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James M. McMillan, Wallace, argued for appellants Siegwarth.
R. Wayne Sweney, Lukins & Annis, Coeur d'Alene, argued for respondents Schadel and Blanchette.
Michael K. Branstetter, Hull & Branstetter, Wallace, argued for respondents Felsing.
J. Patrick Diener, Feltman Gebhardt Greer & Zeimantz, Spokane, Washington, argued for respondent Opportunity Management Co., Inc.
This is an appeal out of Kootenai County from a judgment that dismissed the plaintiffs' claims that they had the right to use parcels of property designated as common areas in a plat that was void because the persons who recorded the plat did not own all of the real property included in the plat and that awarded the plaintiffs an easement across a parcel of land now owned by the cross-appellants. We affirm the judgment of the district court except as to the width of the easement.
In 1980, Michael and Gwen Smith desired to develop real property near Hayden Lake into a subdivision containing seventeen lots. The land was located in two adjoining sections, with the northern part in Section 7 and the southern part in Section 18. The Smiths owned the land in Section 18, but only had an option to purchase the land in Section 7. They had a plat that had been prepared for the proposed subdivision named Berven Bay Terrace (Berven Bay I), but the plat had not yet been recorded.
On May 20, 1981, the Smiths granted deeds of trust to two parcels of the land in Section 18 that had metes-and-bounds legal descriptions corresponding to proposed lots 1 and 2 of the subdivision. The beneficiary of the deeds of trust was a bank that had loaned money to the Smiths, and they built a house on each parcel, which they hoped to sell. The Smiths defaulted on the loans secured by the deeds of trust, and in May 1983 the bank foreclosed and acquired title to the two parcels. The bank sold those parcels the following year.
Kermit and Katherine Petersen and Donald and Violet Klages owned the property included within Berven Bay I that was located in Section 7. They had granted the Smiths an option to purchase that property, but the Smiths did not exercise that option. On June 15, 1984, the Petersens and the Klageses recorded a document declaring the option forfeited for the failure of the Smiths to
comply with its terms. The Petersens and the Klageses did not know that the Smiths had platted the property.
On June 28, 1984, the Smiths sold to The John J. Schafhausen Trust (Schafhausen Trust) three parcels of land in Section 18 that had metes-and-bounds legal descriptions corresponding to proposed lots 3, 4, and 5 of the subdivision. The plat of Berven Bay I was generally rectangular in shape and situated in a southeast-northwest orientation. Lot 10 ran along the southeastern boundaries of Lots 1 through 9, and the southern portion of Lot 10 had frontage on Hayden Lake. The deed to the Schafhausen Trust included the following provision:
The Grantor hereby agrees that the Lake Frontage contained in Lot 10 of proposed Berven Bay Terrace Subdivision may be used by the Grantee herein and its successors and assigns and by all other owners of lots in proposed Bervens [sic] Bay Terrace Subdivision for access to the lake.
The city approved the plat for Berven Bay I in May 1982, and it was recorded on September 7, 1984. Two days later, the Smiths quitclaimed to a third party all of their interest in the subdivision, and on March 8, 1985, that person quitclaimed his interest in the subdivision to the Petersens and the Klageses.
On August 21, 1985, the Petersens, the Klageses, and another couple recorded the plat of Berven Bay Terrace II (Berven Bay II), which consisted of all of the land in Berven Bay I except the five parcels that had been sold. The lots in Berven Bay II were reconfigured from what were the lots in the corresponding part of Berven Bay I. Berven Bay II has eight lots, and the corresponding area in Berven Bay I had twelve lots. Lot 8 in Berven Bay II was the same as Lot 10 of Berven Bay I. The southeastern boundaries of Lots 1 through 5 of Berven Bay II abutted upon Lot 8. The plat of Berven Bay II stated that Lot 8 was to be owned jointly by all of the lot owners of Lots 1 through 7 in a ratio of 1/7 per lot, and that Lot 8 was for the sole use and enjoyment of the owners of the subdivision. Eventually, Edward and Debra Blanchette, Michael and Rosemary Schadel, and Edward and Linda Felsing purchased their respective parcels of land which together comprise Lots 1 through 7 of Berven Bay II. Opportunity Management Co., Inc., had acquired the lots before they were sold to the Blanchettes, the Schadels, and the Felsings.
With respect to the five lots that had been sold in Berven Bay I, Guido and Sandra Armand ultimately acquired Lots 2 and 3 and part of Lot 4, and Robert and Sharri Siegwarth ultimately acquired Lots 1, 5, and part of Lot 4. Thus, both the Armands and the Siegwarths are successors in interest to the property (proposed Lots 3, 4, and 5) that was originally purchased by the Schafhausen Trust.
In May 2000, the Armands and the Siegwarths learned that the Blanchettes, the Schadels, and the Felsings were intending to build a dock on the lake frontage in Lot 8 of Berven Bay II. The parties met, and the Armands and the Siegwarths claimed an interest in Lot 8 based upon their contention that what was Lot 8 in Berven Bay II was intended to be common area in Berven Bay I. The other parties rejected that contention.
On July 23, 2002, the Armands and the Siegwarths (Plaintiffs) filed this lawsuit against Opportunity Management Co., Inc., the Felsings, the Blanchettes, and the Schadels (Defendants) seeking the right to use Lot 8, including but not limited to all littoral rights, and the right to use all common areas dedicated in the Berven Bay I plat. The Defendants moved for summary judgment on the ground that the plat of Berven Bay I was void, and the district court granted their motion and dismissed the lawsuit. The Plaintiffs appealed, and this Court held that there were genuine issues of material fact precluding summary judgment. Armand v. Opportunity Mgmt. Co., Inc., 141 Idaho 709, 117 P.3d 123 (2005). We reversed the grant of summary judgment and remanded the case for further proceedings.
The matter was then tried to the district court. Based upon its findings of fact and
conclusions of law, it dismissed all of the Plaintiffs' claims except their claim to an easement across Lot 8 for lake access. The Siegwarths appealed and the Blanchettes, the Schadels, and the Felsings cross-appealed.
Did the District Court Fail to Properly Apply the Doctrine of the Law of the Case Based Upon this Court's Opinion in the First Appeal?
The Siegwarths contend that the district court failed to properly apply the doctrine of the law of the case. They state, " In the Armand I decision, the Supreme Court explicitly stated that ‘ Armands [and Siegwarths] have a valid interest in the areas that are expressly designated as common areas on the BBT[I] plat,’ " and they assert that the quoted statement from that decision is the law of the case. We have articulated the doctrine of the law of the case as follows:
[U]pon an appeal, the Supreme Court, in deciding a case presented states in its opinion a principle or rule of law necessary to the decision, such pronouncement becomes the law of the case, and must be adhered to throughout its subsequent ...