State ex rel Dept. of Transp. v. Alderwoods (Oregon), Inc., 2015 WL 9589848, --- P.3d --- (2015)
The Oregon Supreme Court held that a government’s use of its police powers to eliminate or limit access to a property for public safety reasons is not compensable under Article I, Section 18 of the Oregon Constitution, so long as reasonable access to the abutting public right-of-way is maintained. The Court summarized its holding in the following proposition:
Adverse possession and prescriptive easements are scary concepts to landowners. Valuable property rights can be lost to neighbors and strangers, seemingly rewarding longtime bad behavior. The Washington Supreme Court has recently struck a chord to promote harmony in our state, and make prescriptive easements tougher to establish in the case of Gamboa v. Clark, 183 Wn.2nd 38, 348 P.3d 1214 (2015).
The Gamboas and Clarks owned adjoining parcels of enclosed agricultural land which had originally been part of one larger parcel separated by a gravel road, largely crossing the Clarks’ property. The road was used by the Gamboas to access their home and by the Clarks for farming grapes on their parcel. The road had been used by both parties and their predecessors for these purposes for decades. Each was aware of the other’s use of the road, and neither party gave the other permission, objected or interfered with the other’s use. After an unrelated dispute arose between the parties in 2008, the Gamboas brought an action seeking a prescriptive easement to use the gravel road to the extent on the Clarks’ property.
The Court found that the elements of a prescriptive easement were all present in this case, with the possible exception of “adversity”. The Gamboas’ use of the road was “open, notorious, continuous, hostile and uninterrupted over the prescriptive period of ten years” and the Clarks had “knowledge of such use at the time when [they] would be able at law to assert and enforce his or her rights.” Incidentally, it’s not clear to me how the use can be found to be “hostile” without also being “adverse”.
In certain circumstances, Washington courts have found that a use of someone’s property will be presumed to be with the owner’s permission and therefore not “adverse”. For example, in the case of unenclosed lands, the regular crossing of another’s property is presumed to with permission. Roediger v. Cullen, 26 Wn.2d 690. A presumption of permissive use also applies to enclosed or developed land cases when it is “reasonable to infer that the use was permitted by neighborly sufferance or acquiescence.” The third situation recognized was when the owner created the road and the claimant’s use did not interfere with the owner’s use. Cuillier v. Coffin, 57 Wn.2d 624, 627 (1961).
In this case, the trial court ruled that because the land was enclosed, there was no presumption of permission from the Clarks, and in effect, accepted a presumption of adverse use. In this close case, that shift from a presumption of permissive use, to placing on the Clarks the burden of establishing permissive use, led to the ruling that the Gamboas were entitled to a prescriptive easement to use the gravel road over the Clarks’ property.
Division III of the Court of Appeals disagreed, and found that the trial court erred in not recognizing that the Clarks should enjoy a presumption of permissive use, placing on the Gamboas the burden of rebutting that presumption to show their use was “adverse”. Gamboa v. Clark, 180 Wn. App. 256, 321 P.3d 1236 (2014). This can be done by presenting evidence that the claimant’s use was “adverse and hostile to the rights of the owner” such as by showing he “interfered with the owner’s use of the land in some manner” or that the owner’s acts or statements acknowledged the claimant’s right to an easement.
Interestingly, Division I of the Washington Court of Appeals (Drake v. Smersh, 122 Wn. App. 147, 153-54, 89 P.3d 726 (2004)) as well the Oregon Court of Appeals (Wels v. Hippe, 269 Or. App 785, 787 (2015)) have recently taken positions more closely aligned with the trial court approach to the presumption of adversity. However, the Washington’s Supreme Court held that even in cases of enclosed land, “an initial presumption of permissive use applies to enclosed or developed land cases in which there is a reasonable inference of neighborly sufferance or acquiescence.” Id. at 1220. “Showing a reasonable inference of neighborly sufferance or acquiescence is a fairly low bar.” Id. at 1221. In this case the fact that both parties knew the other used the road and didn’t object, and the use did not interfere with the owner’s use of its land, was enough to create this inference. Bingo. No prescriptive easement.
