Honorable James J. Wechler. Richard T. C. Tully, Esq., hereby certifies the original of this Certificate of Service TULLY LAW FIRM, P. A.

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STATE OF NEW MEXICO COUNTY OF SAN JUAN ELEVENTH JUDICIAL DISTRICT STATE OF NEW MEXICO ex rel. STATE ENGINEER, Plaintiff, D-1116-CV-75-184 Honorable James J. Wechler v. San Juan River Adjudication THE UNITED STATES OF AMERICA et al., Defendants. Claims of Navajo Nation Case No. AB-07-01 CERTIFICATE OF SERVICE Richard T. C. Tully, Esq., hereby certifies the original of this Certificate of Service will be filed with the above-styled Court on July 16, 2012 and copies of this Certificate of Service and Defendants B Square Ranch, LLC et al. s Report to the Court Concerning Answers/Responses/Objections to these Defendants First Set of Interrogatories were served on the Court s electronic service list by e-mail to wrnavajointerse@nmcourts.gov and to bushnell@law.unm.edu on July 13, 2012 at approximately 6:10 p.m., MDT. TULLY LAW FIRM, P. A. /s/ Richard T. C. Tully, Esq. P. O. Box 268 Farmington, NM 87499-0268 (505) 327-3388 E-mail: tullylawfirm@qwestoffice.net

STATE OF NEW MEXICO, ex rel., STATE ENGINEER, Plaintiffs, D-1116-CV-75-184 HON. JAMES J. WECHSLER Presiding Judge v. SAN JUAN RIVER ADJUCICATION THE UNITED STATES OF AMERICA et al., Defendants, Cause No. AB-07-1 Claims of the Navajo Nation DESCRIPTIVE SUMMARY: Defendants B Square Ranch, LLC et al. report to the Court concerning the answers, responses and objections to these Defendants First Set of Interrogatories by Settling Parties. NAME OF PARTY: Defendants B Square Ranch, LLC et al. NUMBER OF PAGES: 5 pages plus 13 pages of Exhibit A DATE OF FILING: July 13, 2012 by electronic service and July 16, 2012 with Court Clerk DEFENDANTS B SQUARE RANCH, LLC ET AL. s REPORT TO THE COURT CONCERNING SETTLING PARTIES ANSWERS/RESPONSES/OBJECTIONS TO THESE DEFENDANTS FIRST SET OF INTERROGATORIES Pursuant to the Order Concerning the Objections of the Navajo Nation, the United States and the State of New Mexico to Discovery Requests entered on July 9, 2012 ( Order ), Defendants B Square Ranch, LLC et al. herein provides the Court with a report outlining areas of agreement and the areas that would benefit from further discussion with the Court at the hearing to be held on July 18, 2012. Defendants B Square Ranch, LLC et al. served their First Set of Interrogatories on the Settling Parties on June 1, 2012. The Settling Parties served their Objections to

these thirteen (13) Interrogatories on June 15, 2012. Defendants B Square Ranch, LLC filed their Motion of Order Compelling Answers/Responses to Interrogatories on June 29, 2012. The Order entered July 9, 2012 stated that the following subject matter are generally reasonably calculated to lead to the discovery of admissible evidence in the following manner: 1. the available water supply in the San Juan River as it relates to the Settling Parties obligation to demonstrate the the provisions contained in the Settlement Agreement will reduce or eliminate impacts on junior water rights and may also address issues of additional releases and water administration under the Settlement Agreement. ; 5. clarification of the United States hydrographic survey because it describes actual water usage that is relevant to a PIA analysis that relates to the potential claims that could be secured at trial; 6. hydrologic impacts to the San Juan-Chama Project because they relate to whether the Settlement Agreement will reduce or eliminate impacts on junior water rights; 7. water rights, and waiver of water rights, that may be asserted under the Winters doctrine and studies assessing PIA because they directly relate to the potential claims that could be secured at trial; 8. the operation of shortage sharing agreements under the Proposed Decree because they bear on whether the provisions contained in the Settlement Agreement will reduce or eliminate impacts on junior water rights and may also address issues of additional releases and water administration under the Settlement Agreement; and 9. possible future transfers and marketing of water because they are specifically addressed in the Settlement Agreement. The Court also determined that requests concerning the following subject matter are not generally reasonably calculated to lead to the discovery of admissible evidence. 10. proceedings concerning future administration or remedies in the event of insufficient water supplies to fulfill the uses described in the Proposed Decrees because they are at best only tangentially related to the legal standard in this proceeding.

