247 Or. App. 266 268 P.3d 749

Argued and submitted August 11,

affirmed December 14, 2011

Lissa DAVIS, Steven Davis, Rhoda Ritter, and Roger Ritter, Plaintiffs-Appellants, v. NYE DITCH USERS IMPROVEMENT DISTRICT, an Oregon not for profit public corporation; Susan Kiefer; Cathy Larson; John Maletic; Todd Stockebrand; and Matthew Wasson (the Board of Directors of Nye Ditch Users Improvement District), Defendants-Respondents.

Jackson County Circuit Court

085113L2; A145738

268 P3d 749

Richard B. Thierolf, Jr., argued the cause for appellants. With him on the briefs was Jacobson, Thierolf & Dickey, PC. David B. Paradis argued the cause for respondents. With him on the brief were Mark R. Weaver and Brophy, Schmor, Brophy, Paradis, Maddox & Weaver, LLP.

Before Haselton, Presiding Judge, and Duncan, Judge, and Walters, Judge pro tempore.

*267WALTERS, J. pro tempore.

*268WALTERS, J. pro tempore

In this case, plaintiffs Ritter and Davis challenge the authority of defendant Nye Ditch Users Improvement District to enter their property for the purpose of improving and repairing the Nye Ditch that traverses their property.1 Plaintiffs Davis challenge defendant’s authority to assess fees against them for that purpose. This case arose on cross-motions for summary judgment, and we affirm the trial court’s judgment for defendant.

I. DEFENDANT’S RIGHT TO ACCESS PLAINTIFFS’ PROPERTY

Defendant is an improvement district formed under ORS chapter 554, and plaintiffs Ritter and Davis own property within defendant district. In their first three claims for relief, plaintiffs contend that defendant is precluded from entering their property to make repairs and improvements to the Nye Ditch without their express permission.

We take the material facts, which are undisputed, from the record on summary judgment. The Nye Ditch is an irrigation ditch that provides water for agricultural and domestic use. The ditch provides water to approximately 140 properties and 635 acres of land. In the 1920s, neighboring landowners dug the Nye Ditch by hand, using picks, shovels, crowbars, and horses.

The Nye Ditch crosses property that plaintiffs Davis purchased in 2003 and property that plaintiffs Ritter purchased in 2006. Plaintiffs took title to their property subject to all easements of record and those apparent upon the land. Plaintiffs own water rights that permit them to take water from the Nye Ditch, and the ditch is visible on plaintiffs’ property.

Defendant was formed when its articles of incorporation were filed with the Secretary of State on August 3, *2692006. See ORS 554.020 (permitting incorporation for purposes of irrigating land by submitting articles of incorporation to Secretary of State). Those articles state that defendant is a “not for profit public corporation” and describe the district’s pm-pose, in part, as follows:

“To improve, maintain, and operate ditch facilities in connection with the distribution of said water for irrigation, agricultural, domestic, or industrial uses to those persons, firms, and corporations presently obtaining water through the Nye Ditch facilities and to control and distribute water through the facilities of the Nye Ditch * *

Plaintiffs own land described in the articles of incorporation and are therefore members of defendant district. ORS 554.070(1).2 Plaintiffs take water from the Nye Ditch and have paid assessments to defendant and its predecessor.

On October 8, 2008, defendant contracted with an excavation company to make repairs and improvements to the Nye Ditch. The planned work included substantial repairs on the Ritter property — specifically, realigning the ditch, trimming trees over the ditch, and installing a culvert under the Ritter driveway. Plaintiffs Ritter barred the excavation crew from entering their property to perform those repairs. Plaintiffs filed this action on October 29, 2008.

The parties filed cross-motions seeking summary judgment on plaintiffs’ first three claims for relief.3 The trial *270court concluded that defendant had a right to enter plaintiffs’ properties to make repairs and improvements and that that right derived from three sources: (1) the easements belonging to landowners who draw water from the ditch, (2) ORS chapter 554, and (3) defendant’s articles of incorporation. The trial court allowed summary judgment for defendant.

Plaintiffs assign error to that ruling and contend that they have the right to exclude defendant from their property. Summary judgment is proper when there are no issues of material fact and the movant is entitled to judgment as a matter of law. ORCP 47 C. “In an appeal from a judgment that results from cross-motions for summary judgment, if both the granting of one motion and the denial of the other are assigned as error, then both are subject to review.” Eden Gate, Inc. v. D&L Excavating & Trucking, Inc., 178 Or App 610, 622, 37 P3d 233 (2002).

