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Franklin v. Johnston

Court of Appeals of Iowa

March 22, 2017

GENE L. FRANKLIN and CONNIE JOHNSON, EXECUTORS OF THE FAE BLACK ESTATE; GENE L. FRANKLIN, CONNIE JOHNSON, CURTIS L. FRANKLIN, and GREGORY S. FRANKLIN, Plaintiffs-Appellees/Cross-Appellants,
v.
MICHAEL JOHNSTON, ELIZABETH JOHNSTON, STEVE JOHNSTON, KASONDRA JOHNSTON, JAMES YEAGER, and JUDITH YEAGER, Defendants-Appellants/Cross-Appellees.

         Appeal from the Iowa District Court for Van Buren County, Lucy J. Gamon (partial summary judgment ruling) and Randy S. DeGeest (trial), Judges.

         Adjoining property owners both appeal the district court's decision interpreting an easement agreement entered into by the predecessors in title.

         AFFIRMED IN PART, MODIFIED IN PART, AND REMANDED.

          James E. Nervig of Brick Gentry, P.C., West Des Moines, and Lucas C. Helling and Vanessa M. Y. Willman of Foss, Kuiken & Cochran, P.C., Fairfield, for appellants/cross-appellees.

          Michael C. Vance of Vance Law Office, Mt. Pleasant, for appellees/cross-appellants.

          Heard by Danilson, C.J., and Vogel and Vaitheswaran, JJ.

          VOGEL, Judge.

         Michael Johnston, Elizabeth Johnston, Steve Johnston, Kasondra Johnston, James Yeager, and Judith Yeager (the Johnstons) appeal, and Gene Franklin and Connie Franklin, individually and as executors of the Fae Black Estate, Curtis Franklin, Julie Pedrick, Bruce Franklin, and Gregory Franklin (the Franklins) cross-appeal the district court's decisions rendered in this litigation pertaining to the interpretation of a 1962 "Easement and Agreement." The Johnstons and the Franklins are adjoining property owners in rural Van Buren County. The predecessors in title to the properties entered into the easement and agreement allowing for the construction of a dam on the Johnstons' property that resulted in the creation of a 14-acre lake, which spilled onto and covered a portion of both properties. After more than fifty years of enjoyment of the lake by both property owners, the parties are now disputing the extent of each other's rights to access and use the lake, along with disputing the boundary line between the properties. The Johnstons in their appeal raise nine issues related to the district court's decisions; in their cross-appeal, the Franklins raise two additional issues. For the reasons expressed herein, we affirm in part and modify in part the district court's decision.

         I. Background Facts and Proceedings.

         The Johnstons' predecessors in title, Otto and Pauline Estle, desired to create a lake on their rural Van Buren County property, but they knew if they erected a dam the collected water would back up onto the neighboring property, then owned by James and Fae Franklin. The adjoining property owners signed a document entitled "Easement and Agreement" in April 1962. The document provided the Estles were granted a "perpetual easement" by the Franklins

for the right to occasion overflow by water from the land of the [Estles] to and on and over the lands of [James and Fae Franklin] such as would be occasioned by the construction of a dam not to exceed forty (40) feet in height in a ditch located on the land of the [Estles, ] which ditch traverse the property of [James and Fae Franklin], and [the Estles] are hereby granted the perpetual right to erect and maintain such dam and thereby occasion an overflow of water onto and over such portion of [James and Fae Franklin's] land as may be occasioned by the construction of said dam not to exceed forty feet, in height.

         The agreement went on to provide:

It is stipulated and agreed by and between the parties hereto that [James and Fae Franklin] shall have the right to pasture their stock in the fields on to which water may rise on their property and [James and Fae Franklin] shall have the right to fish in said waters and to use such area as is overflowed by water for their own proper and lawful individual purposes.
It is specifically understood and agreed by and between the parties hereto that [James and Fae Franklin] shall have no right to commercialize the area so overflowed by water on their own lands nor to permit the use of said water by parties other than [James and Fae Franklin] or their successors in ownership of said land.
It is further understood and agreed by way of explanation but not by limitation, that commercialization is intended to mean that [James and Fae Franklin] shall permit the construction of no cabins in said area, shall not permit fishing in such waters by persons other than themselves and the immediate members of their family; that they shall not permit the public generally to fish in or use said overflowed area for boating or other recreational purposes.
It is further specifically understood and agreed that in the event [James and Fae Franklin] should at any time elect to sell their premises or in any other manner dispose of or alienate the title to their lands that they shall and do hereby grant, sell, and convey unto the [Estles] their heirs, successors, administrators, or assigns, the first right and option to purchase such overflowed area together with a strip of land surrounding said overflowed area not to exceed twenty (20) feet in width from the shoreline of said overflowed area at and for the same price as [James and Fae Franklin] receive by way of a bona fide offer for the purchase thereof.