I like this decision, and it fits the traditional Scandinavian silent but friendly culture of the Northwest. Why put the burden on the neighbor who allows a neighbor to use his or her road to be nasty to make sure he or she doesn’t lose property rights? Why encourage more fence building when a policy which assumes that neighbors will be generous with each other creates a more pleasant atmosphere? Here’s to a neighborly Washington!
Improvement districts are authorized by statute to construct and operate permanent utilities for irrigation, drainage, diking, water improvement and water control throughout the State of Oregon. See Oregon Revised Statutes Chapters 545, 547, 551, 552 and 549. In some instances, the permanent utilities constructed and operated by these districts have been in existence for over 100 years. Often, these districts do not have title to the land on which the permanent utility is located nor do they hold recorded easements allowing access to maintain the infrastructure of the permanent utility. The lack of recorded property rights can lead to uncertainty as to what rights a district has to enter onto its members’ lands to operate, repair and improve the existing infrastructure of its permanent utility. Current landowners in a district may feel that their district does not have the right to enter onto their lands or that the district must obtain the right to enter their lands through voluntary acquisition or through condemnation. This creates a potential nightmare for an improvement district and its members when a landowner seeks to prevent a district from entering onto his or her land for the purpose of operating, repairing or improving the permanent utility. If this occurs, litigation may be the only option for the district or the landowner. This was the case in Davis v. Nye Ditch Users Improvement District, 247 Or App 266, 268 P3d 778 (2011).
In Nye Ditch, the predecessors-in-interest to the plaintiffs joined with neighboring landowners in the 1920s to dig the Nye Ditch to irrigate their lands for agriculture. Id. at 268. The plaintiffs Davis and Ritters each purchased property in the district in 2003 and 2006, respectively. Id. The plaintiffs’ properties benefitted from the Nye Ditch and it was visible from their land. Id. The Nye Ditch Users Improvement District was formed under Chapter 554 in 2006 and the plaintiffs’ lands were within the district. Id. at 268–69. The plaintiffs used the Nye Ditch and paid assessments to the district. Id. at 269. The district contracted with an excavation contractor to make improvements to the Nye Ditch on the Ritters’ property. The Ritters barred the excavation crew from entering their property and filed a lawsuit challenging the district’s authority to enter onto their lands. Id. The trial court granted summary judgment to the district finding that the district had the right to enter the land based on “(1) the easements belonging to landowners who draw water from the ditch, (2) ORS Chapter 554, and (3) defendant’s articles of incorporation.” Id. at 270. The plaintiffs appealed.
The Court of Appeals began its analysis by noting that the landowners drawing water from Nye Ditch, as neighbors who receive a “mutual benefit” through a “common enterprise,” hold easements to cross their neighbors’ property to access the Nye Ditch. Id. at 270–71 (citing Foster v. Foster, 107 Or 355, 368, 213 P 895 (1923); Luckey v. Deatsman, 217 Or 628, 634, 343 P2d 723 (1959)). The easements are appurtenant to and run with the land. Nye Ditch, 247 Or App at 271; Luckey, 217 Or at 636–37. The Court of Appeals further held that landowners’ easement rights included the right to access their neighbors’ property for repairs. Id. at 271 (citing Baumbach v. Poole, 266 Or 154, 157–58 n.1, 511 P2d 1219 (1973)). “The general rule, that a party who has a right of enjoyment, has also a right to enter and make necessary repairs, is essential to the enjoyment of the thing granted.” Id. at 271–72 (quoting Thompson v. Uglow, 4 Or 369, 372 (1873)).
The Court of Appeals went on to explain that the Nye Ditch Users Improvement District was entitled to exercise its members’ easement rights to enter onto its members’ lands to improve or repair the Nye Ditch. Id. at 275. The holding was based on the statute authorizing the formation of the district, ORS Chapter 554. In particular, the Court noted that ORS 554.110 gave the district’s board “full authority and power to . . . (1) Build, construct and complete any works and improvements . . . (3) Operate and maintain such works as are necessary, convenient and beneficial for said purposes . . . .” Id. at 274. The Court of Appeals found that the statute granted the district the right to enter the land of its members to improve or repair irrigation ditches by implication.
