Helleberg v. Estes

943 N.W.2d 837, 2020 S.D. 27

• Court: South Dakota Supreme Court
• Decided: May 13, 2020
• Docket: 28954
• Status: Published

Opinion

#28954-a-SRJ 2020 S.D. 27

IN THE SUPREME COURT OF THE STATE OF SOUTH DAKOTA

****

KATRINE B. HELLEBERG, SYLVIA J. COX and TRACY K. HEETER, Plaintiffs and Appellees,

v.

THOMAS L. ESTES and WANDA L. ESTES, Defendants and Appellants.

APPEAL FROM THE CIRCUIT COURT OF THE SEVENTH JUDICIAL CIRCUIT PENNINGTON COUNTY, SOUTH DAKOTA

THE HONORABLE JANE WIPF PFEIFLE Judge

FRANK A. BETTMANN of Bettmann Hogue Law Firm, Prof. LLC Rapid City, South Dakota Attorneys for plaintiffs and appellees.

BRIAN L. UTZMAN of Smoot & Utzman, P.C. Rapid City, South Dakota Attorneys for defendants and appellants.

CONSIDERED ON BRIEFS MARCH 17, 2020 OPINION FILED 05/13/20 #28954

JENSEN, Justice

[¶1.] Thomas Estes owns Lots 3 and 4R2 in Estes Subdivision located in

Pennington County, South Dakota. Katrine Helleberg owns Lot 2R within the

Estes Subdivision. Tracy Heeter and Sylvia Cox (Heeter/Cox) live in a home located

on Lot 2R. Sometime after 2008, hostilities developed between Estes and

Heeter/Cox concerning Estes’ use of a road (Easement Road) that crossed Lot 2R.

[¶2.] Unable to resolve their differences, the parties filed multiple claims

against one another in this action. Several of the claims were settled or resolved on

summary judgment. The circuit court heard and resolved the remaining claims

during a bench trial. Estes appeals the circuit court’s following determinations: (1)

that a limited private easement granted Estes the right of access across Lot 2R

solely to repair or install water lines; and (2) that a prescriptive easement did not

exist in favor of Estes for the use of the Easement Road on Lot 2R. We affirm the

circuit court on both issues.

Facts and Procedural History

[¶3.] Estes Subdivision is located on 40 acres of land that had been owned

by Estes’ parents since at least 1959, when they moved into a home on the property.

In 1977, Estes’ father decided to subdivide the 40 acres for the purpose of selling

residential lots. Lot 2, consisting of 2.99 acres, was platted and sold to Eugene and

Linda Mikuska (Mikuskas) in 1977.

[¶4.] The same year, Estes’ father drilled a well on Lot 4R2 and installed a

water line to supply water to residences within Estes Subdivision. The water line

roughly followed the path of the Easement Road. In 1985, the Estes family imposed

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restrictive covenants for the lots within Estes Subdivision by signing a Declaration

of Protective and Restrictive Covenants (Covenants). 1 The Covenants burdened the

lots within Estes Subdivision with the following access easement: “The right of

access to repair or install the water lines and to build an access road and use said

access road over the water line is hereby granted by owner.”

[¶5.] In 1991, Mikuskas conveyed Lot 2 to John and Phyllis Cram by

contract for deed. In 2002, Lot 2 was replatted as Lot 2R. The replat added

approximately seven additional acres as part of Lot 2R. Estes deeded Lot 2R to the

Crams by warranty deed in 2003. Lot 2R was adjacent to the south of Lot 4R2. In

2008, Heeter/Cox purchased Lot 2R from the Crams. Heeter/Cox conveyed by

quitclaim deed Lot 2R to Helleberg, Cox’s daughter, on July 2, 2008, but Heeter/Cox

continued to reside on the property.

[¶6.] Estes testified that the Easement Road had been used for various

purposes from the time his parents moved onto the land in addition to using the

Easement Road for the repair and installation of the water lines. It is clear that

when Lot 2 was replatted and expanded from 2.99 acres to 10 acres in 2003, the

Easement Road was located on replatted Lot 2R. However, the evidence was

disputed whether the Easement Road crossed Lot 2 during the period from 1977

until 2003 prior to the replat. Heeter/Cox assert that the Easement Road was

located on land owned by Estes until the replat in 2003, when Lot 2 was expanded

1. Among other provisions, the Covenants provided that Estes was to operate and maintain the water supply system and water lines for the lot owners in Estes Subdivision. Estes charged a flat rate for the first 3,000 gallons used and an additional fee for every additional 1,000 gallons used. Estes also had the right to raise the charges as necessary to meet operating costs. -2- #28954

