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Dallas Creek Water Co. v. Huey3/10/1997
EN BANC
JUSTICE HOBBS delivered the Opinion of the Court.
JUSTICE MULLARKEY Dissents.
This appeal is from an order of the Water Court for Water Division No. 4 cancelling a conditional water right for purported failure of the owner or user thereof to file timely an application for a finding of reasonable diligence. Although the application was filed by the water user's agent prior to expiration of the applicable diligence period, the application named only a predecessor in interest, a defunct Colorado corporation, as the applicant. The user of the water right sought to proceed with the application, but the water court refused to allow a formal party substitution for this purpose. The water court ordered dismissal of the application on the basis that it lacked subject matter jurisdiction because the application failed to include the present owner or user of the water right as an applicant prior to the filing deadline.
We conclude, however, that subject matter jurisdiction was vested in the water court by the combination of the timely filing of the application and publication of the resume notice. Both the contents of the application and the resume notice disclosed that Dallas Creek Water Company (Dallas Creek Company) was the user of the water right. Since Dallas Creek Company appeared promptly in the proceedings, through counsel, for the purpose of pursuing an application which was filed timely by its agent, and counsel was permitted to participate in motion and discovery practice, we conclude that the water court erred when it ruled that it was without jurisdiction and refused to allow Dallas Creek Company to be substituted formally as the real party in interest to the application. Accordingly, we reverse the order of dismissal and remand for further proceedings regarding the diligence application.
I.
On April 25, 1974, a conditional decree for 10 cubic feet per second (c.f.s.) of water was entered for the Log Hill Pumping Plant at a specified point of diversion on Dallas Creek, a tributary to the Uncompahgre River in Ouray County, Colorado. The water was to be used "on Log Hill Mesa and immediately adjacent areas for municipal purposes, which include industrial, residential, commercial, recreational and fish culture purposes." In re Water Rights of Wright, No. W-1365 (Water Division No. 4, filed Apr. 25, 1974). The original appropriator envisioned development of 7,000 acres of land for residential, commercial, industrial, and recreational use involving 40,000 new residents.
The conditional water right application was filed and the decree obtained by William R. Wright. The subsequent ownership of the water right is disputed by those who have maintained statements of opposition (Objectors). Nevertheless, it is undisputed that Wright, Raymund F. Kolowich, and Robert F. Draper incorporated WRIKO, INC. as a Colorado corporation on February 22, 1972, and that WRIKO successfully pursued subsequent reasonable diligence applications which kept the conditional water right in effect. On April 27, 1987, WRIKO obtained a water court decree which determined that a portion of the Log Hill Pumping Plant conditional right had been made absolute and that 9.38 c.f.s. should remain in effect as a conditional water right.
On March 15, 1993, the water clerk for Water Division No. 4 notified Raymund Kolowich that the conditional decree "filed by Wriko, Inc. as applicant, WILL BE DUE FOR DILIGENCE FILING IN MAY, 1993." On March 30, 1993, "JAMES A. WILLEY, AGENT" filed an application for a finding of reasonable diligence in the name of WRIKO, INC., seeking to keep in effect the conditional water right. Willey was, in fact, the age
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