Category: Property law

Adjacency and Common Conveyor Insufficient to Imply Inclusion in a Restrictive Covenant

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by Eric Christianson

Walters v. Colford
Nebraska Supreme Court, July 28, 2017

The Adamy subdivision was platted and dedicated in 1976. It contains 14 lots created from a 16.5 acre section of Daniel Adamy’s much larger property. When the founding documents were filed with the Butler County register of deeds, the plat and dedication included restrictive covenants. These covenants, among other things, limited the structures on the lots to one single-family, two-story house and one two- or three-car garage.

In 2013, the Colfords purchased 5 acres of property from Adamy adjacent to the pre-existing subdivision. When Adamy sold the property to the Colfords, the property was not subject to any restrictive covenants. After the sale, Adamy and Colford negotiated and agreed to new restrictions, which were different from those in place on the Adamy subdivision.

The Colfords constructed a large metal building on the property to store building materials to build a house on the property. Residents of the Adamy subdivision brought suit against the Colfords claiming that they had violated the subdivisions restrictive covenants.

They argue that the Colford property is subject to the subdivision’s covenant restrictions through the doctrine of implied reciprocal negative servitudes. This doctrine allows for restrictive covenants (i. e. reciprocal negative servitudes) to be applied to a specific piece of property in certain cases, even if the covenant was not recorded on that property. This principle has generally been used by the courts to apply covenant restrictions when all parties understood there to be a covenant in place, but it was not properly recorded.

The Court summarized the six factors that must be present for an implied restrictive negative servitude:

(1) There is a common grantor of property who has a general plan or scheme of development for the property; (2) the common grantor conveys a significant number of parcels or lots in the development subject to servitudes (restrictive covenants) designed to mutually benefit the properties in the development and advance the plan of development; (3) it can be reasonably inferred, based on the common grantor’s conduct, representations, and implied representations, that the grantor intended the property against which the servitude is implied to be subject to the same servitudes imposed on all of the properties within the plan of development; (4) the property owner against whom the restriction is enforced has actual or constructive notice of the implied servitude; (5) the party seeking to enforce the restriction possesses an interest in property in the development that is subject to the servitude and has reasonably relied upon the representations or implied representations of the common grantor that other properties within the general scheme of development will be subject to the servitude; and (6) injustice can be avoided only by implying the servitude.

In this case, the Court found that the Colfords are not subject to the restrictive covenants in force in the Adamy subdivision. There is a common grantor of the property, and the property is adjacent to a number of properties subject to covenants; however, the grantor’s conduct did not indicate that he intended the property to be subject to the same covenant. In fact, he had negotiated a different set of restrictions to apply to the land. Further, although the Colfords were aware that a covenant was in place on the adjacent properties, they never had any reason to believe they would be subject to the same covenant. Finally, the residents of the subdivision have no reasonable expectation that adjacent property outside the subdivision will be restricted in the same way that their properties are.

The purpose of the doctrine of implied reciprocal negative servitudes is not to guarantee that additional land can be made to comply with restrictive covenants. Instead the doctrine has long functioned to remedy a procedural error by the conveyor of the property:

The doctrine of implied reciprocal negative servitudes functions as a gap-filler […] Where a property owner purchases a lot from a developer that is subject to a restrictive covenant in the individual lot deed, but where the developer subsequently conveys a lot within the development without a restriction in the deed, the doctrine steps in to fill the gap. It fills the gap in order to protect the other property owners’ reasonable expectations that all of the lots within the plan of development will be similarly restricted.

The Court explains further that this doctrine may be less commonly applied in the future. Today developers generally place restrictions on an entire development at once through executing and recording a declaration of restrictions. That was the case with the Adamy Subdivision. It is rarer today for properties to be restricted on a deed-by-deed bases as they are sold. This leaves less room for errors to be corrected or gaps to be filled.

Covenants and deed restrictions, Nebraska courts, Property law
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What to Make of Murr v. Wisconsin

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by Eric Christianson

Suppose a landowner owns two adjacent parcels, which she purchased at two different points in time.  One parcel is 20 acres that consists almost entirely of wetlands. The second parcel, immediately to the west, is 50 acres of rolling, developable land.

