author: JUSTICE GRAY

text:
    V. MARK RAFANELLI, Plaintiff and Appellant, v. HAL J. DALE, VIRGINIA LEE GABIG, and PAULETTE DALE-HUTCHEON, Defendants and Respondents.
    No. 95-440.
    Submitted on Briefs May 2, 1996.
    Decided August 9, 1996.
    53 St.Rep. 746.
    278 Mont. 28.
    924 P.2d 242.
   JUSTICE GRAY

delivered the Opinion of the Court.

V. Mark Rafanelli (Rafanelli) appeals from a judgment of the Fifth Judicial District Court, Madison County, that Hal Dale and his daughters, Virginia Lee Gabig and Paulette Dale-Hutcheon, '(the Dales) have an easement by prescription across a portion of his property. We affirm.

The following issues are raised on appeal:

1. Did the District Court err in concluding that the Dales had acquired a prescriptive easement?
2. Did the District Court err in not concluding that the Dales’ prescriptive easement had been extinguished?
3. Did the District Court abuse its discretion in admitting Exhibit 29 into evidence?

The Dales are the owners of approximately 43 acres of land located in Beall Canyon, Madison County, Montana. The Dales’ property is bordered on the north, west, and south by the Whiterock Ranch, currently owned by Rafanelli (see diagram). The east side of the Dales’ property abuts Forest Service land. The only means of accessing the Beall Canyon property is across land belonging to the Whiterock Ranch.

Hal Dale purchased the Beall Canyon acreage in partnership with his brother, Claude Dale, in 1971. The previous owners were Julian Strawn and his heirs Pearl Strawn, Alice Pasley and Frances Salveson (the Strawns).

Claude Dale died on October 3, 1990. Pursuant to a provision contained in Hal and Claude Dale’s partnership agreement, Hal and his two daughters jointly purchased Claude’s one-half interest in the property from Claude’s widow in February of 1992.

The Whiterock Ranch was purchased by Knight Carson and his family (the Carsons) in 1972. The Carsons sold the ranch to June and Ronald Thomas (the Thomases) in December of 1986, and the Thomases subsequently sold the ranch to Rafanelli in 1991.

Three routes across the Whiterock Ranch provide access to Beall Canyon. Route A leads south and east to the main buildings of the Whiterock Ranch, then west nearly to Beall Creek and southeast, roughly parallel to the creek, to the Dales’ property in Beall Canyon. Route B travels south from the Waterloo town dump along the west side of Section 2, Township 2 South, Range 5 West, MPM; turns east through a gate onto the Whiterock Ranch; crosses Beall Pasture and Beall Creek; and then follows the creek into the canyon. Route C begins at the Waterloo town dump, travels east, then southeast to Beall Creek and along the creek into Beall Canyon. The Dales have used all three access routes across Whiterock Ranch since purchasing the Beall Canyon property in 1971.

In 1992, Rafanelli brought an action to quiet title to the Whiterock Ranch property in which he requested the District Court to declare that the Dales had no right, title, or interest in any easement across Whiterock Ranch. The Dales counterclaimed, asserting that they had acquired prescriptive easements over Routes A and B. After a bench trial, the District Court concluded that the Dales had an easement by prescription over access Route B and entered judgment accordingly. Rafanelli appeals.

STANDARDS OF REVIEW

We review a district court’s findings of fact to determine whether they are clearly erroneous, giving “due regard ... to the opportunity of the trial court to judge of the credibility of the witnesses.” Rule 52(a), M.R.Civ.P. In determining whether a court’s findings of fact are clearly erroneous, we apply a three-part test:

First, the Court will review the record to see if the findings are supported by substantial evidence. Second, if the findings are supported by substantial evidence we will determine if the trial court has misapprehended the effect of evidence. Third, if substantial evidence exists and the effect of the evidence has not been misapprehended, the Court may still find that “[A] finding is ‘clearly erroneous’ when, although there is evidence to support it, a review of the record leaves the [C]ourt with the definite and firm conviction that a mistake has been committed.”

Interstate Prod. Credit Ass’n v. DeSaye (1991), 250 Mont. 320, 323, 820 P.2d 1285, 1287 (citations omitted). We review conclusions of law to determine whether the district court’s interpretation of the law is correct. Public Lands Access Ass’n, Inc. v. Boone and Crockett Club Found., Inc. (1993), 259 Mont. 279, 283, 856 P.2d 525, 527.

DISCUSSION

1. Did the District Court err in concluding that the Dales had acquired a prescriptive easement across Whiterock Ranch?

Rafanelli contends that the preponderance of the evidence in the record does not support the District Court’s findings that the Dales had established adverse and uninterrupted use of Route B. He also argues that substantial credible evidence before the District Court proved that the use of Route B was permissive, rather than adverse, or was on the basis of neighborly accommodation. We note at the outset that Rafanelli’s arguments ignore our standard of review of a district court’s findings of fact. It is within the province of the trier of fact to weigh the evidence and assess the credibility of witnesses and we will not second-guess those determinations. Double AA Corp. v. Newland & Co. (1995), 273 Mont. 486, 494, 905 P.2d 138, 142. Moreover, we will uphold a district court’s findings when there is substantial evidence to support them even when there is also evidence supporting contrary findings. Wiesner v. BBD Partnership (1993), 256 Mont. 158, 161, 845 P.2d 120, 122.

The District Court found that the Dales’ predecessors used various routes across Whiterock Ranch without permission for many years. However, the bulk of its findings related to the Dales’ own use of the access routes after they purchased the Beall Canyon property in 1971 and, with regard to this period, the court specifically found that the Dales’ use of Route B met the elements necessary to establish a prescriptive easement. Given that Rafanelli challenges findings relating to only two of the elements, we scrutinize the record to determine whether it contains sufficient evidence to support the court’s findings that the Dales’ use of Route B after their purchase of the Beall Canyon property in 1971 was adverse and uninterrupted.

A prescriptive easement is created by operation of law in Montana. Swandal Ranch Co. v. Hunt (1996), [276 Mont. 229], 915 P.2d 840, 843. The party claiming the easement bears the burden of establishing “open, notorious, exclusive, adverse, continuous and uninterrupted use of the easement claimed for the ... statutory [five-year] period.” Public Lands, 856 P.2d at 527 (quoting Keebler v. Harding (1991), 247 Mont. 518, 521, 807 P.2d 1354, 1356). In order to show that the use of a claimed easement is adverse, a claimant must prove that the use is “exercised under a claim of right and not as a mere privilege or license revocable at the pleasure of the owner of the land; such claim must be known to, and acquiesced in by, the owner of the land.” Rappold v. Durocher (1993), 257 Mont. 329, 332, 849 P.2d 1017, 1019 (citation omitted).

When Knight Carson and his family purchased the Whiterock Ranch in 1972, he noticed the Dales using Route A — the road leading past the main ranch buildings — to reach Beall Canyon. Carson consulted his attorney, who sent a letter to Hal Dale on September 27,1972. The letter informed Dale that the Whiterock Ranch corporation stockholders had no desire to grant any easements across ranch property and that any future agreements regarding access would require approval by the stockholders. The letter also related that a portion of Route A would be plowed under to create a section of irrigated crop land.

The Dales’ attorney responded by letter dated October 16, 1972, stating that

[t]he Dales do not wish to force their way through anyone’s property if a road has not been established and even if it has, if another route of access can be used, then they certainly will comply with the wishes of your client.

The letter indicated the Dales’ belief they had the right, and were affirmatively asserting that right, to cross the Whiterock Ranch by specifically referencing, and attaching a copy of, a document referred to as the Holbert affidavit.

The Holbert affidavit was executed in 1967 by Howard S. Holbert, A. W. Purvis, and Otto C. Nolte, all of whom were acquaintances of the Strawn family, and was recorded with the Madison County Clerk and Recorder. The affidavit identifies the Beall Canyon property and states that the Strawns had used a certain road to access the property for more than twenty years. The Holbert affidavit neither clearly describes the location of the road it references nor indicates that the Strawns were claiming a right over that access adverse to any landowner. Hal Dale testified that, when he and his brother purchased the Beall Canyon property, they believed that they had a right to access their property across the ranch based on this affidavit and comments made to them by the Strawn family.

After the exchange of letters in 1972, the Dales continued to use both Route A and Route B to access the Beall Canyon property; they did not contact the Whiterock Ranch shareholders to make arrangements or ask permission to use either road. The Carsons eventually plowed up a portion of the Route A road in late 1972 and, thereafter, the Dales primarily used Route B to access Beall Canyon, although a ranch lane still provided access through the area of the ranch buildings.

In July of 1973, the Carsons sent the Dales’ attorney another letter regarding the Dales’ accessing Beall Canyon via the ranch and complaining of the amount of traffic through the ranch. The letter informed the Dales that any unauthorized traffic across Whiterock Ranch property would be considered trespass and that the Carsons were putting “no trespassing” signs up at all points of access to the ranch. Additionally, the Carsons intended to place, and eventually did place, an advertisement in the local newspaper notifying the general public of the closure of all roads across the ranch property. The letter stated that the Dales would need to make specific arrangements with Knight Carson or his attorney for access to Beall Canyon across Whiterock Ranch. If such arrangements were not made, the Carsons would consider any use of roads across the ranch by the Dales or anyone else a trespass. The Dales continued to cross ranch property on Route B to reach Beall Canyon, did not contact the Carsons to make arrangements to do so, and completely ignored the posted “no trespassing” signs. This use by the Dales continued until the trial on Rafanelli’s quiet title action.

The Dales’ continuous use of Route B to reach Beall Canyon, their ignoring two requests from the Carsons that they obtain permission to use the road, and the failure of the Carsons to obstruct or interrupt such use by the Dales, are evidence of a use hostile and adverse to the Carsons’ ownership. It is clear that the Carsons knew of the Dales’ use of Route B and that they acquiesced in such use. Although the Carsons requested that the Dales receive permission before using the road, they did nothing affirmative to enforce that request or otherwise stop the Dales from crossing Whiterock Ranch. The Dales notified the Carsons of their claim that they had a right to cross Whiterock Ranch in their October 16, 1972, letter to the Carsons and reinforced that claim by continuing to use Route B without asking for permission. Additionally, the Dales’ use of Route B continued thereafter throughout the entire time that the Carsons, the Thomases, and Rafanelli owned Whiterock Ranch, a period approximately four times longer than the statutory five years needed to establish a prescriptive easement.

