Bos Terra, LP v. Beers

Bos Terra, LP v. Beers, 2015 MT 201 (July 14, 2015) (McKinnon, J.) (5-0, aff’d)

Issue: (1) Whether the district court properly found that the June 20, 1977 easement was an easement in gross; (2) whether the district court properly held that Bos Terra is a third party assignee rather than a successor to the easement; and (3) whether the district court erred in finding Bos Terra’s use of the ditch easement permissive rather than prescriptive.

Short Answer: (1) Yes; (2) yes; and (3) no.

Affirmed

Facts: In 1977, Barrett granted to Stevensons and Kolars a right of way easement for transporting water. Stevensons and Kolars installed a pipeline from the Judith River to the top of a hill, at which point a 100-foot-long ditch was dug to connect the pipeline to the Enterprise Ditch, which had been abandoned. Enterprise Ditch ran through Barrett’s property for about a mile, then through the property of two other neighbors before entering Stevensons’ and Kolars’ land. The ditch was reconstituted and Stevensons and Kolars began irrigating from it the following year, 1978.

Over the decades, the particular tracts of irrigated land changed but the neighbors used the least intrusive means to access Barrett’s property. Beers bought Barrett’s property in 1999 and continued allowing access under the agreement. In February 2011, Bos Terra – a large agribusiness company — bought Stevensons’ and Kolars’ property and converted it to a feed lot. Bos Terra entered Beers’ property without asking permission and began diverting water from the Judith River with the intent of doubling the number of irrigated acres from 410 to 773.

Bos Terra asserts it was a “successor in interest” but Beers advised Bos Terra it was an assignee, and their consent was required for an assignment of rights. After two letters to Bos Terra without any response, Beers told Bos Terra it was prohibited from entering their property for any reason other than removing its equipment and restoring the property to its original condition.

In February 2013 Bos Terra sought Beers’ consent to an assignment of rights, and Beers refused. Bos Terra filed suit.

Procedural Posture & Holding: The parties filed cross-motions for partial summary judgment. Bos Terra argued it had a prescriptive easement across Beers’ property, while Beers argued the agreement creates an easement in gross and not appurtenant, that Bos Terra had to obtain Beers’ consent before any rights or interests under the agreement could be assigned, and that Bos Terra has no rights or interests under the agreement absent Beers’ consent. The court granted partial summary judgment to Beers. The parties went to trial, and the jury found that Beers’ refusal to consent to the assignment was reasonable. Bos Terra appeals and the Supreme Court affirms.

Reasoning: (1) An easement is either appurtenant or in gross. An easement appurtenant benefits a particular parcel of land, the dominant estate, while an easement in gross benefits the easement holder personally. An easement in gross does not create a dominant estate and the easement right does not pass with title to the land. Here, the agreement does not identify a dominant tenement, and extrinsic evidence cannot be used to supply the property description of the dominant estate if it can be ascertained from the transaction documents. Additionally, the assignment provision contemplates severing the right to use the easement from the land, which is inconsistent with an easement appurtenant.

(2) The district court’s interpretation of the agreement gives logical effect to all provisions in the agreement: as long as the ranches were in the hands of the three families (including their heirs and successors), all rights would transfer without permission. Should any third parties become involved, however, the grantor would have to give written consent. Bos Terra is neither an heir nor a successor.

(3) Bos Terra argues the use of the Enterprise Ditch as been adverse, in spite of the agreement, arguing the agreement refers only to a pipeline. It would make no sense to interpret the contract as providing only for a pipeline that was incapable of delivering the eater to the intended beneficiaries.