In arguing that the trial court erred, plaintiffs do not challenge the scope of the repairs that defendant intends to make on the Ritter, or other, property; instead, they assert that defendant has no right whatsoever to access their property. Plaintiffs acknowledge that landowners who draw water from the Nye Ditch have easements to cross their neighbors’ property to access the ditch, but argue that defendant does not. Plaintiffs also acknowledge that they are members of defendant district by virtue of ORS 554.070(1), but argue that an improvement district does not acquire the access easements or licenses of its members. Plaintiffs contend that, unless a property owner expressly grants, or the district acquires, such rights, an improvement district does not have statutory authority to enter the property of its members. That is true, plaintiffs assert, even if a district’s articles of incorporation purport to grant such authority. Finally, plaintiffs contend, if defendant does have a statutory right of access, it must, but did not, adhere to statutory procedures that govern the exercise of that right.

Plaintiffs are correct to recognize the mutual rights of neighbors who construct an irrigation ditch in “common *271enterprise” and for “mutual benefit.” When neighbors join in such an enterprise, one of the neighbors cannot convert the ditch to his or her exclusive use; the other neighbors also are entitled to use the ditch. Foster et al. v. Foster, 107 Or 355, 368, 213 P 895 (1923). When neighbors create and use a water system as a permanent utility, they grant each other mutual easements over their respective lands. Luckey et ux v. Deatsman, 217 Or 628, 634, 343 P2d 723 (1959). In Luckey, the court explained the circumstances necessary to the creation of such mutual easements:

“[T]o create an easement the parties must have intended that the use of the servient land was not to be a revocable privilege. An easement is an interest in land not subject to the will of the possessor of the servient estate. * * * The reservoir and pipe lines were constructed under circumstances indicating that the parties regarded the water system as a permanent utility. The subsequent conduct of [the landowners] in connection with the use and maintenance of the system confirms that interpretation of their understanding.
“If there were need for further support for our conclusion we point out that in this case both the servient and dominant owners joined in the construction of the water system over their respective parcels of land, with the object that both would be served by it when it was completed. From this conduct it is reasonable to infer that there were mutual grants by them of easements over their respective lands.”

Id. Such easements, the court decided, are appurtenant to and run with the land. Id. at 636-37.

Plaintiffs also are correct that the rights of easement owners include the rights of repair and access. The “grant of an easement includes the right to do whatever is necessary by way of repairs, even though damage to the servient estate may result.” Baumbach v. Poole, 266 Or 154, 157-58 n 1, 511 P2d 1219 (1973). And the right to make repairs permits entry onto another’s property to access the shared water utility. See Jewell v. Kroo, 268 Or 103, 106, 517 P2d 657, adh’d to on reh’g, 268 Or 109, 518 P2d 1305 (1974) (owner of dominant estate has right to enter servient estate to do anything reasonably necessary to the proper exercise of easement); Thompson v. Uglow, 4 Or 369, 372 (1873) (“The general rule, *272that a party who has a right of enjoyment, has also a right to enter and make necessary repairs, is essential to the enjoyment of the thing granted.”).

However, as we shall explain, plaintiffs’ argument that defendant lacks authority to exercise the rights of its members is unpersuasive. An improvement district formed under chapter 554 is “one of several water development and distribution organizations that emerged to facilitate irrigated agriculture throughout the West during the late-nineteenth century.” Fort Vannoy Irrigation v. Water Resources Comm., 345 Or 56, 67, 188 P3d 277 (2008). In the western states, the doctrine of prior appropriation “enabled irrigators to divert and use water * * * on nonriparian lands[.]” Id. at 66. However, the labor and capital required to appropriate water were beyond the means of individuals, necessitating collective organizational structures. Id. To address that need, the legislature enacted the predecessor statute to chapter 554 in 1911. Or Laws 1911, ch 172. The title for that act provided:

“To enable land owners to incorporate themselves for the purpose of irrigation or drainage, defining their corporate powers, regulating the manner of issuing bonds, making the debts of said corporation a lien on the land of said owners and fixing the organization and annual license fees of such corporations.”

