The city of Santa Fe filed suit Monday against more than a dozen parties, including the Santa Fe County clerk and El Rancho de las Golondrinas, seeking to settle claims to water rights worth an estimated $1 million.

In dispute are 35.8 acre-feet of irrigation rights the city claims have been part of the city's water supply for more than three decades. One acre-foot is 325,851 gallons.

The city says a mistake by the Office of the State Engineer several years ago prompted the quiet-title lawsuit in state District Court, which seeks to extinguish all other rights or claims to the water.

County Clerk Valerie Espinoza said she has a paper from the state engineer and a decision from a probate judge that indicate her family had valid rights to the same water the city claims.

"Someone made a big mistake," Espinoza said. "As far as I'm concerned, we had valid title to those water rights. This is not something I just conjured up."

Espinoza, who received the lawsuit Monday afternoon and had yet to read it, said she didn't know about the city's claim on the water rights until recently when she met with Bill Cassel, an assistant city attorney, and other city staff.

Espinoza, her brother and her sister sold their claim to water rights they thought they owned in 2005 to a now-defunct limited liability company called R&R.

When R&R filed an application with the Office of the State Engineer to use the water for a subdivision, the city realized these were the same water rights the city thought it owned. "Someone in OSE who was familiar with the water right and knew me asked me what was going on," Cassel said, explaining how the city was alerted about the dispute.

Cassel said the water rights were acquired by Sangre de Cristo Water Co. in the 1970s through lawsuits and negotiations as part of the ongoing Anaya adjudication case involving Santa Fe River water rights. In 1979, the state engineer approved the water company's transfer of the water rights for use at the Osage well, according to the lawsuit.

When the city bought the water company from Public Service Company of New Mexico in the mid-1990s, the purchase included all water rights owned by the water utility. The state engineer approved the transfer of the water rights to the city, according to Cassel.

In 2001, however, the state engineer mailed an "offer of judgment" to Espinoza's father, listed in court documents as Reginaldo Espinosa II, and Merrill B. Johns Jr. of Agua Resources. The document recognized the two men's right to "divert and use public waters from the Santa Fe River system," and noted the same well, water amount and place as the water rights the city claims.

Valerie Espinoza accepted the offer as her father's heir, and the state engineer confirmed it through a "consent order."

But the state engineer's own records show none of those three parties owned the rights 2001, according to the city's lawsuit. Consent orders don't decide ownership but confirm the purpose, amount of water, place where the water is diverted and the name of the original rights owner, according to Cassel.

Espinoza, her siblings and two of Johns' family members, unaware of the city's claims, filed a petition in probate court in 2004 seeking to divide the water rights as part of the estates. The court gave the Espinoza heirs half (17.9 acre-feet) and the Johns heirs the other half. In 2005, the Espinozas sold and transferred their half of the water rights by special warranty deed to R&R. A warranty deed guarantees title to the water rights is good.

But the city claims the Espinozas and Johns held "wild deeds" that aren't legitimate in a chain of title to the water rights. "It's our position that they didn't have title to sell," Cassel said. "The bottom line is none of this would have happened but for the error by the OSE."

Calls to two Santa Fe numbers for Charlotte C. Capling, a managing partner of R&R named in the lawsuit, were unanswered Monday. One number was disconnected, and no one answered at the other. A search of New Mexico Public Regulation Commission records for Capling and R&R LLC yielded one document with no mention of Capling.

Cassel said if the court finds in the city's favor and extinguishes all other claims to the water rights, that would leave the Espinozas and R&R to resolve differences. "I know there was a substantial amount of money paid for these water rights," Cassel said, saying he had heard it was between $300,000 and $340,000 for the 17.9 acre-feet.

Espinoza said she didn't know what would happen if the court did not find her family's claims were valid. "This could get very complicated and complex. It could turn over and turn over until the appropriate person that started this chain of events comes forward," she said.

Contact Staci Matlock at 986-3055 or smatlock@sfnewmexican.com.