November 14, 2013
BURCALOW FAMILY, LLC, Plaintiff and Appellant,
THE CORRAL BAR, INC., Defendant and Appellee.
SYNOPSIS OF THE CASE
The Montana Supreme Court ruled in this case that the Corral Bar, Steakhouse and Motel does not have the right to use adjacent property, formerly owned by the federal government, for its business. The Court further held that the Corral is entitled to a trial to determine whether the new owners misrepresented their intentions for the property.
The Corral Bar sits along Highway 191 to the south of the popular skiing destination at Big Sky, Montana. The property sits contiguous to property formerly owned by the United States Forest Service. Part of the restaurant building, a storage shed, a well and water transmission line, a satellite television system, a propane tank, and a sanitation system actually sit on property formerly owned by the Forest Service. The Corral obtained a special use permit from the Forest Service to use this land.
The Forest Service traded its property with private property owners in the 1990s. Burcalow Family, LLC purchased the property, including the portions used by the Corral, in September 1999. Burcalow and the Corral later entered into a five-year license agreement so that the Corral could continue to use portions of Burcalow's property. The agreement expired in 2009. The parties failed to negotiate the Corral's purchase of the land. Burcalow filed a suit against the Corral in 2010 in which it alleged the Corral was trespassing on Burcalow's property.
The District Court determined that the Corral possessed a prescriptive easement over Burcalow's land because the Corral was able to establish that it continuously and adversely had used Burcalow's property for at least five years. This meant that the Corral could legally use Burcalow's property. The District Court also rescinded the parties' license agreement because it determined that Burcalow's counsel's fraudulently told the Corral that the Corral did not have authority to use Burcalow's property.
The Montana Supreme Court reversed the District Court. The Court determined that the Corral did not have a prescriptive easement over Burcalow's land as the Corral's adverse use would have had to begin when the Forest Service owned the property in order to meet the five-year statutory requirement. A private party cannot obtain a prescriptive easement against the federal government. Accordingly, the five years required to establish a prescriptive easement cannot include time that the federal government owns a piece of land. The Court also determined that, as the Corral did not have a prescriptive easement, Burcalow's counsel's statements that the Corral did not have authority to use Burcalow's property were not fraudulent. The Court sent the case back to the District Court in order to allow the Corral to proceed with a negligent misrepresentation claim and any other valid claims previously asserted.