Id.

An improvement district formed under ORS chapter 554 may organize as a nonprofit or a public corporation. ORS 554.050(6) authorizes the formation of a nonprofit corporation and provides that, if all of the members agree, they may designate the corporation as a “public corporation * * * with the rights and privileges of a public corporation^]” No matter which form of organization is used, an improvement district has only the powers conferred by the legislature. See, e.g., City of Keizer v. Lake Labish Water Control Dist., 185 Or App 425, 432, 60 P3d 557 (2002) (it is well settled that water districts are “creatures of statute and can exercise only the authority that the legislature statutorily has conferred on them”) (citing Young et al. v. Gard et al., 129 Or 534, 548, 277 *273P 1005 (1929) (irrigation district is a creature of law and powers are conferred by law)); State Highway Com. v. Efem Whse. Co., 207 Or 237, 241, 295 P2d 1101 (1956) (highway commission, a quasi-public corporation, is “vested with broad powers but, of course, possesses no authority other than that conferred upon it by statute”).

Defendant’s articles of incorporation designate defendant as a “non-profit public corporation,”4 and we look to ORS chapter 554 to determine the extent of its authority. ORS 554.080 grants an improvement district the power to contract, to make bylaws (which must be ratified by a two-thirds vote of the members), to charge and collect fees for the maintenance and operation of the district, and to levy and collect assessments for the purpose of maintenance and operation.5 More particularly, as relevant here, ORS 554.110 *274gives an improvement district’s board of directors the power to construct, operate, and maintain improvements.6

*275Although those statutes do not expressly confer the power to improve and repair irrigation ditches or enter the land of its members for that purpose, we conclude that they do so by implication. As we have explained, the legislature created chapter 554 improvement districts to do collectively what is difficult for landowners to do individually — to divert and use water to irrigate and drain their lands. By expressly granting improvement districts the right to “[o]perate and maintain such works as are necessary, convenient or beneficial” for those purposes, the legislature granted improvement districts the authority necessary to carry out that power, including the right to improve and repair the works and to obtain access to them.

“[WJhere a power is conferred by an act, everything necessary to carry out that power and make it effectual and complete will be implied. Further, that which is implied in a law is as much a part of it as that which is expressed. These long-established principles of statutory construction are universally recognized[.]”

Pioneer Real Estate Co. v. City of Portland, 119 Or 1, 10, 247 P 319 (1926); see also Lane Transit District v. Lane County, 327 Or 161, 168-69 n 4, 957 P2d 1217 (1998) (express power to appoint general manager implies power to fix terms of manager’s employment); Fales v. Multnomah Co. et al., 119 Or 127, 133, 248 P 151 (1926) (“When a power is given by statute everything necessary to make it effectual is given by implication.”). The legislature granted improvement districts the authority to act on behalf of individual landowners and to exercise, on their behalf, their common-law rights of improvement and repair and the access necessary for that purpose.

Therefore, as a chapter 554 improvement district, defendant has statutory authority to improve and repair its ditch facilities and to access the property of its members as necessary for that purpose. When it filed articles of incorporation with the Secretary of State describing its purposes as including obtaining, controlling, and distributing water through the facilities of the Nye Ditch, defendant undertook to exercise that authority. Although plaintiff is correct that a corporation cannot extend its authority through its articles of incorporation, Oregon v. Portland Gen. Elec. Co., 52 Or 502, *276517, 95 P 722 (1908), no extension was necessary in this case. Oregon statute granted defendant the authority it wishes to exercise.

In reaching that conclusion, we reject plaintiffs’ argument that the fact that the legislature also granted improvement districts the power to purchase easements and rights of way and to exercise the power of eminent domain indicates that the legislature intended to preclude improvement districts from obtaining access to the property of their members without such purchase or acquisition. The statutes that plaintiffs cite, ORS 554.270 and ORS 554.080(4), are permissive. ORS 554.270(1) provides:

“Whenever the board of directors of the corporation shall by resolution determine that it is to the best interest of the corporation, the board may enter into contracts for the purchase or option to purchase or lease, upon such terms as it determines to the best interest of the corporation, any ditch, works, improvement, easement, right of way, water right or other thing required or advantageous to the corporation for the works and improvement of the land described in the articles of incorporation within the scope of the purposes therein named.”

