Low v. Reick

Low v. Reick, 2016 MT 167 (July 12, 2016) (Cotter, J.) (5-0, aff’d)

Issue: (1) Whether the district court erred in holding that Reicks’ lot is encumbered by a single easement, the existing road, measured 10 feet from each side of the road’s centerline; (2) whether the district court erred by holding Low lacked authority to sign an application for a permit to improve Reicks’ lakeshore property; (3) whether the district court erred by concluding the maintenance agreement is unenforceable against Reicks for lack of consideration; (4) whether the district court erred in holding that Reicks did not breach the maintenance agreement; (5) whether the district court erred by concluding Low breached the road detour agreement, and awarding damages to Reicks; (6) whether the district court erred by concluding Reicks did not convert Low’s fill material; and (7) whether the district court erred in ordering Low to pay Reicks’ attorney’s fees and costs arising from their counterclaim.

Short Answer: (1) No; (2) no; (3) yes, but the error is harmless; (4) no; (5) no; (6) no; and (7) no.           

Affirmed (1-3, 4-7) and reversed (3)

Facts: Echo Chalet Village consists of 21 lots on a peninsula extending into Echo Lake. In the early 1950s, before the subdivision, a road was established to service a single home on the north end of the peninsula. In 1974, two families who owned the peninsula (Masons and Mastoliers) executed a subdivision plat of Echo Chalet Village that included a 20-foot wide road easement that ran in part along the west boundary of lot 24. Mason owned lots 24 and 25. Lot 24 is at the southern end of the peninsula, and all other lot owners in the subdivision must pass through it to access their properties.

Reicks bought lot 24 from Mason in 1983 under a warranty deed and subject to an existing easement establishing the access road. Reicks occasionally use the road but it is not generally necessary to the use of their property. The road runs parallel to the lake and has several low-elevation sections that occasionally flood.

In 1992, the parties or their predecessors entered into a maintenance agreement for the road, which provided for equal sharing of expenses and/or labor, majority votes for repairs or maintenance, and an explicit statement that the agreement was intended to run with the land and be binding on the parties, their heirs, PRs, etc., until such time as the road was dedicated and accepted for use as a public road by a governmental entity.

Echo Lake topped its banks in 1997-1998 and again in 2011-2012. The 2011 flood rendered parts of the road impassable. In June 2011, Low and Reicks entered into a road detour agreement under which the parties agreed to bring in gravel and build an elevated spur road using the Reicks’ private driveway and property. The county approved construction of the spur road. The agreement provided that fill material would be taken from Reicks’ property, which would be restored to its original condition thereafter. The parties also bought fill to elevate lower sections of the road. The parties used the spur road throughout 2011 and the first half of 2012, at which point the lake’s waters rose again, although not as high.

Thereafter, Reicks posted a sign prohibiting the use of the spur road by heavy construction vehicles, but allowing other peninsula owners to use the road. In late summer 2012, the flood waters receded, and the county and Reicks demanded that fill material be removed from the spur road. Low asked Reicks to obtain a lakeshore permit allowing them to take the fill material from the spur road and use it to elevate the access road. Reicks refused. Low refused to remove the fill.

Low et al. filed suit in November 2012, seeking declaratory judgment that the 1992 maintenance agreement was valid and enforceable and authorized them to elevate the access road. Seeking specific performance and damages, Low alleged Reicks breached the maintenance agreement.

In late summer 2013, Reicks again demanded that Low remove the spur road fill and restore their property as required by the detour agreement. Low refused. Reicks then removed and disposed of the fill, after which Low amended their complaint to add a count for conversion. Reicks counterclaimed for breach of the detour agreement, quantum meruit for the value of providing the spur road and then removing it, and bad faith.

Low moved for summary judgment in February 2014, claiming multiple easements over Reicks’ property, the combination of which allowed them to unilaterally rebuild the easement road at a higher elevation. They also asserted they did not need Reicks’ signatures to submit an application for lakeshore permits to improve the easement road, and sought summary judgment on their conversion claim. Reicks filed a cross-motion for summary judgment.

The district court denied Low’s motion for summary judgment and granted summary judgment for Reicks on the basis of (1) the existence of one easement over lot 24, not multiple; (2) Low’s lack of authority to submit a lakeshore permit application without Reicks’ signature; and (3) the Reicks having not breached the detour agreement. It set a bench trial for the remaining issues, which it held in February 2015.

Procedural Posture & Holding: The district court issued findings, conclusions and an order awarding judgment to the Reicks in September 2015. It found that (1) Low breached the detour agreement and was liable to Reicks for fees and costs on this issue; (2) the maintenance agreement was not enforceable against Reicks for want of consideration; (3) Reicks did not convert the spur road fill; and (4) Low must pay Reicks for costs Reicks incurred in removing the spur road fill and restoring their property, plus prejudgment interest. Low appeals, and the Supreme Court affirms on all issues except one, which it finds is harmless error.

Reasoning: (1) It is undisputed that elevating the easement road 5-7 feet would require a support slope extending well beyond the 20-foot express easement. The record does not support establishment of a second express easement, and Low has not established a prescriptive easement, an implied easement by necessity, or am implied easement by pre-existing use. The scope of the easement includes maintenance or reconstruction of the easement road within the 20-foot easement corridor, providing the construction complies with applicable regulations and does not unduly burden the servient estate.

(2) The right to obtain lakeshore improvement permits normally belongs to the landowner. Low has no right to sign for permits authorizing improvements to land they do not own.

(3) Upon entering the maintenance agreement, Reicks received the benefit of a cost-sharing agreement for maintaining and repairing the road. This mutual benefit constitutes consideration, and the district court’s holding to the contrary is in error. In light of the next issue, however, the error is harmless and does not warrant remand.

(4) Had Low et al. proposed repairs to the easement road that could be accomplished within the existing easement, Reicks would have been obligated by the maintenance agreement to consent to the repairs and share in their costs. However, the repairs as proposed cannot occur within the existing easement, and Reicks are therefore not in breach of the maintenance agreement.

(5) The terms of the detour agreement were simple and unequivocal. Reicks did nothing to prevent Low from performing. The district court properly granted summary judgment to Reicks on Low’s breach of the detour agreement.

(6) Low suffered no damage from Reicks’ removal of the unusable fill material, and the district court did not err in denying Low’s conversion claim.

(7) Reicks presented an offer of settlement of their counterclaim to Low on Dec. 31, 2012, seeking $5,250. Reicks also notified Low of the potential liability for attorney’s fees and costs under § 27-7-105. Low countered in April 2014, seeking $5,564. As Reicks prevailed and the final judgment of $5,300 was less favorable to Low than its settlement offer, the district court did not err in awarding Reicks fees and costs.