We conclude, therefore, that substantial evidence supports the District Court’s finding that the Dales had established the elements of a prescriptive easement, including the adverse and uninterrupted use elements.

PERMISSIVE USE

Rafanelli advances a variety of arguments in support of his position that the Dales’ use of Route B was permissive rather than adverse and that the District Court erred in finding otherwise. We address each of his arguments in turn.

Rafanelli argues that the Carsons granted express permission to the Dales to improve and use Route B when the Carsons plowed up part of Route A in 1972 and, as a result, the Dales’ use of Route B cannot be adverse. The record reflects that, at some point in 1973, the Dales improved Route B by grading the road. Knight Carson stated that the Dales did so with his permission pursuant to a meeting between himself and Claude Dale. Carson testified that, during the meeting with Claude, he granted permission to the Dales to improve and use Route B, in place of Route A, as long as the Dales paid for all maintenance of the road and installed a locked gate at the point where the road entered the Whiterock Ranch. Carson’s son, Christopher, provided similar testimony.

Hal Dale claimed to have no knowledge of such a conversation between Claude and the Carsons. He testified that, even if a conversation had occurred, his brother would not have asked for permission to improve Route B because the Dales had always believed they had the right to use all of the various access routes to Beall Canyon across the Whiterock Ranch. According to Hal, the Dales simply decided they wanted to improve the Route B access and went ahead with the project without consulting the Carsons.

Sometime in 1974, the Dales installed a bridge over Beall Creek at the point where Route B crossed it because a flood had washed out the ford where the Dales usually were able to drive across the creek. Again, the Carsons claimed that Claude Dale met with them to ask their permission to build the bridge, while Hal Dale asserted that permission was not requested.

The District Court found the Dales’ testimony that Claude did not request permission to use and improve Route B to be more credible than the Carsons’ testimony that they granted permission and, as a result, rejected the Carsons’ version of the meetings. The court determin that Claude Dale, being “an experienced mining entrepreneur,” would not have requested permission to use an access route which his family and their predecessors already had been using under a claim of right for many years. Credibility determinations are within the province of the trier of fact and “[w]e will not second guess the district court’s determination regarding the strength and weight of conflicting testimony.” Double AA Corp., 905 P.2d at 142.

Moreover, the undisputed fact that the Dales paid all the costs of improving, building and maintaining Route B, the bridge, and the gate at the entrance to the Whiterock Ranch further supports the District Court’s finding that the Dales’ use of the road was not permissive. Regular maintenance of a road by the party asserting a prescriptive easement is evidence of adverse, rather than permissive, use. Swandal Ranch Co., 915 P.2d at 844.

Although Rafanelli points to evidence of record which might support a finding that the Dales’ use of Route B was permissive, we do not review findings to determine whether evidence supports contrary findings. Wiesner, 845 P.2d at 122. As discussed above, substantial credible evidence of record supports the District Court’s finding that the Dales’use of Route B was adverse rather than permissive.

Rafanelli also contends that the Dales admitted the permissive nature of their access. This contention is based on negotiations between himself and Hal Dale in 1991 regarding Rafanelli’s desire to purchase Claude Dale’s partnership interest in the Beall Canyon property.

When Rafanelli began dealing with the Thomases in late 1990 about purchasing the 'Whiterock Ranch, he became aware of the Dales’ use of roads across the ranch to access their Beall Canyon property. Rafanelli testified that he knew of the Dales’ use of the roads and requested a title company to investigate whether there was any record of an easement granted to the Dales. The title search revealed the Holbert affidavit but did not locate any record of an easement being granted to the Dales. When Rafanelli realized that the Dales had no deeded easement to cross 'Whiterock Ranch, he approached Hal Dale to discuss the possibility of purchasing Claude Dale’s interest in the Beall Canyon property. Rafanelli regarded this proposed partnership as a solution to what he considered a problem with the Dales’ access; if Rafanelli were a partial owner of the Beall Canyon property, any potential disputes over the access would be resolved without Rafanelli being required to grant or recognize an easement across Whiterock Ranch for access to the canyon. Rafanelli felt that the acquisition by the Dales of an easement over Whiterock Ranch would have a negative impact on the value of the ranch.

Rafanelli and Hal Dale arranged for an appraisal of the Beall Canyon property during their negotiations. In a letter to Hal Dale dated February 13, 1991, the appraiser noted that there was no deeded access to the Beall Canyon property and that access had always been with permission of the owners of Whiterock Ranch; in his opinion, however, there was a good chance of establishing a prescriptive easement. Rafanelli’s attempted purchase of Claude Dale’s partnership interest in the Beall Canyon property was never completed.

Rafanelli argues that, because Hal Dale neither objected to the appraiser’s characterization of the access as permissive nor made corrections to that statement in the appraisal, he impliedly admitted that access was permissive. Rafanelli also asserts, in this regard, that the mere fact of the negotiations between himself and Hal Dale evidences the Dales’ knowledge that access was permissive. He argues that Hal Dale would not have entered into the negotiations if he thought there was a clear right to access the Beall Canyon property via Whiterock Ranch and that the negotiations were conducted in order to solve the problem of the access.

The District Court found that Hal Dale’s actions regarding the appraisal letter and the purchase negotiations with Rafanelli were not inconsistent with a claim of a prescriptive easement. Rather, the court determined that Hal merely was attempting to solidify his right to use the access without going through the time and expense of litigation to establish a prescriptive easement. “[T]his Court may not substitute its judgment for that of a district court in making a finding based to a large extent on credibility and weight of the evidence.” In re Marriage of Boyer (1995), 274 Mont. 282, 288, 908 P.2d 665, 668. We conclude that the District Court’s finding that the Dales did not admit that the access was permissive was supported by substantial evidence.

Rafanelli’s final argument regarding permissive use is that the evidence on which the District Court relied in finding that the use was adverse rather than permissive was patently incredible. Specifically, Rafanelli contends that the District Court erred in relying on Hal Dale’s testimony because that testimony was inconsistent with his earlier deposition testimony and because Hal admittedly fabricated a scene for purposes of taking a photograph which was later admitted into evidence.

The District Court observed that Hal Dale’s credibility was questionable because of his somewhat contradictory conduct over the years, but stated that it did not doubt his honesty or sincerity. The court specifically found that Hal’s overall behavior through the years was not inconsistent with his assertion that the Dales’ use of the access to the Beall Canyon property was adverse to the owners of the Whiterock Ranch.

We give due regard to the opportunity of the trial court in a nonjury trial to determine the credibility of witnesses and to resolve inconsistencies in the testimony. Rappold, 849 P.2d at 1020. We do so because the trial court is in a better position than this Court to observe the demeanor, and assess the credibility, of witnesses. Double AA Corp., 905 P.2d at 142. Additionally, even if a portion of a witness’ testimony is shown to be false or unreliable, the trier of fact need not discount the entirety of that witness’ testimony. Kis v. Pifer (1978), 179 Mont. 344, 350, 588 P.2d 514, 517-18.

Here, the District Court carefully considered Hal Dale’s testimony and actions and, having had the opportunity to observe his demeanor, accepted his testimony regarding the adverse nature of the Dales’ use of Route B to access their Beall Canyon property. We conclude that the District Court did not err in relying on the testimony of Hal Dale.

NEIGHBORLY ACCOMMODATION

Rafanelli next advances two arguments relating to his position that the Dales’ use of Route B was not adverse because it was based on neighborly accommodation. It is well-settled that a prescriptive easement cannot be established where use of a neighbor’s land is based on neighborly accommodation or courtesy because such use is not adverse to the owner of the land. Public Lands, 856 P.2d at 528.

Rafanelli contends that the statements in the Carsons’ 1972 and 1973 letters show that the Carsons allowed the Dales to use the access on a neighborly accommodation basis. We disagree. The letters clearly state that access would be permitted only if the Dales sought permission from, and made arrangements with, the Carsons to use the roads. Tb the extent the letters relate to the question of neighborly accommodation, they are evidence tending to show that the Dales’ access was not by way of neighborly accommodation, because neighborly accommodation does not require permission at every passing. See Lemont Land Corp. v. Rogers (1994), 269 Mont. 180, 186, 887 P.2d 724, 728.

Rafanelli also contends, in this regard, that the District Court misinterpreted June Thomas’ testimony insofar as it related to adverse use or neighborly accommodation when it found that she felt the Dales had a right to access Beall Canyon across Whiterock Ranch and that the Thomases did not attempt to control the Dales’ access. June Thomas testified by deposition that when she and her husband purchased the Whiterock Ranch in late 1986, the Dales were primarily using Route B to reach Beall Canyon. She also testified that she and her husband never tried to restrict the Dales’ use of the access road and, although she thought the Thomases could control where the access was, she believed the Dales had the right to cross the ranch to reach their Beall Canyon property.

Although the District Court did not specifically find that June Thomas’ testimony either supported or did not support its finding that the Dales use of Route B was adverse, the court made note of those portions of her testimony indicating that she and her husband thought the Dales had the right to cross Whiterock Ranch to reach Beall Canyon and that the Thomases did nothing to control the Dales’ access. Rafanelli contends that June Thomas’ testimony was consistent with his theory that use of the road was by neighborly accommodation and that the District Court erred when it failed to find that her testimony supported that theory.

The District Court found that the Dales’ use of Route B had been adverse to the Carsons’ ownership, rather than permissive, since 1972. Therefore, the Dales had established the statutory five-year period of adverse use well before the Thomases purchased Whiterock Ranch in 1986. As a result, it is not relevant whether the Thomases thought the Dales’ use of Route B was by permission, by neighborly accommodation or by right.

THE HOLBERT AFFIDAVIT AND PRE-1971 USE

Rafanelli next argues that the District Court erred in relying on the Holbert affidavit as evidence of a claim of right to access to Beall Canyon across Whiterock Ranch. The District Court found that the affidavit should have put any post-1967 owners of the Whiterock Ranch on constructive notice that an adverse claim of access across the ranch to Beall Canyon was being asserted. Although Rafanelli did not object to the admission of the affidavit into evidence, he challenges the court’s finding regarding its significance, arguing that the affidavit itself cannot, and does not, establish the elements of prescription. While Rafanelli is correct in this regard, the District Court did not determine that the affidavit proved the elements of prescription. Rather, the court used the affidavit as one piece of evidence supporting the Dales’ assertion of a claim of right to use the access routes.

