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Stevens County Land Battle

Ronald J. Cogdell et al., Respondents, v. 1999 O'Ravez Family, LLC, Appellant.

 

No. 27133-1-III

 

COURT OF APPEALS OF WASHINGTON, DIVISION THREE

 

153 Wn. App. 384; 220 P.3d 1259; 2009 Wash. App. LEXIS 3022

 

October 13, 2009, Oral Argument

December 3, 2009, Filed

 


PRIOR HISTORY:  [***1]

Appeal from Stevens Superior Court. Docket No: 05-2-00076-5. Judgment or order under review. Date filed: May 2, 2008. Judge signing: Honorable Jerome Joseph Leveque.

 

CASE SUMMARY:

PROCEDURAL POSTURE: Appellant landowner challenged a decision of the Stevens Superior Court (Washington), which ordered an easement as an equitable remedy after finding that respondent landowners encroached on land owned by appellant. Respondents had sued for quiet title and equitable relief or for the establishment of a true boundary, and respondents' bankruptcy court ruled that the case could proceed to judgment. Appellant sought fees and costs on appeal.

OVERVIEW: The issue in this case was whether the trial court erred in its equitable remedy by ordering an easement favoring respondents without granting any offsetting relief to appellant. The court held that the trial court erred and vacated the easement and remanded. The unchallenged findings of fact and conclusions of law established that respondents' residence, a pool, and a well were constructed on a parcel acquired by appellant, thereby establishing respondents' encroachment on appellant's property. It appeared that respondents conceded that the easement granted was an inappropriate remedy. The court agreed because respondents' improvements were built entirely on appellant's parcel. The easement awarded in essence rewarded respondents' encroachment without any counter-balancing equitable compensation for appellant. Thus, in equity, the easement did not do substantial justice for appellant. The court vacated the easement and remanded. Certain warranties did not authorize an award of attorney fees on appeal, such that appellant was not entitled to attorney fees and costs on this basis.

OUTCOME: The court vacated the easement and remanded to the trial court with instructions to decide an equitable remedy. The court denied fees and costs on appeal.

CORE TERMS: easement, encroachment, attorney fees, warranty, parcel, conclusions of law, encroaching, tenable, equitable remedy, substantial justice, encroacher, built, boundary lines, equitable, landowner, ejectment, removal, verities, automatic stay, forced sale, affirmative defenses, inappropriate, unchallenged, oppressive, adjacent, novo, warranty deed, unsuccessfully, ordering, acres

LexisNexis(R) Headnotes

Civil Procedure > Trials > Bench Trials

Civil Procedure > Appeals > Standards of Review > De Novo Review

Civil Procedure > Appeals > Standards of Review > Substantial Evidence > Sufficiency of Evidence

[HN1] When a trial court has weighed the evidence in a bench trial, appellate review is limited to determining whether substantial evidence supports its findings of fact and, if so, whether the findings support the trial court's conclusions of law. Substantial evidence exists when there is a sufficient quantity of evidence to persuade a fair-minded, rational person that a finding is true. Further, unchallenged findings of fact are verities on appeal. Moreover, both questions of law and conclusions of law are reviewed de novo. And, any conclusion of law erroneously denominated a finding of fact will be subject to de novo review.

Civil Procedure > Equity > General Overview

Civil Procedure > Appeals > Standards of Review > Abuse of Discretion

[HN2] A court in equity has broad discretion to fashion a remedy to do substantial justice and end litigation. Equity does not permit a wrong without a remedy. That is to say, equity must be applied in a meaningful manner. Equity applications are reviewed for an abuse of discretion. Accordingly, the appellate court reviews a trial court's grant of equitable relief to determine whether the remedy is based upon tenable grounds or tenable reasons.