to Lot 2R and conveyed to the Crams. Estes claims, to the contrary, that the

Easement Road was located on Lot 2 in 1977 when the lot was originally platted

and he did not thereafter own the land underlying the portion of the Easement

Road on Lot 2. A survey done on January 1, 2018 suggests that the Easement Road

may in fact have crossed the former Lot 2. 2

[¶7.] On June 6, 2013, Heeter/Cox and Helleberg filed a complaint against

Estes. The complaint sought a declaratory judgment that the water system in the

Estes Subdivision was not owned by Estes and that Estes was not entitled to the

monies generated from the water system. The complaint also requested the

appointment of a receiver and injunctive relief. On July 3, 2013, Estes filed an

answer and counterclaim seeking a declaration concerning Estes’ right of access to

use Lot 2R and the Easement Road on Lot 2R, and a declaration that Estes owned

the water system. Estes also counterclaimed for assault and battery. 3 The assault

and battery claim was bifurcated from the other claims and eventually settled.

[¶8.] On December 30, 2014, the circuit court granted Estes’ motion for

partial summary judgment, determining that Estes owned the water system, the

2. The circuit court did not make a specific finding on the question of whether the Easement Road crossed Lot 2 prior to the 2003 replat creating Lot 2R. However, even if it did, the court found that Estes failed to show that his use of the Easement Road was adverse to the prior owners. See Rotenberger v. Burghduff, 2007 S.D. 19, ¶ 8, 729 N.W.2d 175, 178 (quoting Rancour v. Golden Reward Mining Co., 2005 S.D. 28, ¶ 7, 694 N.W.2d 51, 54) (“To find that a prescriptive easement exists the property must be used “in a manner that is hostile or adverse to the owner.”).

3. During one of these quarrels between the parties, Estes claimed that Heeter slammed his foot in a car door, injuring his foot. This alleged incident became the basis for Estes’ assault and battery claim. -3- #28954

revenues generated from it, and that Estes had the right to control the water

system. Heeter/Cox did not appeal this determination.

[¶9.] On November 27, 2018, the circuit court held a bench trial on the

remaining issues, including Estes’ easement rights on Lot 2R. At the conclusion of

the trial, the court orally ruled that the Covenants granted Estes a limited private

easement to access Lot 2R to install and repair water lines. The court also

determined that Estes did not have a prescriptive easement for the Easement Road

that crossed Lot 2R. Estes appeals from the written judgment incorporating the

court’s rulings. 4

Analysis and Decision

[¶10.] “The interpretation of a restrictive covenant is a legal question which

we review de novo.” Harlan v. Frawley Ranches PUD Homeowners Ass’n, Inc., 2017

S.D. 54, ¶ 6, 901 N.W.2d 747, 750. We review “‘declaratory judgments as we do any

other order, judgment, or decree’ giving no deference to a circuit court’s conclusions

of law under the de novo standard of review.” In re Pooled Advocate Trust, 2012

4. Estes argues for the first time in his reply brief that an implied easement was established on this record. See Thompson v. E.I.G. Palace Mall, LLC, 2003 S.D. 12, ¶ 13, 657 N.W.2d 300, 305 (“[T]he party claiming the existence of an implied easement must show that it is necessary . . . .”). The circuit court briefly referenced in its ruling that an argument had been made for an implied easement, but the court determined there was no showing of necessity or permanency. Further, Estes failed to plead a claim for an implied easement in his counterclaim. Estes also failed to raise appellate error concerning an implied easement in his initial brief to this Court. Therefore, the issue is not properly before this Court on appeal. See Ellingson v. Ammann, 2013 S.D. 32, ¶ 10, 830 N.W.2d 99, 102 (quoting Agee v. Agee, 1996 S.D. 85¸ ¶ 21 n.4, 551 N.W.2d 804, 807 n.4) (“A party may not raise an issue for the first time on appeal, especially in a reply brief when the other party does not have the opportunity to answer.”).

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S.D. 24, ¶ 20, 813 N.W.2d 130, 138 (quoting Fraternal Order of Eagles No. 2421 of

Vermillion v. Hasse, 2000 S.D. 139, ¶ 8, 618 N.W.2d 735, 737). However, “[f]indings

of fact . . . may not be set aside unless clearly erroneous . . . .” Estate of Henderson

v. Estate of Henderson, 2012 S.D. 80, ¶ 9, 823 N.W.2d 363, 366 (quoting SDCL 15-6-

52(a)).

1. Whether the circuit court erred when it limited the private easement granted in the Covenants to the installation and repair of water lines.

