JOHN REEVES and FAIRBANKS GOLD CO., LLC, Appellants and Cross-Appellees,
v.
GODSPEED PROPERTIES, LLC and GOLD DREDGE 8, LLC, Appellees and Cross-Appellants.
Appeal
from the Superior Court of the State of Alaska No.
4FA-12-02133 CI, Fourth Judicial District, Fairbanks, Bethany
Harbison, Judge.
Joseph
W. Sheehan, Sheehan Law Office, Fairbanks, for
Appellants/Cross-Appellees.
Michael C. Kramer, Kramer and Associates, and Robert John,
Law Office of Robert John, Fairbanks, for
Appellees/Cross-Appellants.
Before: Fabe, Chief Justice, Stowers, Maassen, Bolger, and
Carney, Justices. [Winfree, Justice, not participating.]
OPINION
STOWERS, JUSTICE.
I.
INTRODUCTION
Two
adjoining landowners dispute the creation and continuing
validity of an easement for ingress and egress to and from
property near Fairbanks. The superior court held that a valid
easement was created but had been extinguished by
prescription. We are asked to decide whether one party's
mining activities - placing gravel piles, equipment, and a
processing plant in the easement - were sufficient to
prescriptively extinguish the entire easement. We hold that
they were not. Although the processing plant extinguished the
portion of the easement on which it stood, the evidence
presented regarding the gravel piles and equipment was
insufficient to support extinguishing the entire easement.
II.
FACTS AND PROCEEDINGS
A.
Facts
Alaska
Gold Company owned a considerable amount of property near
Fairbanks in the early 1980s. In 1982 John Reeves purchased a
lot from Alaska Gold- MS-8 51 - that contained an old gold
dredge, which he turned into a tourist attraction. The
parties refer to this property as "Gold Dredge 8."
MS-851 was located southwest of MS-1724, a separate lot owned
by Alaska Gold. Alaska Gold allowed Reeves to cross MS-1724
to reach Gold Dredge 8.[1]
In 1986
Alaska Gold sold MS-1724 to Alice Ellingson. Alice married
Harold Ellingson shortly thereafter. The deed contained a
reserved easement for Alaska Gold to cross MS-1724 to reach
its other properties:
SPECIFICALLY RESERVING UNTO THE GRANTOR, its successors and
assigns a dedicatable easement for ingress, egress, and
utilities, 100 feet in width, along the southerly boundary of
Side Claim On Bench Off No. 2 Above Discovery On Engineer On
R.L. Placer, United States Mineral Survey No. 1724 beginning
at its intersection with the westerly boundary of the Old
Steese Highway right of way and proceeding South
59°37' West approximately 500.00 feet to Corner No. 1
of said claim; Thence North 70°09' West approximately
728.2 feet to Corner No. 2 of said claim.
Alaska
Gold owned MS-1709, the property at the terminus of the
reserved easement. Pete Eagan, Alaska Gold's manager
beginning in 1986, used the easement occasionally to travel
to Alaska Gold's land beyond the easement. Eagan was
friendly with the Ellingsons, and he was aware of the
easement to cross MS-1724. He also gave Reeves permission to
use Alaska Gold's easement to access Gold Dredge 8.
Alice
and Harold Ellingson erected a gold plant on MS-1724 soon
after Alice purchased the property from Alaska
Gold.[2] The plant began operating in 1988. At
Reeves's suggestion, the Ellingsons also erected an
elevated footbridge spanning the easement so that tourists
could walk from Gold Dredge 8 to the gold plant to view the
mining operations. Eagan commonly drove off the easement onto
other portions of the Ellingsons' property with the
Ellingsons' knowledge.
In 1996
Reeves sold Gold Dredge 8 to Holland America, which in turn
sold it to Godspeed Properties. In 2000 Reeves bought Alaska
Gold's remaining property in the area. This included part
of MS-1709 - the parcel next to MS-1724 - at the terminus of
the easement. In 2002 the Ellingsons shut down the gold
plant, and in 2009 Godspeed purchased MS-1724 from Alice
Ellingson. Thus, at the time of this litigation, Godspeed
owned Gold Dredge 8 and MS-1724, while Reeves owned MS-1709,
the parcel at the end of the easement crossing MS-1724.