[W]here a power is conferred by an act, everything necessary to carry out that power and make it effectual and complete will be implied. Further that which is implied in a law is as much a part of it as that which is expressed. These long-established principles of statutory construction are universally recognized [.]
Id. at 275 (quoting Pioneer Real Estate Co. v. City of Portland, 119 Or 1, 10, 247 P2d 319 (1926)). “The legislature granted improvement districts the authority to act on behalf of individual landowners and to exercise, on their behalf, their common-law rights of improvement and repair and access necessary for that purpose.” Id. at 275.
The decision in Nye Ditch has a number of interesting aspects. First, it acknowledges that the landowners who band together to build a permanent utility have property rights in each other’s lands. Second, it takes that concept a step further to allow statutorily created and governed improvement districts to exercise its members’ property rights to operate, maintain and improve its existing infrastructure. Third, by allowing the districts to exercise its members’ property rights, the Court of Appeals appears to have bypassed the question of whether the District’s operation, maintenance and improvement of a permanent utility on the lands of its members constitutes a constitutional taking. By doing so, it removes the possibility that the members of the district may have to pay for the permanent utility twice – once when it was built and a second time to gain access to it. Thus, the Court of Appeals created an elegant solution to what is otherwise an intractable problem for improvement districts around the Oregon.
The law recognizes that under certain circumstances, continued unauthorized crossing of another’s land for a long time can lead to the right to do so indefinitely, notwithstanding that there is no agreement from the landowner. The right so gained is called a prescriptive easement. When the law allows one landowner to lose property rights in favor of another, without compensation, disputes often occur. No surprise. If it were my land, I’d be upset, too.
The Oregon Court of Appeals, in Wels v. Hippe, 269 Or App 785, 787 (2015), recently dealt with such a dispute, and provided the litigants and practitioners of the law with an in-depth analysis of one element of a prescriptive easement case – “adversity”.
In order to obtain a prescriptive easement to cross over or use the property of another under Oregon (as well as Washington) law, a plaintiff claiming a prescriptive easement is required to show, “by clear and convincing evidence, that his use (or use by former owners of his property) of the road on defendants’ property was ‘open and notorious,’ ‘adverse to the rights of defendants,’ and ‘continuous and uninterrupted’ for 10 years.” Id, at 787.
K.L.W. Construction Co., Inc. v. Town of Pelham, 2014 WL 6967664 (N.H.) involved petitions for declaratory judgment by a construction company and a developer for a refund of what in Oregon are termed “systems development charges” authorized by a New Hampshire statute. Under the statutory scheme, local governments may assess fees for capital improvements; however, if the fees are not spent within six years, they must be refunded. Defendant’s ordinance authorized a refund, but only to the “current owner” of the land assessed. Plaintiff Construction Company paid the fee, which refund was also sought by the original developer. The land in question was sold to homeowners after development and the Town contended that only these successors could claim the refund.
The assessments were levied to build a new Town fire station; however, after some of the funds had been spent for feasibility studies and architectural plans, the voters of the Town declined to authorize construction. The trial court upheld the Town’s restriction of refunds to current owners and granted its motion to dismiss Plaintiffs’ claims, determining that the statutory direction for a refund of unused fees did not require that such refund be paid to the original payee.
On appeal, the court found no factual disputer and reviewed the trial court’s order of dismissal on a de novo basis, as Plaintiffs’ standing was jurisdictional and a question of law over statutory interpretation of “refund,” a term not otherwise defined by the enabling legislation. Plaintiffs contended that local governments must follow the statutory mandate and that “refund” must be given its ordinary meaning of “pay back” or “reimburse.” Plaintiffs also contended that another statute relating to exactions was more specific, providing refunds in those cases to the payer or the payer’s successor in interest. However, the SDC statute did not contain such language and the court declined to insert the same, finding the two statutes enacted at different times and dealing with different situations.
