AI Generated Opinion Summaries

This summary was computer-generated without any editorial revision. It is not official, has not been checked for accuracy, and is NOT citable.

Facts

• The appellant, Charles Headen, owns two tracts of land in Socorro County, New Mexico, and claims to possess water rights amounting to 82.83 acre-feet. He applied to the Office of the State Engineer (OSE) to change the point of diversion and place and purpose of use of these water rights. OSE denied his application, stating Headen possessed no valid water rights to transfer. Headen appealed this determination and requested an administrative hearing. Prior to the hearing, he sought a declaratory judgment in district court to establish the validity of his water rights and filed a motion to stay the administrative proceedings (paras 2-3).

Procedural History

• District Court, December 21, 2006: The court stayed administrative proceedings pending the outcome of Headen's declaratory judgment action to establish the validity of his water rights (para 3).

Parties' Submissions

• Appellant (Charles Headen): Argued the validity of his water rights and provided factual evidence to support his claim. Contended that the district court had jurisdiction under the Declaratory Judgment Act to determine the validity of his water rights, that he was not required to exhaust his administrative remedies under Smith, and that OSE waived the exhaustion requirement by stipulating to a stay of administrative proceedings (paras 3, 5).
• Respondents (OSE): Filed a motion to dismiss Headen’s declaratory judgment action on the basis that he failed to exhaust his administrative remedies pursuant to NMSA 1978, Section 72-2-16 (1973). Argued that the Declaratory Judgment Act does not allow a court to hear a claim simply because a petitioner decides to proceed in district court after initiating an administrative process (paras 4, 10).

Legal Issues

• Whether the appellant was required to exhaust administrative remedies before seeking a declaratory judgment in district court.
• Whether the Office of the State Engineer waived the requirement for the appellant to exhaust administrative remedies by stipulating to a stay of administrative proceedings.

Disposition

• The district court's order dismissing Headen’s declaratory judgment claim for failure to exhaust administrative remedies was affirmed (para 19).

Reasons

• The Court of Appeals, per Judge Roderick T. Kennedy, with Judges Jonathan B. Sutin and Timothy L. Garcia concurring, held that based on Lion’s Gate Water v. D’Antonio and Smith v. City of Santa Fe, the appellant was required to exhaust administrative remedies before seeking judicial relief. The court found no significant difference between the threshold issue of water availability in Lion’s Gate and the issue of forfeiting a water right in the present case. It was determined that for the appellant to challenge the pre-hearing determination of forfeiture, he had to continue with the administrative process and then pursue statutory de novo appeal procedures. The court also rejected the appellant's contention that OSE waived the exhaustion requirement by stipulating to a stay of administrative proceedings, interpreting the stipulation as merely pausing, not terminating, the administrative process pending the outcome of the declaratory judgment action, which was ultimately dismissed (paras 6-18).