Reeves
informed Godspeed of the easement and offered to sell it to
Godspeed. The parties negotiated between 2009 and 2012 but
were unable to come to an agreement. During this time
Godspeed developed MS-1724 as an integrated tourist
attraction with Gold Dredge 8; it built a small-gauge railway
through the property for visitors to view Gold Dredge 8 and
learn about mining in the area.
In 2012
Reeves was granted plat approval to subdivide MS-1709. The
plat memorialized Reeves's plan to dedicate the easement
through MS-1724 to public use as the access for the
subdivision. Reeves constructed a rough dirt road through the
easement. In response, Godspeed built a gravel berm across
the easement and blocked access.
B.
Proceedings
Godspeed
filed a complaint against Reeves seeking declaratory relief
and to quiet title. Godspeed also moved for and was granted a
preliminary injunction barring Reeves from constructing the
road until a court determined whether the easement was valid.
After considerable motion practice, the superior court ruled
that the 1986 deed from Alaska Gold to Ellingson created a
valid easement. The court also concluded that "John
Reeves and [Reeves's company] Fairbanks Gold Company, LLC
are the successors-in-interest to Alaska Gold Company."
The parties proceeded to trial on the main remaining issue:
whether the easement was extinguished by prescription during
the time that the Ellingsons owned MS-1724 and Alaska Gold
owned MS-1709.
During
the trial, Alice Ellingson testified that she and Harold
poured the concrete foundation for the gold plant in 1986 and
that it was "all concrete and steel and it . . .
probably [weighed] ... a couple hundred tons." The plant
was "pretty sophisticated, " cost close to a
million dollars to install, and occupied "not quite half
of the easement.[3] She explained that equipment, conveyor
belts, and sand, gravel, and sewer rock surrounded the plant.
She also testified that the plant was in continuous operation
until 2002 when it was dismantled. Both Alice and Eagan
testified that the footbridge between Reeves's property
and the gold plant was high enough to drive underneath.
There
was also considerable testimony about the condition of the
remainder of the easement. Alice testified that Harold built
berms out of sewer rock around the property. One year, he
also blocked the main gate with a berm in the winter and
unblocked it in the spring. And she testified that there were
piles of material in the easement that were continually being
built up and moved as they were sold. Hatton Franciol, a
former employee of the Ellingsons, testified that cars had
been parked on the easement and that, based on a picture
taken when the Ellingsons owned MS-1724, a pile of rock
spanned almost the entire easement at one end. But he also
explained that miners berm off the entrance to mines at the
end of the season to comply with safety regulations. Like
Alice, he testified that the material piles in the easement
were for sale and constantly moving. Eagan testified that the
process piles[4] "were not permanent"; "the
nature of [the] business is that you produce piles of
material and then hopefully you're [going] to sell
them."
Eagan
further testified that he would visit the property three to
six times each summer. He stated that "Harold ended up
having the plant out there and ... parts of the easement were
blocked. But [Eagan did] know that you could pretty much get
through there, " and it was never "absolutely
blocked." Alice testified that a "substantial"
gate blocked the easement but that it was only meant to keep
out the public and that Reeves had a key to the gate. Reeves
testified that the gate was built after he sold the dredge.
And former employees testified that they had seen Reeves
using the easement frequently.
In its
decision the superior court noted that "because of the
social relationship between the Ellingsons and Eagan/Alaska
Gold, adversity is difficult to determine." As a result
the court required "Godspeed [to] show extensive
activity in the easement area." The court concluded that
"operating and maintaining the gold plant within the
easement area for a period of 15 years unreasonably
interfered with Alaska Gold's ingress and egress along
the easement to access MS-1709, " and "[i]t also
unreasonably interfered with a prospective dedication of the
easement to the public." The court found that the gold
plant was a "permanent and expensive improvement that
was difficult and damaging to remove" and that it
"completely blocked approximately half of the
easement." The court further found that sometimes the
plant activities blocked the entire easement or forced
someone navigating it to go close to the gold plant in a
manner that would be unsafe for the general public. Finally,
the court found that the Ellingsons had constructed various
barriers that restricted public access to the easement. Based
on these findings the court concluded that the entire
easement had been terminated by prescription.
