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Water Win Has Ripple Effect

August 21, 2013 | Land Trust Alliance | Washington, D.C.

A western conservation easement without water rights is like a night without stars. That’s why land trusts celebrated when a Colorado court held that easements included the property’s water rights. After years of litigation, the Colorado Supreme Court has denied the appeal of Mesa Land Trust v. Allen, so that decision is now useful precedent.

After almost a year, the Colorado Supreme Court has denied the landowners’ (appeal) of.Previously, Mesa Land Trust (MLT) won convincingly against the successor landowners, the Allens, at the Colorado Court of Appeals (Mesa County Land Conservancy v. Allen, 2012 COA 95 (Ct. App. Col. 2012)). The Court of Appeal’s decision upheld the trial court ruling in the Mesa Land Trust v. Allen case and Mesa Land Trust’s conservation easement. In its unanimous decision the court held:

  • Colorado's 1976 conservation easement statute allowed the encumbrance of water rights in a conservation easement;
  • The United States validly encumbered the disputed water;
  • The legislature's 2003 amendments to the statute clarified rather than changed existing Colorado law;
  • The notice requirements added by the 2003 statute apply prospectively and not retrospectively;
  • Colorado common law did not require the United States to give notice to the mutual ditch and reservoir company to encumber the water rights;
  • The United States gave the only notice required when it properly recorded the conservation easement pursuant to the conservation easement statute; and
  • Shares in a mutual ditch and reservoir company are not subject to the Uniform Commercial Code.

The Court of Appeals recognized that the legislature intended to avoid litigation and not create it, as the Allens' interpretation of the statute would inevitably foster, threatening hundreds of conservation easements in Colorado. The Allens tried to mask the real issue by clothing it as one of corporate law involving a stock transfer (by a mutual ditch company) rather than conservation law. The court’s decision in favor of Mesa Land Trust is big news since, according to the Land Trust Alliance’s 2010 Census, there are over a million acres protected by conservation easement in Colorado, and hundreds of those conservation easements encumber water rights.

Even though this is an older easement (the conservation easement was a form easement then-used by the Farmer’s Home Administration) and by today's standards not as well drafted as one would wish, nonetheless MLT won completely anyway. This is the only appellate decision on encumbering water rights in a conservation easement in the nation, and one of a handful of appellate decisions on conservation easements. The mandate, which establishes the finality of the judgment, should be issued within a few weeks. The decision will then be published, and citable as authority.

A broad coalition of dozens of conservation organizations, including The Land Trust Alliance, established a significant precedent for conservation in Colorado. Rob Bleiberg, Bill Prakken, Diana Cort, Ilana Moir and all the folks at Mesa Land Trust did a terrific job on this matter, as did their legal team of Allan Beezley, Peter Nichols, Bob Trout, with Peter as the lead attorney on the appeal, Melinda Beck as the lead attorney on the two amicus briefs, Larry Kueter who testified at the trial and helped on the strategy throughout, Amy Beatie, Zach Smith, Chris Mills, Steve Imig on the amicus brief, Marie Vicek on the briefs and trial preparation, Bill Silberstein, Andy Hamano and the Land Trust Alliance team, who helped on strategy. We can accomplish great things for conservation permanence working together.

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