Years after she purchased both parcels the state enacts a law that effectively prohibits filling, dredging, developing, or otherwise modifying wetlands. The landowner sues the state, claiming a taking of “all viable use” of her property.

What is her “property”?  The landowner will claim that her property for purposes of her takings claim is only the parcel made up of the 20 acres of now-unbuildable wetlands. The state will argue that her property is both parcels taken together, which means the landowner continues to have “viable use” 50 of her 70 total acres.

Who is right?  Courts have long struggled with developing rules for determining the appropriate “denominator parcel” for analyzing taking claims. In Murr v Wisconsin (see the full case brief from last week below) the Supreme Court dealt with precisely this question. And while not offering any clear rules, the court does seem to give local governments the benefit of the doubt in this determination.

A key element in arguing a regulatory takings claim successfully is that the owners show that they have been deprived of, “all or nearly all economically beneficial use of their land” by the offending regulation. This is often determined by comparing the value of the property before the law in question went into effect to its value under the effects of the new law.

Defining the property more narrowly usually gives the landowner the upper hand. Focusing only on the effected parcel makes the loss more severe relative to its value. However, when considered with the entirety of a property owner’s holdings, the deprivation may be less significant relative to the the full value of the land. This is often called the “denominator problem” in takings analysis. Courts need to determine which value to divide the loss by to see if a law has resulted in a loss of all economically viable use.

One complicating factor is the existence of merger provisions in state and local law which under certain circumstances automatically merge adjoining parcels held under common ownership. Such merger provisions have been features of local zoning ordinances for a long time. Towns began enacting them in the 1920s. They were very common by the 1960s, because local governments and state courts recognized that they represent an attractive middle ground between two unattractive extremes: (1) entirely prohibiting the development of substandard lots, which would be a hardship to their owners, and (2) allowing the development of all substandard lots, which would be a hardship to neighbors and restrict the ability of a community to pass regulations.

Whether the inclusion of a merger provision in local law is enough to determine the relevant parcel was one of the most important aspects of Murr v. Wisconson. In this case, the Supreme Court adopted a three-part test to help guide lower courts in making this determination. It also gives local governments some idea what the extent of their power is in setting land use regulations.

This new test directs courts to take into account: (1) state and local law, (2) the physical characteristics of the land, and (3) the prospective value of the land. This case does not give us any bright line rules, but it appears that merger clauses will determine the relevant parcel in most cases. Kennedy’s argument in adding physical characteristics and prospective value to the equation is his attempt to avoid “gamesmanship” by states to avoid paying for regulatory takings. States do not have total power to determine what property rights are.

In returning to our example above, while we do not have a clear answer as to how a court would rule, we do have some idea how a court should reason. (1) What does state and local law say about these two parcels? Are they entirely separate? Or, is there some provision in state law which treats them as merged? (2) How do these two parcels fit together? Are they simply touching along a short edge or do they form a cohesive whole? (3) Finally what is the financial impact of the regulation on the parcels? Are the 20 acres of wetland a total loss or can they serve some economic purpose? Perhaps the wetland is an attractive amenity raising the value of a future housing development on the other 50 acres. Clearly our simple example does not have enough detail for us to answer all these questions.

The second and third factors have to do with the inherent qualities of the land and the local property market, but local governments do have control over the first. In Murr the Court gave significant weight to the existence of a merger provision local law.

In the end, this decision preserves the right of local governments to set minimum lot sizes and avoid further subdivision even where lot lines may appear on a plat map. This is overall a win for local and state governments. However, Kennedy finishes up the opinion of the court by reflecting that much like the analysis of regulatory takings itself, determining the relevant parcel “cannot be solved by any simple test.” If recent takings fights have taught us anything, where there is ambiguity, there will be litigation. Stay tuned.