Both
parties appeal. Godspeed appeals the superior court's
conclusion that an easement was created, and Reeves appeals
its conclusion that the easement was terminated by
prescription.
III.
STANDARD OF REVIEW
Whether
a deed or plat is ambiguous is a question of law that we
review de novo.[5] "When applying the de novo standard
of review, we apply our independent judgment..., adopting the
rule of law most persuasive in light of precedent, reason,
and policy."[6] When a deed is ambiguous, the trial
court's findings about the parties' intent are
findings of fact that we review for clear
error.[7] A decision is clearly erroneous "when
a review of the entire record leaves us with a definite and
firm conviction that a mistake has been
made."[8]
Whether
an easement was extinguished by prescription presents issues
of both law and fact.[9] "We do not disturb a trial
court's findings of fact unless they are clearly
erroneous. We review the application of law to facts de
novo."[10]
IV.
DISCUSSION
A.
The 1986 Deed Created An Easement Appurtenant.
The
superior court concluded that Alaska Gold's transfer of
MS-1724 to Ellingson in 1986 created an easement
appurtenant.[11] Godspeed contends that this holding was
error because the deed contained ambiguities. Specifically,
Godspeed argues that the deed uses the word
"dedicatable"-which is not a word-and does not
specify which property is benefited by the easement.
"
'[T]he touchstone of deed interpretation is the intent of
the parties, ' and 'where possible, ... the
intentions of the parties [will be] given effect.'
"[12] We apply a three-step test to interpret
a deed: first, we "look at the four corners of the
document to see if it unambiguously presents the parties'
intent"; second, "[i]f a deed is ambiguous, the
next step is to consider 'the facts and circumstances
surrounding the conveyance' to discern the parties'
intent"; and finally, "[i]n the event that the
parties' intent cannot be determined, we rely on rules of
construction."[13] The inquiry under step two "can be
broad, looking at 'all of the facts and circumstances of
the transaction in which the deed was executed, in connection
with the conduct of the parties after its execution.'
"[14]
The
language of the 1986 deed states, in relevant part:
"SPECIFICALLY RESERVING UNTO THE GRANTOR, its successors
and assigns a dedicatable easement for ingress,
egress, and utilities, 100 feet in width, along the southerly
boundary of... [MS] No. 1724." While
"dedicatable" is not a word, its use was plainly an
attempt to create an easement that was capable of being
dedicated.[15] We conclude that the use of a slight
variation on a well-known and commonly used word does not
make the deed ambiguous; rather, the use of the variant word
is akin to a spelling mistake. "Where it is perfectly
plain that a word is misspelled, the courts will construe the
deed according to the meaning of the word intended, rather
than according to the meaning of the word actually
used."[16] This is especially true when construing
the word as written "would give no effect to the clause
containing the doubtful word."[17] Here "looking within
'the four corners of the document, ' 'the [word
"dedicatable" is] capable of but one reasonable
interpretation.' "[18] The deed is not ambiguous in
this regard.
