Davis v. Chino Grande, LLC – 3/19/2009

March 24, 2009

Arizona Supreme Court Holds Landowners Have No Interest in the Potential Future Use of Groundwater That Is Severable From the Overlying Land.

Merwyn Davis sued, inter alia, Chino Grande to invalidate a commercial water rights reservation on his ranch that severed the future rights to groundwater from the rights to the overlying land.  The trial court granted summary judgment in favor of Davis, but the Court of Appeals vacated the trial court’s ruling.

The Arizona Supreme Court vacated the Court of Appeals’ decision and remanded the case to the trial court.  The Supreme Court, relying on existing precedent, affirmed that “there is no right of ownership of groundwater in Arizona prior to its capture and withdrawal from the common supply and that the right of the overlaying landowner is simply to the usufruct of the water.”  Town of Chino Valley v. City of Prescott, 131 Ariz. 78, 82, 638 P.2d 1324, 1328 (1981).  Therefore, the Court concluded landowners do not have a real interest in the potential future use of groundwater, but only an “unvested expectancy.”  Further, the Court found no precedent that allowed the “unvested expectancy” in water to rights to be severed from the overlying land.  The Court also noted that allowing the severance of water rights is inconsistent with the language of the Groundwater Management Act (“GMA”), which requires the permission of the landowner to transport water off of a property.  A.R.S. § 45-555(A).  This GMA provision would not make sense if the legislature intended groundwater rights to be severable from land ownership.

Justice Bales authored the Court’s unanimous opinion.