May 31, 2024
Utah Court of Appeals (June 21, 2024)
2024 UT App 88 (click for full text of opinion)
The Utah Court of Appeals ruled that a jury properly found that a landowner had not intended to convey water shares together when the land was sold.
This case reiterates the important point that Utah law has long drawn a distinction between water rights and water shares in mutual irrigation corporations, which represent these rights. Water rights that are appurtenant to land are presumed to be transferred with the conveyance of land unless expressly provided for otherwise in the instrument; however, Utah statute provides that the right to use water evidenced by water shares is not deemed appurtenant to the land. Utah courts have held that this statute creates a rebuttable presumption that may be overcome by showing clear and convincing evidence that said water right was appurtenant and that the grantor intended to transfer the water right with the land, even if there is no express mention made in the deed.
In this case, the Zundels had purchased property from a landowner, and a dispute later arose whether a reference to “water rights” in the deed had intended to convey certain water shares held by the grantor to the Zundels. At trial, the Zundels presented witnesses testimony that in the real estate professional community, the terms “water rights” and “water shares” were used interchangeably, and that the phrase “water rights” had intended to include the water shares in question. However, the defendants also presented evidence that the grantor understood the distinction between the two, and had several times in the past, separately conveyed water rights or transferred water shares, accordingly, and had not intended to convey the water shares with the sale of the land. At the end of the trial, the jury found that the water shares were appurtenant to the land, but that the grantor had not intended to convey those water shares to the Zundells. The district court granted judgment to the defendants.
On appeal, the Zundells argued that the plain language of the deed unambiguously manifested the grantor’s intent, and that whereas the jury had decided the shares were appurtenant, the district court had erred in not awarding judgment to the Zundells. The Utah Court of Appeals found the deed to be ambiguous, as both proffered interpretations were reasonable, and that it was both proper to send the question of the grantor’s intent to the jury, and that there was sufficient evidence to support the jury’s conclusion.