Moreover, the court cited decisions from other courts that allowed refunds to go to other than the original payers and rejected the possibility that local governments could enter into an agreement a payer to have payments specifically refunded to that payer as requiring this arrangement to be made. Moreover, the court declined to use legislative history to interpret the refund statute, finding no necessary ambiguity that would allow for such an examination. Finally, the court rejected Plaintiffs’ takings challenges, finding no adequate preservation of constitutional issues. The court thus affirmed the trial court’s conclusion that the local ordinance authorizing SDC refunds to current landowners to be within the statutory authorization.
This is a case of statutory interpretation. Although Oregon law does not speak to the refund issue, common practice is that unspent systems development charges must be refunded. Refunding those charges to current landowners provides for better predictability in the use of those funds and for allocation of the risk of that possibility as part of the sales price for land.
K.L.W. Construction Co., Inc. v. Town of Pelham, 2014 WL 6967664 (N.H.)
As the Oregon Legislative session moves into full-swing giving spectators a front row seat to frantic lobbying and frenetic lawmaking, the Oregon Court of Appeals issued a decision that should remind those involved in this pastime affectionately known as “sausage-making,” to consider the importance of the deliberations. The decision relates to efforts to remove the oldest home in Lake Oswego, the historic Carman House, from the City of Lake Oswego’s inventory of historic resources and potentially allow for its demolition, as described in my previous blog post. In 1995, the Oregon Legislature passed the statute at issue, ORS 197.772, which precludes a local government from imposing a historic designation on a property over “a property owner’s” objection. Subsection (3) of that same statute further provides that “a property owner” may subsequently seek to remove a historic designation that was imposed. The issue before LUBA and the Court in the case, Lake Oswego Preservation Society v. City of Lake Oswego, was whether a request to remove a designation after it has been imposed must be made by the same property owner who originally objected or whether a subsequent owner may also seek removal.
The general rule when interpreting a statute is to focus on the text and context of the provision. However, courts will also look to the legislative history to determine intent. In the Lake Oswego case, the Court found, as had LUBA, that the text and context for determining who was included as “a property owner” under ORS 197.772 was not particularly helpful and it turned to the legislative history. This history came largely from two hearings before the House Committee on General Government and Regulatory Reform. LUBA keyed into a statement by one of the bill’s authors, when asked whether a subsequent purchaser could seek to remove historic designation, responded that “[w]e haven't thought about that situation.” LUBA also noted that a proposed amendment making clear that in cases where the property owner does not object, subsequent owners are bound to the designation, and was rejected and not included in the engrossed bill. Based on those comments, LUBA concluded that the drafters intended to afford relief only to those property owners on whose property the designation had been imposed.
The Court of Appeals analysis of the legislative history makes no mention of those portions of the legislative history that LUBA found important. Instead, the court highlighted that the legislation was to allow owners that were “coerced into the historic property designation” to seek removal of that designation. The court quoted from another representative summarizing the scope of subsection (3) to include those cases where “property owners were not allowed to consent and government imposed it on them that now they would have an opportunity to remove their property from that designation.” From this, the court concluded that the amendment allows “individuals who own property on which historic designations had been involuntarily imposed by the local government – before the enactment of ORS 197.772 – to have that designation removed.” The court explained that the focus during these committee meetings was on providing relief in cases where a designation was imposed over an owner’s objection and not on whether subsequent purchasers could also take advantage of the previous owner’s objection. Further, the court found that preservation advocates’ concerns that adoption of subsection (3) would have the effect of “dismantling historic districts” and a lack of response by the proponents indicated an intent to have broad effects. As a result, the court concluded that any property owner that has a local historic designation forced on their property may remove that designation.
What is so interesting about this case is that two review bodies looked at the same legislative history and reached diametrically opposing conclusions. Maybe the difficulty is that the Court of Appeals failed to mention, much less explain, why the comments that LUBA found instructive were not helpful. How could the court find that committee discussions focused solely on giving relief to those owners who were “coerced into a historic preservation designation” and from that extend that same protection to property owners who were not coerced but instead knowingly purchased a designated property? If this ruling rests on the conclusion that the legislature intended the effect of ORS 197.772 to “dismantle” historic preservation efforts, legislators, both proponents and opponents, need to be much more descriptive and particular in describing their intent.