When establishing a prescriptive easement, the element of adversity is proven by showing that the use of the easement was exercised under a claim of right. Rappold, 849 P.2d at 1019. A claim of right to an easement “must be known to, and acquiesced in by, the owner of the land.” Rappold, 849 P.2d at 1019.

Although the Holbert affidavit does not speak specifically in terms of a claimed right to access Beall Canyon across Whiterock Ranch property, the Dales relied on the affidavit in asserting their claim of right to use the access roads after they purchased the Beall Canyon property in 1971. The October 16, 1972, letter from the Dales’ attorney to the Carsons notified the Carsons of the existence of the Holbert affidavit and made it known to the Carsons that the Dales claimed a right to the access. The Carsons thereafter acquiesced in that claim of right when, although requesting the Dales to arrange for permission to use the access, they took no affirmative action to stop the Dales from crossing Whiterock Ranch.

The District Court stated that the recorded Holbert affidavit was constructive notice to all post-1967 owners of Whiterock Ranch that a claim of right to access Beall Canyon via the ranch was being asserted. The Dales gave the Carsons actual notice that they were asserting a claim of access across the ranch by sending the Carsons a copy of the affidavit. The District Court neither found nor implied that the Holbert affidavit supported any element of a prescriptive easement other than a claim of right to use the access road in question.

Rafanelli also advances a variety of arguments asserting that the District Court erred in finding that pre-1971 use of the access routes by the Dales’ predecessors was adverse. We determined above that the District Court’s finding that the Dales established that their use of Route B had been adverse to the Carsons’ownership of Whiterock Ranch since 1972 is supported by substantial credible evidence. Because the Dales proved that their use of the road had been adverse from 1972 forward, it is not necessary to determine whether pre-1971 use of the roads by the Dales’predecessors was adverse. Thus, we decline to address Rafanelli’s arguments regarding pre-1971 use of the access routes.

INTERRUPTED USE

Although the majority of Rafanelli’s arguments are directed toward whether the District Court erred in finding that the Dales’ use was not permissive, he also makes vague assertions that the Dales did not prove the element of uninterrupted use. This assertion is apparently based on the Carsons’ act of plowing up a portion of Route A in 1972 and allegedly giving the Dales permission to use Route B thereafter.

The District Court found that the Dales ceased to use Route A after 1972, and, as a result, the court did not grant the Dales a prescriptive easement over that road. Thus, any act of the Carsons which may have interrupted the Dales’ use of Route Ais not relevant to whether the Dales established an easement by prescription over Route B.

In addition, the District Court rejected Rafanelli’s position, advanced through the Carsons’ testimony, that Claude Dale sought— and the Carsons gave — permission to use Route B in 1972. Indeed, as discussed above, the District Court found that the Dales had been using Route B without permission and adversely at least since the Carsons purchased Whiterock Ranch in 1972 and substantial credible evidence supports those findings. Moreover, there is no evidence of record reflecting any post-1972 act by the Carsons, the Thomases, or Rafanelli himself which interrupted the Dales’ adverse use of Route B to access their Beall Canyon property until Rafanelli locked the gate at the entrance to the ranch in October of 1991. Even then, however, the Dales simply cut the lock off the gate and continued to use the road. Moreover, Rafanelli’s act of locking the gate occurred long after the running of the statutory five-year period for establishing a prescriptive easement. We conclude that the District Court’s finding that the Dales established uninterrupted use of Route B for the statutory five-year period is supported by substantial credible evidence.

In summary, the Dales and Rafanelli presented substantial and conflicting evidence in this case, primarily about the adverse versus permissive nature of the use of Route B across the Whiterock Ranch to access the Dales’ Beall Canyon property. “[A] district court sitting as a fact finder, is in the best position to determine whether use was permissive or adverse.” Swandal Ranch Co., 915 P.2d at 845 (citation omitted). We conclude that the District Court’s findings of fact that the Dales had established the elements of a prescriptive easement over Route B across the Whiterock Ranch to access their Beall Canyon property are supported by substantial evidence and are not otherwise clearly erroneous. We hold, therefore, that the court did not err in concluding that the Dales had acquired a prescriptive easement over Route B.

2. Did the District Court err in not concluding that the Dales’ prescriptive easement had been extinguished?

Rafanelli argues that, even if a prescriptive easement existed at one time over either Route A or Route B, that easement was extinguished when the Carsons plowed up a portion of Route Ain 1972 and gave the Dales permission to use Route B instead. A servitude maybe extinguished by the destruction of the servient tenement or an act by the owner of the servitude, or with his consent, which is incompatible with the nature of the servitude. Section 70-17-111, MCA.

We have held, on the basis of that statute, that if a prescriptive easement exists, subsequent acts inconsistent with the claim by prescription, support the conclusion that the prescriptive easement has been extinguished.

Public Lands, 856 P.2d at 531-32.

The District Court found that the Dales had stopped using Route A in 1972 and, therefore, no easement was established over that road. Because the District Court did not grant the Dales a prescriptive easement over Route A and the Dales did not appeal that determination, it is not necessary to address whether any easement over Route A was extinguished by the Carsons’ act of plowing up a portion of that road.

Rafanelli relies on Public Lands for the proposition that acquiescence in a change of the use of an easement extinguishes that easement and argues that, by allowing the Carsons to move the access from Route A to Route B, the Dales acquiesced in a change of use which extinguished any prior easement. In Public Lands, we concluded that, if an easement had existed, it would have been extinguished by the land owner’s act of blocking the road and creating a walk-in only policy. Public Lands, 856 P.2d at 532. Such a change in use, when cooperated with and adhered to by the owner of the easement, is inconsistent with a claim of a prescriptive easement and works to extinguish it. Public Lands, 856 P.2d at 532.

Rafanelli’s reliance on Public Lands is misplaced. The Dales did not acquiesce in any change in their use of Route B. The record reflects that the Dales had used Route B regularly since purchasing the Beall Canyon property in 1971 and continued that use after the Carsons purchased Whiterock Ranch in 1972. The obliteration of Route A did not affect or alter the Dales’ continued use of Route B and the District Court found that, contrary to their assertions, the Car-sons did not “permit” the Dales to relocate the access from Route A to Route B. Thus, the act of plowing under a portion of Route A did not create a change in the Dales’ use of Route B similar to the change in use which occurred in Public Lands. The only change that transpired here was that the Dales rarely, if ever, used Route A from that time on.

Moreover, even if there had been an act by the Carsons during 1972 which was inconsistent with the Dales’ claim of a prescriptive easement, the Dales’ continued adverse use of Route B for more than five years after that time would have created a new prescriptive easement over Route B. See Glenn v. Grosfield (1995), 274 Mont. 192, 196, 906 P.2d 201, 204. We held in Glenn that, if a change in location or modification of the use of an easement occurs and the owner of the previous easement uses the modified easement in the same manner for the statutory five-year period, a new prescriptive easement over the modified route is established. Glenn, 906 P.2d at 204. The District Court found that the Dales’use of Route B was adverse to the Carsons and the subsequent owners of Whiterock Ranch since 1972. Thus, even if a previous easement over that route had been extinguished, the Dales would have acquired a new prescriptive easement after five years of adverse use. Glenn, 906 P.2d at 204.

We hold that the Dales’ prescriptive easement over Route B was not extinguished by the Carsons’ plowing up of Route A in 1972 and that the District Court was correct in not concluding that the easement was extinguished.

3. Did the District Court abuse its discretion in admitting Exhibit 29 into evidence?

Exhibit 29 consisted of three hand-written pages of notes dated August 8, 1973, allegedly written by Claude Dale during or immediately after a telephone conversation he had with his brother Hal. The notes refer to comments Claude made to Hal regarding access to their Beall Canyon property.

As foundation for the exhibit, Hal Dale testified that the notes were in Claude’s handwriting, that Claude was in the habit of always making notes of his telephone conversations, and that Hal had found the notes with other possessions that Claude had brought with him when he moved to the Beall Canyon property after retiring from his work with a mining corporation. The Dales offered Exhibit 29 under the business records exception, as well as other exceptions, to the hearsay rule. Rafanelli objected to the exhibit on the grounds that it was hearsay, that the Dales had failed to properly authenticate it, and that it did not qualify under any of the exceptions to the hearsay rule.

The District Court admitted Exhibit 29 under Rule 803(6), M.R.Evid., the business records exception to the hearsay rule. It quoted the notes in its findings of fact and relied on them as part of the evidence showing that Claude Dale did not request permission from the Carsons to improve and use Route B or to build the bridge over Beall Creek. The court also found that the notes were indicative of adverse use by the Dales.

A district court has broad discretion in determining whether evidence is relevant and admissible. We will not reverse such a determination unless the court has abused that discretion. Galbreath v. Golden Sunlight Mines, Inc. (1995), 270 Mont. 19, 22, 890 P.2d 382, 384.

Under Rule 803(6), a document “kept in the course of a regularly conducted business activity” may be admitted into evidence, even though it is hearsay, when it is “the regular practice of that business activity” to create the document. Although Hal Dale testified that Claude made notes of all of his telephone conversations, the record does not reflect that Exhibit 29 was made by Claude in the course of any business activity; indeed, a review of the notes establishes that they were in the nature of a memorandum made for personal use. While district courts have broad discretion in admitting evidence, the record before us is totally lacking in foundation for admission of Exhibit 29 as a business record under Rule 803(6), M.R.Evid. Thus, the District Court abused its discretion in admitting Claude Dale’s notes under the business records exception to the hearsay rule.

The Dales also argued, however, that Exhibit 29 was admissible under the so-called state of mind exception to the hearsay rule. We recently have discussed state of mind evidence, distinguishing between hearsay state of mind evidence, admissible only under an exception to the hearsay rule, and nonhearsay state of mind evidence. In State v. Losson (1993), 262 Mont. 342, 348, 865 P.2d 255, 259, we determined that whether such evidence is hearsay or not depends on whether the statement is direct evidence proving the declarant’s state of mind or only circumstantial evidence of the declarant’s state of mind.

If the evidence circumstantially proves the declarant’s state of mind, then the evidence is not offered to prove the truth of the matter asserted and the evidence is not hearsay.
Alternatively, when the evidence directly proves the declarant’s state of mind, the evidence is introduced to prove the truth of the matter asserted and is hearsay.

