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Earl v. Pavex, Corp.

Supreme Court of Montana

November 12, 2013

JAMES EARL and RACHEL E. EARL, Plaintiffs, Appellees, & Cross-Appellants,
v.
PAVEX, CORP., an Arizona corporation licensed to do business in Montana, Defendant, Appellee, & Cross-Appellee.

Submitted on Briefs: May 15, 2013

APPEAL FROM: District Court of the Sixteenth Judicial District, In and For the County of Rosebud, Cause No. DV 08-66 Honorable Joe L. Hegel, Presiding Judge.

For Appellant: Gerry P. Fagan, Brandon JT Hoskins, Moulton Bellingham PC, Billings, Montana

For Appellees: Steven W. Jennings, Crowley Fleck PLLP, Billings, Montana

OPINION

Laurie McKinnon, Justice.

¶1 James and Rachel Earl commenced this action against Pavex Corporation in the Sixteenth Judicial District Court, Rosebud County. The Earls sought declaratory rulings concerning two overlapping easements—one 100 feet in width, the other 30 feet in width—that burden the Earls' land for the benefit of Pavex's land. The Earls conceded the 30-foot-wide easement but disputed the 100-foot-wide easement. They asserted that the latter easement is unenforceable because it does not appear in the chain of title to the Earls' property. In the alternative, even if the 100-foot-wide easement is valid, the Earls alleged that they are not required to remove structures and cropland that encroach upon the 30-foot-wide and 100-foot-wide easements.

¶2 The District Court concluded that the 100-foot-wide easement does not burden the Earls' property and, thus, granted summary judgment to the Earls on this issue. The court further concluded that the Earls may be required to remove structures and cropland from the easements—the 30-foot-wide easement, as well as the 100-foot-wide easement if this Court found the latter easement valid—to the extent necessary to effectuate the purposes of the easements. The court thus granted summary judgment to Pavex on this issue.

¶3 Pavex now appeals from the District Court's ruling that the 100-foot-wide easement does not burden the Earls' property, and the Earls cross-appeal from the court's ruling that encroachments may need to be removed. We address two issues: (1) whether Pavex's 100-foot-wide easement was extinguished by failure to properly record it, and (2) whether encroachments need to be removed from Pavex's easements. We reverse as to Issue 1, affirm as to Issue 2, and remand for further proceedings as specified below.

BACKGROUND

¶4 The two parcels of land at issue in this case were previously held by Edward, Mattie, Robert, Mary, Benjamin, and Kathyrn Keim as a single 390.841-acre tract designated "Tract 1" on Certificate of Survey No. 85486, which is shown here:[1]

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¶5 There is a 3 0-foot-wide easement over Tract 1 beginning at Rosebud County Road #S-447 and running in easterly and northerly directions, as shown by the dashed line on the diagram above. It appears from documents in the record that one of the Keims' predecessors in interest (Tongue River Farms, LLC) granted this easement in 1999 for purposes of ingress, egress, and utilities to land north and west of Tract 1. As noted, there is no dispute concerning the validity of this easement, although there is a dispute concerning the need for the Earls to remove encroachments from it.

¶6 In 2006, the Keims executed Amended Certificate of Survey No. 85486/99927, which divided Tract 1 into a 275.940-acre parcel designated Tract As and a 52.828-acre parcel designated Tract 2A. (It appears the southernmost 62.073 acres of original Tract 1 had already been severed.) Amended Certificate of Survey No. 85486/99927 shows the same 30-foot-wide easement over what is now Tract 2A and Tract 1 A.

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¶7 The Keims filed Amended Certificate of Survey No. 85486/99927 with the Rosebud County Clerk and Recorder on August 16, 2006. Nine days later, on August 25, the Keims conveyed Tract 1A to Pavex by a warranty deed which referenced Amended Certificate of Survey No. 85486/99927. The Keims retained Tract 2A. In the deed, the Keims granted Pavex a 100-foot-wide easement over Tract 2A, described as follows:

together with a non-exclusive, perpetual easement, 100 feet in width, running with the land, for ingress and egress, and for the installation, maintenance, repair and replacement of utilities, from the Tongue River Road to the aforesaid Tract 1A of COS 99927 along, over and beneath an existing roadway on the southerly boundary of [Tract 2A] . . . .

¶8 It appears from the foregoing description that the 100-foot-wide easement follows the same course as the existing 30-foot-wide easement. Pavex's owner, Siamak Samsam, filed an affidavit in the present lawsuit stating that he insisted on the 100-foot-wide easement over Tract 2A when he purchased Tract 1A. He explained that the extra width is necessary to enable the passage of farm equipment and semi-trucks and trailers and that the 30-foot-wide easement, in its existing configuration, is insufficient for this purpose.

¶9 The Keims-Pavex warranty deed was filed with the Rosebud County Clerk and Recorder on September 15, 2006. Seven months later, in April 2007, the Keims entered into a contract for deed for the sale of Tract 2A to the Earls. The contract for deed refers to Amended Certificate of Survey No. 85486/99927 but makes no mention of the 100-foot-wide easement granted in the Keims-Pavex warranty deed.

¶10 The Earls assert that when they purchased Tract 2A, they had knowledge of the 30-foot-wide easement but were unaware of the 100-foot-wide easement. The Earls state that they became aware of the latter easement in April 2008 when James Earl stopped a motorist who was using the roadway over Tract 2A in order to reach Tract 1A. When James asked the motorist what he was doing, the motorist (an associate of Pavex) replied that Pavex holds a 100-foot-wide easement over the southern portion of Tract 2A and that the Earls would need to remove their encroachments from this easement.

¶11 Following this encounter, the Earls contacted Pavex's title company and inquired about the alleged easement. The title company sent the Earls a copy of the deed in which the Keims had granted Pavex the 100-foot-wide easement. The Earls then contacted their own title company. They asserted that their title company had "missed" the Keims-Pavex deed in the title search and demanded that the title company "fight to get this easement off our land."

ΒΆ12 The instant action was filed on July 1, 2008, seeking to invalidate Pavex's claimed 100-foot-wide easement or, in the alternative, to obtain a ruling that the Earls are not required to remove their structures and cropland from Pavex's easement(s). The parties filed cross-motions for summary judgment on both issues. The proceedings were stayed for approximately 20 months while the parties attempted to settle the dispute; however, when such efforts proved unsuccessful, the District Court ...


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