There are three types of easements that can be created without an express agreement: an implied easement, an easement by necessity, and a prescriptive easement. It is not uncommon to see all three types of unwritten easements pled in a lawsuit seeking quiet title even though the elements for establishing each type of easement are quite different. The following is a quick primer of the elements necessary to establish each type of easement where there is no written agreement to convey an easement.
Implied Easement. An implied easement can only be created where property held under one ownership is divided into separately owned parts. An easement may be implied when the circumstances existing at the time ownership is divided establishes that the grantor intended to create an easement. The following factors are considered by the Court in deciding whether an implied easement exists: (1) whether the claimant is the conveyor or the conveyee; (2) the terms of the conveyance; (3) the consideration given for it; (4) whether the claim is made against a simultaneous conveyee; (5) the extent of necessity of the easement to the claimant; (6) whether reciprocal benefits result to the conveyor and conveyee; (7) the manner in which the land was used prior to its conveyance; and (8) the extent to which the manner of prior use was or might have been known to the parties. Cheney v. Mueller, 259 Or 108, 118-119 (1971). The Court of Appeals recently clarified that the key time point for analyzing whether the grantor intent to provide an easement is the date ownership of the land is divided and not the date the land was partitioned or platted. Manusos v. Skeels, 263 Or App 721, 730 (2014). The Court of Appeals also clarified that the “necessity” needed to establish an implied easement is not the “absolute necessity” required for an easement by necessity (discussed next). Id. at 732.
Easement by Necessity. An easement by necessity is created when the following three factors are present: (1) unity of title in the grantor; (2) severance of ownership; (3) actual necessity. Unlike an implied easement, an easement by necessity is terminated once the necessity ceases to exist. Relling v. Khorenian, 261 Or App 1, 8-9 (2014).
Prescriptive Easement. In order to establish a prescriptive easement, the claimant must show by clear and convincing evidence that they or their predecessors, under a claim of right, used the alleged easement adversely to the rights of the respondent or their predecessors for a continuous and uninterrupted period of 10 years. Thompson v. Scott, 270 Or 542, 546, 528 P2d 509 (1974). It is important to note that the adverse possession statute (ORS 105.620), which includes the additional requirement of an “honest belief” of ownership by the claimant, does not apply to prescriptive easements. Uhl v. Krupsky, 254 Or App 736, 740-741 (2013). Although courts recognize that a presumption of adversity arises from open and continuous use of property, that presumption may be rebutted by showing the use was permissive or by showing the claimant’s use of an existing roadway over a neighbor’s land does not interfere with the neighbor’s use. Woods v. Hart, 254 Or 434, 437, 458 P2d 945 (1969).
If, as expected, climate change and sea level rise become a bigger threat to private property in the 21st century, ancient doctrines about boundary changes, including accretion, reliction and avulsion will become increasingly important. On August 14, 2014, the Oregon Supreme Court explained its view of accretion in Sea River Properties, LLC v. Parks, 355 Or 831 (2014).
The case arose just north of Rockaway Beach along the Nehalem River and involved grants of land that went back over a century and a half. There was a complex geologic and factual background, but the question the court had to answer was who owned land that had generally built up west of the defendant’s land and north of the plaintiff’s land between the old bed of the Nehalem river (before the federal government built a jetty) and the ocean. The Oregon Supreme Court chose not to exercise its ability to re-weigh the facts and, relying on the facts found by the trial court, concluded that “accreted land belongs to the upland owner where the accretion began,” even if it eventually grows in front of the property of another.
In itself, this case is not particularly surprising or interesting, but, as climate change continues to affect our world, these cases will only become more common and it behooves practitioners to understand the application of the common law property doctrines involved in shifting boundary lines.
Last week in the case Lake Oswego Preservation Society v. City of Lake Oswego, LUBA gave a huge boost to the historic preservation community and the protection of local historic resources. ORS 197.772 is one of the few statutes regulating how local governments designate and protect historic resources. ORS 197.772(1) provides that where a property owner objects to any form of historic property designation, the local government must remove the designation. Subsection (3) of the same statute requires that the local government “allow a property owner” to remove a historic designation that was previously “imposed by the local government.” LUBA was asked to decide whether the term “property owner” is limited to the owner at the time that the designation was imposed or whether a person who becomes an owner after the designation was imposed, where the original owner objected to the designation, could also seek removal.