(Emphasis added.) ORS 554.080(4) provides, in part:

“To purchase, condemn by the power of eminent domain, possess and dispose of such real and personal property as may be necessary and convenient to carry into effect the objects of the corporation * *

(Emphasis added.)

Thus, if a district wishes to obtain and own property interests or water rights, it may acquire them. But the power to obtain and own property interests on its own behalf does not preclude an improvement district from exercising its other statutory power to act on behalf of its members to operate and maintain ditches and easements that its members own. ORS 554.110, which confers the power to operate and maintain irrigation works, does not condition the exercise of that power on an improvement district’s acquisition of its own water or property rights.7

*277Plaintiffs’ final argument is that, if chapter 554 grants defendant the right to improve and maintain the Nye Ditch, the district must adhere, and failed to adhere, to the procedures mandated by that chapter. Plaintiffs contend that to incur indebtedness for the costs of such improvements, defendant is required to follow the dictates of ORS 554.170 to 554.210.

ORS 554.210 provides that owners of land described in the articles of incorporation may, by unanimous agreement or a two-thirds vote, approve and adopt “detailed plans and specifications for the works and improving of the lands under the plan described in the articles of incorporation.”8 *278ORS 554.170 permits landowners who have adopted plans “as provided in ORS 554.210” to “mutually covenant and agree for the purpose of binding their respective lands, as provided in ORS 554.180.”9 ORS 554.180 and ORS 554.190 provide that, if landowners desire to enter into such covenant, they shall prepare and record a notice describing the land and stating either that the land shall be subject to any indebtedness incurred by the corporation or to the lien of any assessments thereon.10 Finally, ORS 554.200 provides, in part, that,

*279“[w]hen any corporation is organized pursuant to ORS 554.005 to 554.340, the board of directors and the corporation may not lawfully incur any indebtedness or obligation of such corporation, except as otherwise provided in ORS 554.005 to 554.340, before the landowners’ notice has been executed and recorded.”

(Emphasis added.)

Thus, an improvement district that seeks to incur indebtedness must follow the procedures set out in ORS 554.170 to 554.210, unless another statute in chapter 554 provides otherwise. In this case, however, plaintiffs do not challenge defendant’s authority to incur indebtedness; plaintiffs challenge defendant’s authority to enter their property. To answer that question, we need not decide whether defendant was required to follow the dictates of ORS 554.170 to 554.210 before incurring indebtedness. The statutes that plaintiffs cite do not refer to, much less restrict, a district’s right to access its members’ properties.

*280In summary, with respect to plaintiffs’ first three claims for relief, we conclude that ORS chapter 554 authorizes defendant to enter plaintiffs’ properties to improve and repair the Nye Ditch. Therefore, the trial court properly granted defendant’s motion for summary judgment, and properly denied plaintiffs’ motion for summary judgment, on those claims.

II. DEFENDANT’S RIGHT TO ASSESS FEES FOR COSTS OF IMPROVEMENT

Plaintiffs Davis assert three additional claims for relief alleging that defendant is prohibited from assessing fees for repairs to the Nye Ditch. Plaintiffs Davis contend that, under the terms of a 1943 agreement, landowners with pre-1923 water rights cannot be assessed for “ditch widening.”11 In those claims, plaintiffs Davis request a declaratory judgment and a judicial determination that “defendant! ] ha[s] no authority to use funds collected from members of defendant 2006 corporation, such as plaintiffs, with water rights based on filings dated October 23, 1923, or before, for ditch widening!.]” Plaintiffs also seek an injunction ordering defendant to “refrain from using any funds collected from members of defendant 2006 corporation, such as plaintiffs, with water rights based on filings of October 23, 1923, or before, for ditch widening!.]” The parties filed cross-motions for summary judgment presenting the legal issue of the applicability of the 1943 agreement to defendant’s assessments. The trial court determined that the 1943 agreement “no longer governs the activities and assessments associated with the Nye Ditch” and granted summary judgment for defendant. We agree with the trial court’s determination.