         The dam was constructed, but the Estles died in the late 1960s. The Estles' estate conveyed the property, including the dam, to Robert and Imogene Johnston in 1971, and Robert erected a fence on the north side of the lake between his property and the Franklin property running from the highway to the water. Robert informed James Franklin where the boundary line was, and James believed him. Together the two completed the fence. Thereafter, Clark and Alice Johnston purchased the property from the Robert Johnston estate in 1986. Clark and Alice have since conveyed various pieces of that property to their children, the defendants-the Johnstons-in this case.

         James and Fae Franklin divorced in 1979, and ownership of the land in question was conveyed to Fae alone. Fae then married James Black and conveyed title to herself and James in joint tenancy, but after James's death, title to the property again was solely in Fae's name. Fae died in June 2012, and her will left the property to her children, the plaintiffs-the Franklins-in this action.

         The parties' dispute began after Fae died. It was discovered Mike Johnston's house that was believed to be entirely on the Johnstons' property was partially located on the Franklins' property after a 2007 survey determined the fence line erected by James Franklin and Robert Johnston did not follow the true boundary line between the properties. In response, the Johnstons told the Franklins they could no longer use the portion of the lake that covered the Johnstons' land. Of the fourteen-acre lake, a little more than four acres covers the Franklins' land, while the remaining lake, including the dam, covers the Johnstons' property. The Johnstons enlisted the help of the local sheriff to inform the Franklins that they were not to trespass on the Johnstons' side of the lake.

         The Franklins filed suit in May 2013, asserting the right of first refusal in the 1962 easement and agreement was no longer valid and the restrictive covenants contained in the agreement were stale pursuant to Iowa Code section 614.24 (2013). The Franklins further requested the court declare they had the right to use the entire lake by way of an easement and asked that the true boundary line between the properties be established. The Franklins further amended their petition in May 2014 to add a claim for a civil rights violation under 42 U.S.C. § 1983, alleging the Johnstons worked in collusion with the county sheriff to deprive the Franklins of their property rights. The Johnstons denied the allegations in the amended petition, and in August 2014, both parties moved for partial summary judgment.

         After a hearing, the district court granted in part the partial summary judgment motions on October 10, 2014. The court found the use restriction- specifically the restriction from commercializing the Franklins' property-was no longer valid in light of section 614.24. The court determined the provision in the easement agreement that gave the Johnstons the right of first refusal to purchase the Franklins' property surrounding the lake did not yet violate the rule against perpetuities in light of the legislative amendment to "wait and see, " but the court found the right of first refusal did violate the rule against restraints on alienation of land and was therefore invalid. The court declared the fence line on the north side of the lake to be the boundary line between the two properties pursuant to Iowa Code section 650.14-boundary by acquiescence. But the court denied the motion with respect to establishing a boundary on the south side of the lake, finding material issues of fact were in dispute. Finally, the court also denied the motion with respect to the section 1983 action, finding the Franklins had made a "prima facie" case. The court noted the ultimate dispute underlying the section 1983 action was still undecided-whether the Franklins had a right to use the entire lake. This issue was not before the court as part of the summary judgment action.

         The case then proceeded to a bench trial in September 2015 with the remaining issues including the extent of the Franklins' right to use the lake, the existence of the boundary line through the lake and to the south of the lake, whether the Johnstons were liable under section 1983, and whether the Johnstons have the legal right to drain the lake. The court issued its ruling in November 2015, finding the Franklins were entitled to use the entire lake by way of an express easement, and alternatively, by way of a prescriptive easement and an implied easement, and "that each party has a reciprocal easement to use the other parties' part of the lake that lies above their land." The court found the boundary through and to the south of the lake was the deeded boundary line after concluding no boundary by acquiescence existed in this area. Thus, from the last fence post on the shoreline on the north side of the lake, the court ordered the boundary line would proceed east at a right angle until it connected with the deeded line. The court concluded the Franklins did not prove their civil rights violation claim under section 1983 after determining the county sheriff acted independently and in good faith. Finally, the court concluded the 1962 easement and agreement did not require the Johnstons' predecessor in title to construct the dam that created the lake and, therefore, there was nothing to require the lake exist in perpetuity.

         After the court denied the parties' posttrial motions, both parties appealed from the district court's orders.

