Diamond K Investments, Inc. v. 1330 LLC

2024 Ark. App. 433, 698 S.W.3d 653
Court of Appeals of Arkansas·Decided September 18, 2024·Published·Cited by 2 cases

Opinion

Cite as 2024 Ark. App. 433 ARKANSAS COURT OF APPEALS DIVISION II

No. CV-23-222

Opinion Delivered September 18, 2024 DIAMOND K INVESTMENTS, INC.

APPELLANT APPEAL FROM THE FAULKNER COUNTY CIRCUIT COURT

[NO. 23CV-22-470]

V.

HONORABLE CHARLES E. CLAWSON 1330 LLC III, JUDGE APPELLEE

REVERSED AND REMANDED

WENDY SCHOLTENS WOOD, Judge I. Introduction

This case involves a dispute between adjacent property owners regarding whether the owner of an easement for the purpose of a roadway, 1330 LLC (“1330”), may erect a fence and gate across the roadway of the landowner, Diamond K Investments, Inc. (“Diamond K”), over its objection. The circuit court found that 1330’s placement of a fence and gate across the roadway was a reasonable improvement and not an unreasonable burden on Diamond K. On the basis of this finding, the circuit court denied Diamond K’s motion for summary judgment on the easement issue; granted 1330’s motion for partial summary judgment, which dismissed Diamond K’s counterclaims; and denied Diamond K’s motion to reconsider the order denying Diamond K’s motion for summary judgment. On appeal, Diamond K contends, first, that 1330 does not have the right to encumber the road on

Diamond K’s property with a fence and gate; alternatively, that 1330’s placement of a fence and gate over the road was unreasonable; and, finally, that the circuit court should not have dismissed Diamond K’s counterclaims. We reverse the court’s orders denying Diamond K’s motion for summary judgment, granting 1330’s motion for partial summary judgment, and denying Diamond K’s motion for reconsideration, and we remand for proceedings consistent with this opinion.

II. Facts

On January 12, 1999, Diamond K purchased property by warranty deed “[s]ubject to a right of way for roadway purposes over and across the following described lands in favor of [adjoining property landowner] A.W. Renfroe and Virginia L. Renfroe.” The deed specifically described the express easement as an approximately thirty-foot-wide right-of-way. The easement is referred to herein as Tract 4.

In 2018, 1330 purchased the property adjoining Diamond K’s property from Julia and James Roberson, who had acquired it from the Renfroes in 2005. The Robersons represented to 1330 that they also owned Tract 4, containing the roadway easement, in fee simple; they executed a deed purporting to convey Tract 4 to 1330; and 1330 believed that its purchase price included an amount in exchange for this roadway. 1330’s property is currently under lease by a tire company.

In November 2021, 1330 erected a fence across the north end of the roadway and a fence with a gate across the south portion of the roadway “to prevent thefts of property experienced by the business operating on the property (as well as neighboring businesses)”

and provided Diamond K with the access code. On November 23, Diamond K sent a letter to 1330 informing it that the fencing and gate constitute a trespass on its property and demanding that 1330 remove them immediately.

This is an arial photograph of the parties’ adjoining properties and the easement.

DIAMOND K PROPERTY

The blue lines mark the approximate boundaries of Diamond K’s property; the white lines mark the approximate boundaries of 1330’s property; and the area defined by the red lines is the easement, which 1330 has enclosed with a fence on the north end and a fence and a gate on the south end.

III. Procedural History

On April 20, 2022, 1330 filed a complaint against Diamond K asking the court to quiet title to Tract 4 in 1330 or, in the alternative, to declare that 1330 is entitled to maintain the fences and gate erected across Tract 4 for protection against theft.1 1330 alleged that the fences and gate did not unreasonably restrict Diamond K’s access to its property because Diamond K’s property was undeveloped woodlands, Diamond K has never used the roadway for ingress and egress, and 1330 provided Diamond K with the access code to the lock on the gate at the south end of Tract 4.

Diamond K filed an answer asserting that its warranty deed (attached as an exhibit to its answer) regarding Tract 4 “speaks for itself” and that it owns Tract 4 on which 1330 erected the fences and gate; denying that the Robersons had any title to Tract 4 to convey to 1330; admitting that 1330 has a right-of-way for roadway purposes over and across Tract 4; and claiming that 1330 had erected fences and a gate on Tract 4 and that Diamond K had asked 1330 to remove them. Diamond K also filed counterclaims for trespass, nuisance, negligence, ejectment, and unjust enrichment claiming that 1330 has no right as the owner of the easement to erect fences and a gate and that doing so interfered with Diamond K’s use and enjoyment of the property. Diamond K asked the court to enjoin 1330 to remove the fences and gate and eject 1330 from its property.

1 1330’s complaint also contained claims against the Robersons and the relevant titleinsurance companies for breach of contract, breach of fiduciary duty, and unjust enrichment for misleading it regarding Tract 4. These claims have all been resolved, were dismissed by the circuit court, and are not at issue in this appeal. The parties on appeal agree that Tract 4 is owned by Diamond K subject to 1330’s easement.

1330 filed a motion to dismiss the counterclaims arguing it was “undisputed” that thieves had stolen property from 1330’s tenant, that Diamond K did not use the roadway to access its property, that 1330 provided the access code to Diamond K, and that the fences and gate did not unreasonably interfere with Diamond K’s rights.

On July 28, Diamond K moved for summary judgment alleging as undisputed facts that it was the fee-simple owner of Tract 4 on which 1330 erected the fences and gate, specifically setting forth the description in an attached warranty deed conveying Tract 4 to Diamond K. Diamond K further alleged that 1330 has a “right of way for roadway purposes over and across” Tract 4 as specifically set forth in the attached warranty deed; that 1330 was the dominant estate and Diamond K the servient estate regarding Tract 4;2 and that 1330 refused to remove the fences and gate after Diamond K sent a letter to 1330 informing it that they constituted a trespass and demanding their removal. Diamond K claimed that the fence erected by 1330 on the north end of Tract 4 prohibited any ingress or egress to Diamond K’s property and that the fence with a gate on the south end required an access code, further encumbering Tract 4. Diamond K argued that 1330 was intentionally trespassing on Tract 4, had created a nuisance that unreasonably interfered with Diamond K’s access to and use of its property, and had been negligent in erecting and maintaining the fence. Diamond K asked the court to eject 1330 from Tract 4 and require it to remove the

2 The land over which an easement is imposed is known as the servient tenement or estate, and the land having the right of use is the dominant tenement or estate. Burley v. Bradley, 2021 Ark. App. 105, at 13, 619 S.W.3d 49, 57.

fences and gate at its cost. Diamond K requested damages, punitive damages, attorney’s fees, and costs. In addition to the warranty deed, Diamond K attached the affidavit of its president, Bruce Keathley, in which he states that Diamond K is the fee-simple owner of the disputed property; that 1330 had acquired the adjoining property and thus had an easement over Diamond K’s property for roadway purposes as specifically described and set forth in Diamond K’s warranty deed; that Diamond K had not and would not give 1330 permission to erect fences or a gate over and across Tract 4; that the erection of fences and a gate had damaged Tract 4; and that Diamond K will incur costs and expenses to remediate Tract 4 following the removal of the fences and gate.

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Diamond K Investments, Inc. v. 1330 LLC, 2024 Ark. App. 433, 698 S.W.3d 653 (Ark. Ct. App. 2024).

2024 Ark. App. 433 (Diamond K Investments, Inc. v. 1330 LLC) — published by Counsel Stack Legal Research, free access to 12M+ legal documents.

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