In 1990, the City of Lake Oswego designated the Carmen House, a historic farmhouse and barn, along with a number of other properties within the City’s historic landmark inventory. The property owners at the time, Wilmot and Gregg filed an objection to the designation. While the City’s decision was pending review before LUBA, a fire on the property destroyed the barn. The City’s decision was withdrawn for reconsideration and as a result, the Carmen House was designated without the additional acreage and without further objection. The Mary Caldwell Wilmot Trust, the current owner of the property, sought to remove the Carman House’s historic designation under ORS 197.772(3). The City Council granted the request to remove the historic designation concluding that the term “property owner” is not limited to the owner at the time the property was designated. The neighbors appealed that decision to LUBA.
LUBA began its analysis by focusing on the text and context of ORS 197.772(3). LUBA found the text of the provision not terribly helpful because adding a phrase to limit qualifying property owners to those who made the initial objection would insert language into the provision just as including post-designation subsequent purchasers would also insert language, contrary to a law governing statutory construction. Moving to the context, LUBA found the use of the same phrase, “a property owner” in both subsection (1) and (3) of the statute suggests that the two phrases have the same meaning and refer to the initial objecting property owner. However, LUBA also noted that these two provisions have “different, non-overlapping circumstances that occur at different times,” suggesting an intent to describe different owners because the two categories are “mutually exclusive.”
What tipped the scales for LUBA was legislative history indicating that the purpose of subsection (3) was to allow property owners who “have been coerced into the historic property designation” to petition for removal. When one of the legislators was asked whether a person who bought a piece of property that had a historic designation could seek to remove it, the response was “[w]e haven’t thought about that situation.” A proposed amendment was offered that in cases where a local government designation occurs with concurrence from the local government, the obligation “runs with the land.” LUBA found that “taken together,” subsection (3) and the proposed amendment would treat subsequent owners the same as the original owner. If the designation was imposed over an objection, then a subsequent owner could request removal and conversely, if the initial owner consented, the subsequent property owner could not request removal. This “run with the land” amendment was removed before final adoption. Without any discussion explaining why the amendment was deleted, LUBA concluded that elimination of the additional language that would have put “subsequent owners on the same footing as the property owner” provides the “strongest inference” that the legislature did not intend this result. From this analysis, LUBA concluded that, although it is “a close question,” the legislature did not intend for the term “property owner” to include person who become owners of property after it is designated and the City erred in removing the designation based on ORS 197.772(3).
LUBA’s decision went on to find that a property owner’s failure to continually raise the objection through later stages of a proceeding does not mean that the owner withdrew the objection or implicitly consented to the designation. LUBA found that although Wilmot did not object to the subsequent designation of just the Carman House, Wilmot did not withdraw his previous objections.
LUBA’s decision makes sense from a policy perspective. Once a historic inventory designation is in place, subsequent buyers, who are presumably aware of the designation, should be assumed to have bought the designation along with all of the obligations that come with it. Removal of the designation is still possible through Goal 5 and its implementing rules, but not through an end-run, relying on the limited objection of a previous owner who subsequently elected not to pursue such a course. After all, the value of a historic resource and its overall contribution to a community does not lessen when contemporary development pressures create incentives to develop that may have not existed when a resource is designated.
In a land use scheme that many argue is overly complicated and convoluted, it is interesting to note that historic preservation has very little, arguably a single relatively clear statutory standard, governing the protection has resulted in this case that will have a demonstrable impact on preservation efforts throughout the state. The first of these cases, Demlow v. City of Hillsboro, LUBA narrowed the removal exception to those cases where the historic designation was “imposed on the property”. Now, LUBA has narrowed the exception further to the current owners that object. This is a narrow exception indeed. Now we will wait to see if the Court of Appeals is asked to review or if the legislature decides to enlarge or alter the standard.
Note: This firm represents the City of Lake Oswego in some limited matters unrelated to this case.
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