East Jordan Irrigation Co. v. Morgan

East Jordan Irrigation Company (East Jordan) (plaintiff) owned shares of certain water rights in a Utah lake. East Jordan sold shares of its stock to Payson City Corporation (Payson). Payson filed an application with the state engineer to change the point of diversion. Payson sought to use the water year-round for municipal purposes outside East Jordan’s service. Payson sought a point of diversion, place of use, and nature of use substantially different from those of other shareholders. Payson’s proposed use was also substantially different from those anticipated in East Jordan’s articles of incorporation. Several owners who also shared water rights in the lake opposed the diversion. Following hearings on the application, the state engineer approved the change. East Jordan filed an action in the trial court to overturn the engineer’s decision. East Jordan and Morgan (defendant) filed cross-motions for summary judgment on the issues of (1) whether Payson had a legal right to file a change application in its name without the consent of East Jordan and (2) whether the state engineer had jurisdiction to consider such an application. The trial court granted summary judgment in favor of Payson. East Jordan appealed the summary judgment upholding the state engineer’s decision allowing Payson to change the point of diversion for a portion of East Jordan’s water without East Jordan’s consent.