In Re: CSRBA CASE NO. 49576, SUBCASE NO. 91-7094.
JEFFREY C. SHIPPY, Objector-Appellant. DOUGLAS MCINTURFF and DARCY MCINTURFF, Claimants-Respondents
from the Fifth Judicial District of the State of Idaho, Twin
Falls County. Eric J. Wildman, District Judge.
district court's partial decree is affirmed.
Barker, Rosholt & Simpson, LLP, Boise, for appellant
Jeffrey C. Shippy.
P. Barker argued.
Douglas McInturff and Darcy McInturff, Cataldo, respondents
Douglas McInturff argued.
appeal arises from a disputed water right relating to the St.
Joe River in Benewah County, Idaho, between a landowner and
the tenants who put the water to beneficial use. The license
at issue described the water right as "appurtenant to
the described place of use." The landowner argues that
the water right is appurtenant to his land, while the tenants
contend that the right was developed and owned by their
predecessors in interest and now belongs to them by virtue of
their having purchased the interest. The district court
ultimately adopted the Special Master's report and issued
a partial decree, which listed the tenants as the owner of
the license. For the reasons set out in this opinion, we
affirm the district court's decree.
FACTUAL AND PROCEDURAL BACKGROUND
disputed water right in this case first arose as a result of
Jeffrey Baker (Baker) and Alexander Bruner (Bruner) creating
an association, St. Maries Wild Rice Growers (St. Maries), to
engage in commercial wild rice production. After St.
Maries' formation, the association entered into an
agreement with Aaron and Jeanne Robinson (the Robinsons) by
which the association would cultivate wild rice on land owned
by the Robinsons. In order to cultivate rice, the association
needed water. In October 1983, St. Maries applied for a water
right to irrigate the Robinsons' land. The Director of
the Idaho Department of Water Resources (IDWR) approved St.
Maries' permit application in November 1983 and issued it
a license in 1991. The license contained a notation in its
conditions section that stated: "This water right is
appurtenant to the described place of use."
the time the water right was initially being put to
beneficial use, St. Maries Wild Rice, Inc. was incorporated
with Bruner as its president; however, the company was
administratively dissolved by 1998. Nevertheless, the water
right always remained under the name St. Maries Wild Rice
Growers, and, in one form or another, St. Maries utilized the
water right from the early 1980s until 2001.
15, 2001, Bruner executed an agreement with Douglas and Darcy
McInturff (the McInturffs) to sell the wild rice harvesting
business and equipment. This agreement included the disputed
water right as part of the sale, noting that it was
"valuable and absolutely essential to the
operation." The McInturffs, as the owners of St. Joe
River Wild Rice Company, then took over cultivation of the
land described in the water license. Four years later, the
McInturffs submitted a notice of change in water right
ownership to IDWR as required by Idaho Code section 42-248.
The Director of the IDWR recorded the change in ownership of
the water right to the McInturffs in December 2006.
this time, the land on which the rice was harvested also
changed owners. While the Robinsons initially owned the land
on which St. Maries used the water, they later conveyed the
land to their son Jeffery Shippy (Shippy). The property was
transferred in four separate conveyances in 1993, 1994, 1998,
and 1999. In 2010, Shippy conveyed the land to Cedar Creek
Ranch, LLC (Cedar Creek), with Shippy as its sole managing
member. Cedar Creek is the current owner of the land on which
the rice was cultivated. Shippy and Cedar Creek never
received notice of the change in ownership of the water
license to the McInturffs in 2006 as communications occurred
only between IDWR and the McInturffs. Meanwhile, Shippy
contends that Robinson had owned the "appurtenant"
water right by being the landowner, and, consequently, that
the right passed with the land.
February of 2015, the McInturffs filed a notice of claim
within the Coeur d'Alene-Spokane River Basin Adjudication
(CSRBA). The Director recommended the McInturffs be
recognized as owners of the water right. Shippy timely filed
an objection and a separate claim, arguing that he should be
the sole owner of the water right. Following an
investigation, the Director's Report explained that he
was unable to determine who owned the water right, and
therefore recommended it go to both Shippy and the
McInturffs. The McInturffs filed an objection, and the
parties went to trial before a Special Master on August 3,
2016. Following the trial, the Special Master determined that
the McInturffs owned the water right. On November 28, 2016,
Shippy filed a motion to alter or amend the Special
Master's report and recommendation, which the Special
Master denied. Shippy then challenged the Special
Master's ownership determination in the district court.