Losson, 865 P.2d at 259. For example, if a person said “X threatened to kill me,” the statement is circumstantial evidence of that person’s state of mind regarding X to the extent it is used only to show that the person was afraid of X and not to prove that X actually threatened the person. As such, the statement is not hearsay as defined in Rule 801(c), M.R.Evid., and it is generally admissible if relevant. See Rule 402, M.R.Evid. Conversely, if the person said “I hate X,” the statement directly shows the person’s feelings about X and is offered to prove that the person hates X. In that case, the statement is hearsay under Rule 801(c), M.R.Evid., and is admissible only if it comes within an exception to the hearsay rule.

The District Court’s finding of fact #14 contains the following quote from Claude Dale’s notes of his telephone conversation with Hal on August 8, 1973, in which he advised Hal:

establish a road that we want to use and go ahead with its use. I advised Hal to make no commitment to Carson. Go up established road — cut lock or fence if necessary. Carson has changed road thru [sic] farm and is trying to get it established that this new road is a private road. This not so — -just because he changed it. County maintenance on the ranch road fives [sic] better access to us than any other. I think, anyway, don’t commit us to anything and keep all avenues open til [sic] we move there.

The District Court used Claude Dale’s notes in support of its finding that Claude did not request permission from the Carsons to use Route B. In other words, the court’s finding was that the notes reflected Claude’s state of mind that the Dales had the right to use the access roads regardless of what the Carsons did or said about such use. Thus, to the extent that the District Court admitted Claude’s statements to show that his state of mind was such that he would not have asked permission from the Carsons to use Route B, the statements are not hearsay. The statements were not offered to prove that Claude told Hal to cut the lock or fence; nor were they offered to prove that the Carsons changed the road or that Claude Dale told Hal not to commit to anything about the access. The statements circumstantially indicated Claude’s state of mind both about the Carsons and about the Dales’ right to use the road, and they were offered to show that Claude did not seek permission from the Carsons to use Route B in exchange for maintaining the road and installing a locked gate. To this extent, Exhibit 29 is not hearsay under Losson.

Rafanelli’s objection to Exhibit 29 was limited to the hearsay nature of the evidence and its lack of admissibility under any exception to the hearsay rule. Having determined that the exhibit was not hearsay to the extent'it was offered to show Claude’s state of mind regarding the Dales’ right to use Route B, we conclude that the District Court did not abuse its discretion in admitting Exhibit 29 for that purpose.

The District Court also found that Claude’s notes were “persuasive evidence of adverse use not permissive.” In making this finding, the court went beyond using the notes as circumstantial evidence of Claude’s state of mind regarding the Dales’ right to use Route B and used Claude’s statements, such as that he had told Hal to “establish a road that we want to use and go ahead with its use” and to “cut lock or fence if necessary,” as directly showing that the Dales’ use of the access was hostile and adverse to the Carsons. In doing so, the court accepted the contents of the statements as being true and, for that purpose, the notes are hearsay. Therefore, the notes are inadmissible unless they come within an exception to the hearsay rule. As noted above, the Dales argued that the notes were admissible under the “state of mind” exception contained in Rule 803(3), M.R.Evid.

Under Rule 803(3), M.R.Evid., a statement is not excluded by the hearsay rule if it is

[a] statement of the declarant’s then-existing state of mind, emotion, sensation, or physical condition (such as intent, plan, motive, design, mental feeling, pain and bodily health), but not including a statement of memory or belief to prove the fact remembered or believed.

In Losson, we concluded that a declarant’s statements to a Naval Reserve officer that he thought his wife was going to kill him and that he was afraid of her were hearsay because they were introduced as direct evidence to prove that the declarant was afraid of his wife. We concluded, however, that the statements met the Rule 803(3), M.R.Evid., exception to the hearsay rule because they were offered to show the declarant’s state of mind at the time he sought to reenlist in the Navy. Losson, 865 P.2d at 259.

In the present case, the notes do not come within the Rule 803(3) state of mind exception to hearsay because the court interpreted the statements to be evidence of adversity, rather than an explanation of or reason behind any of Claude’s actions. In order to fall under the state of mind exception to the hearsay rule, the statements must be used to show “the declarant’s then-existing state of mind, emotion, sensation, or physical condition....” Rule 803(3), M.R.Evid. In Losson, the hearsay statement met the Rule 803(3) exception because it explained the reason behind the declarant’s subsequent actions. Here, the court did not connect Claude’s statements to a state of mind reason for any of Claude’s actions. Rather than finding that Claude told Hal to do certain things or that Claude himself did certain things because Claude thought their use of Route B was adverse to the Carsons, the court simply found that the statements themselves evidenced adverse use. We conclude that the District Court abused its discretion in admitting Claude Dale’s notes as direct evidence that the Dales’ use of Route B was adverse rather than permissive.

The question remains, however, whether the District Court’s error in admitting Exhibit 29 for this purpose was reversible error. “No civil case shall be reversed by reason of error which would have no significant impact upon the result. Where there is no showing of substantial injustice, the error is harmless and may not be used to defeat the judgment.” Paternity of W.L. (1995), 270 Mont. 484, 489-90, 893 P.2d 332, 336 (citations omitted).

Rafanelli attempted to show at trial that the access across Whiterock Ranch had always been on a permissive basis and, therefore, that the Dales could not prove the adverse use element necessary to establish a prescriptive easement. The District Court found Rafanelli’s evidence that the Carsons had granted the Dales permission to use Route B less credible than the Dales’ evidence that they did not request permission.

The evidence that the Dales had disregarded the Carsons’ two letters requesting the Dales to arrange for permission to cross the ranch, that the Carsons took no affirmative action to stop the Dales’ use of the access, and that the Dales had improved and maintained Route B, is substantial evidence supporting the court’s finding of adverse use. The further finding that Claude’s notes were evidence of adverse use was merely cumulative and not necessary to the District Court’s determination that the Dales’ use of Route B was adverse rather than permissive. Thus, the court’s finding that Claude Dale’s hearsay notes were direct evidence of adverse use did not have a significant impact on the result that the court reached and did not cause substantial injustice to Rafanelli.

We conclude that the District Court’s abuse of discretion in admitting Exhibit 29 as direct evidence of adverse use was harmless and did not constitute reversible error.

Affirmed.

CHIEF JUSTICE TURNAGE, JUSTICES TRIEWEILER, HUNT and LEAPHART concur.


source: Caselaw Access Project

author: JUSTICE TRIEWEILER JUSTICE NELSON JUSTICE LEAPHART, CHIEF JUSTICE TURNAGE,

license: Public Domain

text:
    IN THE MATTER OF THE APPLICATION FOR BENEFICIAL WATER USE PERMIT Nos. 66459-76L, Ciotti; 64988-g76L, Starner; and APPLICATION FOR CHANGE OF APPROPRIATION WATER RIGHT No. G15152-S76l, Pope.

    No. 95-080.
    Submitted December 14, 1995.
    As Amended on Denial of Rehearing September 24, 1996.
    Decided August 22, 1996.
    53 St.Rep. 777.
    278 Mont. 50.
    923 P.2d 1073.

      For Appellant: Daniel F. Decker (argued), and John B. Carter, Tribal Legal Department, Confederated Salish and Kootenai Tribes, Pablo; James H. Goetz (argued), Goetz, Madden & Dunn, Bozeman.

      For Respondent: Hon. Joseph P. Mazurek, Attorney General, Harley R. Harris (argued), Assistant Attorney General, Helena; Tim D. Hall (argued) and Donald D. MacIntyre, Special Assistant Attorneys General, Department of Natural Resources and Conservation, Helena.
   JUSTICE TRIEWEILER

delivered the Opinion of the Court.

On April 30,1985, the Confederated Salish and Kootenai Tribes of the Flathead Reservation (Tribes) filed an objection with the Montana Department of Natural Resources and Conservation (DNRC) to an application by Frank Pope, a non-Indian landowner on the reservation, for an authorization to change his point of diversion and place of use of a portion of his on-reservation water right. Between February 10,1987, and September 16,1987, the Tribes filed objections with the DNRC to three applications from non-Indian landowners on the reservation who were seeking permits for new water rights from sources on the reservation. DNRC consolidated the Tribes’ objections to all of the water permit applications, and on April 14,1992, issued a final order in which it denied the objections. On January 12, 1995, the District Court affirmed DNRC’s final order. The Tribes appeal the District Court’s order. We reverse the District Court.

On appeal we address only the issue of whether DNRC has authority to grant new water use permits on the Flathead Indian reservation prior to settlement or adjudication of the Tribes’ reserved water rights.

FACTUAL BACKGROUND

On October 5, 1984, Frank Pope, a non-Tribal member who owns land in fee on the Flathead Indian Reservation, filed an application with the Department of Natural Resources and Conservation for a permit to change the point of diversion and place of use of a portion of his existing water right. Between August 19, 1986, and August 4, 1987, three other applicants, all of whom are non-Tribal members who own land in fee on the reservation, filed applications with DNRC to obtain permits for new water rights from sources on the reservation. Following notice of each of these applications, the Confederated Salish and Kootenai Tribes filed objections and requested that the applications be denied in their entirety.

In response to the Tribes’ objections, DNRC appointed a hearing examiner and set an initial hearing date for each of the applicant’s petitions. Subsequently, the Tribes moved to dismiss one of the cases for lack of jurisdiction and requested that the hearing examiner bifurcate the jurisdictional and substantive issues. The Tribes contended that the merits of the individual applications could not be decided until it was determined whether DNRC has jurisdiction to engage in water rights proceedings on the Flathead Reservation. On November 8, 1989, the hearing examiner granted the Tribes’ motion to bifurcate and certified the Tribes’ legal objections to DNRC’s director pursuant to Rule 36.12.214, ARM.

DNRC director Karen Barclay Fagg consolidated the Tribes’ objections to all ofthe applications. On April 30,1990, Fagg issued an order and memorandum in which she concluded that DNRC has jurisdiction to regulate any surplus water on fee land on the reservation even though Tribal reserved water rights have not yet been quantified.

The consolidated cases were subsequently remanded to the hearing examiner who issued individual “Proposals for Decision for each of the Applications.” The Tribes filed exceptions to the hearing examiner’s proposed decisions based on their contention that DNRC does not have jurisdiction to regulate waters on the reservation. The DNRC director then allowed a consolidated oral argument on September 26, 1991, at which the Tribes were allowed to present exceptions. On April 14, 1992, Fagg issued DNRC’s final order which affirmed its previous April 30,1990, order and clarified that it applied to “new permits for surplus, non-reserved water, and to changes [to permits for] surplus, non-reserved water, by non-Indians on fee lands within the exterior boundaries of the Flathead Indian Reservation.”

