author: JUSTICE ERDMANN

text:
    JACK R. TANNER and PATRICIA L. TANNER, FREDERICK McFARLAND, SHERRIE McFARLAND, and THOMAS J. FARRELL, Plaintiffs, Respondents, and Cross-Appellants, v. DREAM ISLAND, INC., a Nevada Corporation,and JUANITA DALY, Defendants, Appellants, and Cross-Respondents.
    No. 95-094.
    Submitted on Briefs January 25, 1996.
    Rehearing Denied April 11, 1996.
    Decided March 21, 1996.
    53 St.Rep. 208.
    275 Mont. 414.
    913 P.2d 641.

      For Appellants: John M. Morrison, Meloy & Morrison, Helena.
    For Respondents: James A. Manley, Manley Law Offices, Poison.
   JUSTICE ERDMANN

delivered the Opinion of the Court.

Defendants appeal from jury findings incorporated into a judgment, order, and permanent injunction issued by the Twentieth Judicial District Court, Lake County. The District Court adopted the jury’s special verdict concerning disputed road easements and permanently enjoined defendants from obstructing plaintiffs’ use and enjoyment of the easements. Plaintiffs cross-appeal on the issue of attorney fees. We affirm in part and reverse in part.

The issues on appeal are as follows:

1. What is the effect of the District Court’s injunction, issued during the trial, which prevented Daly from obstructing plaintiffs’ use and enjoyment of Indian Boulevard?

2. Was there substantial credible evidence to support the jury verdict which found road easements by grant, prescription, and necessity?

3. Did the District Court err in instructing the jury regarding prescriptive easements?

4. Did the District Court abuse its discretion in concluding that an equitable award of attorney fees was not proper for either party in this case?

FACTS

The parties are adjoining landowners of lake front property on Flathead Lake. The properties are part of Lot 4, Block 2, of the Armo Villa townsite near the town of Big Arm. When the United States government platted the villa sites in 1910 it reserved a forty-foot boulevard called Indian Boulevard between the lots and the lake shore. This boulevard, like others around the lake, has historically been used for vehicular and foot traffic. In some places the boulevard has been used by adjacent lot owners as a lawn area or for cabin sites or boat houses.

In 1932 Lot 4, Block 2, was divided in half. The Mueller Realty Company conveyed the north half to Eugenia Rochester (who also owned a nearby island named Dream Island) and the south half to Harry Mueller. Plaintiffs’ title derives from Mueller and defendants’ title derives from Rochester. The indenture to Rochester reserved:

[A] right-of-way for road purposes over and upon the premises herein conveyed, to Harry J. Mueller of Butte, Montana, and to his heirs and assigns, forever, over and upon any and all roads now laid out and heretofore traveled over upon and across said premises, or any portion thereof.

The transfer of the south half of Lot 4 to Mueller contained an identical easement reservation over and upon the land conveyed to Rochester.

In 1959 Juanita Daly and her late husband, Marcus Daly III, purchased the north half of Lot 4 and Dream Island (the Daly property) from the Kirks who then owned the Rochester property. In 1964 the Dalys conveyed the property to Dream Island, Inc., a solely owned private corporation. In 1965 Ross and Delores Young purchased the south half of Lot 4 from the Boetchers who then owned the Mueller property. The Youngs subdivided the property into three smaller lots. These sublots were purchased by plaintiffs’ predecessors and later conveyed to plaintiffs for summer homes.

In 1971 Jack and Patricia Tanner purchased the sublot adjacent to the Daly property (the Tanner property). In 1981 Frederick and Sherrie McFarland purchased the sublot adjacent to the Tanner property (the McFarland property). In 1971 Thomas Farrell purchased the third sublot which lies adjacent to the Tanner and McFarland properties (the Farrell property). In 1974 Farrell conveyed his property to the United States to be held in trust for him as a tribal member.

The Daly property lies north of the plaintiffs’ property except for a small triangle of the McFarland property which is situated north of the Daly property. The Tanner property lies adjacent to and south of the Daly property. The McFarland property lies adj acent to and south of the Tanner property. The Farrell property lies adjacent to and southeast of both the Tanner and McFarland properties. The roads at issue are designated as A, Al, A2, B, C, D, E, F, and G.

No witnesses were found who remembered the property in 1932 but two nearby landowners remembered the property as far back as 1934 or 1935. Sid Walker clearly remembers that the Rochesters and others, including the Tanners’ predecessors, used roads A and G. Red Tucker bought nearby property in the mid-1930s and identified road B as the old county road. He and other landowners used road Ato get down to road G on the boulevard. He testified that the public, as well as the parties’ predecessors, used roads A, B, and G. Other testimony established that prior residents used roads A, G, and E.

