ROGER HALVORSON and CONSTANCE HALVORSON, Plaintiffs/Counter-Claim Defendants-Appellees,
ALLEN BENTLEY and DIXIE BENTLEY, Defendants/Counter-Claim Plaintiffs/Cross-Claim Plaintiffs-Appellees/ Cross-Appellants, and KERNDT BROTHERS SAVINGS BANK, Defendant/Cross-Claim Defendant-Appellant/Cross-Appellee.
from the Iowa District Court for Clayton County, Andrea J.
Kerndt Brothers Savings Bank appeals and land purchasers
Allen and Dixie Bentley cross-appeal the order of the
district court finding that the Bank breached its warranty
under its deed to the Bentleys because it represented the
easement on the adjoining land it sold to Roger and Constance
Halvorson permitted parking when the language of its contract
with the Halvorsons only expressly mentioned
"access." JUDGMENT VACATED IN PART, AFFIRMED IN
PART, AND REMANDED WITH DIRECTIONS.
G. Larson of Larson Law Office, Decorah, and James A. Garrett
of James A. Garrett Law Office, Waukon, for
appellant/cross-appellee Kerndt Brothers Savings Bank.
Robison and Anne E.H. Kruse of Allen, Vernon & Hoskins,
P.L.C., Marion and McGregor, for appellees/cross-appellants
T. Heavens of McClean & Heavens Law Offices, Elkader, for
by Danilson, C.J., and Doyle and McDonald, JJ.
dispute in this case concerns an easement on land Kerndt
Brothers Savings Bank (Bank) sold to Roger and Constance
Halvorson. The easement was granted for the benefit of the
adjoining lot of land, which the Bank sold to Allen and Dixie
Bentley. The central issue is whether or not the easement
grants the Bentleys parking privileges. Following trial on
the Halvorsons' petition for declaratory judgment, along
with the Bentleys' cross-claims against the Bank, the
district court concluded the easement only granted the
Bentleys "access" to their land-meaning ingress and
egress only, not parking. Because the warranty deed the Bank
delivered to the Bentleys does not limit the easement to
access only, the court found the Bentleys were entitled to
the consideration they paid to the Bank for the easement they
thought they were getting-one that allowed parking, and
awarded the Bentleys $7500 in compensatory damages. The court
also awarded the Bentleys their attorney fees for defending
the Halvorsons' action. The court then entered a judgment
against the Bank in favor of the Bentleys for $21, 757.28.
Bank now appeals the district court's ruling in favor of
the Bentleys, arguing both the Bentleys and the Halvorsons
received the easement they bargained for with the Bank and,
therefore, it did not breach any warranty deed. The Bentleys
cross-appeal, challenging the court's determination the
easement was for ingress and egress only.
facts of the case are essentially undisputed. In 2009, after
its mortgagee defaulted on a loan, the Bank acquired title to
the real estate that secured the mortgage loan. The property
consisted of several lots in the picturesque river town of
Marquette. A two-level duplex was located on one of the lots.
A house that was in "very bad shape" was located on
an adjoining lot to the west. The two buildings were situated
on a steep hill on the south side of the west end of North
Street. The house and the duplex were separated by a path
that was used as a driveway (Driveway), shown in the aerial
photo below. The Driveway inclines from North Street at
a grade of approximately ten to fifteen percent and flattens
out near its southern terminus.
making the duplex conversion, the mortgagee "cut the
roof off and raised it up so [he] could have an
upstairs." He then "added on to make it a duplex,
" and he "took the [interior] stairs out of the
house." Without interior stairs, there was no access
between units inside the duplex. To provide access to the
upper unit, the mortgagee installed an exterior door on the
south side of the unit and built a walkway from that exterior
door to the southern terminus of the Driveway. Because of the
incline and the topography, the walkway was built in a
southwest direction where it eventually met the Driveway at
an acute angle. The mortgagee lived in the upper-level unit
of the duplex and parked his vehicle at the end of the
Driveway near the walkway. The mortgagee made the lower level
of the duplex into a rental unit. Another driveway, which
could hold two or three vehicles, existed on the north side
of the lower level of the duplex. Parking in front of the
duplex on North Street would obstruct the driveway to the
the Bank acquired the property, it decided to sell the
property in separate lots, with the house and duplex each in
its own separate lot. To that end, the Bank hired Roger Mohn,
a civil engineer and professional land surveyor, to identify
the exterior lot lines of the property so it could divide the
property into lots accordingly.
upon the boundaries of the existing lots, which can be seen
in the aerial photo above, the Driveway and most of the
walkway fell within the house lot-not the duplex lot. The
Bank determined an easement would be established on the house
lot to allow the future owners of the duplex lot to reach the
entrance of the duplex's upper-level unit. Based upon the
topography of the house lot, the existing Driveway path and
walkway were used for determining the placement of the
easement. After the surveyor informed the Bank's
representative James Kerndt that easements were normally
between ten to twelve feet wide, it was decided the easement
would be twelve feet wide.