On May 15, 1992, the Tribes simultaneously filed a petition for judicial review in the First Judicial District Court in Lewis and Clark County and a complaint for declaratory and injunctive relief in the United States District Court for the District of Montana. On July 24, 1992, DNRC filed a motion in the First Judicial District Court to affirm its final order regarding jurisdiction.

After considering various motions by the parties, the District Court held that the questions raised in the federal action should be resolved before the state issues, and ordered the state action stayed pending a decision from the federal court. The federal court, however, ordered the federal action stayed until the state issues were resolved and permitted the Tribes to reserve the federal questions pending state court resolution. The federal court expressly held that the Tribes had properly reserved the federal claims for later review.

On January 12, 1995, the District Court, after considering oral arguments from the parties, issued its decision and order affirming DNRC’s jurisdiction. The court held that DNRC has jurisdiction pursuant to the Water Use Act to issue new use permits prior to formal adjudication of existing water rights or completion of compact negotiations, that DNRC’s jurisdiction to issue such permits is not suspended by § 85-2-217, MCA, and that DNRC is not collaterally estopped by the District Court’s prior holding in United States v. Department of Natural Resources and Conservation (1st Jud. Dist. Mont. June 15, 1987), No. 50612.

DISCUSSION

On appeal we address only the issue of whether DNRC has authority to grant new water use permits on the Flathead Indian Reservation prior to settlement or adjudication of the Tribes’ water rights. Because this issue is dispositive, we need not address the Tribes’ additional contentions that (1) DNRC’s jurisdiction to issue water use permits on the reservation is suspended during the pendency of the Tribes’ negotiations with the Montana Reserved Water Rights Compact Commission pursuant to § 85-2-217, MCA, and that (2) the DNRC is collaterally estopped by the same District Court’s prior decision in United States v. Department of Natural Resources and Conservation (1st Jud. Dist. Mont. June 15, 1987), No. 50612.

This case was bifurcated prior to the DNRC hearing and the only issue decided has been whether DNRC has jurisdiction to engage in water rights proceedings on the Flathead reservation. Because this jurisdictional issue is purely legal, we review the District Court’s order to determine whether its interpretation of the law is correct. Carbon County v. Union Reserve Coal Co. (1995), 271 Mont. 459, 469, 898 P.2d 680, 686.

Title 85, Chapter 2, MCA (Montana Water Use Act) governs the administration, control, and regulation of water rights within the state of Montana. Section 85-2-101, MCA. Among other things, the Act provides for the application and issuance of permits for the appropriation of surface water. The requirements for the issuance of water use permits are specifically set forth in § 85-2-311(1), MCA, which provides that DNRC must issue a permit if an applicant proves by a preponderance of the evidence that all of the following relevant criteria are met:

(a) there are unappropriated waters in the source of supply at the proposed point of diversion;
(b) the water rights of a prior appropriator will not be adversely affected;
(e) the proposed use will not interfere unreasonably with other planned uses or developments for which a permit has been issued or for which water has been reserved ....

In this case, the Tribes maintain that given the undisputed fact that they possess senior unquantified reserved water rights, it is impossible for a water permit applicant to prove (1) that there are unappropriated waters in the source of supply pursuant to § 85-2-311(l)(a), MCA; (2) that the Tribes’ rights as a prior appropriator will not be adversely affected pursuant to § 85-2-3 ll(l)(b), MCA; and (3) that the applicant’s proposed use will not interfere with the Tribes’ planned uses for which water has been reserved pursuant to § 85-2-311(l)(e), MCA. The Tribes contend that until their reserved water rights have been quantified by a compact negotiation pursuant to § 85-2-702, MCA, or by a general inter sese water rights adjudication, an applicant cannot meet his burden of proof pursuant to § 85-2-311, MCA, and DNRC will not have jurisdiction to issue new water use permits on the reservation.

The District Court’s decision regarding DNRC’s jurisdiction to issue water use permits on the reservation pursuant to § 85-2-311(1), MCA, discussed only the applicant’s burden to meet the requirements of subsections (a) and (b). Although the Tribes contended that the existing water rights must first be adjudicated and the Tribes’ reserved water rights quantified before an applicant could prove that there is unappropriated water available for new use and that the rights of a prior appropriator would not be adversely affected, DNRC maintained, and the District Court agreed that “the applicant need only show that there is water available at the proposed point of diversion, and thus not appropriated, giving the applicant potential, adjudicable water rights to the surplus water.”

The District Court’s decision rested, in part, on its determination that “appropriated waters” do not include Indian reserved water rights, and therefore, that the Tribes are not “prior appropriators,” as contemplated by § 85-2-3 ll(l)(a) and (b). In its decision and order, the court specifically held that:

Section 85-2-102(1), MCA, defines “appropriate” as to “divert, impound, or withdraw (including by stock for stock water) a quantity of water ....” Section 85-2-301, MCA, provides that a person may not appropriate water except as provided in chapter 2 of the Water Use Act. Section 85-2-302, MCA, states that “[e]xcept as otherwise provided in (1) through (3) of 85-2-306, a person may not appropriate water ... except by applying for and receiving a permit from the department.” Section 85-2-311, MCA, sets forth the criteria for issuance of a permit. Subsection (6) provides that any appropriation contrary to the provision of the section is invalid.
Clearly, the language of these sections leads one to conclude that appropriated water is water that has been allocated by the permit process provided in that chapter, and the amount of water used should reflect the amount allocated by permit.
This conclusion addresses the Tribes’ contention that an applicant cannot prove the availability of unappropriated water unless the water supply has been quantified. The statutory scheme does not require it.

(Emphasis added.)

This Court has long recognized a distinction between state appropriative water rights and Indian reserved water rights. In State ex rel. Greely v. Confederated Salish and Kootenai Tribes of the Flathead Reservation (1985), 219 Mont. 76, 89-90, 712 P.2d 754, 762, we noted that:

State appropriative water rights and Indian reserved water rights differ in origin and definition. State-created water rights are defined and governed by state law. Indian reserved water rights are created or recognized by federal treaty, federal statutes or executive order and are governed by federal law.
Appropriative rights are based on actual use. Appropriation for beneficial use is governed by state law. Reserved water rights are established by reference to the purposes of the reservation rather than to actual, present use of the water.

(Citations omitted.)

We also distinguished reserved rights on the basis that they need not be diverted from the stream when we observed that:

The right to water reserved to preserve tribal hunting and fishing rights is unusual in that it is non-consumptive. A reserved right for hunting and fishing purposes “consists of the right to prevent other appropriators from depleting the stream waters below a protected level in any area where the non-consumptive right applies” [United States v.] Adair [(9th Cir. 1983)], 723 F.2d [1394,] 1411 [cert, denied, 467 U.S. 1252, 104 U.S. 3536 82 L.Ed.2d 841 (1984)].
The Supreme Court has also held that under the implied-reservation-of-water-rights doctrine, Indians are entitled to sufficient water “to develop, preserve, produce or sustain food and other resources of the reservation, to make it livable.” Arizona v. California [(1963)], 373 U.S. [546,] 599-600, [83 S.Ct. 1468, 1497-98, 10 L.Ed.2d 542]. “[I]ndian treaty rights to a natural resource that once was thoroughly and exclusively exploited by the Indians secured so much as, but no more than, is necessary to provide the Indians with a livelihood — that is to say, a moderate living.” Washington v. Fishing Vessel Ass’n [(1979)], 443 U.S. [658,] 686, [99 S.Ct. 3055, 3075, 61 L.Ed.2d 823],
The Winters Court held that reserved water on the Fort Belknap Reservation could be beneficially used for “acts of civilization” as well as for agricultural purposes. Winters v. [United States (1908)], 207 U.S. [564,] 576, [28 S.Ct. 207, 211, 52 L.Ed. 340]. It may be that such “acts of civilization” will include consumptive uses for industrial purposes. We have not found decisive federal cases on the extent of Indian water rights for uses classed as “acts of civilization.”
It is clear, however, that Indian reserved water rights may include future uses. Arizona v. California, 373 U.S. at 600-01, 83 S.Ct. at 1498; United States v. Ahtanum Irrigation District (9th Cir. 1964), 330 F.2d 897, 914. Most reservations have used only a fraction of their reserved water. National Water Commission, Water Policies for the Future 51-61 (1973). However, reserved rights may reflect future need as well as present use. For example, the “practicallydmgable acreage” standard applies to future irrigation or reservation land, not present irrigation practices and current consumptive uses.

Greely, 219 Mont, at 93-94, 712 P.2d at 764-65.

In addition, the Montana Water Use Act, as amended in 1985, reflects the distinction between federal and Indian reserved water rights and state-created appropriative rights. See, e.g., § 85-2-224, MCA (statement of claim for federal reserved water rights); § 85-2-234(2), MCA (terms of negotiated Indian water rights compact must be included in final decree without alteration); § 85-2-234(3), MCA (final decree must establish existing rights and priorities of Indian tribe possessing water rights arising under federal law); and §§ 85-2-701 through -705, MCA (establishing reserved water rights compact commission to negotiate with Indian tribes to quantify Indian reserved water rights).

Therefore, an applicant’s proof in satisfaction of § 85-2-3 ll(l)(a) and (b), MCA, does not satisfy the requirement of § 85-2-311(l)(e), MCA, that his “proposed use will not interfere unreasonably with other planned uses or developments for which a permit has been issued or for which water has been reserved.”

Because of the nature of Indian reserved water rights and because of the fact that the Tribes’ rights have not yet been quantified, the Tribes contend that an applicant cannot meet this statutory burden and that DNRC cannot issue a permit consistent with the Montana Water Use Act’s statutory scheme.

Although the argument was neither made in the District Court nor in its brief on appeal, DNRC asserted during oral argument, without citation to authority, that § 85-2-311(l)(e), MCA, does not pertain to Indian reserved water rights, but only to those rights reserved by the state or the United States pursuant to § 85-2-316, MCA. However, there is no basis from the plain language of § 85-2-311, MCA, for making that distinction. Furthermore, were we to construe § -311 to exclude Indian reserved rights as opposed to all others, we would be ignoring the admonition in Greely which served as the very premise for our conclusion that the Montana Water Use Act was adequate on its face to adjudicate Indian reserved water rights. There we stated:

We presume that the Water Court will not apply these code sections in an improper manner to the claimants of Indian reserved water rights. Federal Indian law must be applied in these areas as well.
In a similar manner, it may be contended that Section 85-2-316, MCA, which limits the reservation of future uses to certain river basins, sets forth an improper limitation on Indian reserved rights. We also presume that the Water Court will not apply these statutes without regard to controlling federal law on Indian water rights.
We recognize that the Water Use Act of Montana does not explicitly state that the Water Court shall apply federal law in adjudicating Indian reserved rights. However, we conclude that is not fatal to the adequacy of the Act on its face. We hold that state courts are required to follow federal law with regard to those water rights.