The district court adopted the Special Master's
recommendation that the McInturffs owned the water right and
entered a partial decree reflecting that decision. Shippy
timely appealed. Following oral arguments, this Court ordered
supplemental briefing to address a question regarding the
identity of the real party in interest in the case.
STANDARD OF REVIEW
Special Master's legal conclusions that the district
court adopts are considered to be the district court's
conclusions. United States v. Black Canyon Irrigation
Dist., 163 Idaho 54, 59, 408 P.3d 52, 57 (2017). This
Court freely reviews the district court's legal
conclusions. Id. In addition, this Court exercises
free review in determining whether an ambiguity exists in a
legal instrument. Rangen, Inc. v. Idaho Dep't of
Water Res., 159 Idaho 798, 807, 367 P.3d 193, 202
of fact . . . must not be set aside unless clearly
erroneous[.]" I.R.C.P 52(a)(7). A trial court's
findings of fact are not clearly erroneous "if the
findings are supported by substantial and competent
evidence." PacifiCorp v. Idaho State Tax
Comm'n, 153 Idaho 759, 767, 291 P.3d 442, 450 (2012)
(quoting Senator, Inc. v. Ada Cty. Bd. of
Equalization, 138 Idaho 566, 569, 67 P.3d 45, 48
Shippy and Cedar Creek are both real parties in
we can address the issues raised on appeal, we must determine
who is the real party in interest. Shippy contends that he
and Cedar Creek are both real parties in interest in this
case because Cedar Creek owns the land to which the contested
water right is appurtenant. Because this appeal was only
brought by Shippy, the Court requested additional briefing
concerning who the real parties in interest are. Cedar Creek
subsequently filed a request to ratify, join, or be
substituted into this action. We agree with Shippy that both
parties are real parties in interest and grant Cedar
Creek's motion to join pursuant to Idaho Rule of Civil
Procedure 17(3) to afford complete relief to the parties.
is essential to justiciability. Therefore, it is an issue
that may be raised at any time, including for the first time
on appeal or sua sponte by this Court. Houpt v.
Wells Fargo Bank, Nat'l Ass'n, 160 Idaho 181,
186, 370 P.3d 384, 389 (2016). Idaho Rule of Civil Procedure
17(a) requires an action to be "prosecuted in the name
of the real party in interest." We have interpreted Rule
17 liberally to "further the policy favoring the just
resolution of actions- providing litigants their day in
court." Houpt, 160 Idaho at 187, 370 P.3d at
390 (citation omitted). Thus, Rule 17 "prevent[s]
forfeiture when determination of the proper party is
difficult or when an understandable mistake has been made in
selecting the party plaintiff." Id. (citation
Cedar Creek and Shippy are real parties in interest. First,
Cedar Creek is a real party in interest because it owns the
land to which the water right at issue is appurtenant. Though
Cedar Creek was not originally a party on this appeal, we
grant its motion to join this action to best afford relief.
Shippy is still a real party in interest because he was a
proper claimant in the CSRBA. See I.C. §§
42-1401A(1), 1412. As we held in Bray v. Pioneer
Irrigation District, any claimant has standing to file
an objection or response to a water right reported in the
director's report. 144 Idaho 116');">144 Idaho 116, 118, 157 P.3d 610, 612
(2007). Injury is not required to object to a water right.
Id. Accordingly, Shippy has standing to object to
the McInturffs' claim and argue that Cedar Creek is the
rightful owner of the water right, both of which he has done.
the ultimate contest over the water right belongs to Cedar
Creek and the McInturffs. While Shippy is a claimant with
standing to object to the water right's ownership, he
cannot argue that he is personally entitled to the water
right when Cedar Creek owns the land.
The district court did not err in rejecting
Shippy's claim to the water right license.
The district court correctly determined that Shippy's
objection was an impermissible collateral attack.
district court found that it was an impermissible collateral
attack for Shippy to object to the determination of ownership
made during the licensing process, which should have been
made at the time the license was issued in 1991.
[Shippy and Cedar Creek] presented evidence at trial that it
was originally intended for the water right to be held by
Aaron Robinson and not St. Maries Wild Rice Growers. Tr.,
136-137. However, if [Shippy and Cedar Creek] or their
predecessors believed the license was owned by Robinson, this
proceeding is not the proper time or place to raise that
argument. If the Director erred in vesting ownership of the
license in St. Maries Wild Rice Growers, the Objectors or
their predecessors were required to ...