Civil Procedure > Equity > Relief

Evidence > Procedural Considerations > Burdens of Proof > Clear & Convincing Proof

Real Property Law > Adjoining Landowners > Encroachments

[HN3] Generally, courts will order an encroacher to remove encroaching structures even though it is extraordinary relief. However, an exception exists where such an order would be oppressive. For the exception to apply, the encroacher must prove the following elements by clear and convincing evidence: (1) he did not simply take a calculated risk or act in bad faith, or act negligently, willfully, or indifferently in locating the encroaching structure; (2) the damage to the landowner is slight and the benefit of removal equally small; (3) there is ample remaining room for a structure suitable for the area and there is no real limitation on the property's future use; (4) it is impracticable to move the encroaching structure as built; and (5) there is an enormous disparity in the resulting hardships.

Civil Procedure > Appeals > Costs & Attorney Fees

[HN4] The appellate court may award attorney fees on appeal only if authorized by contract, statute, or a recognized ground in equity.

Real Property Law > Deeds > Covenants of Title

[HN5] Neither a warranty to defend or of seisin authorizes an award of attorney fees on appeal.

SUMMARY:

WASHINGTON OFFICIAL REPORTS SUMMARY

Nature of Action: Action to quiet title to a parcel of real property and for equitable relief or, in the alternative, for the establishment of a true boundary between two parcels of land. The defendant counterclaimed for quiet title, ejectment, trespass, and breach of a statutory warranty deed. The plaintiffs originally purchased four 20-acre lots. The plaintiffs sold two of the lots to the defendant. The plaintiffs then constructed a well, septic system, pool, and residence on what they believed was their property. The defendant obtained a survey showing that the plaintiffs' improvements were constructed on one of the defendant's lots. The plaintiffs refused the defendant's offer to purchase the plaintiffs' improvements on the property or, alternatively, to convey title to the plaintiffs in exchange for an equal portion of the plaintiffs' property, which would have left each party with a 20-acre lot. The plaintiffs later reopened bankruptcy proceedings on an unrelated matter and listed the defendant as an unsecured nonpriority creditor in the bankruptcy. The listing caused the trial court in the quiet title action to stay proceedings on the action. The bankruptcy court ruled that the quiet title action could proceed to final judgment, the trial court lifted the stay, and the case then proceeded to a bench trial.

Superior Court: The Superior Court for Stevens County, No. 05-2-00076-5, Jerome J. Leveque, J. Pro Tem., on May 2, 2008, entered a judgment granting the plaintiffs an easement that permitted their structures to remain on the defendant's property and that provided them with ingress to and egress from the structures, but denied any monetary relief to the defendant on the basis that no monetary remedy was available because of the plaintiffs' bankruptcy.

Court of Appeals: Holding that the trial court abused its discretion by granting an easement remedy for the plaintiffs' encroachment on the defendant's property without providing the defendant with any offsetting relief, the court vacates the easement and remands the case for further proceedings.

HEADNOTES

WASHINGTON OFFICIAL REPORTS HEADNOTES

[1] Trial -- By Court -- Review -- Standard of Review. When a trial court has weighed the evidence in a bench trial, appellate review is limited to determining whether substantial evidence supports the trial court's findings of fact and, if so, whether the findings support the trial court's conclusions of law. "Substantial evidence" is a sufficient quantity of evidence to persuade a fair-minded, rational person of the truth of the finding. Unchallenged findings of fact are verities on appeal. Questions of law and conclusions of law are reviewed de novo.

[2] Appeal -- Conclusions of Law -- Review -- Erroneous Identification as Finding of Fact -- Effect. A conclusion of law erroneously denominated as a finding of fact is reviewed as a conclusion of law.

[3] Equity -- Remedies -- Discretion of Court. A court sitting in equity has broad discretion to fashion an equitable remedy to do substantial justice and to end the litigation.

[4] Equity -- Nature -- Remedy for Wrong. Equity does not permit a wrong to be without a remedy; i.e., equity must be applied in a meaningful manner.

[5] Equity -- Remedies -- Review -- Standard of Review. A trial court's fashioning of an equitable remedy is reviewed for abuse of discretion. Under the abuse of discretion standard, an appellate court reviews the trial court's equitable remedy to determine whether it is based In tenable grounds or tenable reasons.