Greely, 219 Mont. at 94-95, 712 P.2d at 765-66.

DNRC farther maintains that even if § 85-2-311(l)(e), MCA, does contemplate Indian reserved water rights, an applicant for a water use permit may still, prior to quantification of the Tribes’ reserved rights, prove that his proposed use will not interfere with those rights. DNRC contends that, because any new water rights permits it issues are subordinate to the senior rights of the Tribes, the Tribes would not be prejudiced by the issuance of such permits.

It is undisputed that the Confederated Salish and Kootenai Tribes possess reserved water rights. Winters v. United States (1908), 207 U.S. 564, 28 S.Ct. 207, 52 L.Ed 340; Greely, 219 Mont. 76, 712 P.2d 754. The Tribes and the State of Montana are presently involved in formal compact negotiations to quantify the Tribes’ reserved rights on the reservation pursuant to §§ 85-2-701 through -705, MCA. Until the formal negotiations are resolved, however, the extent of the Tribes’ reserved water rights remains unknown. Although it is likely that the Tribes’ rights are pervasive, reserved water rights are difficult to quantify. See United States v. Alexander (9th Cir. 1942), 131 F.2d 359, 360 (stating that “The [Hellgate] treaty impliedly reserved all waters on the [Flathead] reservation to the Indians”); Greely, 219 Mont. at 92, 712 P.2d at 764 (stating that “Winters [Indian reserved water] rights are difficult to quantify”). It is well-established, however, that Indian reserved rights incorporate both consumptive and non-consumptive uses, both implicit and explicit uses, and both present and future uses for reservation purposes. Greely, 219 Mont. at 93, 94, 98, 712 P.2d at 764, 765, 768. In addition, the Tribes’ reserved water rights will presumably include water for agricultural purposes, water for tribal hunting and fishing, and water for “acts of civilization.” Greely, 219 Mont. at 92-93, 712 P.2d at 764-65. Water for agricultural purposes includes enough water to “irrigate all the practically irrigable acreage on the reservation.” Greely, 219 Mont. at 92,712 P.2d at 764 (quoting Arizona v. California (1963), 373 U.S. 546, 600, 83 S.Ct. 1468, 1498, 10 L.Ed.2d 542). Non-consumptive water use for tribal hunting and fishing rights “consists of the right to prevent other appropriators from depleting the stream waters below a protected level in any area where the non-consumptive right applies.” Greely, 219 Mont. at 93, 712 P.2d at 764 (quoting United States v. Adair (9th Cir. 1983), 723 F.2d 1394, 1411). See also Joint Bd. of Control v. United States (9th Cir. 1987), 832 F.2d 1127, 1131-32, cert, denied (1988), 486 U.S. 1007, 108 S.Ct. 1732, 100 L.Ed.2d 196 (stating that the Tribes’ aboriginal fishing rights secured by treaty include the right to maintain instream flows and reservoir pools at levels designed to protect tribal fisheries, regardless of the effect on junior claimants to reservation waters). Water for “acts of civilization,” includes water to “develop, preserve, produce or sustain food and other resources of the reservation, to make it liveable,” and may also include consumptive uses for industrial purposes. Greely, 219 Mont. at 93, 712 P.2d at 764, 765 (quoting Arizona v. California (1963), 373 U.S. 546, 599-600), 83 S.Ct 1468, 1497-98, 10 L.Ed.2d 542).

Although the scope and extent of the Tribes’ reserved water rights have not been resolved and are not at issue in this case, the elusive nature of Indian reserved water rights underscores both the difficulty of quantifying those rights and the difficulty a water permit applicant would have proving that his proposed use will not interfere with those rights. Clearly the only way to determine if an applicant’s use will unreasonably interfere with the Tribes’ reserved water rights is to decide how much water is reserved and how much water is available. The Tribes maintain that such a determination obviously requires quantification of their reserved water rights. DNRC maintains, however, that “the DNRC process rarely requires that the ultimate scope of an existing right be known.” According to DNRC, § 85-2-313, MCA, which provides that a permit is provisional and subject to a final determination of existing water rights, is intended to permit the issuance of water use permits prior to the adjudication of existing rights.

Nothing in that section, however, relieves an applicant of his burden to meet the statutory requirements of § 85-2-311, MCA, before DNRC may issue that provisional permit. Instead of resolving doubts in favor of appropriation, the Montana Water Use Act requires an applicant to make explicit statutory showings that there are unappropriated waters in the source of supply, that the water rights of a prior appropriator will not be adversely affected, and that the proposed use will not unreasonably interfere with a planned use for which water has been reserved. Section 85-2-311, MCA. As we stated, the latter requirement is critical to our conclusion in Greely that the Act must be applied consistently with federal Indian law.

A reading of the Water Use Act which did not recognize the clear mandates of § 85-2-311, MCA, would promote the uncontrolled development of a valuable natural resource which, as we recognized in Montana Power Co. v. Carey (1984), 211 Mont. 91, 96, 685 P.2d 336, 339, would “contradict[] the spirit and purpose underlying the Water Use Act.”

The Montana Water Use Act, our prior decision in Greely, and the decisions of the federal courts make it clear that an applicant for a permit to use water within the exterior boundaries of the Flathead Reservation must prove that his proposed use does not unreasonably interfere with the Tribes’ reserved water rights. We hold that given the nature of Indian reserved water rights such a showing cannot be made until the Tribes’ rights are quantified by a compact negotiation pursuant to § 85-2-702, MCA, or by a general inter sese water rights adjudication. Because an applicant’s burden of proof pursuant to § 85-2-311(l)(e), MCA, may not be satisfied until the Tribes’ reserved water rights are quantified, we further hold that DNRC does not have authority to grant water use permits on the reservation until that quantification is complete.

Accordingly, we reverse the order of the District Court which held that DNRC has jurisdiction pursuant to the Water Use Act to issue new use permits prior to formal adjudication of the Tribes’ reserved water rights or completion of compact negotiations.

JUSTICES HUNT, GRAY and NELSON concur.

JUSTICE NELSON

specially concurs.

I concur with the analysis and result of our decision and have, accordingly, signed the opinion. In doing so, I, nevertheless, question the necessity for our taking this approach, given the fact that in 1987, DNRC unsuccessfully litigated the exact issues that are now before us in the same District Court. Under such circumstances, the doctrine of collateral estoppel should, and in my view, does preclude DNRC from relitigating those very same issues again here.

The doctrine of collateral estoppel or issue preclusion bars a party against whom the claim is asserted from relitigating an issue that the party previously litigated. Peschel v. Jones (1988), 232 Mont. 516, 521, 760 P.2d 51, 54. The bar extends to all questions essential to the judgment which were determined by a prior judgment. Haines Pipeline Const. v. Montana Power (1994), 265 Mont. 282, 288, 876 P.2d 632, 636. Collateral estoppel refers to a preclusion of issues and is distinct from res judicata which refers to a preclusion of claims. Peschel, 760 P.2d at 54; see also Boyd v. First Interstate Bank (1992), 253 Mont. 214, 218, 833 P.2d 149, 151.

We apply a three-prong test to determine whether collateral estoppel applies in a given case:

1) Was the issue decided in the prior adjudication identical with the one presented in the action in question?
2) Was there a final judgment on the merits?
3) Was the party against whom the plea is asserted a party or in privity with a party to the prior adjudication?

Peschel, 760 P.2d at 54 (quoting Aetna Life Ins. Co. v. McElvain (1986), 221 Mont. 138, 146, 717 P.2d 1081, 1086). This Court has further held that upon an affirmative answer to all three questions, collateral estoppel bars litigation regarding an issue in trial which was previously litigated in either a civil or criminal trial. Peschel, 760 P.2d at 54.

The Tribes contend that the issue of DNRC’s authority to grant new water use permits on the Flathead Indian Reservation prior to settlement or adjudication of the Tribes’ reserved water rights has been previously litigated in a civil trial in Montana district court. On June 15,1987, the Montana First Judicial District Court, the Honorable Gordon R. Bennett (now retired), presiding, entered its opinion and order reversing DNRC’s final decision to issue a provisional permit to appropriate water to Don Brown and Jerry Wallem. See United States and Montana Power Co. v. Department of Natural Resources (Don Brown) (D. Mont. June 15, 1987), No. 50612. Specifically, the court construed § 85-2-311, MCA, and held that DNRC did not have the authority to issue a permit for a new water application when questions of senior conflicting claims had been raised.

In Don Brown, a junior claimant sought a permit for a new water appropriation. The Montana Power Company and the United States Bureau of Reclamation timely objected on the grounds that there were no unappropriated waters available and that their rights as prior appropriators would be adversely affected by DNRC’s granting a new permit. DNRC contended, as it did in the instant case, that the permits would not adversely affect the rights of the prior appropriators. The court stated that there is:

only one way to determine if an unappropriated water right exists in a source of supply: decide how much water is available and how much of it has been appropriated. This obviously requires quantification of existing rights. There is, likewise, only one way to determine whether the water rights of prior appropriators will be adversely affected by additional appropriation. You must begin by determining what the water rights of the prior appropriators are. In either case, the need to determine existing water rights is inescapable and authority to make such a determination is, and has been since 1973, exclusively in the district or water courts.

The court, therefore, found that DNRC did not have the authority to issue the permits under § 85-2-311, MCA, because without a quantification of existing water rights, DNRC was unable to determine if the applicant met the criteria set forth in § 85-2-311, MCA, requiring the applicant to show that there were unappropriated waters in the source of supply and that the water rights of prior appropriators would not be adversely affected. The parties to Don Brown, including DNRC, reached a stipulation and did not appeal the district court’s findings in its order and opinion. Therefore, the judgment of the district court is final and subject to the doctrine of collateral estoppel.