We take the facts relevant to the claim of plaintiffs Davis from the undisputed evidence submitted on summary judgment. In 1943, certain property owners with existing water rights signed an agreement entitled “Agreement between Nye Ditch Users” and formed an unincorporated association called the “Nye Ditch Water Users Association” *281(the association). Under that 1943 agreement, property owners along the ditch associated together to

“acquire, build, construct and maintain all necessary main line ditches and to procure right-of-way therefor, and to acquire, develop and maintain any and all other rights, properties and interests that may be necessary or convenient in connection with the affairs of the Association.”

The 1943 agreement provided that projects to enlarge the ditch to accommodate additional users were to be financed through assessments on property owners who purchased land with water rights acquired after October 23,1923.12 The 1943 agreement further provided that the 1943 agreement could not be modified and that the association would continue perpetually unless “the owners of not less than 75% of the acreage irrigated or irrigable from the ditch shall, by written agreement, otherwise provide.” The 1943 agreement was made binding on the signers’ “successors and assigns” and was recorded in the Jackson County property records.

In 1958, the persons who had been parties to the 1943 agreement formed a new nonprofit corporation called “Nye Ditch Users Incorporated.”13 The association assigned its assets to Nye Ditch Users Incorporated.14

*282The articles of incorporation of the 1958 corporation stated that the purpose of incorporating was to relocate, construct, maintain, and improve the Nye Ditch. Neither the articles nor the bylaws of the 1958 corporation included the limitation on assessments that was included in the 1943 agreement.

In 1986, Nye Ditch Users Incorporated filed restated articles of incorporation. The restated articles also provided that the corporation’s purpose was to operate, construct, and maintain the ditch to benefit all users, and did not include the 1943 limitation on assessments.

On April 25, 1990, the 1958 nonprofit corporation was dissolved and a new nonprofit corporation was formed. That 1990 corporation was formed under ORS chapter 554 and was named the “Nye Ditch Users Improvement District.” The articles of incorporation described the district that it created as including the property of each property owner along the Nye Ditch, including plaintiffs’ predecessors-in-interest. The articles stated that the improvement district was formed to improve, maintain, and operate the Nye Ditch facilities and that the district had the authority to fix assessments to each adjoining landowner.

In 1995, unbeknownst to the members of the 1990 district, the Secretary of State administratively dissolved the 1990 district for failure to file its annual report or pay its annual fee. In 2006, the members of the 1990 district learned of the administrative dissolution, but could not reinstate the *283corporation because more than five years had elapsed. See ORS 554.307(1) (corporation administratively dissolved may apply for reinstatement within five years). The members then formed another corporation, defendant here, by the identical name.

On appeal, plaintiffs Davis assert that the 1943 agreement continues to be operative because the members of the association never voted to dissolve the association in accordance with the terms of the agreement. Plaintiffs Davis assert that, when the association incorporated in 1958, the articles of incorporation of the 1958 nonprofit corporation may have changed the procedures by which the ditch users conducted their business, but did nothing to abrogate their “substantive right[s]” under the 1943 agreement. Plaintiffs Davis argue that, because the 1943 agreement was binding on “successors and assigns,” and because defendant is a successor of the 1943 association, defendant is bound by the 1943 agreement.

Plaintiffs Davis misapprehend the effect of the 1943 agreement on later formed corporations. The 1943 agreement was an agreement between the persons who formed the association. That agreement governed the operation of the 1943 association. To the extent that that agreement bound the successors and assigns of those who signed the agreement, it bound them only as to the operation of the association. Later formed entities were governed by the statutes under which they were formed and their articles and bylaws, not by the agreement that governed the operation of the 1943 association.

The association may not have been dissolved according to the terms of the 1943 agreement, but, even if that association continues in existence, the terms of its operation are irrelevant in this case. Defendant is an entirely new entity that is entitled to make assessments according to the statutes, articles, and bylaws that now govern its operations. The trial court did not err in granting defendant summary judgment as to the claims of plaintiffs Davis.

In summary, we hold that defendant has the authority to enter the property of plaintiffs for the purpose of *284improving and maintaining the Nye Ditch and that the challenge by plaintiffs Davis to defendant’s assessment of fees is without merit.

Affirmed.

Davis v. Nye Ditch Users Improvement District
247 Or. App. 266 268 P.3d 749

Case Details

Name
Davis v. Nye Ditch Users Improvement District
Decision Date
Dec 14, 2011
Citations

247 Or. App. 266

268 P.3d 749

Jurisdiction
Oregon

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