[6] Adjoining Landowners -- Encroachment -- Injunction -- Oppression Exception -- Elements -- In General. A court generally will order an encroacher on another's property to remove the encroaching structures even though the relief is extraordinary in nature; however, an exception exists where an order to remove would be oppressive. The oppression exception requires the encroacher to prove by clear and convincing evidence that (1) the encroacher did not take a calculated risk or act in bad faith, or act negligently, willfully, or indifferently in locating the encroaching structure; (2) the damage to the complaining landowner is slight and the benefit of removal is equally small; (3) there is ample remaining room for a structure suitable for the area and there is no real limitation on the future use of the property; (4) it is impractical to move the encroaching structure as built; and (5) there is an enormous disparity in the resulting hardships.

[7] Adjoining Landowners -- Encroachment -- Remedies -- Easement -- Sufficiency. Granting an easement as a remedy for an encroachment on the property of another is inappropriate if the owner of the burdened property is not granted any counterbalancing equitable compensation or relief. A remedy that does not provide substantial justice for the owner of the burdened property is not sustainable. An easement, alone, permits a wrongful encroachment without a meaningful remedy.

[8] Costs -- Attorney Fees -- On Appeal -- Basis for Award -- In General. Attorney fees may be awarded on appeal only if authorized by contract, statute, or a recognized ground in equity.

[9} Deeds -- Warranty Deed -- Breach -- Attorney Fees -- Warranty Language. A deed warranty will not support an award of attorney fees if the warranty does not contain language authorizing such an award.

COUNSEL: Joseph P. Delay (of Delay Curran Thompson Pontarolo & Walker) and Michael S. DeLeo (of Eisenhower & Carlson PLLC), for appellant.

J. Gregory Lockwood (of J. Gregory Lockwood PLLC), for respondents.

JUDGES: Authored by Stephen M. Brown. Concurring: Teresa C. Kulik, Dennis J. Sweeney.

OPINION BY: Stephen M. Brown

OPINION

 [*386]  [**1260] ¶1 Brown, J. -- Today we hold the trial court abused its discretion by failing to do substantial justice when ordering an easement as an equitable remedy after finding respondents Ronald J. Cogdell and Catherine L. Cogdell encroached on land owned by appellant, the 1999 O'Ravez Family LLC. The easement permits the Cogdells' considerable encroachments to remain on the O'Ravez property without offsetting relief for O'Ravez. The Cogdells argue the trial court correctly decided their earlier bankruptcy  [*387]  discharge prevents compensation, but considering the bankruptcy court lifted its automatic stay to allow a final judgment and now both parties criticize the trial court's easement grant,  [***2] we decide the trial court erred in not considering damages and ejectment or a forced sale of the disputed property. Accordingly, we vacate the easement and remand to the trial court with instructions to decide an equitable remedy.

FACTS

¶2 Most facts are unchallenged and, therefore, are verities on appeal. See Robel v. Roundup Corp., 148 Wn.2d 35, 42, 59 P.3d 611 (2002) (stating that "[u]nchallenged findings are verities on appeal").

¶3 In 1994, the Cogdells purchased 80 acres in Stevens County, which they divided into four 20-acre parcels. O'Ravez purchased two of the Cogdells' parcels; the one in issue was acquired on January 4, 1997, by statutory warranty deed. The Cogdells retained one 20-acre parcel adjacent to the contested O'Ravez parcel. About the same time, the Cogdells began improving property near the boundary between the adjacent properties and completed construction of  [**1261]  their wells, septic system, pool, and residence by fall 1997. The Cogdells did not obtain a survey before constructing their residence, assuming they were improving property they owned. The O'Ravez family did not know where the property lines were located. They asked the Cogdells to join in a survey to locate the  [***3] boundary lines, but the Cogdells refused.