Federal courts, Property law, Takings, United States Supreme Court, Wisconsin courts
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The power of local governments preserved in Murr v. Wisconsin

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by Eric Christianson

Murr v. Wisconsin

United States Supreme Court, June 23, 2017

In the 1960s, the Murr family purchased two adjoining lots along the St. Croix River in Wisconsin. Lot F, was purchased in 1960 and used to build a vacation cabin. The other, Lot E, was purchased in 1963 and was primarily held as an investment. Originally the properties were held separately. Lot F was owned by the family plumbing company, and Lot E was owned by the family directly. In 1994 and 1995, the ownership of the two parcels was transferred from the parents, who purchased the lots, to their children. In 2004 the children began to attempt to sell Lot E to fund improvements to the cabin on Lot F; however, they were prevented from selling Lot E separately due to intervening changes in state and local land use laws. Both of these lots are now considered substandard as building sites, and a state law passed in 1976 considers adjoining substandard lots in common ownership to be effectively merged.

According to Wisconsin law in the area where these properties are located, a parcel must have at least one acre of buildable land to be developed or subdivided. Although both of these parcels are approximately 1.25 acres, the topography of the bluffs running through the lots as well as the steep river bank leaves only 0.98 acres of buildable land between the two. Wisconsin law does allow substandard lots to be developed through a grandfather clause, but does not allow them to be further subdivided. Despite the fact that they appear to be two separate lots on the plat map and have been taxed separately, they are effectively merged. The property owners are therefore barred by state and local law from “subdividing” the larger effective parcel and selling either lot independently.

The Murr family sought a variance from the St Croix County Board of adjustment to allow for separate sale of the lots. The Board denied the request, and the family appealed, alleging that the land use regulations deprived them of all economically beneficial use of Lot E. As the case moved through the Wisconsin court system, the argument for regulatory takings hinged largely on the “denominator problem.” This meant that the courts had do determine whether the parcels should be considered as a whole or if the takings analysis should be applied to Lot E alone. In this case, this decision would be determinative as the loss to Lot E is fairly significant, more than 90% of its value, while the loss to the two parcels taken together is fairly minor, less than 10% of the total value.

In a 5-3 decision written by Justice Kennedy (Justice Gorsuch took no part in this case) the court upheld the rulings of the lower courts that the two lots had been effectively merged and that the law as applied did not constitute a regulatory taking. In doing so, the court adopts a new multi factor test to determine the relevant parcel for a takings claim.

The Court continues to rely on the “Penn Central Test” in determining if government action goes too far and constitutes a regulatory taking. Unless regulations deprive property owners of all economically beneficial use of land, there are no hard and fast rules. Instead, courts are asked to reconcile the individual’s right to private property ownership and the government’s power to adjust rights for the public good. Courts have generally relied on a three-part test first established in Penn Central (1) the economic impact of the regulation (2) the extent to which the regulation has interfered with distinct investment-backed expectations, and (3) the character of the governmental action.

In this case as in Penn Central itself, before applying the three pronged “Penn Central Test”, the court must establish the relevant parcel. Because the test relies on the value of the property before and after application of a regulation, defining the parcel itself can be key to the the ultimate decision. In this case the state of Wisconsin and the local governments asked the court to defer to state law in determining the relevant parcel. The state argued that the court should take the state at its word that the two parcels are now one. The Murr family disagreed and preferred the lot lines as drawn on the plat maps.

The Court has never been entirely clear about how to determine the parcel to be used for analysis, but there are some principles to be drawn from previous decisions. Historically the court has not allowed petitioners to segment the most effected part of their property to allow them to claim a total loss of value in that particular segment. On the other hand, although property law has its foundations in state law, states have not been granted complete authority to define property rights.

This decision does not offer us a simple answer of how to determine the parcel in question for a takings claim. Instead, Kennedy offers up yet another multi-factor test considering: (1) state and local law, (2) the physical characteristics of the land, and (3) the prospective value of the land.

Under this new test, Lots E and F are considered effectively merged. (1) State law considers adjoining parcels to be merged if held in common ownership. The Murr family brought these two parcels into common ownership in 1995 well after the local law that merged them went into effect in 1976. (2) The physical characteristics of these lots support their treatment as a single parcel. The lots are contiguous along their longest edge and their rough terrain makes it reasonable to expect their use may be limited. (3) Even if Lot E cannot be sold independently it still contributes value to the parcel as a whole. A new larger cabin could be built anywhere on the two lots and the property has more privacy and recreational space than other substandard lots.

