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Regan v. Owen

Supreme Court of Idaho

September 8, 2017

BRENT REGAN and MOURA REGAN, husband and wife, Plaintiffs-Appellants,
v.
JEFF D. OWEN and KAREN A. OWEN, husband and wife, Defendants-Respondents.

         2017 Opinion No. 98

         Appeal from the District Court of the First Judicial District of the State of Idaho, Kootenai County. Hon. John P. Luster, District Judge.

         The judgment of the district court is affirmed.

          Macomber Law, PLLC, Coeur d'Alene, for appellant. Arthur B. Macomber argued.

          James, Vernon & Weeks, PA, Coeur d'Alene, for respondents. Susan P. Weeks argued.

          HORTON, Justice.

         This case presents the issue whether a prescriptive easement across a parcel of land was extinguished by operation of former Idaho Code section 63-1009[1] when that parcel was sold by tax deed. The Owens purchased a small parcel of land ("the Orphan Parcel") from Kootenai County after a tax sale. A dispute arose as to whether the Regans had the right to drive across the parcel. The Regans sued the Owens to reform the tax deed to include an express easement and to establish a prescriptive easement.

         The district court granted summary judgment in favor of the Regans, ruling that the Owens' deed contained a mutual mistake and should be reformed to reflect an express easement that the original grantors intended. The Owens appealed and this Court held that the deed should not be reformed, vacated a portion of the district court's judgment, and remanded for further proceedings. Regan v. Owen, 157 Idaho 758, 339 P.3d 1162 (2014) ("Regan I"). On remand, the district court granted summary judgment in favor of the Owens, finding that any prescriptive easement was extinguished by Idaho Code section 63-1009, which provides that tax deeds convey property free of all "encumbrances." The Regans timely appealed. After they filed their appeal, the Idaho Legislature amended Idaho Code section 63-1009. 2016 Idaho Sess. L. ch. 273, §§ 7, p. 758. We affirm.

         I. FACTUAL AND PROCEDURAL BACKGROUND

         The underlying facts of this case are set forth in Regan I. 157 Idaho 758, 760-61, 339 P.3d 1162, 1164-65 (2014). There, we held that the Regans' claim was not barred by the statute of limitations. Id. at 762, 339 P.3d at 1166. We also held that the district court erred in reforming the Owens' deed and concluding, on inadequate evidence, that the Regans had a prescriptive easement over the Orphan Parcel. Id. at 763-64, 339 P.3d at 1167-68. Accordingly, the case was remanded to the district court. Id. at 765, 339 P.3d at 1169.

         On remand, the Owens filed a third motion for summary judgment, alleging that the Regans' prescriptive easement claim was extinguished by issuance of the tax deed. A hearing was held and the district court issued a written decision granting the Owens' motion. The court concluded that the plain language of Idaho Code section 63-1009, together with the definition of "encumbrances" and interpretation of section 63-1009 in Regan I required the court to conclude that any claim the Regans had to a prescriptive easement over the Orphan Parcel was extinguished when the tax deed was issued. Accordingly, the district court entered judgment in favor of the Owens.

         On March 30, 2016, several months after Regans filed their appeal, Governor Otter signed Senate Bill 1388 into law. Section 1 of Senate Bill 1388 contains a lengthy statement of legislative intent wherein this Court's decision in Regan I is mentioned by name and the district court's subsequent determination that Idaho Code section 63-1009 extinguished the Regans' private access easement is expressly rejected. 2016 Idaho Sess. L. ch. 273, § 1, p. 750. Section 1 further declares: "[a]s its context should have made evident, the purpose of Section 63-1009, Idaho Code . . . has always been to convey title absolutely free and clear of liens and mortgages of a monetary nature." Id. Senate Bill 1388 amended Idaho Code section 63-1009 to remove the reference to "encumbrances" and to more clearly state that the title conveyed by tax deed is the same as that of the "record owner."[2] Finally, section 8 of Senate Bill 1388 declares: "Being a clarification of existing law, the Legislature does not view the application of this amendment to prior conveyances as retroactive legislation. In any event, the Legislature expressly intends that these amendments shall be interpreted to apply to any and all conveyances by tax deed, past or future." 2016 Idaho Sess. L. ch. 273, § 8, p. 758.

         II. STANDARD OF REVIEW

         "This Court reviews summary judgment using the same standard as the court that originally ruled on the motion." State ex rel. Indus. Comm'n v. Bible Missionary Church, Inc., 138 Idaho 847, 849, 70 P.3d 685, 687 (2003). "[S]ummary judgment is proper if the pleadings, depositions, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact, and that the moving party is entitled to a judgment as a matter of law." Silicon Intern. Ore, LLC v. Monsanto Co., 155 Idaho 538, 544, 314 P.3d 593, 599 (2013) (internal quotations omitted).

         "[T]he interpretation of a statute is a question of law over which this Court exercises free review." Insight, LLC v. Gunter, 154 Idaho 779, 783, 302 P.3d 1052, 1056 (2013). "Constitutional issues are questions of law also subject to free review by this Court." Brewer v. La Crosse Health & Rehab, 138 Idaho 859, 862, 71 P.3d 458, 461 (2003).

