Dory Lakes POA vs. Gilpin County has day in court
Over water storage and use issue
Dory Lakes Property Owners Association (POA) and Gilpin County each came out of Judge Fred Rodgers’ courtroom on September 10, 2009, with one thing they wanted and one they did not. After negotiations failed, the two parties were at loggerheads over a water lease arrangement that dates back to 1996. At that time the POA agreed to lease the use of their private lake to the County for up to 30 acre-feet of water storage (one acre-foot equals 325,000 gallons), at the rate of $300 per acre-foot (with adjustments for inflation) or a minimum of $4,500 per year. The arrangement assured a stable water level for recreational use of the lake by POA members and benefitted the County as a convenient place to store water needed for local use.
The County has used the water to serve the Justice Center, Community Center, Exhibit Barn, Public Health Building, Ball Field Irrigation and Road Maintenance projects. Most of the water is pumped from wells by the Justice Center and the County’s water stored in Dory Lake is sent downstream to replace that used from the Ralston Creek Watershed. To that end, the County installed a pump and piping (outlet works) under POA property and a county road running through POA property. The POA, noting their lease stipulates water use for the Justice Center but not the additional facilities and uses, objected to the amount of water being sent downstream, shrinking their lake. They also made claim the County had not obtained permission, per the lease, for continued maintenance of the pump and pipeline on POA property. The County took the stand they were using no more than the agreed-upon 30-acre feet and could use it as they wished. They maintained the lease and their rental payment included an easement for all features of the equipment.
As the trial started, more than 25 people filled the seats in the courtroom, most of them POA members. Judge Rodgers heard two days of testimony from four expert witnesses from the POA and two more from the County on September 8 and 9, and then issued his decision on September 10th. On the matter of water use, he granted the County’s motion for dismissal because the statute of limitations barred continuing. He determined the POA knew about the water use as early as 1998, based on correspondence from the County’s attorney at that time. Per statute, the POA needed to act within three years, making the current action too late.
Regarding the access easement for the County’s equipment, Judge Rodgers found the lease was missing the additional document describing easement so there was no evidence the County had ever sought or obtained POA permission before constructing their outlet works. Nor is there language in the lease expressly concerning payment for the easement. The Judge made note the lease is “not tightly drafted,” and referenced a 2007 “standstill agreement” between the POA and County because State water officials threatened to cut off the County’s Dory Lake water storage and uses unless the required amount of water was delivered to the Ralston Creek watershed for downstream users. That agreement allowed the County to construct and install the outlet works without compensation to the POA at that time. The parties were to resolve the issues related to the outlet works at a later date. Judge Rodgers, who described the language of the lease as ambiguous, inadequate and a “linguistic muddle,” found that language insufficient to support the County’s claim that their payment for water storage included the easement for maintenance of the outlet works. “The parties may have been aware that an outlet works was a necessary prerequisite to maintaining water storage rights, but inexplicably they either failed to make provision in the lease outlining the steps necessary to meet this requirement, or where the steps were outlined, failed to follow them,” he concluded.
The decision leaves the County in a position to use the water as it deems fit – once it obtains permission from the POA for the outlet works access easement. The POA originally filed this lawsuit over a year ago. DLPOA attorney Bruce Smith said they believe the judge’s decision was in error and they may appeal, although that hasn’t been decided, yet. Gilpin County Attorney Jim Petrock said a DLPOA appeal could trigger a County appeal. When last checked (June 2009), the suit had cost the POA more than $80,000 and the County $119,194.in legal fees.