But the
deed is ambiguous as to whether the easement is an easement
appurtenant or an easement in gross. An easement appurtenant
"is a right to use a certain parcel, the servient
estate, for the benefit of another parcel, the dominant
estate."[19] "[A]n appurtenant easement. . . may
not be used for the benefit of property other than the
dominant estate."[20] While easements appurtenant run with
the land and continue to benefit the dominant estate,
easements in gross are assigned to a specific person and do
not run with the land.[21] Here, although the easement is for
ingress and egress and is descendable, [22] it is
ambiguous whether the easement is an easement appurtenant
because it is not clear, looking at the face of the deed,
which parcel of land is to benefit. Because the deed fails to
explicitly state what parcel will be benefited by the
easement, the deed must be considered
ambiguous.[23]
Thus,
we proceed to apply the second step of our three-step
analysis in interpreting deeds: we consider " 'the
facts and circumstances surrounding the conveyance' to
discern the parties' intent."[24] The relevant
inquiry is whether the easement was intended to benefit
another parcel of land or a person.[25]
The
superior court considered evidence of the parties'
intent, the situation of the properties, and the purpose and
nature of the easement. The court found that "[the
easement] clearly created a servient estate (MS-1724) in
favor of a dominant estate (adj acent Alaska Gold [p]roperty,
specifically, MS-1709, which is now divided into MS- 1709 and
MS-1709A)." It noted that the "domina[nt] estate is
the property at the terminus of the easement corridor, "
MS-1709. This finding is not clearly erroneous. MS-1709 lies
at the end of the easement, so it would be the logical
benefited parcel of an easement for ingress and egress. The
evidence shows that Alaska Gold usually accessed its land by
driving across MS-1724. And a 2002 Notice of Reservation of
Rights given by Alaska Gold to Reeves reflects this intent by
stating that Alaska Gold had easements to access its
adjoining land. The superior court therefore did not err in
holding that the 1986 deed created a valid easement
appurtenant on MS-1724.
B.
It Was Error To Conclude That The Entire Easement Was
Terminated By Prescription.
The
superior court concluded that the entire easement was
terminated by prescription. An easement is terminated by
prescription if the party claiming prescription can
"prove continuous and open and notorious use of the
easement area for a ten-year period by clear and convincing
evidence."[26] The prescriptive period is triggered
when "use of the easement 'unreasonably
interfere[s]' with the current or prospective use of the
easement by the easement holder."[27]
The
superior court found that the gold plant was a
"permanent and expensive improvement that was difficult
and damaging to remove" and that "operating and
maintaining the gold plant within the easement area for a
period of 15 years unreasonably interfered" with Alaska
Gold's use of the easement. The court also found that the
operation of the plant used the entire easement, that Eagan
did not drive next to the gold plant, and that it would not
have been safe for him to do so.
Reeves
disagrees with the superior court and argues: (1) there was
no interference, much less unreasonable interference, with
the current or prospective use of the easement because mining
operations ceased before the development of the easement; (2)
the Ellingsons' property was a mining claim, and
therefore mining on the property should not be considered
unreasonable interference; (3) gold plants are movable and
therefore are not permanent improvements; and (4) the gold
plant did not entirely block use of the easement.
We
disagree with Reeves's third argument and conclude that
the superior court did not err in holding that the gold plant
extinguished that portion of the easement upon which it
stood. But we agree with Reeves's fourth argument that
the gold plant did not entirely block use of the easement.
This suggests that the easement was partially prescripted. We
requested supplemental briefing from the parties on partial
prescription.[28]
1.
Alaska law allows for partial extinguishment of an easement
prescription.
In
Hansen v. Davis we "follow[ed] the approach
adopted by the Restatement (Third) of Property and many
jurisdictions and h[e]ld that an easement can be extinguished
by prescription."[29] We have not previously addressed the
possibility of partial prescription, but we agree with the
weight of authority that an easement may be partially
prescripted.
The
Restatement explains that an easement may be
"modified or extinguished" by
prescription;[30] it further clarifies in a comment that
"extinguishment brought about by prescription may be
complete or partial."[31] The treatise The Law of
Easements and Licenses in Land explains, "An easement...
may be increased in width, depth, or height by prescription.
