR GAS COMPANY, Appellee.

No. 20140050–CA.

Court of Appeals of Utah.

Oct. 29, 2015.

Shawn E. Draney, Rodney R. Parker, Scott H. Martin, and Dani N. Cepernich, Salt Lake City, for Appellant.

Edwin C. Barnes, Perrin R. Love, Shannon K. Zollinger, Colleen Larkin Bell, Salt Lake City, and Joseph D. Kesler, for Appellee.

Opinion

ORME, Judge:

¶ 1 The Metropolitan Water District of Salt Lake & Sandy (the District) appeals from the district court's denial of the District's motion for summary judgment and the dismissal of its claims. We affirm.

BACKGROUND¹

¶ 2 The District owns and operates the Salt Lake Aqueduct (the SLA), a water pipeline that delivers water from Deer Creek Reservoir to the Little Cottonwood Water Treatment Plant before carrying the treated water to various storage facilities. The SLA was constructed between 1939 and 1951 as part of the Bureau of Reclamation's (the BOR) Provo River Project. According to the District, the “SLA corridor consists of fee lands, deeded easements, and easements reserved in federal land patents pursuant to the Canal Act of 1890 [.]”²The portion of the SLA at issue in this case was constructed within a non-exclusive easement reserved by a federal land patent dated May 5, 1898. In 1955, after construction of the SLA, the land encumbered by the SLA was dedicated to Salt Lake County for public use. The relevant part of the SLA lies under the western edge of Westview Drive, a residential street in Salt Lake County.

¶ 3 Questar Gas Company (Questar) maintains a natural gas pipeline, two inches in diameter, which runs parallel to the SLA on the opposite side—the east side—of Westview Drive. A sewer line and a water line also run between Questar's pipeline and the SLA. Questar's pipeline provides natural gas to the homes along Westview Drive and crosses the SLA in four locations. In 1956, Questar's pipeline was installed pursuant to two gas franchises granted by Salt Lake County in 1928 (the 1928 Franchise Agreements) and construction permits granted in 1956.³The 1928 Franchise Agreements authorized Questar to “lay and construct all pipe lines under this franchise in accordance with modern and established practice and in such a manner as not to unreasonably interfere with water pipes which may have been previously laid.” Before Questar constructed its pipeline, it also entered into a fifty-year license agreement (the 1956 License Agreement) with the BOR on December 5, 1956. Under the 1956 License Agreement, Questar's pipeline was acknowledged to “not be incompatible with the purposes for which [easements for the SLA] were acquired and are being administered.” The 1956 License Agreement expired on December 5, 2006.

¶ 4 Two months before the 1956 License Agreement expired, the BOR quitclaimed the SLA and the non-exclusive easement to the District. Consequently, when the 1956 License Agreement expired, the District asked Questar to sign a new license agreement for the continued presence of Questar's pipeline within the SLA corridor. The parties negotiated extensively in an effort to formulate the terms of a new license agreement. They were not successful, primarily because of Questar's insistence that it is not subject to the District's regulations by reason of its franchise agreement with Salt Lake County.

¶ 5 In 2001, Questar had entered into a franchise agreement (the 2001 Franchise Agreement) with Salt Lake County. The 2001 Franchise Agreement authorizes Questar to “construct, maintain and operate in the present and future roads, streets, alleys, highways and other public rights-of-way ... within County limits a distribution system for furnishing natural and manufactured gas to the County, the County's inhabitants and persons for heating and other purposes.” The agreement is silent regarding interference with existing utility lines.

¶ 6 The District has adopted regulations for non-district use of the SLA. Among other things, the District's regulations provide that utility crossings require a license agreement. In particular, one regulation provides:

Utility crossings of Aqueduct Corridors require a License Agreement on an individual basis. All applicable state, city, and county regulations shall be adhered to in the construction of utilities. Where utilities will be constructed by or for a developer, but dedicated to a municipality or other local governmental entity or regulated public utility, the District will require the License Agreement to be signed by both the developer and that municipality or other local governmental entity or regulated public utility. Parallel utilities are not allowed within Aqueduct Corridors. Metal pipes which are in close proximity to and may affect District pipelines shall implement corrosion protection measures that provide adequate protection of the District's pipelines.