¶4 In February 2002, the Cogdells filed a Chapter 7 bankruptcy. In June 2002, the Cogdells were granted a discharge. O'Ravez was not mentioned in the bankruptcy.

¶5 In January 2004, O'Ravez obtained a survey showing the Cogdells' improvements were all constructed on the second O'Ravez parcel. O'Ravez unsuccessfully offered to purchase the Cogdells' improvements for $ 375,000, less their attorney fees. O'Ravez unsuccessfully offered in the  [*388]  alternative to convey title to the land upon which the encroachments were placed in exchange for an equal piece of the Cogdells' property so each party would retain a 20-acre parcel.

¶6 In 2005, the Cogdells sued O'Ravez for quiet title and equitable relief. Alternatively, the Cogdells asked the court to establish a true boundary. O'Ravez counterclaimed for quiet title, ejectment, trespass, and breach of their statutory warranty deed. The Cogdells failed to responsively plead any affirmative defenses.

¶7 In August 2006, the Cogdells reopened their bankruptcy due to an unrelated matter. 1 In September 2007, the Cogdells listed O'Ravez as an unsecured, nonpriority creditor in the bankruptcy, causing the trial court to stay  [***4] this case. The Cogdells moved the bankruptcy court to lift the 11 U.S.C § 362 automatic stay to allow this case to proceed. The bankruptcy court ruled this case could proceed to final judgment, noting that the Cogdells claimed the property as exempt. The Cogdells and O'Ravez stipulated that the trial court stay should be lifted and the case tried.

1   A commissioner of this court granted the O'Ravez family's request to supplement the record with exhibit A-1, a transcript of the bankruptcy court's hearing on the Cogdells' motion for an order lifting the automatic stay, and exhibit B-1, the Cogdells' motion.

¶8 Throughout the bench trial, O'Ravez maintained that due to the Cogdells' bankruptcy, any judgment, including their claimed $ 25,000 fair market value loss, would be uncollectable. The trial court rejected the Cogdells' boundary line recognition, express agreement, and common grantor theories, and reasoned no money damage remedy was available "because of bankruptcy." Clerk's Papers (CP) at 240.

¶9 The trial court concluded:

[The Cogdells] have breached their statutory warranties against defects in the title, which resulted in damages to the [O'Ravez family] in the sum of $ 3,500.00 for surveying  [***5] expense, $ 2,000.00 for appraisal fees, and $ 35,000.00 for attorney's fees;  [*389]  and [the O'Ravez family's] real property has depreciated in value to the extent of $ 25,000.00.

CP at 246-47. Further, the court concluded O'Ravez was not entitled to a money judgment because of the Cogdells' bankruptcy. Instead the court ruled, "[The Cogdells] are entitled to an easement upon [the O'Ravez] real property ... with 30 feet of clearance around all the existing structures and well, along with an easement for egress and ingress to said structures." CP at 247. The court denied O'Ravez "a judgment for costs and disbursements herein incurred and for statutory attorney's fees, because of [the Cogdells'] bankruptcy proceedings." CP at 251.

¶10 The trial court found the Cogdells' "residence was listed [in the bankruptcy] at a value of $ 275,000.00 and the equity was claimed exempt." CP at 243. Noting that both parties could have been more zealous in getting a survey, the trial court found:

The Court has not been able to resolve in equity a land swap or a redefining of the lands that would compensate that would make sense.

The Court's lack of visual understanding of the land and being able to see a boundary  [***6] line that would mark and carve out equivalent value of land that would transfer back to [the O'Ravez family] their 20 acres. Based on the testimony and the  [**1262]  evidence, the Court couldn't visualize a reasonable or practical way to swap land.

CP at 240.

¶11 O'Ravez unsuccessfully moved for reconsideration. O'Ravez then appealed.