Likewise, a servient owner may reduce an easement's
dimensions by preventing the holder from utilizing a portion
of the easement area for the prescriptive period,
"[32] and more directly, "[A]n easement
may be partially extinguished "[33] The treatise Powell on
Real Property agrees: "The servient owner can extinguish
an easement in whole or in part by adverse uses
continued for the prescriptive period."[34]
The
rationale underlying the doctrine of prescription supports
recognizing partial prescription. "The doctrine [of
prescription] protects the expectations of purchasers and
creditors who act on the basis of the apparent ownerships
suggested by the actual uses of the land."[35] Prescription
also "is supported by the rationale that underlies
statutes of limitation[:] [b]arring claims after passage of
time encourages assertion of claims when evidence is more
likely to be available and brings closure to legal
disputes."[36] Recognizing partial prescription best
allows for legal title to match apparent title and brings
closure to legal disputes in the way that best reflects
reality.[37]
Godspeed
argues that adopting partial prescription "will
substantially erode the hostility element for prescription
because doing so will encourage people to stealthily encroach
on easements by expanding their garden, extending their lawn,
or building an addition to their deck." Easement holders
will still be able to use their easements, Godspeed argues,
and will not recognize the infringement of their rights until
it is too late. But this argument understates the
"hardi[ness]"[38] of easements. The prescriptive period
is not triggered until the owner of the servient estate's
"use of the easement 'unreasonably interfere[s]'
with the current or prospective use of the easement by the
easement holder."[39] This standard sufficiently guards the
rights of the easement holder.[40]
The
parties agree that if we adopt partial extinguishment, then
the standard set forth in Hansen should apply. This
is consistent with the authorities already cited, which treat
partial extinguishment as part of the doctrine of
extinguishment by prescription and not as a separate concept.
We therefore hold that Alaska law recognizes partial
extinguishment of easements through prescription and that the
standard to show partial extinguishment is the standard we
set out in Hansen.
2.
The gold plant partially extinguished the
easement.
The
gold plant did extinguish that part of the easement upon
which it stood. The superior court found that the gold plant
"cost approximately one million dollars to erect"
and "took years to build and substantial effort to
dismantle." Alice testified that the plant was "all
concrete and steel and it was probably... a couple hundred
tons, " and that it was in continuous operation from
1988 until 2002, when it was dismantled. The testimony
established that the plant was in continuous, open, and
notorious operation for more than ten years, [41] and the
superior court therefore did not clearly err in finding that
the gold plant was a permanent improvement.
3.
The gold plant's operations did not fully
extinguish the easement.
We do
not agree with the superior court that the remainder of the
easement was extinguished. "Whether the improvement is
an unreasonable interference with the servitude depends on
the character of the improvement and the likelihood that it
will make future development of the easement difficult. If
the improvement is temporary and easily removed, it is
generally not unreasonable."[42]
Although
the gold plant itself was an unreasonable interference, none
of the parties testified to an impediment that continuously
blocked the entire easement for the entire ten-year period.
Alice testified that equipment, conveyor belts, and sand,
gravel, and sewer rock surrounded the plant. A former
employee testified that cars were parked in the easement and
that a pile of rock spanned almost the entire easement during
one year. This type of temporary activity was insufficient to
terminate the easement over a mining claim.
In
Hansen we considered whether the maintenance of a
garden on an easement was sufficient to terminate an easement
and concluded it was not.[43] We explained that "[a]s a
matter of law, the maintenance of a garden on the easement
area did not constitute an improvement sufficiently adverse
to commence the prescriptive period."[44] And cars,
equipment, and gravel piles are not significantly less
moveable than a garden. In mining country gravel piles,
berms, miscellaneous mining equipment, and vehicles (often
broken down) are the "vegetation" one would expect
to find "growing" in the area.
The
weight of authority indicates that equipment, conveyor belts,
and sand, gravel, and sewer rock are insufficient to
terminate an easement, at least in a setting like mining
country. "[T]he adversity standard is not met when the
owner of a servient estate uses the easement area for
gardening; places obstructions on the easement that the
easement holder can simply go around; or relies on a natural
barrier, such as an embankment, to obstruct the easement
holder, " and "parking cars from time to time in a
manner that obstructs the easement does not meet the
continuity requirement."[45]Further, "what constitutes
unreasonable interference, and thus triggers the prescriptive
period, [is] heavily fact dependent."[46] This includes
the manner in which the parties are using the
land.[47]
The
superior court found that the operation of the gold plant,
including the conveyor belts, jigs, and supporting equipment,
made driving past it in the easement unsafe. The court also
found that Eagan never drove past the plant in the easement,
instead taking other routes through the property. Neither of
these findings leads to prescription as a matter of law:
"[w]here the easement holder has not used the easement
for some time, or at all, the servient estate owner enjoys
wide latitude with respect to use of the easement area, and a
showing of extensive activity will be required to demonstrate
adversity."[48] There is ...