When do restrictive covenants run with the land in Utah water rights cases? Stern v. Metropolitan Water District Explained

In Stern v. Metropolitan Water District, the Utah Supreme Court addressed critical questions about property rights and restrictive covenants in the context of water infrastructure development. The case arose when homeowners challenged Metropolitan Water District’s construction of a culinary water aqueduct along a historic irrigation canal.

Background and Facts

The Point of the Mountain Aqueduct is a sixty-inch diameter pipeline that Metropolitan Water District constructed along the historic Draper Canal. The District acquired property rights through various instruments dating back to 1914-1915, including warranty deeds from the Crosgroves and condemnation judgments. The original canal was built for irrigation purposes but the District’s aqueduct transports culinary water. The construction included concrete air-valve structures rising several feet above ground and a fiber-optic control cable.

Key Legal Issues

The homeowners argued that the original conveyances granted only easements for irrigation purposes, not fee interests, and that the culinary water aqueduct exceeded the scope of those rights. Alternatively, they claimed the deeds contained restrictive covenants limiting use to “canal purposes only” and that the above-ground structures violated those restrictions. The Water District contended it held fee interests free of restrictive covenants.

Court’s Analysis and Holding

The Court held that the Crosgrove Deeds conveyed fee interests to the District’s predecessor, not mere easements, based on the “convey and warrant” language and statutory presumptions. However, the Court reversed the district court’s finding that any restrictive language created only personal covenants. Instead, the Court found that the “canal purposes only” clause created restrictive covenants that run with the land because: (1) the covenant touches and concerns the land, (2) the parties’ intent for the covenant to run could be implied from the covenant’s nature, and (3) privity existed.

Regarding the scope of “canal purposes,” the Court held that culinary water transport falls within this definition, citing historical evidence that Utah canals served domestic water purposes in the early 1900s. However, the Court reversed the grant of summary judgment on whether the concrete air-valve structures were reasonable improvements that did not materially alter the burden on the servient estates, finding this presented factual questions requiring remand.

Practice Implications

This decision provides important guidance for practitioners handling water rights and property development cases. The Court’s analysis of when restrictive covenants run with the land emphasizes examining the covenant’s relationship to the property and surrounding circumstances. For infrastructure projects, the decision confirms that technological improvements to water systems are generally permissible, but the reasonableness of specific modifications presents factual questions that may preclude summary judgment. Practitioners should carefully analyze the placement and language of restrictive provisions in historical deeds to determine whether they create personal covenants or restrictions that bind successive owners.