Chief Justice Roberts dissented joined by Thomas and Alito; however, they did not dispute the outcome, only the reasoning. Roberts would have preferred a much clearer ruling which takes state law as determinative of the relevant parcel in “all but the most exceptional circumstances.” Justice Thomas also filed a separate dissent stating his desire to “take a fresh look at our regulatory takings jurisprudence” in a way that could be better grounded in the original meaning of the constitution.

Later this week we will upload another post with more analysis of the implications of this decision for practitioners.

Fourteenth Amendment, Property law, Takings, United States Supreme Court, Wisconsin courts
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Montana landowners successfully claim reverse adverse possession of county road created by public prescriptive easement

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by Hannah Dankbar and Gary Taylor

Letica Land Company, LLC v Anaconda-Deer Lodge County
Montana Supreme Court, November 17, 2015

Letica Land Company (Letica) and Don McGee appeal a lower court’s ruling that two stretches of a road crossing their properties in Anaconda-Deer Lodge County are public roads.

Modesty Creek Road was established as a county road by the County Commission in 1889. The land across which the road traverses has been owned by the federal government, Anaconda Company, various private interests and most recently Letica and McGee who purchased the land in 1989 and 1997 respectively. Prior to Letica and McGee purchasing the land locked gates were placed on various places in the road that blocked public access, even though the public continued to access the road on a permissive basis. Because of these gates Letica and McGee claim that they were unaware of any public right of access of Modesty Creek Road.

In 2012 county residents asked the County Commission to reaffirm the road as a county road and reopen it to the public. The County Commission voted in approval and Letica filed a complaint. The complaint was denied and McGee joined as a plaintiff to amend the complaint.

The trial court concluded that Modesty Creek Road’s lower branch was a statutorily created road, and that Modesty Creek Road’s upper branch was established as a public road via public prescriptive easement, and that the prescriptive easement had not been terminated by “reverse adverse possession.” The court also found the takings question was not ripe until after an appeal. Letica and McGee appealed, challenging both the declaration of a statutorily created road and the declaration of a public prescriptive easement.

Letica and McGee first claimed that the record does not sufficiently demonstrate that the road was created by petition. They claim that Modesty Creek Road is on some county road maps, but not on others. The court found that this does not qualify as “affirmative steps to indicate intention to abandon” county roads once they are established, further these maps do nothing to provide evidence of the process of how these roads were approved. Letica and McGee also claimed that the lower branch must terminate at the eastern portion of Section 23, Township 6 North, Range 11 West. There is no definitive description in the record of where the road ends, but evidence when taken as a whole, such as testimony and other historical records are consistent enough for the court to conclude that the Dry Gulch is located along Section 22, Township 6 North, Range 11 West and that the lower court correctly took the record as a whole. The lower court’s decision regarding the statutorily created lower branch of the road were affirmed.

Letica and McGee argued that the actions of landowners to block public access throughout the years created in the landowners ownership by adverse possession.  The court emphasized that in Montana a “private individual may not obtain title to a public statutorily created road by a adverse possession.” Since it was established that the lower branch is a statutorily created road and therefore could not be claimed by adverse possession.  This still left open the question of whether reverse adverse possession extinguished the public prescriptive easement on the upper branch.

Locked gates blocked public access to the upper branch from 1980 to 2012. The public who used to use the upper branch found alternate routes and County staff said they would have cut the locks if they were made aware of the issue as they did this in other instances. The record shows that the public “cooperated and adhered” to the permissive use policy. Those who leased land or had water rights along the road had keys to the gates.

After declaring the upper branch a county road in 2012 the County found that the landowners asserted hostile rights for thirty years. However, the court found that the public abandoned this road and the County was aware of the gates and did not remedy the situation.  Montana statute provides that a prescriptive easement may be terminated “by disuse of the servitude by the owner of the servitude for the period prescribed for acquiring title by enjoyment.” The Court reversed the lower court’s ruling that the public prescriptive easement was not terminated by reverse adverse possession.

One justice dissented. Chief Justice McGrath concurred with the resolution of the first issue, and dissents the conclusion of the second issue. He would uphold the lower court’s decision and conclude that “this case would not exist but for the unlawful closure of the lower branch road….[A] person may not illegally block a road created by action of a public government entity, and then use that blockage as evidence to support a claim of reverse adverse possession that extinguishes the public’s prescriptive right to any other property or interest in property.”

