Haik v. Sandy City

Around 1976, Harold Bentley and Saunders-Sweeney, Inc. (Saunders-Sweeney) conveyed a water right to Sandy City (defendant) by deed and entered into an Agreement of Sale for the water right with the mayor of Sandy City. The Agreement was recorded on January 14, 1997. Sandy City did not record the deed at the time. In 1978, Saunders-Sweeney conveyed property appurtenant to the water right, known as Lot 31, to Judith Saunders. Lot 31 was later conveyed to Lynn Biddulph in 1983. The deeds documenting the Lot 31 conveyances did not specifically reserve the water right. In 1999, Saunders-Sweeney conveyed all its interest in the water right to Biddulph. Biddulph recorded this deed. She then applied to the Utah State Engineer for a permanent change of water. Sandy City learned of the application and voiced its concern against the application, but Sandy City neither made a claim to the water right nor challenged Biddulph’s interest in the water right. In 2003, Biddulph conveyed the water right to LWC, L.L.C., which in turn conveyed the water right to Tolton (plaintiff). In October 2003, Tolton conveyed the water right to the Haiks (plaintiffs). Prior to the conveyance, Mark Haik (plaintiff) researched the chain of title for the water right. He searched back to 1983 or 1984 and thus did not uncover the 1976 Agreement of Sale. The Haiks recorded their deed to the water right on December 10, 2003. In 2004, the Haik Parties applied with the Utah Division of Water Rights to change the diversion point of the water right. Sandy City sought to oppose the Haiks’ application and, after investigation, uncovered the Agreement of Sale and the corresponding deed. Sandy City recorded the deed in April 2004. Tolton and the Haiks (Haik Parties) brought suit to quiet title to the water right. The district court granted the Haik Parties summary judgment.