DNRC argues that the doctrine of collateral estoppel does not apply in the instant case because the issues raised by the Tribes do not meet the first prong of the test. Specifically, DNRC contends that the issues decided in the Don Brown case are not identical to those presented in the instant case because the Montana Legislature made significant changes to § 85-2-311, MCA, in 1989.1 disagree. In Don Brown, the district court construed the 1985 version of § 85-2-311, MCA, which provided:

(1) Except as provided in subsections (2) through (4), the department shall issue a permit if the applicant proves by substantial credible evidence that the following criteria are met:
(a) there are unappropriated waters in the source of the supply
(b) the water rights of a prior appropriator will not be adversely affected;
(e) the proposed use will not interfere unreasonably with other planned uses or developments for which a permit has been issued or for which water has been reserved.

Section 85-2-311, MCA (1985). Section 85-2-311, MCA (1993), the statute applicable to the instant case provides:

(1) Except as provided in subsections (3) and (4), the department shall issue a permit if the applicant proves by a preponderance of the evidence that the following criteria are met:
(a) there are unappropriated waters in the source of supply at the proposed point of diversion ...
(b) the water rights of a prior appropriator will not be adversely affected ...
(e) the proposed use will not interfere unreasonably with other planned uses or developments for which a permit has been issued or for which water has been reserved;

[Emphasis added to illustrate changes from the 1985 statute.] In 1989 and 1993, the legislature amended § 85-2-311, MCA, to require a preponderance of the evidence standard of proof rather than a substantial credible evidence standard and to qualify the source of supply. However, the legislature did not make such substantial amendments to § 85-2-311, MCA, so as to alter the issues discussed by the District Court construing these statutory provisions. In fact, the issues decided in the Don Brown case are identical to those presented in the action in question and meet the first prong of the collateral estoppel inquiry.

Moreover, the opinion and order issued by the court in Don Brown qualifies as a final judgment on the merits and therefore meets the second prong of the collateral estoppel inquiry. Finally, DNRC was both a party in the Don Brown adjudication and a party in the instant case and thereby satisfies the third prong of the collateral estoppel inquiry. Thus, in this case, each prong of the three part test is satisfied.

In Don Brown, the district court already adjudicated and decided issues identical to the ones presented to this Court in the instant case. The doctrine of collateral estoppel renders that court’s decision dis-positive. Accordingly, while I agree with the analysis and result of our opinion, the First Judicial District Court had resolved the issues in a final judgment rendering relitigation of the very same issues unnecessary. Under such circumstances, our decision here should not come as any great surprise.

JUSTICE LEAPHART,

specially concurring.

I concur in the result reached by the Court. However, while the Court has concluded that the applicants have failed to satisfy the Montana Water Use Act, specifically, § 85-2-311, MCA, I would hold that under the principles of tribal sovereignty, the state has no jurisdiction to issue water permits on the Flathead Reservation. Montana has no jurisdiction and no regulatory authority over tribal waters until tribal sovereignty has been waived pursuant to the McCarran Amendment, 43 U.S.C. § 666. In the absence of state jurisdiction to regulate or administer tribal water, compliance with the Water Use Act is immaterial.

In the administrative hearing on the Tribes’ motion to dismiss for lack of jurisdiction before the Department of Natural Resources and Conservation (DNRC), the Tribes initially argued lack of state jurisdiction based, in part, on the McCarran Amendment. In appealing DNRC’s final order and simultaneously filing a complaint for relief in the United States District Court for the District of Montana, the Tribes reserved the federal questions, including the jurisdictional issue raised by the McCarran Amendment, for the federal court. For purposes of “informing” this Court, the Tribes set forth the McCarran Amendment jurisdictional issue as follows:

The reach of the McCarran Amendment’s waiver of sovereign immunity, however, extends only to state processes involving a general stream adjudication. See Dugan v. Rank, 372 U.S. 609, [83 S.Ct. 999, 10 L.Ed.2d 15] (1963). Obviously the present procedure, by which the DNRC proposes administratively to grant individual new water rights on a case-by-case basis does not fall within the McCarran Amendment’s waiver.

Having raised the specter of lack of state regulatory jurisdiction, the Tribes nonetheless contend that the jurisdictional issue has been reserved for resolution in the federal district court and that the only issue before this Court is the interpretation of Montana statutes. The Tribes, however, cannot run with the hare and hold with the hounds on the question of jurisdiction. John Lyly, Euphus (1579). Regardless of whether the parties seek to have us resolve the question of jurisdiction, we must do so. In re Marriage of Miller (1993), 259 Mont. 424, 426-27, 856 P.2d 1378, 1380. We cannot address the question of whether the applicants can comply with the requirements of the Water Use Act without making a threshold determination that the state had jurisdiction to apply the Water Use Act to the tribal waters in the first instance.

Indian reserved water rights are creatures of federal law and as such their existence and application are independent of state laws. Winters v. United States (1908), 207 U.S. 564, 28 S.Ct. 207, 52 L.Ed. 340. By virtue of their federal origin, Indian reserved water rights preempt any rights determined by state forums. Water use on a federal or Indian reservation is not subject to state regulation absent explicit federal recognition of state authority to do so. Federal Power Commission v. Oregon (1955), 349 U.S. 435, 75 S.Ct. 832, 99 L.Ed. 1215; Colville Confederated Tribes v. Walton (9th Cir. 1981), 647 F.2d 42, 52, cert, denied 454 U.S. 1092, 102 S.Ct. 657, 70 L.Ed.2d 630. Such recognition of state authority can be found in the McCarran Amendment, enacted in 1952, which allows joinder of the United States in state court adjudications of water rights, and subsequently in the states’ administration of such water rights, in river systems where the government owns rights. 43 U.S.C. § 666. The McCarran Amendment provides that:

Consent is hereby given to join the United States as a defendant in any suit (1) for the adjudication of rights to the use of water of a river system or other source, or (2) for the administration of such rights, where it appears that the United States is the owner of or is in the process of acquiring water rights by appropriation under State law, by purchase, by exchange, or otherwise, and the United States is a necessary party to such suit. ...

The United States Supreme Court has concluded that the McCarran Amendment includes Indian reserved water rights, thus, the states have jurisdiction to adjudicate Indian water rights. Colorado River Water Conservation Dist. v. United States (1976), 424 U.S. 800, 809-10, 96 S.Ct. 1236, 1242, 47 L.Ed.2d 483, 493-94. The suit at issue in Colorado River was part of Colorado’s ongoing comprehensive water adjudication. The Court was persuaded by the policy evinced in the McCarran Amendment that piecemeal adjudication of water rights in a river system should be avoided. Colorado River, 424 U.S. at 819, 96 S.Ct. at 1247.

The consent to jurisdiction given by the McCarran Amendment bespeaks a policy that recognizes the availability of comprehensive state systems for adjudication of water rights as the means for achieving these goals.

Colorado River, 424 U.S. at 819, 96 S.Ct. at 1247.

In a sequel to Colorado River, the United States Supreme Court restated the important federal interest in allowing all water rights on a river system to be adjudicated in a single comprehensive state proceeding rather than piecemeal litigation. Arizona v. San Carlos Apache Tribe (1983), 463 U.S. 545, 551, 103 S.Ct. 3201, 3205, 77 L.Ed.2d 837, 846.

The McCarran Amendment, as interpreted in Colorado River, allows and encourages state courts to undertake the task of quantifying Indian water rights in the course of comprehensive water adjudications. Although adjudication of those rights in federal court instead might in the abstract be practical, and even wise, it will be neither practical nor wise as long as it creates the possibility of duplicative litigation, tension and controversy between the federal and state forums, hurried and pressured decisionmaking, and confusion over the disposition of property rights.

San Carlos Apache, 463 U.S. at 569, 103 S.Ct. at 3215 (emphasis added). However, the Court added a caveat to the state courts’ adjudication of Indian water rights.

[0]ur decision in no way changes the substantive law by which Indian rights in state water adjudications must be judged. State courts, as much as federal courts, have a solemn obligation to follow federal law. Moreover, any state-court decision alleged to abridge Indian water rights protected by federal law can expect to receive, if brought for review before this Court, a particularized and exacting scrutiny commensurate with the powerful federal interest in safeguarding those rights from state encroachment.

San Carlos Apache, 463 U.S. at 571, 103 S.Ct. a 3216. Thus, in these and other cases, federal and state courts have clearly established that states may join the United States and Indian tribes in comprehensive water rights adjudications that include all claimants along a river. See United States v. District Court in & for Water Div. No. 5 (1971), 401 U.S. 527, 91 S.Ct. 1003, 28 L.Ed.2d 284; United States v. District Court for Eagle County (1971), 401 U.S. 520, 91 S.Ct. 998, 28 L.Ed.2d 278; Dugan v. Rank (1963), 372 U.S. 609, 83 S.Ct. 999, 10 L.Ed.2d 15; In re Snake River Basin Water System (Idaho 1988), 764 P.2d 78, cert, denied 490 U.S. 1005, 109 S.Ct. 1639, 104 L.Ed.2d 155 (1989); Elephant Butte Irrigation v. Regents of New Mexico (N.M. App. 1993), 849 P.2d 372, 375-80.

In Colville Confederated Tribes, the Ninth Circuit Court of Appeals addressed the question of when states may exert jurisdiction over water on an Indian reservation. Colville Confederated Tribes, 647 F.2d 42. The court held that state water laws are not controlling on an Indian reservation. Colville Confederated Tribes, 647 F.2d at 53. Especially applicable in the instant case, the court quoted United States v. McIntire (9th Cir. 1939), 101 F.2d 650, 654:

[T]he Montana statutes regarding water rights are not applicable, because Congress at no time has made such statutes controlling in the Reservation. In fact, the Montana enabling act specifically provided that Indian lands within the limits of the state, “shall remain under the absolute jurisdiction and control of the Congress of the United States.”

Colville Confederated Tribes, 647 F.2d at 53. The court also noted that it did not perceive the McCarran Amendment as expanding the state’s regulatory powers over water on a federal reservation.

Later, in United States v. Anderson, the Ninth Circuit revisited the issue of state authority to regulate water on Indian reservations. United States v. Anderson (9th Cir. 1984), 736 F.2d 1358. In Anderson, the court held that because the Indian reserved water rights in question had been quantified and were under the protection of a federal water master, the state of Washington could exercise its regulatory jurisdiction over the use of surplus, non-reserved Chamokane Basin waters by non-members on non-Indian fee lands within the Spokane Reservation. Anderson, 736 F.2d at 1366. Central to the Ninth Circuit’s decision was the fact that:

[T]he interest of the state in exercising its jurisdiction will not infringe on the tribal right to self-government nor impact on the Tribe’s economic welfare because those rights have been quantified and will be protected by the federal water master.

Anderson, 736 F.2d at 1366.