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Plain language of right-of-way deeds grant easements

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by Andrea Vaage

Sargent County Water Resource District v. Mathews
North Dakota Supreme Court, December 1, 2015

Paul Mathews sought to control land rented to him by Nancy Mathews and Phyllis Delahoyde. In response, The Sargent County Water Resource District filed for declaratory relief in November 2012 as the successor in interest to the Sargent County Board of Drain Commissioners. The Board obtained interest in the property through right-of-way deeds signed in 1917 and 1918.

At issue is whether the deed conveyed an easement or an estate in fee. The district court found the deeds granted fee title in property to the District. The Mathews appealed. The Mathews argued the right-of-way deeds from 1917 and 1918 unambiguously show an intent to convey easements for a right of way when read in plain language. In addition, if the deeds were ambiguous, the Mathews argued the district court interpretation of parol evidence is erroneous. When a deed is unambiguous, meaning of the deed is determined from the document itself. When it is found to be ambiguous, extrinsic evidence may be considered.

The deed reads, in part, that owners:

“grant, sell and convey, and forever release to the people of the County of Sargent, in the State of North Dakota, right of way for the laying out, construction and maintenance of a public drain, as the same may be located by the Board of Drain Commissioners, through said above described lands, being a strip of land . . . [described]. And we hereby release all claims to damages by reason of the laying out, construction and maintenance thereof through our said lands.”

The Court analyzed the deed to understand the grantor’s intent. The deed grants a “right of way” specifically for “construction and maintenance of a public drain” and does not convey an estate in fee. When the granting clause includes the phrase “right of way,” courts have found the deed usually conveys an easement. The Court found the deed was unambiguous and conveyed an easement when read in plain language.

The decision of the district court was reversed.

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Co op days shy of being able to claim adverse possession

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by Andrea Vaage and Gary Taylor

Quality Ag Service of Iowa Inc. v. Burlington Northern Santa Fe Railway
Federal 8th Circuit Court of Appeals, October 30, 2015

At issue is the ownership of a sidetrack adjacent to two Burlington Northern Santa Fe Railway (BNSF) tracks running through Melrose, Iowa. Quality Ag of Iowa purchased land on August 25, 2000 from Farmers Coop, which purchased land from BNSF in 1994.  The sale did not include the sidetrack adjacent to the purchased parcel; however, Quality Ag has used the sidetrack to receive fertilizer shipments since 2000. On August 3, 2010, one of BNSF’s trains derailed east of the sidetrack. BNSF used the sidetrack to store equipment after the derailment, preventing Quality Ag from using the sidetrack for fertilizer shipments. Instead, Quality Ag was forced to truck fertilizer in at increased expense.  Quality Ag sued BNSF for damages due to the increased cost of delivery, and property damages resulting from the derailment.  The claim was dismissed and an appeal ensued.

Quality Ag’s owner testified that he believed the sidetrack was part of the land purchased from Farmers Coop because a Farmers Coop representative told him that it did at the time of the sale. He also testified that BNSF entered into a written agreement with Quality Ag that BNSF could use the sidetrack if BNSF maintained it; however, the owner was unable to produce this agreement for trial. Conversely, BNSF was able to produce a land survey showing they owned the sidetrack. On appeal, Quality Ag raised the claim that it owns the sidetrack due to adverse possession.

In order to prove a claim of adverse possession a party must “establish hostile, actual, open, exclusive and continuous possession, under a claim of right or color of title, for at least a ten year period.” Quality Ag would need to establish that it met those conditions from August 25, 2000 to August 25, 2010. Since BNSF used the track for equipment storage on August 3, 2010 and beyond, after the derailment, Ag Services failed to show continuous sole use for a full ten year period.  The maintenance agreement claim also failed because Quality Ag was unable to produce the maintenance agreement or othershow it owned the sidetrack.