Specific rulings by the Court were attached to the Order in tables labeled as Rulings on the Settling Parties Objections to Discovery. The table describing the rulings on Defendants B Square Ranch, LLC et al. s First Set of Interrogatories stated that the Settling Parties Objections to these Defendants thirteen (13) Interrogatories were sustained. However, the determinations for the above-quoted rulings contained in the Order and the rulings described in the table attached to the Order were inconsistent, contradictory and ambiguous. Defendants B Square Ranch, LLC et al. then submitted 13 revised Interrogatories on June 12, 2012 to the Settling Parties because the Order (not the attached table) appeared to state these Defendants Interrogatories were relevant, but overly broad. A redlined copy of the 13 revised Interrogatories submitted by Defendants B Square Ranch, LLC et al. to the Settling Parties on June 12, 2012 is attached hereto as Exhibit A. Counsel for the Settling Parties responded approximately 3 hours after receipt of these Defendants revised Interrogatories on June 12, 2012 stating as follows: Although the Court found the discovery requested to be relevant, but overly broad, the Court sustained the objections to all the interrogatories on other grounds. We appreciate your efforts to narrow your requests, but even as modified the requests still seek information that the Court has found is not discoverable. Accordingly, the Navajo Nation, the United States, and the State of New Mexico conclude that your proposed modifications to these interrogatories are not appropriate. IN CONCLUSION, Defendants B Square Ranch, LLC et al. and the Settling Parties do not have any areas of agreement concerning the subject 13 Interrogatories, and these Defendants request that these areas would benefit from further discussion at the July 18, 2012 hearing.

TULLY LAW FIRM, P.A. /s/ Richard T. C. Tully, Esq. Defendants B Square Ranch, LLC et al. P. O. Box 268 Farmington, NM 87499-0268 e-mail: tullylawfirm@qwestoffice.net wateradjudicationdiscoveryreporttocourt

EXHIBIT A to Report to Court (Defendants B Square Ranch, LLC et al.) FIRST SET OF INTERROGATORIES Introduction The proposed Navajo Nation Water Rights Settlement Agreement for the San Juan River Basin in New Mexico and its associated documents (Settlement Agreement ) state there must be a determination declaring there is sufficient water reasonably likely to be available to New Mexico under the apportionment made by the Upper Colorado River Compact for the Navajo Nation s uses in New Mexico under the Navajo-Gallup Water Supply Project and for existing and authorized Navajo and non-navajo uses from the San Juan River Basin in New Mexico. 1. In the event the determination that there is insufficient water reasonably available to New Mexico under the apportionment made by the Upper Colorado River Compact for the Navajo Nation s uses in New Mexico is not accurate, and the United States of America, the State of New Mexico and other water users on the San Juan River suffer injuries or damages due to such determination, please describe the procedures, remedies and relief available to such partiesthe United States of America, the Navajo Nation, the State of New Mexico and other water users for such insufficient waterincorrect or inaccurate determination. Formatted: Indent: First line: 0"

2. In the event the direct flow of the San Juan River is insufficient to supply beneficial uses under direct-flow water rights in New Mexico and to supply the amount of water available from the Settlement Agreement for the Navajo Nation s uses, please describe the procedures, remedies and relief available to the United States of America, the Navajo Nation, the State of New Mexico and other water users for an incorrect or inaccurate determination that when there is insufficient water reasonably available to New Mexico under the apportionment made by the Upper Colorado River Compact for the Navajo Nation s uses in New Mexico. Introduction The State of New Mexico is to serve as the watermaster for the purpose of administering water rights and the diversion of water within the water stream system in New Mexico subject to the Settlement Agreement.

3. In the event the State of New Mexico does not properly administer the water rights and the diversion of water within the water stream system in New Mexico that are subject to the Settlement Agreement are not properly administered, please describe the procedures, remedies and relief available to the Navajo Nation, the United States of America and the other water users for such improper administration of the water available to New Mexico under the apportionment made by the Upper Colorado River Compact for the Navajo Nation s uses in New Mexico.