A year later, the Ninth Circuit restated the proposition that the McCarran Amendment waives immunity only after a general adjudication of stream water rights has been made. South Delta Water Agency v. United States (9th Cir. 1985), 767 F.2d 531, 541. Determining that a court cannot adjudicate the administration of water rights until it determines what those rights are, the court held that:

Because there has been no prior adjudication of relative general stream water rights in this case, there can be no suit “for the administration of such rights” within the meaning of the McCarran Amendment.

South Delta, 767 F.2d at 541. Consequently, as the Tribes argue, albeit equivocally, a general stream adjudication, under subsection (1), must precede administration of federal or Indian water rights under subsection (2) of the McCarran Amendment. South Delta, 767 F.2d at 541.

In the instant case, DNRC’s issuance of new water permits to non-Indians on the Flathead Reservation was not part of a general stream adjudication. See Dugan, 372 U.S. at 618, 83 S.Ct. at 1005. Thus, as the Tribes point out “the present procedure, by which the DNRC proposes administratively to grant individual new water rights on a case-by-case basis does not fall within the McCarran Amendment’s waiver.”

In passing the Indian and Federal Water Rights Act, §§ 85-2-701 through -705, MCA, the Montana Legislature recognized the unique status of Indian reserved water rights within the state adjudication system. The Act allows Montana Tribes and the Montana Reserved Water Rights Compact Commission to negotiate a resolution of Indian claims rather than enter into a full McCarran inter sese adjudication. The Tribes’ negotiations with the Montana Reserved Water Rights Compact Commission are ongoing and not yet complete. Accordingly, pursuant to § 85-2-217, MCA, “all proceedings to generally adjudicate reserved Indian water rights and federal reserved water rights of those Tribes and federal agencies which are negotiating are suspended.” Until the senior tribal water rights have been identified and quantified through negotiation or adjudication, excess or surplus waters that could subsequently be available for appropriation under the Water Use Act, are unidentifiable and unquantifiable. Thus, until the compact negotiations conclude, DNRC cannot, under the McCarran Amendment, administer water permits for those drainages that are affected by reserved Indian water rights.

Consequently, in the absence of a completed adjudication or negotiation of Indian water rights, the McCarran Amendment’s waiver of tribal sovereign immunity for the purposes of “administering” those rights is not triggered. Until there has been a quantification of tribal water rights, DNRC does not have jurisdiction under the McCarran Amendment to “administer” any excess waters through issuing permits — even if those permits are provisional and subject to future adjudication. See § 85-2-313, MCA.

Accordingly, I concur in the Court’s conclusion that DNRC cannot grant a permit to use water on the Flathead Reservation until the-Tribes’ water rights are first adjudicated and quantified. However, while the Court bases its decision on the applicants’ failure to satisfy the Water Use Act, § 85-2-311(l)(e), MCA, I conclude that the Montana Water Use Act does not come into play unless, pursuant to the jurisdictional prerequisites of the McCarran Amendment, the Tribes’ sovereignty is waived. That is, until there has been a completed adjudication or negotiation of Indian water rights, the state of Montana has no ability to quantify those rights and no jurisdiction to administer potentially surplus waters through the issuing of permits, provisional or otherwise.

CHIEF JUSTICE TURNAGE,

dissenting.

I concur in the majority’s starting premise that the Tribes possess a reserved water right which is unique and which has not yet been quantified. However, I must dissent from the majority’s conclusion that, under Montana statutes, this right of the Tribes requires a shutdown of the water permitting process in Montana.

Section 85-2-217, MCA, provides that adjudication of Indian reserved water rights and federal reserved water rights shall be suspended during negotiations for the conclusion of a water compact. That provision recognizes the critical importance of the compacting process in determining reserved water rights in Montana, and guarantees that adjudication will accommodate the compacting process. Unquestionably, the best solution to federal reserved water rights is through compact negotiations.

The grant of a water use permit is not an adjudication of water rights, however. Under § 85-2-313, MCA, the DNRC’s granting of a provisional water permit is not a final determination of water rights. Granting a water use permit under § 85-2-311, MCA, cannot deprive any Tribe of its prior rights, due to the provisional nature of the permits.

The majority opinion will result in a shutdown of not only water right adjudication, but also the preliminary decree process throughout the state, until the compacting process is completed. Counsel for the Tribes admitted as much at oral argument. Although the Tribes have argued that this decision applies only to the Flathead Indian Reservation, there is hardly a watershed in Montana which is not impacted by water rights of one or more of the seven Indian reservations located within the state’s boundaries. As the District Court noted, this result entirely defeats the purpose of the permit process, denying landowners after 1973 the right to any new water use or change of use until the adjudication process is completed.

The majority relies upon § 85-2-311(1), MCA, to reach its conclusion that DNRC does not have jurisdiction to issue new use permits prior to quantification of the Tribes’ reserved water rights by adjudication or compact negotiations. That statute provides, in relevant part:

[T]he department shall issue a permit if the applicant proves by a preponderance of evidence that the following criteria are met:
(a) there are unappropriated waters in the source of supply at the proposed point of diversion:
(b) the water rights of a prior appropriator will not be adversely affected;
(e) the proposed use will not interfere unreasonably with other planned uses or developments for which a permit has been issued or for which water has been reserved [.]

The majority concludes that subsection (l)(e) above requires proof that the proposed use will not interfere with Indian reserved water rights. Because Indian reserved water rights have not yet been quantified, the majority reasons, such proof is impossible.

DNRC has explained, however, that the language “other planned uses or developments for which a permit has been issued or for which water has been reserved” in subsection (l)(e) refers to § 85-2-316, MCA, “Reservation of waters.”

The state or any political subdivision or agency of the state or the United States or any agency of the United States may apply to the department to reserve waters for existing or future beneficial uses or to maintain a minimum flow, level, or quality of water throughout the year or at periods or for a length of time that the department designates.

Section 85-2-316(1), MCA. The statute goes onto provide an extensive description of the process and procedure for obtaining a reservation of water, including the basins in which water may be reserved, the procedure for processing applications and granting reservations, limitations on reservations, the priority of appropriation of a water reservation, and transfers of reservations.

The reference in § 85-2-311(l)(e), MCA, to “other planned uses or developments for which a permit has been issued or for which water has been reserved” relates logically and naturally to the extensive statutory scheme a few sections thereafter for reservation of waters. It relates considerably less logically or naturally to the reserved water rights of Indian tribes, in connection with which the language “for which a permit has been issued” simply makes no sense. I conclude that the subsection (l)(e) language upon which the Tribes rely for their argument of statutory noncompliance does not address Indian reserved water rights.

The majority opinion states that if § 85-2-311(l)(e), MCA, does not address Indian reserved water rights, then the statute ignores such rights in contravention of federal law and this Court’s opinion in Greely. There is nothing in the extremely limited factual record in this case to indicate that the proposed permit use by the applicants will interfere with Indian reserved water rights. If the statutory language lacks clarity as to the necessity for consideration of Indian reserved water rights in the permitting process, that concern should be addressed by statutory revision.

The Don Brown case out of the First Judicial District Court, discussed in Justice Nelson’s concurring opinion, does not control by res judicata or collateral estoppel because the statutes were amended after Don Brown was decided. A claim of existing right is no longer prima facie proof of its content for all purposes, but only for “purposes of adjudicating rights pursuant to this part.” Section 85-2-227, MCA. Section 85-2-311, MCA, additionally has been amended since Don Brown, to require that there must be unappropriated waters in the source of supply at the proposed point of diversion and during the period in which the applicant seeks to appropriate. In short, the ruling in Don Brown as to the effect of the prima facie statute on permit processing has been superseded by legislative amendment.

The jurisdictional question discussed in Justice Leaphart’s concurring opinion is not presently before this Court. The Tribes have reserved the federal questions for their action for declaratory and injunctive relief in the United States District Court for the State of Montana, Confederated Salish and Kootenai Tribes v. Simonich, No. CV-92-54-M-CCL.

The permit process was intended to provide for new water use prior to adjudication. Now we are left with no such process. This denies landowners after 1973 the right to any new water use or change of use until the adjudication process is completed. This result is not in harmony with the purposes of the Water Use Act to “coordinate the development and use of the water resources of the state so as to effect full utilization, conservation, and protection of its water resources” and to “promote the prosperity and welfare of the people of Montana through the sound management of the state’s water resources.” Sections 85-1-101(3) and -103, MCA. The result reached by the majority in this case certainly was not the intended purpose of the Water Use Act, and I do not believe it is a necessary result of the statutes here interpreted.

I therefore respectfully dissent.

JUSTICE ERDMANN:

I concur in the dissent of Chief Justice Turnage.

      . The Tribes have challenged DNRC’s jurisdiction to issue new water use permits pursuant to § 85-2-311, MCA, and its authority to authorize changes of existing appropriation rights pursuant to § 85-2-402, MCA. Because an applicant’s burden of proof is essentially the same under either statute, this Court will focus its discussion on the requirements of § 85-2-311, MCA. Our decision, however, applies equally to both § 85-2-311, MCA, and § 85-2-402, MCA.

      . The federal district court granted the Tribes an England reservation thereby allowing the Tribes to litigate their state claims in state court and then return to federal court to litigate the question of whether they are constitutionally exempt from the Montana Water Use Act. England v. Louisiana State Bd. of Medical Examiners (1964), 375 U.S. 411, 84 S.Ct. 461, 11 L.Ed.2d 440. In affirming that reservation, the Ninth Circuit held that the intent of such an England reservation is to allow the federal court to await the state court litigation and then, if necessary, decide the federal claims "in light of the state court’s rulings." Confederated Salish v. Simonich (9th Cir. 1994), 29 F.3d 1398, 1406. The federal courts, however, have failed to reckon with the fact that the federal question (whether the tribes are constitutionally exempt from the Montana Water Use Act) presents a threshold question of jurisdiction; i.e., whether the state of Montana has any jurisdiction to apply its Water Use Act in the first instance. That fundamental question of state jurisdiction must be addressed first. The state courts cannot proceed to interpret the Water Use Act vis a vis the tribal rights unless it is first determined that the state of Montana has jurisdiction to apply the Act to tribal waters. Secondly, the state’s interpretation of the Water Use Act will shed no "light" on the resolution of the issue which has been reserved for federal court. That is, whether the tribes, through their sovereignty, are exempt from the Act. It is the state court which should be awaiting resolution of the jurisdictional question in federal court, not vice versa.