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State ex rel. Office of State Engineer v. Romero

Court of Appeals of New Mexico

August 13, 2019

TOBY ROMERO, Defendant-Appellant, and ELEPHANT BUTTE IRRIGATION DISTRICT, et ah, Defendants.

          APPEAL FROM THE DISTRICT COURT OF DONA ANA COUNTY James J. Wechsler, District Judge.

          Domenici Law Firm, P.C. Pete V. Domenici, Jr. Reed C. Easterwood Albuquerque, NM for Appellant.

          Hector H. Balderas, Attorney General Greg C. Ridgley, General Counsel L. Christopher Lindeen, Deputy General Counsel Richard A. Allen, Special Assistant Attorney General Martha Franks, Special Assistant Attorney General Santa Fe, NM for Appellee.



         {¶1} Defendant Toby Romero appeals from the district court's memorandum opinion and order adopting the special master's report. In its report, the special master determined that Defendant's underground water rights were forfeited and abandoned, except for a portion used for livestock purposes. We affirm.


         {¶2} This case arose as a subfile proceeding in the course of a general adjudication of water rights in the Lower Rio Grande Basin. At issue in this proceeding is a disputed groundwater right in the Lower Rio Grande Basin perfected by prior appropriation when the Atchison, Topeka, and Santa Fe Railroad Company (the Railroad) drilled and beneficially used water from a well (the Well) in the now-nonexistent town of Cutter, New Mexico.

         {¶3} Defendant's cousin and a limited liability company (the LLC) whose members were Defendant and Defendant's brother (collectively, the Romeros) purchased property where the Well was located (the Property) from the Railroad in 1994, with the goal of selling the water rights. The LLC conveyed its interest in the Property to Defendant and Defendant's cousin later that year, and Defendant's cousin conveyed his interest to Defendant in 1998. Defendant filed a declaration of groundwater rights with the State Engineer, filled out by an employee in the State Engineer's Office, stating that the Well was "used 1921 [through] 1966 for providing water to steam locomotives[, ]" and "from 1992 [through] 1995 for livestock watering purposes." Defendant then conveyed the Property to two buyers who conveyed the Property back to Defendant over five years later. The State never sent forfeiture notices to Defendant or his predecessors in title.

         {¶4} In the course of its general adjudication of the water rights in the Lower Rio Grande Basin, the State served Defendant with an offer of judgment stating that the Property had no water right. Defendant objected to the State's offer, claiming a water right in the amount of 394.85 acre-feet per year. The district court referred the present subfile proceeding to a special master, pursuant to Rule 1-053 NMRA.

         {¶5} At trial before the special master, the parties agreed that the Railroad drilled the Well in 1921 to acquire water for its operations at Cutter (the Railroad Right), long before the State Engineer's 1982 extension of the Lower Rio Grande Basin to the area wherein the Property was located. Cutter was a station located between two of the Railroad's terminal points, and the water drawn from the Well was used by the Railroad for its steam locomotives, its workers, the livestock, and the community of Cutter. Following the switch to diesel locomotives in the late 1940s, the stop in Cutter "was no longer necessary and Cutter was nearly completely abandoned."

         {¶6} Defendant relied in part on the testimony and a report by Edward Landreth, an engineer previously employed by the Railroad. Landreth testified that in the context of the 1994 sale of the Property, he alerted Defendant's cousin "to the surplus properties that the [Railroad] was selling off and that Landreth "may have given [Defendant's cousin] contact information with [a real estate firm], and he took it from there." When asked if he was paid for his advice, Landreth stated, "[Defendant's cousin] ... may have paid me a little something for wages."

         {¶7} Landreth indicated in his report that "the consumption of water from [the Well] and predecessor wells at Cutter would have been extensive between 1881 and the end of the steam locomotive era in 1955." Landreth testified that although he characterized 1955 as "the end of the steam locomotive era," steam locomotives continued to be used, albeit to a much lesser extent. He also stated in his report that "the appurtenances to [the Well] was [sic] retired in place in 1959, as the Town of Cutter had ceased to exist and the railroad track maintenance forces have been relocated."