 [*390]  ANALYSIS 2 

2   O'Ravez contends the Cogdells failed to plead discharge as an affirmative defense. But here the bankruptcy discharge was tried by the express or implied consent of the parties. See, e.g., Bickford v. City of Seattle, 104 Wn. App. 809, 813-14, 17 P.3d 1240 (2001) (where affirmative defense tried by express or implied consent).

A. Encroachment Remedy

¶12 The issue is whether, considering the range of encroachment remedies, the trial court erred in its equitable remedy by ordering an easement favoring the Cogdells without granting any offsetting relief to O'Ravez. The short answer is yes.

[1, 2] ¶13 [HN1] "When a trial court has weighed the evidence in a bench trial, appellate review is limited to determining whether substantial evidence supports its findings of fact and, if so, whether the findings support the trial court's conclusions of law." Hegwine v. Longview Fibre Co., 132 Wn. App. 546, 555, 132 P.3d 789 (2006).  [***7] "Substantial evidence exists when there is a sufficient quantity of evidence to persuade a fair-minded, rational person that a finding is true." Id. at 555-56. Further, "[u]nchallenged findings [of fact] are verities on appeal." Robel, 148 Wn.2d at 42. Moreover, both "[q]uestions of law and conclusions of law are reviewed de novo." Sunnyside Valley Irrig. Dist. v. Dickie, 149 Wn.2d 873, 880, 73 P.3d 369 (2003). And "any conclusion of law erroneously denominated a finding of fact will be subject to de novo review." Robel, 148 Wn.2d at 43.

[3-5] ¶14 [HN2] A court in equity has broad discretion to fashion a remedy to do substantial justice and end litigation. Hough v. Stockbridge, 150 Wn.2d 234, 236, 76 P.3d 216 (2003). Equity does not permit a wrong without a remedy. Crafts v. Pitts, 161 Wn.2d 16, 23, 162 P.3d 382 (2007). That is to say, equity must be applied in a meaningful manner. Arnold v. Melani, 75 Wn.2d 143, 152, 449 P.2d 800 (1968). Equity applications are reviewed for an abuse of discretion.  [*391] See Willener v. Sweeting, 107 Wn.2d 388, 397, 730 P.2d 45 (1986). Accordingly, we review the trial court's grant of equitable relief to determine whether the remedy is based upon tenable grounds or tenable  [***8] reasons. State ex rel. Carroll v. Junker, 79 Wn.2d 12, 26, 482 P.2d 775 (1971).

[6] ¶15 [HN3] "Generally, courts will order an encroacher to remove encroaching structures even though it is extraordinary relief." Proctor v. Huntington, 146 Wn. App. 836, 846, 192 P.3d 958 (2008) (citing Arnold, 75 Wn.2d at 152; Hanson v. Estell, 100 Wn. App. 281, 287-88, 997 P.2d 426 (2000)). However, an exception exists "where such an order would be oppressive." Id. at 847. For the exception to apply, the encroacher must prove the following elements by clear and convincing evidence:

   (1) [H]e did not simply take a calculated risk or act in bad faith, or act negligently, willfully, or indifferently in locating the encroaching structure; (2) the damage to the landowner is slight and the benefit of removal equally small; (3) there is ample remaining room for a structure suitable for the area and there is no real limitation on the property's future use; (4) it is impracticable to move the encroaching structure as built; and (5) there is an enormous disparity in the resulting hardships.

Id. (citing Arnold, 75 Wn.2d at 152).

¶16 The unchallenged findings of fact and conclusions of law establish that the Cogdells' entire residence,  [***9] a pool, and a well were constructed on the second parcel acquired by O'Ravez, thereby establishing the Cogdells' encroachment on the O'Ravez property. The trial court rejected the Cogdells' various theories seeking to avoid responsibility for the encroachment. The Cogdells did not cross-appeal.

