Reference no: EM132260499

DRILLING FOR WATER DISPUTE

Melvin and Belladonna own adjoining farms in Parched County, New Mexico, an area where all agriculture requires irrigation, which they both use in their farming. The water comes from the dammed Parched County Reservoir. Melvin, in a quest for better tasting drinking water, bought a used well-drilling rig and drilled a 400-foot well on his property from which he drew drinking water. Belladonna needed no additional irrigation water, but in January 2014, she asked Melvin on what terms he would drill a well near her house to supply better tasting drinking water than the Parched County municipal water she has been using for years.

Melvin considered the idea for several weeks. He refused. Belladonna said she would make it worth his while and she would make sure he did not lose money doing it. Melvin then told her that because he had never before drilled a well for hire, he would charge Belladonna only $10 per foot. This was only about $1 more than his expected drilling cost. He told Belladonna this. Melvin said that he would drill to a maximum depth of 600 feet, which is the deepest his rig could reach. Belladonna said, “OK, if you guarantee June 1 completion.” Melvin agreed and asked for $3500 in advance, with any additional further payment or refund to be made on completion. Belladonna said, ” OK,” and paid Melvin $3500. She marked the spot where she wanted the well drilled and insisted it be drilled there rather than the site Melvin selected which was nearer his own well. He agreed.

Melvin started to drill on May 1. He had reached a depth of 200 feet on May 10, when his drill struck hard rock and broke, plugging the well hole, making it useless. The accident was unavoidable given the subsurface rock strata. Belladonna was actually aware of the underlying rock from seismic tests performed for her Grandfather who had originally owned her farm. It had actually cost Melvin $12 per foot just to drill this 200 feet, not counting the damage to the equipment. Melvin said he would not charge Belladonna for drilling the useless hole. He told Belladonna that he would have to start a new well closer to his own well, and could not promise its completion before July 1.

Belladonna, annoyed by Melvin’s initial failure and anticipated delayed start refused to let Melvin start another well, and on June 1st she contracted with Carlos to drill a well instead. Carlos agreed to drill to a maximum depth of 350 feet for $4500, which Belladonna also paid in advance, but Carlos could not start drilling until October 1. He started on October 1st, completed drilling and struck water at 300 feet on October 30.

In the interim, on August 1st, Parched County’s dam failed, thus reducing the amount of water available for irrigation. Belladonna lost her apple crop worth $15,000 as a result. The loss could have been avoided by pumping from Belladonna’s new well if it had been operational by August 1.

Belladonna sues Melvin. What are her claims? What are Belladonna’s rights and what damages, if any, will she recover? What are Melvin’s defenses or damages if any? Discuss.