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

• In 1998, Owens sold the High Nogal Ranch, which included Maxwell Springs, to the Christophers. Owens initially hesitated to include the land surrounding Maxwell Springs but agreed for an additional $100,000 and a condition to retain an interest in the water produced from it. The warranty deed specified Owens and the Christophers each owned fifty percent of the water from Maxwell Springs. Owens sold his fifty percent interest to Sonora Corporation in 2002. Disputes arose when both the Christophers and Owens filed applications to appropriate water from Maxwell Springs, leading to the current litigation (paras 2-5).

Procedural History

• District Court of Otero County: The district court ruled that Owens could not reserve any cognizable water interest in the sale to the Christophers and that he provided no actionable warranty covenants to Sonora. Only Sonora appealed this decision (para 1).

Parties' Submissions

• Christophers: Argued that Owens never had a recognized water right in Maxwell Springs water because he did not follow New Mexico law requirements for such a right and could not legally reserve any interest in the water (para 8).
• Owens and Sonora: Initially argued that the deed created a joint relationship in which they would each own an undivided fifty percent interest in the present or future water from Maxwell Springs. Sonora later argued that the deed was sufficient to reserve one-half of the pre-1907 rights in the water (paras 9, 21).

Legal Issues

• Whether Owens reserved any cognizable interest in the water of Maxwell Springs.
• If Owens did not reserve any interest, whether he breached any warranty covenants when his deed failed to convey any interest in the waters of Maxwell Springs to Sonora.
• Whether Owens breached any contractual obligations when the deed he delivered to Sonora failed to convey any interest in the Maxwell Springs (para 15).

Disposition

• The Court of Appeals of New Mexico reversed the district court's ruling, finding that Owens did reserve a cognizable interest in the water of Maxwell Springs that he could enforce against the Christophers and could sell and assign his interest to Sonora (para 1).

Reasons

• Per Michael D. Bustamante, J. (Linda M. Vanzi, J., M. Monica Zamora, J., concurring): The court concluded that Owens reserved a cognizable interest in the water of Maxwell Springs enforceable against the Christophers and could sell and assign this interest to Sonora. The court's decision was based on the interpretation of the deed's language and the parties' intentions, emphasizing that the dispute did not involve a claim to water rights against the world but rather what the deed meant between the parties. The court disagreed with the district court's application of regulatory processes to the parties' transaction, noting that Owens and the Christophers could divide the potential for water between themselves. The court reversed the district court's orders concerning the failure of warranty covenants in Owens' deed to Sonora and the application of the doctrine of merger, stating that Owens did have something he could convey to Sonora (paras 16-32).