         {¶8} The parties stipulated to the admission of several articles detailing the history of Cutter. One such article stated that after the Railroad switched to diesel locomotives, "the trains no longer stopped to water up or unload cinders. In time the section crews were abolished and the bunkhouse and foreman's house became vacant.... [F]inally on June 15, l956[, ] the post office at Cutter was closed. The office had been serving only six families[.] Another stated that the Railroad's "last standing depot was torn down in 1956."

         {¶9} A map of the area contained a handwritten notation that read "retired in place AFR 4590-59," and arrows pointing to the Well's pump house, fuel tank, and underground piping. Landreth testified that when property is identified as "retired in place," it is "removed ... from the tax rolls" and is demolished, and that the notation "AFR" identifies property that is "[a]uthorized for retirement." He further explained that the Railroad retires property primarily to reduce their "maintenance expense and tax exposure[, ]" and that when property is retired, the Railroad is "relieved ... of the obligation to pay property taxes ... [o]n improvements" and theoretically stops maintaining the property. However, in the context of maintaining the retired property, he noted that "what headquarters do and the local people do can be two different things."

         {¶10} Landreth said he did not interpret the map as identifying the Well as having been retired. Instead, he believed that the Railroad retained the Well for future use; otherwise, he stated, it would have been erased from the map, "[j]ust like the depot" that had burned down. The State's witness, John Verploegh, a hydrographic surveyor in the Office of the State Engineer's Litigation and Adjudication Program, testified that he understood Landreth's statement concerning the retirement in place of the Well's appurtenances to reference the "equipment as necessary for the diversion of water from [the W] ell... to its place of use, in this case that being the casing, the motor, the pump, the piping, the tank[.]" In his discussion of the map, Verploegh testified that he interpreted "the dotted lines-with arrows to both the pipeline and a dotted line to what [he] understood] to be the pump house, the reservoir, [the W]ell, and the oil pit, that those dotted lines point[ed] directly to those appurtenances[.]" He understood the notation "retired in place AFR 4590-59" to mean that the appurtenances, "no longer being necessary to the operation of the [R]ailroad, their having been found not necessary for some time at that point, [he] would presume ... that they are retired in place even inasmuch, as Mr. Landreth put it, on standby ... in the course of general operation."

         {¶11} Defendant also called Walter Sam Waldo Johnson as a witness. Johnson testified that sometime between 1962 and 1964, he helped his father repair the Well because it was not pumping water. Johnson testified that he and his father were hired to repair the Well so it could provide water for livestock. On direct-examination, defense counsel asked if Johnson had been told the Well "was always maintained in operational condition[, ]" to which Johnson replied:

Yes. Yes, sir. Whenever we went out there and got it going and got it back into operational condition, the owner said that-whoever, I don't know whether he own [sic] it or leased it. I'm not sure how. I wasn't involved on [sic] that. But it was-they had said that it was two or three years since it had been run.

         {¶12}A map of the Railroad's lines in New Mexico indicated that in 1966 the Railroad still had a station in Cutter, with a siding that could "handle [eighty-two] cars." Although Landreth could not attest to what extent, if any, water from the Well was used for steam locomotives from 1921 to 1966, nor for "municipal purposes through the [l9]7Os[, ]" he did testify that it was his understanding that the water was used for a road project "sometime probably between [l9]75 and ... [l9]86."

         {¶13} The special master recommended the district court enter a judgment rejecting Defendant's water right claim, and adjudicating Defendant only "a livestock right." The special master found "that the amount of water the Railroad beneficially used from the Well was at most 107.53 acre-feet per year[, ]" rather than Defendant's claim of 394.84 acre-feet per year. Further, the special master found that there was no evidence that water from the Well was used for any purpose other than watering livestock between December 31, 1960 and December 31, 1964, and that the Railroad therefore forfeited the non-livestock Railroad Right. The special master also found that the State proved by clear and convincing evidence that the Railroad abandoned the Railroad Right after not using the right for any purpose other than watering livestock for thirty-four years, at which time the Railroad sold the Property to the Romeros.

         {¶14} The district court adopted the special master's report in ...

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