¶17 The Cogdells argue, "[T]he trial court's decision [granting the easement] has created a situation which continues to create conflict." Resp'ts' Br. at 26. Further, the Cogdells state, "[I]t is respectfully requested that the Court deny the [O'Ravez] appeal except for the issue of placing a jog in the mutual  [**1263]  property line giving both parties 20 acres and the elimination of easements for improvements."  [*392]  Resp'ts' Br. at 46. Thus, the Cogdells appear to concede that the easement was an inappropriate remedy. As explained below, we agree. Therefore, it is unnecessary to address the unconstitutional taking issue urged by O'Ravez.

¶18 In Proctor, the plaintiff and the defendants purchased adjacent parcels of land. Proctor, 146 Wn. App. at 840-41. They later discovered the defendants' home and other improvements were built entirely on the plaintiff's property. Id. at 840, 843. The plaintiff sued the defendants for, among  [***10] other claims, ejectment. Id. at 843. The trial court denied the plaintiff's requests for ejectment and a mandatory injunction, "conclud[ing] that requiring the [defendants] to move their home and other improvements to another location would be oppressive, unduly costly, and inequitable" based on the five elements set forth above. Id. at 843-44. Instead, the trial court ordered the defendants to pay the plaintiff $ 25,000 to adjust the boundary line, which gave the defendants the property on which their house and improvements were located. Id. at 844. On appeal, the plaintiff challenged the trial court's failure to order the defendants to remove their encroachments. Id. at 846. The court found the trial court properly ruled that the exception to removal of encroaching structures applied. Id. at 847-51. The plaintiff also challenged the remedy of a forced sale. Id. at 851. In upholding this remedy, the court found that because the home and improvements were built entirely on the plaintiff's property, "an easement is not workable, and the trial court's boundary adjustment was an appropriate remedy." Id.

[7] ¶19 Here, like Proctor, the easement remedy was inappropriate; the Cogdells' improvements  [***11] were built entirely on the O'Ravez parcel. See Proctor, 146 Wn. App. at 851. In essence, the easement rewarded the Cogdells for their encroachment without any counterbalancing equitable compensation for O'Ravez. Thus, in equity, the easement does not do substantial justice for O'Ravez. Hough, 150 Wn.2d at 236. Moreover, the easement alone permits a wrongful encroachment without a meaningful remedy.  [*393]  Crafts, 161 Wn.2d at 23; Arnold, 75 Wn.2d at 152. Because of uncertainty over the effect of the 2002 bankruptcy discharge, the trial court did not order the expected encroachment remedies, removal of the encroaching structures, or a forced sale. See Proctor, 146 Wn. App. at 846-47, 851.

¶20 Given all, we conclude the trial court lacked tenable grounds or tenable reasons in ordering an easement. Accordingly, we vacate the easement and remand for the trial court to provide meaningful relief for the encroachment.

B. Attorney Fees and Costs on Appeal

[8, 9] ¶21 The O'Ravez family asks for attorney fees and costs on appeal. [HN4] "This court may award attorney fees on appeal only if authorized by contract, statute, or a recognized ground in equity." Forbes v. Am. Bldg. Maint. Co. W., 148 Wn. App. 273, 300, 198 P.3d 1042 (2009)  [***12] (citing Bowles v. Dep't of Ret. Sys., 121 Wn.2d 52, 70, 847 P.2d 440 (1993)). Here, the O'Ravez family contends they are entitled to attorney fees on appeal based upon the breach of warranty of title, citing cases discussing an award of attorney fees for a breach of the warranty to defend and a breach of the warranty of seisin. See Mastro v. Kumakichi Corp., 90 Wn. App. 157, 164-66, 951 P.2d 817 (1998) (warranty to defend); Double L Props., Inc. v. Crandall, 51 Wn. App. 149, 155-58, 751 P.2d 1208 (1988) (warranty of seisin). However, [HN5] neither warranty authorizes an award of attorney fees on appeal. Therefore, the O'Ravez family is not entitled to attorney fees and costs on this basis.

¶22 Easement vacated and remanded for proceedings consistent with this opinion.

Kulik, A.C.J., and Sweeney, J., concur.

Reconsideration denied March 19, 2010.

 

 

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