The decision of the district court was affirmed.

http://media.ca8.uscourts.gov/opndir/15/10/143025P.pdf

 

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Record did not support the level of inconvenience required to establish private road by necessity

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by Hannah Dankbar and Gary Taylor

Price v Judy Hutchinson, Wayne Garman and Ross Garman
Wyoming Supreme Court, December 16, 2014

In February 2011 Price applied to establish a private road across Wayne Garman’s land under Wyo, Stat. Ann. §24-9-101 because his property had no outlet to a public road.  Price preferred the route crossing Garman’s land, but the Garmans argued that Price had three viable access points to public roads and therefore did not qualify for a private road. Price contended that County Road 58 in Crook County, Wyoming does not touch or enter his land, and that in any case the road is a cow trail that does not provide reasonable and convenient access because it is not used or maintained as a public road.  Furthermore, State Highway 14 also did not provide reasonable or convenient access. In summer and fall of 2011 the Crook County Board of Commissioners gathered evidence and tried to make their decision, but malfunctioning audio equipment led the Board to start the process over. On May 1, 2012 the Board denied Price’s application. The District Court upheld this order and an appeal followed.

Price argued that the Board failed to take an preserve a complete record of the proceedings, as required by state statute, when it failed to record the proceedings, and that therefore the orders resulting from those meetings should be reversed.  The court determined that the failure to record the meetings is a procedural failure according to this statute, but because the meetings immediately stopped when the technology failure was discovered, and the meetings were later reconvened with functioning equipment, there was no error or prejudice to Price.

Price questioned whether the Hearing Officer in this case provided legal opinions and advice to the Board violating Wyoming statutes. (Wyoming law allows for the appointment of a Hearing Officer to preside over a hearing to regulate the course of proceedings, receive evidence and address procedural questions). Wyo. Stat. Ann. §16-3-107(k) provides that a person serving as the hearing officer cannot be the representative of an agency  at a hearing of which the agency is a party, but the Board was never a party in this case, so this argument failed. Price argued that the County Attorney should not have been the Hearing Officer and that as such, he should not have offered legal opinion to the Board. Price’s arguments failed. Wyo. Stat. Ann. § 16-3-112(a) and (b) allow for the Hearing Officer to provide recommendations and advice.  It was clear from the record that the Board alone made the decision, and no bias or prejudice resulted from the County Attorney’s responses to the Board’s questions or his clarification of the issues.

Price claims that the Board’s findings were not supported by substantial evidence as required by Wyo. Stat. Ann. § 16-3-14(c)(ii)(E). The court disagreed. The Board gave multiple reasons why County Road 58 is a public road. At the hearing multiple people testified that they use County Road 58 to travel to and from Price’s residence. Just because another road would be more convenient for Price as an individual does not mean that the Board has to approve it.  “Necessity” as the showing required for condemnation of private property to provide access means that existing alternatives must be “obviously impractical and unreasonable.”  Price failed to carry this burden of proof.

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To prove covenants were abandoned, landowner must show change to the neighborhood “of a radical and permanent nature” resulted from ignoring covenants

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by Hannah Dankbar and Gary Taylor

Moore v Wolitich
Wyoming Supreme Court, January 15, 2015

The residents of Milatzo Subdivision in Cheyenne, Wyoming filed a complaint against Jennifer Moore who ran Silly Bear Daycare for operating a daycare out of her home in the subdivision. The district court found that the daycare violated the protective covenants of the subdivision. Moore appealed.

The covenants in question were adopted on June 27, 1979 and state: “[n]o lot shall be used except for residential purposes,” and that “[n]o residential lot shall be used as a business.” In September 2012 Jennifer Moore began operating Silly Bear Daycare out of her home that was purchased earlier in the year. In October 2012 multiple residents in the subdivision filed a complaint. The Moore’s did not contest the finding that they were running a business; rather, the Moores advanced two arguments on appeal: (1) that the covenants had been abandoned and were therefore unenforceable, and (2) that the activities of the other landowners left them with “unclean hands” and therefore unable to enforce the covenants.