Introduction The District Court of San Juan County, New Mexico, as the court in the above-styled action, has jurisdiction pursuant to 43 U.S.C. Section 666 over the terms and conditions of the Settlement Agreement. However, the San Juan County District Court does not have jurisdiction over the interpretation or determinations of the Mexican Water Treaty, the Colorado River Compact, the Upper Colorado River Basin Compact, the La Plata River Compact or the Animas-La Plata Project Compact. 4. Please state whether the San Juan County District Court will have has jurisdiction in the event there is an incorrect or inaccurate determination that there is insufficient water reasonably available to New Mexico under the apportionment made by the Upper Colorado River Compact for the Navajo Nation s uses in New Mexico.

5. Please state whether the San Juan County District Court will havehas jurisdiction in the event there is an improper administration of the water available to New Mexico under the apportionment made by the Upper Colorado River Compact for the Navajo Nation s uses in New Mexico. Formatted: Indent: First line: 0" 6. State whether any documents have been reviewed and/or approved by the Navajo Nation Tribal Council or any other governing or advisory body of the Navajo Nation wherein the Navajo Nation has waived its sovereign immunity for any damages or injuries that may occur to the United States of America, the State of New Mexico or other water users as a result of the Settlement Agreementfor an incorrect determination of the determination that there is sufficient water reasonably available to New

Mexico under the apportionment made by the Upper Colorado River Compact for the Navajo Nation s uses in New Mexico.

7. State whether any documents have been reviewed and/or approved by the United States of America or any other governing or advisory body of the United States of America wherein the United States of America has waived its sovereign immunity for any damages or injuries that may occur to the Navajo Nation, the State of New Mexico or other water users as a result of the Settlement Agreementfor an incorrect determination of the determination that there is sufficient water reasonably available to New Mexico under the apportionment made by the Upper Colorado River Compact for the Navajo Nation s uses in New Mexico.

8. State whether any documents have been reviewed and/or approved by the State of New Mexico or any other governing or advisory body of the State of New Mexico wherein the State of New Mexico has waived its sovereign immunity for any damages or injuries that may occur to the Navajo Nation, the United States of America or other water users as a result of the Settlement Agreementfor an incorrect determination of the determination that there is sufficient water reasonably available to New Mexico under the apportionment made by the Upper Colorado River Compact for the Navajo Nation s uses in New Mexico.

9. State whether any documents have been reviewed and/or approved by the Navajo Nation Tribal Council or any other governing or advisory body of the Navajo Nation wherein the Navajo Nation has waived its sovereign immunity for any damages or injuries that may occur to the United States of America, the State of New Mexico or other water users for an improper administration of the water available to New Mexico under the apportionment made by the Upper Colorado River Compact for the Navajo Nation s uses in New Mexico. Formatted: Indent: First line: 0"

10. State whether any documents have been reviewed and/or approved by the United States of America or any other governing or advisory body of the United States of America wherein the United States has waived its sovereign immunity for any damages or injuries that may occur to the Navajo Nation, the State of New Mexico or other water users for the improper administration of the water available to New Mexico under the apportionment made by the Upper Colorado River Compact for the Navajo Nation s uses in New Mexico.

11. State whether any documents have been reviewed and/or approved by the State of New Mexico or any other governing or advisory body of the State of New Mexico wherein the State of New Mexico has waived its sovereign immunity for any damages or injuries that may occur to the Navajo Nation, the United States of America or other water users for the improper administration of the water available to New Mexico under the apportionment made by the Upper Colorado River Compact for the Navajo Nation s uses in New Mexico.

12. If any of the documents described in Interrogatories 6 through 11 above have been reviewed and/or approved by the above-described parties, please identify and describe these documents and attach copies to your answers and responses to these Interrogatories. Formatted: Indent: First line: 0"

13. Pursuant to Rule 1-030(B)(6), NMRA, please designate the person(s) who will testify on behalf of each of the Settling Parties concerning the matters addressed in each of the foregoing interrogatories. wateradjudicationrevisedinterrogatories Formatted: Font: 8 pt