Water Association Illegally Formed and Cannot Collect Dues From Ranch

The plaintiff, a ranching operation, bought a 100-acre tract along a road which included surface rights necessary for irrigation water from canals that diverted water from a nearby river.  The defendant organized itself as a water users' association that assessed dues on adjoining landowners to the canals for the purpose of covering the cost of maintaining the canal system.  The defendant claimed that the plaintiff became a member of the association obligated to pay assessed dues upon buying the tract, and assessed $9,500 in dues on the plaintiff that the plaintiff could not opt out of.  The plaintiff challenged the assessment on the basis that the defendant was not qualified to operate under state (ID) law.  The trial court agreed and upheld the assessment, and also ruled for the defendant on contract-based equity theories.  On appeal, the court reversed.  The court determined that the defendant was not authorized to operate under ID law on the basis that the canals were fed by water that was in a natural watercourse rather than a canal or reservoir as ID law required and because only two users (rather than the statutorily-required three or more) used water from a qualified source.  The appellate court also rejected the trial court's equity-based theories.  In addition, the appellate court granted the plaintiff's attorney fees and costs on appeal.  Big Wood Ranch, LLC v. Water Users' Association of the Broadford Slough and Rockwell Bypass Lateral Ditches, Inc., No. 41265, 2015 Ida. LEXIS 75 (Idaho Sup. Ct. Mar. 2, 2015).