February 2, 2010, the plat of the lots prepared by the
surveyor was recorded-without the easement shown or described
therein. Though the surveyor provided to the Bank a metes and
bounds description of the centerline of the proposed
easement, the Bank did not have that description recorded
with the plat. The proposed easement's written
description stated, in relevant part: "A twelve (12)
[sic] wide easement located in Lot Ten (10) of Block Five (5)
and in vacated Third Street . . . ." The description
went on to set forth the metes and bounds of the centerline
of the easement. The proposed easement did not include the
terms "access, " "ingress, "
"egress, " or "parking"; in fact, no
purpose for the easement was given in the written
Halvorson contacted Kerndt at the Bank about buying some of
the lots on the property. The Halvorsons live three blocks
from the property, and they operate a winery on North Street
near the property. Roger wanted to preserve the hillside
where the house was located and "had strong feelings
about preventing anyone from developing that hillside."
Roger was advised that if he did not purchase both the house
lot and the duplex lot, an easement across the house lot
would be necessary to allow the future owners of the duplex
lot access to the duplex's upper-level unit. On February
20, 2010, the Halvorsons made and the Bank accepted a written
offer to purchase several lots of land, including the house
lot but not the duplex lot. The offer stated on the first
page that it was subject to "an easement to be placed
approximately in existing driveway for access to adjacent
house upper level." Handwritten next to the above quoted
sentence were the words "Exhibit C." Exhibit
"C" was attached to the agreement and set forth the
metes and bounds description of the centerline of the
easement exactly as drafted by the surveyor.
Bank listed the duplex lot for sale with a realtor. Allen and
Dixie Bentley contacted another realtor, who was with the
same realty agency as the Bank's realtor, to view the
duplex lot, and they and their realtor viewed the property
together. The Bentleys liked the property but were concerned
about the parking situation for the upper-level unit of the
duplex. The Bentleys' realtor expressed the Bentleys'
concerns about the parking situation to the Bank's
realtor, and the Bank's realtor clarified with Chad
Curtain, a representative of the Bank, that an easement would
be drawn up "to amend the problem." The Bank's
realtor believed that "parking was involved in the
negotiations, " though it "did not end up being in
the easement description." The Bank's realtor
believed the purpose of the easement was for parking.
Ultimately, the Bentleys decided to purchase the duplex lot
and the closing occurred sometime around the beginning of
July 2010. The warranty deed for the duplex lot was recorded
on July 12, 2010, and it sets forth the metes and bounds
description of the easement exactly as proposed by the
surveyor. The easement's description lacks any explicit
reference to "access, " "parking, " or
appears the Halvorsons never had a formal closing. The Bank
had quitclaimed some of the property the Halvorsons intended
to purchase "to provide [them] basically with possession
while the [Bank] continued its efforts to foreclose on the
property." The Halvorsons received a warranty deed for
the house, as well as other land they purchased from the
Bank. The deed was signed by the Bank's representatives
July 14, 2010 and recorded July 19, 2010. The Halvorsons'
warranty deed makes no reference to the easement.
their purchase, the Bentleys used the Driveway as a driveway.
They parked their vehicles at the end of the driveway near
the walkway. At some point, the Halvorsons had the house torn
down, creating more open area by the Driveway. Sometime
thereafter, a neighbor contacted Roger and told him,
"You better come up here. You got a parking lot up
here." Roger went to investigate and found "there
were four cars up there. There was the Bentleys' pickup,
. . . and a car, and a couple other pickups. So there [were]
a number of people parked . . . on the lots up there."
And the battle began.
the parties could not reach an agreement, the Bentleys
contacted the surveyor and requested that he draw a plat of
the easement based upon the metes and bounds set forth in
their deed. The surveyor then platted the easement and lots.
That platting is distilled into the following illustration:
2011, the Halvorsons filed a petition "in equity"
and "for declaratory judgment" against the Bentleys
and the Bank. The Halvorsons requested the district court
declare "the nature and scope of the easement [was]
limited to ingress and egress only and that it may not be
used by the Bentleys for any other purpose, " declare
the "size and dimensions of the easement [were] limited
to the narrowest possible [twelve]-foot strip of land, "
and find the Bank negligent and award the Halvorsons damages.
The Bank admitted in its answer that its "understanding
and intent with respect to the [Bentleys'] easement"
was that the Bentleys could come and go across the easement
but had no right to park there. The Bank denied it was
negligent and affirmatively asserted it did not owe the
Halvorsons any duty with respect to the Bentleys'
easement "in that the Bentley transaction was fully
consummated prior to the [Halvorsons'] acquisition"
of the house lot that was subject to the easement.