[¶11.] Estes claims that the circuit court erred in its determination that the

private easement grants a right of access across Lot 2R solely for the repair or

installation of the water lines. Estes urges that the circuit court failed to give effect

to all of the provisions of the Covenants by ignoring the language that states, “to

build an access road and use said access road over the water line.” Appellees argue

that the circuit court did not err in restricting Estes’ use of the easement because

the limitation solely for use to repair and install water lines was clearly and

expressly provided for in the 1985 Covenants.

[¶12.] We apply the rules of contract interpretation to interpret the

Covenants. See Jackson v. Canyon Place Homeowner’s Ass’n, Inc., 2007 S.D. 37, ¶ 9,

731 N.W.2d 210, 212. Here, the parties acknowledge that the Covenants are not

ambiguous. We agree. The language of the Covenants is unambiguous when

viewed objectively and in the context of the entire Declaration of Protective and

Restrictive Covenants. “[A] contract is ambiguous only when it is capable of more

than one meaning when viewed objectively by a reasonably intelligent person who

has examined the context of the entire integrated agreement.” Coffey v. Coffey,

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2016 S.D. 96, ¶ 9, 888 N.W.2d 805, 809 (quoting Dowling Family P’ship v. Midland

Farms, 2015 S.D. 50, ¶ 13, 865 N.W.2d 854, 860).

[¶13.] “When the meaning of contractual language is plain and unambiguous,

construction is not necessary.” Ziegler Furniture & Funeral Home, Inc. v. Cicmanec,

2006 S.D. 6, ¶ 14, 709 N.W.2d 350, 354 (quoting Pesicka v. Pesicka, 2000 S.D. 137,

¶ 6, 618 N.W.2d 725, 726). Instead, “to ascertain the terms and conditions of a

contract, we must examine the contract as a whole and give words their plain and

ordinary meaning.” Coffey, 2016 S.D. 96, ¶ 8, 888 N.W.2d at 809 (internal quotation

marks and citations omitted). Further, when the language of a restrictive covenant

is unambiguous, “its meaning must be determined from the four corners of the

instrument without resort to extrinsic evidence of any nature.” Jackson, 2007 S.D.

37, ¶ 9, 731 N.W.2d at 212 (quoting Halls v. White, 2006 S.D. 47, ¶ 7, 715 N.W.2d

577, 580-81).

[¶14.] The plain language of the Covenants provides for a limited easement

on the lots within Estes Subdivision to: (1) repair or install water lines; and to (2)

build an access road and use said access road over the water line. The language of

the easement is included within the provisions dealing exclusively with the water

system. These provisions detail the rights and duties related to the water line and

water system. Further, the only reference to the building and use of a road within

Estes Subdivision is in relation to the water lines. There is no language expressing

an intention to allow the expanded use of the Easement Road for other purposes.

[¶15.] Estes argues that the circuit court impermissibly rendered the

language “to build an access road and use said access road over the water line . . .”

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meaningless. Estes asserts that the words “and use said access road” grants him

the right to use the Easement Road for any purpose. However, the language, when

read within the whole of the Covenants, indicates that the sole purpose of the

easement is to grant access to repair or install the water lines within the Estes

Subdivision.

[¶16.] As the circuit court determined, “if, in fact, the Esteses had intended at

any time that the land would be used to haul sticks off or tree limbs or 10-foot

pieces of pipe, they most certainly would have included it in the declaration of the

restrictive easement.” The circuit court properly limited the easement to repairing

or installing water lines consistent with the plain language of the Covenants.

2. Whether the circuit court erred in its determination that the evidence did not satisfy the elements for a prescriptive easement.

[¶17.] The circuit court concluded that Estes failed to prove the elements for

a prescriptive easement by clear and convincing evidence. Estes argues that the

circuit court erred because he and his predecessors in interest used the Easement

Road and have treated it as their own without Appellees, or their predecessors’,

consent or permission. Appellees assert that a prescriptive easement does not exist

because Estes had actual title to the land containing the easement for most of the

required statutory period of twenty years. Alternatively, Appellees argue that

Estes had permissive use of the Easement Road consistent with the Covenants and

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the prior owners of Lot 2R and did not openly or continually use the Easement Road

in a way that was hostile to the owners for twenty years. 5

[¶18.] To prove the existence of a prescriptive easement, Estes must satisfy

“a two-part test by clear and convincing evidence.” Rotenberger, 2007 S.D. 19, ¶ 8,

729 N.W.2d at 178. First, Estes must show “an open, continued, and unmolested

use of the land in the possession of another for the statutory period of 20 years.” Id.