         III. ANALYSIS

         A. The district court did not err in determining that the Regans' prescriptive easement was an encumbrance extinguished by the tax sale of the Orphan Parcel.

         Prior to its amendment, Idaho Code section 63-1009 provided:

The [tax] deed conveys to the grantee the absolute title to the land described therein, free of all encumbrances except mortgages of record to the holders of which notice has not been sent as provided in section 63-1005, Idaho Code, any lien for property taxes which may have attached subsequently to the assessment and any lien for special assessments.

(emphasis added).

         In Regan I, this Court addressed the meaning of "encumbrance" in Section 63-1009:

An encumbrance is "any right or interest in land to the diminution of its value, but consistent with the free transfer of the fee." Hunt v. Bremer, 47 Idaho 490, 494, 276 P. 964, 965 (1929). Whether something is an encumbrance does not depend upon the extent to which it diminishes the value of the land. An encumbrance "embraces all cases in which the owner does not acquire the complete dominion over the land which his grant apparently implies." Id. An easement is not an encumbrance if the easement is essential to the enjoyment of the land and it enhances the land's value.

Regan I, 157 Idaho at 765, 339 P.3d at 1169.

         The district court determined, following the direction given in Regan I, that the plain language of Section 63-1009 "conveys absolute title free of all encumbrances" and that the legislature "delineated certain exceptions that do not apply." This was so regardless of the "inequitable or oppressive results" because "it is not the province of the trial court to rewrite the law or impose an application contrary to the clearly stated language."

         The Regans assert that the language defining "encumbrance" in Regan I is dicta and relies on dicta from Hunt, 47 Idaho at 494, 276 P. at 965. The Regans also argue that the district court's interpretation of "encumbrances" in Idaho Code section 63-1009 to include private easements is poor public policy. The Regans champion a reading of Section 63-1009 that restricts encumbrances to financial interests, as contemplated by Idaho Code section 55-613.

         "Statutory interpretation begins with the literal words of the statute, and this language should be given its plain, obvious and rational meaning." Idaho Youth Ranch, Inc. v. Ada Cnty. Bd. of Equalization, 157 Idaho 180, 184, 335 P.3d 25, 29 (2014) (internal citations and quotations omitted). "If the statutory language is unambiguous, the clearly expressed intent of the legislative body must be given effect, and there is no occasion for a court to consider rules of statutory construction." Id. at 184-85, 335 P.3d 29-30.

         Section 63-1009 expressly states that "the [tax] deed conveys to the grantee absolute title to the land . . . free of all encumbrances" with the exception of a few specifically delineated exceptions. (emphasis added). As both parties recognize, there is no ambiguity in the statute. The only question is whether "encumbrances" in Section 63-1009 includes private easements, such as the one at issue here. This question was largely answered in Regan I, when this Court defined encumbrance as "any right or interest in land to the diminution of its value, but consistent with the free transfer of the fee" and declared that "[a]n easement is not an encumbrance if the easement is essential to the enjoyment of the land and it enhances the land's value." 157 Idaho at 765, 339 P.3d at 1169.

         Thus, the prescriptive easement asserted by the Regans over the Orphan Parcel survives issuance of the tax deed only if the easement is essential to the enjoyment and enhances the value of the Orphan Parcel. In his affidavit in support of his Third Motion for Summary Judgment, Jeff Owen stated that the easement was not essential to his use or enjoyment and that it diminished the value of the Orphan Parcel. Additionally, the Regans and the district court cite deposition testimony from Brent Regan indicating that Regan "couldn't say" whether the easement over the Orphan Parcel increased the value of the Owens' land. However, the key inquiry is not whether the easement over the Orphan Parcel increased the value of the Owens' land, but rather, whether the easement increases the value of the Orphan Parcel itself. Brent Regan's deposition testimony is thus irrelevant, because it addresses the wrong question.

         The easement over the Orphan Parcel did not increase the Orphan Parcel's value in such a way that it cannot be considered an encumbrance. The Kootenai County assessor indicated that the Orphan Parcel had been given a placeholder value from the time it was first assessed in 2000 and that placeholder values are typically given to "parcels that are unbuildable and to remainder parcels that are used for private roadways." In his opinion, "the [O]rphan [P]arcel did not appear to be a buildable lot and its utility was limited by the existing roadway running the length of the parcel." Because the utility of the Orphan Parcel lay in providing private access to surrounding parcels, its value was limited. There was no evidence presented to the district court that the Regans' prescriptive easement over the Orphan Parcel increased the Orphan Parcel's value. Thus, the district court correctly concluded that the easement was an encumbrance for purposes of Idaho Code section 63-1009 and was extinguished by issuance of the tax deed.

         The Regans challenge the district court's application of our discussion of encumbrances in Regan I to this case, complaining that such language is dicta and contending that the definition in Idaho Code section 55-613, which defines encumbrances as including "taxes, assessments, and all liens upon real property" is more appropriate.

         Although the encumbrance language in Regan I was not strictly necessary to the Court's holding in that case, we included it in order to provide guidance to the trial court on remand. "Where an appellate court reverses or vacates a judgment upon an issue properly raised, and remands for further proceedings, it may give guidance for other issues on remand." Urrutia v. Blaine Cnty., 134 Idaho 353, 359, 2 P.3d 738, 744 (2000). The ...


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