Abandoned covenants.  Under Wyoming caselaw, to find that a covenant has been abandoned the violations of that covenant that have been acquiesced to by the subdivision’s landowners “must be so substantial as to support a finding that the usefulness of the covenant has been destroyed, or that the covenant has become valueless and onerous to the property owner.”  The abandoned covenants must also result in a change to the neighborhood “of a radical and permanent nature.”  To prove their point the Moores cited other covenant violations that take place in the subdivision, including numerous trailers, sheds, boats, unregistered vehicles and other items on various properties throughout the subdivision in violation of the covenants.  The Moores also pointed to a babysitting business and an identity theft victim assistance business being run from homes in the subdivision, as well as parking numerous business-associated vehicles and trailers at other homes.  The covenants also create a Building and Covenants Committee to resolve issues and violations, but the committee does not exist.

The Wyoming Supreme Court disagreed that these activities amounted to abandonment of the covenants.  The evidence presented at district court was that the other business activities were occasional or incidental, and not the type of substantial, routine, and permanent business activities that would change the nature of the neighborhood.  Moreover, the Moores failed to produce evidence concerning how long the trailers, sheds, and other items of concern had been present, or how they impacted the neighborhood in a way that was “so great, or so fundamental or radical as to neutralize the benefits of the restrictions to the point of defeating the purpose of the covenants.”

Doctrine of “unclean hands.”   The court found that the Moore’s were aware of the covenants when they bought the home and signed the covenants.  They did not consult an attorney or their neighbors in the subdivision to determine whether the covenants had been abandoned.  They were aware of the covenants and flagrantly ignored them by opening the daycare.  The Supreme Court affirmed the district court’s finding that the equities of the case weighed against the Moores for this reason.

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Platted village streets constitute “public highway” for purpose of defense to acquiescence claim

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by Hannah Dankbar

Haynes v Village of Beulah
Michigan Court of Appeals, December 9, 2014

The Haynes argue that they are entitled to two strips of land within the platted rights-of-way of Lake Street and Commercial Avenue in the Village of Beulah citing the theory of acquiescence. The Haynes own Lots 10,11 and part of Lot 7 in Block 2. These lots are bordered by Lake Street on the northwest side and Commercial Avenue on the southwest side. Before 1968 the prior owners of the Haynes’ property installed railroad ties along Lake Street, separating the portion of the road used for travel from the grass and trees. On the southwest, a rock wall was installed in the 1950s to separate the part of Commercial Avenue used for travel from landscaping plants, a portion of the Haynes’ driveway, a maple tree and a strip of grass owned by the Haynes.

In 2012, the Village of Beulah introduced plans to create angled parking, a new sidewalk and a streetscape in the platted right-of-way of each street and would occupy land owned by the Haynes. The Haynes brought suit to prevent this action. The trial court granted the Village of Beulah’s motion for summary disposition based on MCL 247.190.

MCL 247.190 provides as follows:

 All public highways for which the right of way has at any time been dedicated, given or purchased, shall be and remain a highway of the width so dedicated, given or purchased, and no encroachments by fences, buildings or otherwise which may have been made since the purchase, dedication or gift nor any encroachments which were within the limits of such right of way at the time of such purchase, dedication or gift, and no encroachments which may hereafter be made, shall give the party or parties, firm or corporation so encroaching, any title or right to the land so encroached upon.

Plaintiffs argued that MCL 247.190 does not apply to platted village streets or property acquiescence claims.  The issue in this case is the definition of “public highways,” which is not defined in the statute. “Highway” has been defined through multiple cases and multiple legal dictionaries before the enactment of MCL 247.190. These definitions encompass a broad reading of the term “highway.” Because of this, the Court of Appeals found that the trial court did not err in broadly construing the term to include village streets.

The Haynes also argued that MCL 247.190 does not apply to property acquiescence claims, but the Court of Appeals disagreed. MCL 247.190 provides, “no encroachments” on a public highway “shall give the party or parties, firm or corporation so encroaching, any title or right to the land so encroached upon.” Nothing in the statute permits the court to distinguish between different legal theories used to assert a private right or claim to any portion of a public highway.  A claim for acquiescence constitutes an encroachment.

The Haynes also argued that the unimproved portions of platted right-of-ways are not “public highways” that are entitled to protection under MCL 247.190. The Court of Appeals disagreed with this assertion, as well.  It is sufficient for the spending of public funds on a road in a dedicated right-of-way to constitute public acceptance of the entire width, and therefore have the entire width constitute “public highway,” even if the municipality never improves the specific strips of land within the right-of-way.