Bentleys answered and asserted counterclaims against the
Halvorsons, including a claim that the Halvorsons
intentionally damaged the Bentleys' property. The
Bentleys also asserted cross-claims against the Bank for
breach of warranty and breach of contract. The Bank answered
the Bentleys' cross-claims and admitted "that no
express limitation on the scope of the easement [was] set
forth on the face of the deed, " but it affirmatively
stated "the real estate description for the easement
[made] it clear that motor vehicle access [was] not included
within its scope." The Bank denied that "there was
a meeting of the minds between [the] Bentleys and the [Bank],
through its employed real estate agent, that the easement
would be used for travel over and across the servient estate,
and for parking a vehicle thereon."
trial was held in May 2014. At the trial's outset, the
court noted it had before it "a blend of legal and
equitable claims, " and it advised the parties it was
"going to try this as if the whole [was] in equity,
" but that when evidence was offered to which there was
an objection, each party should "state your
objection" and "the basis for your objection so
that it's in the record." The court stated it would
admit the evidence subject to the objections and explained it
would not consider irrelevant or inadmissible evidence with
respect to each claim in making its decision.
trial, Roger Halvorson admitted he read the legal description
of the easement, but he testified he "just assumed that
the easement was going to go closer to the property line
rather than . . . meandering back through the other two
lots." Roger did not know the prior owner/mortgagee had
been parking in the Driveway; Roger testified he had
"never visualized the driving and parking
situation" and believed "[a]ccess was by foot
traffic primarily." Curtain testified he told the
Bank's realtor that he "believed there was going to
be an easement, " but he did not "have any
specifics." The Bank's realtor testified she did not
remember Curtain expressly using the word "parking,
" but she believed it was Curtain's understanding
that the purpose of the easement was for parking, testifying
"[t]hat was the purpose of the easement."
trial, the court entered its decree on March 3, 2015, finding
the easement created by the Bank was for "access"
only, meaning the right to ingress and egress and not for
parking. The court noted that the Bentleys' deed does not
define any purpose for the easement, and it relied upon the
Halvorsons' purchase agreement which only references
"access." The court found the easement was intended
to be twelve feet wide. Additionally, the court found this
easement was what the Halvorsons bargained for, so the Bank
was not negligent in this respect.
the Bentleys, the court found the easement set forth in their
warranty deed was not accurate because the easement omits the
"access" limitation language that is included in
the Halvorsons' purchase agreement, which predated the
Bentleys' deed. Since the Bank chose to include the
easement's description in the warranty deed it gave to
the Bentleys, the court found the Bank had a duty to defend
the Bentleys in the Halvorsons' declaratory-judgment
action concerning the easement, and it awarded the Bentleys
attorney fees of $14, 257.28. The court also found the Bank
was liable "for the amount of consideration that [the
Bentleys] paid for the easement described in their warranty
deed rather than the easement that was created" in the
purchase agreement between the Bank and the Halvorsons. The
court found $7500 was "approximately what the Bentleys
paid in the expectation that they would receive the easement
described in their warranty deed rather than the more limited
easement that they actually received." The court
concluded the Bentleys did not prove any breach of contract
separate from the warranty deed, and it entered a final
judgment in favor of the Bentleys for $21, 757.28 against the
Bank. The court also denied the Bentleys' counterclaims
against the Halvorsons.
March 9, 2015, the Bank filed a motion pursuant to Iowa Rule
of Civil Procedure 1.1007 requesting additional time to file
post-trial motions. It stated it intended "to file one
or more motions pursuant to [rule] 1.904 and/or 1.004
(sic)" and gave reasons it asserted were good cause for
the extension. Neither the Bentleys nor the Halvorsons filed
a resistance, and the court on March 17, 2015, entered its
order granting the motion, extending the deadline for
post-trial motions for all parties to April 17, 2015.
April 17, 2015, the Bank filed its rule 1.904(2) motion
challenging the court's findings and
conclusions. Among other things, it argued the court
erred in ignoring its evidentiary objections under the parol
evidence rule and "in imposing a warranty of an easement
upon the parties which the parties at the time of the
[warranty deed] did not agree upon." The Bentleys filed
their resistance to the motion on April 27, 2015, which
asserted, among other things, that the Bank's motion was
"a poorly written, hurried and confused scattergun-shot
of supposed judicial errors, presenting no persuasive
argument to change the basis for the [district court's]
award of damages." The Halvorsons did not respond. On
May 1, 2015, the court denied the Bank's motion.
Bank filed its notice of appeal on May 20, 2015. The Bentleys
filed their notice of appeal the next day. On its own motion,
the Iowa Supreme Court determined the Bentleys' notice
should be treated as a notice of cross-appeal. It
subsequently transferred the case to this court in May 2016,
and it was submitted following oral argument in November
Scope and ...