¶ 7 In August 2012, the District filed a complaint against Questar. Thereafter, the District filed a motion for summary judgment seeking a declaratory judgment that, among other things, Questar's pipeline belongs to the District because the 1956 License Agreement expired in 2006, the District has statutory authority to require a licensing agreement for Questar's continued occupancy in the SLA corridor, and Questar's continued presence in the SLA corridor (absent an agreement with the District) amounts to “trespass, interference with waterway, and public nuisance as a matter of law.”

¶ 8 The district court denied the District's motion and issued a memorandum decision. Noting that the District and Questar “have had their respective pipelines in the easement for more than sixty years without any problems or interference with each other and there is no issue of interference at this time,” the district court concluded that Questar's pipeline did not “constitute an unreasonable interference on the SLA.” The court also concluded that “nothing contained in the statutes nor [the District]'s regulations, grant [the District] unilateral authority to modify or interfere with [Salt Lake] County's right to grant a franchise to Questar, or to claim ownership of Questar's Pipelines.” Finally, the court concluded that the District “is the holder of a non-exclusive easement, and Questar Gas maintains its Pipelines pursuant to permits approved by Salt Lake County.” Accordingly, the court could “find no trespass, public nuisance, nor interference as a matter of law.”

¶ 9 On December 17, 2013, the district court issued a notice of inquiry, asking whether “this matter can be dismissed in view of its memorandum decision.” In response, Questar filed a request for dismissal along with a proposed order of dismissal without prejudice, which the District opposed. About two weeks later, the district court signed the proposed order of dismissal, thereby dismissing, without prejudice, the District's claims in their entirety. The court concluded:

[W]ith respect to the easements at issue: (1) [the District] is the holder of a non-exclusive easement in the [SLA]; (2) Questar maintains its gas pipelines in the SLA pursuant to permits approved by the fee owner of Westview Drive and other public roads at issue in this case, Salt Lake County; (3) the 1956 License Agreement ... is expired, and nothing contained in the Utah Code, or [the District]'s regulations, grant [the District] unilateral authority to modify or interfere with Salt Lake County's right to grant a franchise to Questar, or for [the District] to claim ownership of Questar's pipelines; (4) as such, [the District] and Questar must exercise their rights so as not to unreasonably interfere with the other, and only in the event of an irreconcilable conflict are Questar's rights subservient to [the District], as [the District]'s easement is first in time; and (5) the parties have had their respective pipelines in the SLA for more than sixty years without interference with each other and there is no issue of interference to be adjudicated at this time.

¶ 10 The District appeals.

ISSUES AND STANDARDS OF REVIEW

¶ 11 First, the District contends that the district court erred “in holding that Questar need not comply with [the District's] regulations because [Questar's] franchise from Salt Lake County allows it to install gas pipelines under dedicated roadways, and [the District] lacks ‘unilateral authority to modify or interfere with the County's right to grant a franchise to Questar.’ ” Second, the District contends that even if its regulations are not applicable to Questar, the district court erred “in failing to conclude as a matter of law that the unlicensed presence of [Questar's] high-pressure gas pipeline in the SLA corridor easement is an unreasonable burden on the easement.”

¶ 12 “Summary judgment is appropriate where (1) there is no genuine issue as to any material fact and (2) the moving party is entitled to a judgment as a matter of law.” Hillcrest Inv. Co. v. Utah Dep't of Transp.,2012 UT App 256, ¶ 11, 287 P.3d 427(citation and internal quotation marks omitted). “A district court's ruling on either a motion to dismiss or a motion for summary judgment is a legal question which we review for correctness [.]” Commonwealth Prop. Advocates, LLC v. MERS, Inc.,2011 UT App 232, ¶ 6, 263 P.3d 397. See also Orvis v. Johnson,2008 UT 2, ¶ 6, 177 P.3d 600(“An appellate court reviews a trial court's legal conclusions and ultimate grant or denial of summary judgment for correctness and views the facts and all reasonable inferences drawn therefrom in the light most favorable to the nonmoving party.”) (citations and internal quotation marks omitted); Rushton v. Salt Lake County,1999 UT 36, ¶ 17, 977 P.2d 1201(“The proper interpretation of a statute is a question of law. Therefore, when reviewing an order of dismissal involving the interpretation of a statute, we accord no deference to the legal conclusions of the district court but review them for correctness.”) (internal citation omitted).

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