Judgment for the Village of Beulah was affirmed.

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Another North Dakota mineral rights case brought on by fracking

Gary Taylor

by Gary Taylor

Reep v. State
(North Dakota Supreme Court, December 26, 1014)

Several owners of land next to navigable waters in North Dakota (the “Reep owners”) sued the State, the North Dakota Board of University and School Lands, and the North Dakota Trust Lands Commissioner (“State”), seeking a declaration that the Reep upland owners own the mineral interests under the shore zone of the navigable waters.  The State responded that its title to the beds of navigable waters continues to extend, as it did at the moment of statehood, from high watermark to high watermark under the equal footing doctrine.

N.D.C.C. § 47-01-15 provides:  “Except when the grant under which the land is held indicates a different intent, the owner of the upland, when it borders on a navigable lake or stream, takes to the edge of the lake or stream at low watermark. All navigable rivers shall remain and be deemed public highways. In all cases when the opposite banks of any stream not navigable belong to different persons, the stream and the bed thereof shall become common to both.”

The State argues N.D.C.C. § 47-01-15 does not convey or grant public resources; rather, the statute is a rule of construction for conveyances of riparian land and clarifies the extent of a grantor’s conveyance to the grantee except when the grant under which the land is held indicates a different intent. The State argues the equal footing doctrine and the anti-gift clause prohibit construing N.D.C.C. § 47-01-15 as a State grant of the mineral interests under the shore zone to private entities. The upland owners countered that the State’s public trust and equal footing obligations relate to the public’s use of waters for “navigating, boating, fishing, fowling and like public uses” and do not relate to the proprietary privileges of ownership of subsurface mineral interests under the shore zone.

The Court looked first to history.

Before North Dakota was admitted to the Union, the United States held the beds of navigable waters in the Dakota Territory from high watermark to high watermark in trust for the future state.  Upon admission to the Union, North Dakota was entitled to sovereign ownership of the beds of navigable waters from high watermark to high watermark under the equal footing doctrine.  Upon entering the Union on equal footing with the established States, the “rights of riparian or littoral proprietors in the soil below high water mark of navigable waters [were] governed by the local laws.”  North Dakota could “resign to the riparian proprietor rights which properly belong to [it] in [its] sovereign capacity,” and was free to allocate property interests in the beds of navigable waters below the ordinary high watermark. However, North Dakota could not totally abdicate its interest to private parties because it held that interest, by virtue of its sovereignty, in trust for the public.

In a prior case the Court said N.D.C.C. § 47-01-15 did not grant an upland owner or the State absolute ownership of the shore zone and emphasized neither party’s interest in the shore zone was absolute. The word “takes” in that statute was ambiguous and the Court construed the statutory language as a rule of construction for determining the boundary for grants of land next to navigable waters.  The Court agreed with the State’s position that the State owned the mineral interests under the shore zone to the ordinary high watermark under the equal footing doctrine at the moment of statehood in 1889 and its ownership was thereafter governed by State law, including the anti-gift clause of N.D. Const. art. X, § 18, which precluded the state from allocating or gifting its mineral interests under the shore zone to an upland owner . N.D. Const. art. X, § 18,  currently provides:

The state, any county or city may make internal improvements and may engage in any industry, enterprise or business, not prohibited by article XX of the constitution, but neither the state nor any political subdivision thereof shall otherwise loan or give its credit or make donations to or in aid of any individual, association or corporation except for reasonable support of the poor, nor subscribe to or become the owner of capital stock in any association or corporation.

The court concluded N.D.C.C. § 47-01-15 does not convey or allocate the State’s equal footing interest in minerals under the shore zone, which the State owned at the moment of statehood in 1889, to upland landowners on navigable waters in North Dakota. Under the rule of construction for determining boundaries in N.D.C.C. § 47-01-15, however, if the State contractually grants or conveys parts of its equal footing interests to upland owners by deed, subject to the restrictions of the public trust doctrine, and except when the deed provides otherwise, the grantee takes the State’s full interest to the low watermark.

 

North Dakota courts, Property law ,
Leave a Comment on Another North Dakota mineral rights case brought on by fracking

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