         II. Scope and Standard of Review.

         The parties challenge both the district court's ruling on partial summary judgment and the district court's trial ruling. We review decisions on motions for summary judgment for the correction of errors at law. Stew-Mc Dev., Inc. v. Fischer, 770 N.W.2d 839, 844 (Iowa 2009) ("Summary judgment is appropriate when, after review of the entire record, there is no genuine issue of material fact."). The parties both agree the trial on the remaining issues was heard in equity; therefore, our review is de novo. See Passehl Estate v. Passehl, 712 N.W.2d 408, 414 (Iowa 2006) ("Our review of actions for declaratory judgment depends upon how the action was tried to the district court. . . . Because this matter was tried by the district court wholly in equity, we review this appeal de novo."). To the extent the parties challenge the district court's interpretation of the applicable statutes, our review is for the correction of errors at law. See Van Sloun v. Agans Bros. Inc., 778 N.W.2d 174, 182 (Iowa 2010) ("The court reviews issues involving the interpretation of statutes for correction of errors at law.").

         III. The Johnstons' Appeal.

         A. Use Restrictions.

         For their first claim on appeal, the Johnstons assert the district court incorrectly determined the portion of the agreement that contained the use restriction, preventing the Franklins from commercializing their side of the lake, was no longer valid by application of Iowa Code section 614.24-the stale use statute.

          This statutory provision provides in pertinent part:

No action based upon any claim arising or existing by reason of the provisions of any deed or conveyance or contract or will reserving or providing for any reversion, reverted interests or use restrictions in and to the land therein described shall be maintained either at law or in equity in any court to recover real estate in this state or to recover or establish any interest therein or claim thereto, legal or equitable, against the holder of the record title to such real estate in possession after twenty-one years from the recording of such deed of conveyance or contract or after twenty-one years from the admission of said will to probate unless the claimant shall . . . file a verified claim with the recorder of the county wherein said real estate is located within said twenty-one year period.

Iowa Code § 614.24(1). "If a claim is properly filed, it extends or preserves the time to bring an action on the claim for an additional twenty-one years." Fjords N., Inc. v. Hahn, 710 N.W.2d 731, 735 (Iowa 2006) (citing Iowa Code § 614.25). The purpose of the statute was to simplify land transfers by "shortening the title-search period for these types of claims" but allowing for these claims to be kept alive if desired. Id.

         A special distinction was subsequently brought to light that the "use restrictions" referenced in section 614.24 only apply to negative easements, not affirmative easements. See Amana Soc'y v. Colony Inn, Inc., 315 N.W.2d 101, 109-10 (Iowa 1982) ("[I]t was not the intent of those who prepared the bill to include [affirmative grants or reservation of property interests] within the ambit of the limitation act. What we were trying to do was to limit stale uses and reversions and not to bar interest in land granted or reserved. We are trying to distinguish a negative easement or a perpetual right of reentry. An 'easement' providing for use and occupancy of land is an entirely different class from a restriction on use imposed on a grantee of the land." (alterations in original) (citation omitted)). A negative easement is "a restriction[] on the use of one's own land, " while an affirmative easement is "the right of a limited use of the land of another." Id. at 110 (citation omitted). The stale use statute thus only applies to the former type of restriction-the negative easement.

The disputed provision in the 1962 easement and agreement provides:
It is specifically understood and agreed by and between the parties hereto that [James and Fae Franklin] shall have no right to commercialize the area so overflowed by water on their own lands nor to permit the use of said water by parties other than [James and Fae Franklin] or their successors in ownership of said land.
It is further understood and agreed by way of explanation but not by limitation, that commercialization is intended to mean that [James and Fae Franklin] shall permit the construction of no cabins in said area, shall not permit fishing in such waters by persons other than themselves and the immediate members of their family; that they shall not permit the public generally to fish in or use said overflowed area for boating or other recreational purposes.

         We agree with the district court's conclusion that this provision in the parties' contract that restricts the Franklins' use of their own property to noncommercial purposes only is a negative easement. See id. ("For purposes of applying the stale use statute, we hold the deed restrictions on the business use of the properties to be 'negative' easements subject to the statute as 'use restrictions.'"). The Johnstons assert the 1962 easement and agreement was in fact "an executory contract establishing an easement by express written grant." As shown above, section 614.24 specifically includes contracts among the instruments that are governed by the stale use restrictions. See Iowa Code § 614.24(1) ("No action based upon any claim arising or existing by reason of the provisions of any deed or conveyance or contract or will . . . ." (emphasis added)); Fjords N., 710 N.W.2d at 736 ("Thus, the statute applies to claims based on three types of provisions (reversion interests, reverted interests, and use restrictions) contained in one of four types of ...


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