(quoting Rancour v. Golden Reward Mining Co., 2005 S.D. 28, ¶ 7, 694 N.W.2d 51,

54). Second, Estes must show that the property is being used “in a manner that is

hostile or adverse to the owner.” Id. (quoting Rancour, 2005 S.D. 28, ¶ 7, 694 N.W.

2d at 54).

[¶19.] To constitute an open and continuous use, “the adverse use must be

made in such a way that a reasonably diligent owner would learn of its existence,

nature, and extent. Sporadic and casual uses are generally not open nor notorious.”

Hamad Assam Corp. v. Novotny, 2007 S.D. 84, ¶ 11, 737 N.W.2d 922, 926 (quoting

Restatement (Third) Prop. (Servitudes) § 2.17 (2000)). The continuous requirement

does not require the claimant to have used the servient estate constantly or

frequently. Id. ¶ 12. However, when the use is intermittent, “the question becomes

whether such use is ‘consistent with the normal use that an owner of the property

would make and is sufficiently open and notorious to give notice to the owner of the

5. Appellees also argue that Estes failed to raise a claim for prescriptive easement at trial. However, a claim for prescriptive easement was raised in Estes’ counterclaim and the court addressed the claim in its oral ruling.

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servient estate that the user is asserting an easement.’” Id. (quoting Great N. Paper

Co. v. Eldredge, 686 A.2d 1075, 1077 (Me. 1996)).

[¶20.] The circuit court found that Estes’ use of the Easement Road was not

open, continuous, and unmolested for a period of twenty years. The record supports

the circuit court’s finding. Estes testified that the Easement Road was used for

purposes beyond accessing the water system since the late 1950s, primarily to

access a storage shed for the Aero Sheet Metal business. However, this use appears

to have been sporadic after the 1990s. Since it is undisputed that Estes and his

father owned the property underlying the road until Lot 2 was created in 1977, that

is the first point in time from which Estes’ claim of a prescriptive easement may be

considered. Because the 1985 Covenants expressly created a permissive access and

use of the Easement Road to repair and install the water lines, the only question is

whether the road was openly and continuously used for other purposes after 1977

for a period of at least 20 years. Testimony was offered that it was extremely

difficult for lot owners to know whether Estes’ intermittent use of the Easement

Road over the years was related to the water system permitted by the Covenants or

for some other purpose. We will not modify property rights where the claimant’s

use of the servient estate is not open and notorious enough that the title holder may

have insufficient notice of its unpermitted use of an adverse claim.

[¶21.] The record also supports the circuit court’s finding that Estes failed to

prove by clear and convincing evidence that his use of the property was “in the

manner hostile or adverse to the owner.” “In order to satisfy the adverse or hostile

requirement, the use must be to the ‘physical exclusion of all others under a claim of

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right.’” Rotenberger, 2007 S.D. 19, ¶ 8, 729 N.W.2d at 178 (quoting Thompson, 2003

S.D. 12, ¶ 7, 657 N.W.2d at 304). “A prima facie case for a prescriptive easement is

established ‘by showing such an open and continuous use of another’s land with the

owner’s knowledge, creating a presumption that such use is adverse and under a

claim of right.’” Id. ¶ 9 (citation omitted). However, “a use that is merely

permissive and not adverse to the interests of the property owner will not become a

prescriptive easement.” Thompson, 2003 S.D. 12, ¶ 7, 657 N.W.2d at 304. Here,

there was evidence that Estes’ use was not adverse to the owner of Lot 2 or Lot 2R

for a period of twenty years because he and his predecessors in interest either

owned the property where the Easement Road was located until it was replatted in

2003, or used the road with permission of the prior lot owners. Estes testified that

when the property in Lot 2 and 2R was owned by the Crams from 1991 until 2008,

he had their permission to use the Easement Road for any purpose he wanted. To

the extent that the use by Estes was hostile to Appellees after they purchased the

property in 2008, such use was for a period of less than twenty years.

[¶22.] “The elements that a claimant must prove to establish a prescriptive

easement serve to protect the servient land owner by providing him with notice of a

prescriptive right.” Hamad, 2007 S.D. 84, ¶ 14, 737 N.W.2d at 926-27. The circuit

court found the evidence in this case to be insufficient to prove that a prescriptive

easement existed by clear and convincing evidence. Estes has failed to show that

these findings were clearly erroneous. Thus, the circuit court properly concluded

Estes failed to prove that a prescriptive easement existed.

[¶23.] We affirm.

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[¶24.] GILBERTSON, Chief Justice, and SALTER, DEVANEY, Justices, and

GILES, Circuit Court Judge, concur.

[¶25.] GILES, Circuit Court Judge, sitting for KERN, Justice, disqualified.

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