When does ambiguous deed language create a jury question about water rights transfer? Zundel v. Ramsdell Explained

In Zundel v. Ramsdell, the Utah Court of Appeals addressed whether a deed’s reference to “all water rights appurtenant thereto, if any” unambiguously manifested the grantor’s intent to transfer shares in a mutual irrigation corporation, or whether intent remained a question of fact for the jury.

Background and Facts

Robert Brough owned 17 acres of farmland irrigated through his 15.87 shares of Bear River Canal Company stock. In 2007, Brough’s trust conveyed the property to Brough Properties, LLC through a deed stating “together with all water rights appurtenant thereto, if any.” However, Brough never transferred his actual Bear River shares to Brough Properties. In 2011, Brough Properties sold the property to the Zundels using identical language, though Curtis Brough acknowledged that Brough Properties owned no shares at the time. After Robert Brough’s death, the Zundels filed a quiet title action seeking ownership of the Bear River shares.

Key Legal Issues

The case centered on two critical questions under Utah’s rebuttable presumption established in Brimm v. Cache Valley Banking Co.: whether the Bear River shares were appurtenant to the property, and whether Brough intended to transfer them. Utah Code § 73-1-11(4) creates a presumption that water shares “shall not be deemed appurtenant to the land,” requiring clear and convincing evidence to overcome this presumption.

Court’s Analysis and Holding

The jury found the shares were appurtenant but that Brough did not intend to transfer them. On the Zundels’ renewed motion for judgment as a matter of law, the court of appeals affirmed the denial. The court determined that the phrase “all water rights appurtenant thereto, if any” was ambiguous because both parties advanced reasonable interpretations. The Zundels argued it could only refer to Brough’s Bear River shares since those were his only water rights, while the Daughters contended that water rights and water shares are distinct legal concepts. The court found sufficient evidence supported the jury’s finding of no intent to transfer, including testimony that Brough was adamant about not transferring shares and had previously transferred shares in other property sales when he intended to do so.

Practice Implications

This decision underscores the importance of precise drafting when conveying property with irrigation rights. Generic references to “water rights” may not clearly encompass shares in mutual irrigation corporations, creating costly litigation over grantor intent. Practitioners should specifically identify water shares by company name and certificate numbers to avoid ambiguity and ensure clients’ expectations align with the legal instruments.