Tanner testified that he has used roads A, A2, D, E, and G. Mrs. McFarland testified that she and her husband have used roads A, B, F, and G and Farrell testified that he has used roads A, Al, A2, and G. The Tanners and Farrells testified that they have used the roads for over twenty years and all parties stated they never sought permission from Daly to use the roads, as they believed permission was not necessary. Although Daly objects to plaintiffs using road A across her property, she admits that she uses road A across other people’s property without their permission.

In 1989 Daly’s attorney wrote a letter to the plaintiffs acknowledging that plaintiffs had an easement over her property for those roads which were in existence in 1932 — roads A and G — but that she intended to rescind her alleged permission to use other roads running across her property. Daly indicated in her letter that she intended to install a fence down the south boundary of her property, thereby blocking use of roads B, C, and D.

In the fall of 1992, after the plaintiffs had left their property for the season, Daly erected a fence around her property. The fence extended nearly to the water, cutting off access to the Farrell property and to McFarlands’ lake front property, as well as to their source of water. The fence made access to the Tanners’ cabin difficult and cut Tanners off from their boat house, dock, and barbecue pit. The fence was constructed of iron fence posts and chicken wire and the east end was nailed to the Tanners’ boat house. When Mr. Tanner returned to the property in May 1993, he hired a crew to remove the section of the fence which crossed the boulevard.

In March 1993 the Tanners and McFarlands filed a complaint in District Court claiming easements by grant and prescription and seeking an injunction to prohibit Daly from obstructing the use of their property or their egress and ingress. Plaintiffs requested a jury trial to determine compensatory, emotional distress, and punitive damages. In September 1993 the District Court granted plaintiffs’ motion to join Farrell as a plaintiff who alleged easements by grant, prescription, and necessity.

On June 13, 1994, Daly filed a motion for partial summary judgment on the issues of emotional distress, compensatory damages, and punitive damages. On July 20, 1994, Daly filed a motion for partial summary judgment on the issue of attorney fees. Plaintiffs subsequently withdrew their claim for emotional distress and on July 22, 1994, the District Court denied Daly’s motion for summary judgment on compensatory and punitive damages. The claims for compensatory and punitive damages went to trial on August 30 and 31,1994. In an August 30, 1994, opinion and order, the District Court concluded as a matter of law that attorney fees were not available to either party.

During trial the District Court issued an injunction prohibiting Daly from blocking road G which sits on Indian Boulevard. However, because there was still an issue of the reasonableness or maliciousness of Daly’s actions in erecting the fence across the boulevard, the District Court did not want the jury contaminated or Daly prejudiced by knowledge of the injunction. The parties and the court agreed that the jury’s special verdict form would therefore include the issue of easements over road G, even though that issue had already been decided by the court as a matter of law.

The jury returned a special verdict for the plaintiffs and on September 12, 1994, the District Court entered its judgment and order incorporating the jury verdict. The jury determined that all plaintiffs had an easement by grant over roads A, Al, A2, B, and G. The jury found that Tanner had a prescriptive easement over roads D, E, and G, and that McFarland had a prescriptive easement over roads E and G. In addition, the jury found that Farrell had a prescriptive easement over road G, as well as an easement by necessity over roads A, Al, and G. The jury awarded compensatory damages in the amount of $166.25 (costs to remove the fence) and determined that no punitive damages should be awarded. On November 2,1994, the District Court issued its final opinion, order, and permanent injunction denying the defendants’ motion for judgment notwithstanding the verdict and upholding the jury verdict. This appeal and cross-appeal followed.

ISSUE 1

What is the effect of the District Court’s injunction, issued during the trial, which prevented Daly from obstructing plaintiffs’ use and enjoyment of Indian Boulevard?

Ownership of Indian Boulevard is a complex issue with a number of different parties, including individual landowners, Lake County, the Confederated Salish and Kootenai Tribes, and the United States government, all claiming ownership interest. The plaintiffs did not allege ownership of the boulevard in their complaint and stated that resolution of that issue was beyond the scope of this action. Plaintiffs instead claimed that Daly had no right to the exclusive use of road G on the boulevard either because it belonged to the United States government or, if Daly did own it, it was subject to easements.

On the second day of trial, and out of the presence of the jury, the District Court concluded as a matter of law that:

Until such time as [Daly] has acquired a right to [Indian Boulevard] or permission from a court of jurisdiction, after serving notice on the Tribe and on the United States Government, and bringing an action with them as parties, she’s enjoined from obstructing [road G on the boulevard].

In its November 2, 1994, opinion and order, the District Court clarified this issue:

As to road G, the Court has previously ruled, as a matter of law, that ownership of Indian Boulevard cannot be decided without naming the relevant native american tribes and the United States government. However, as between Plaintiffs and Defendants, the jury found that to the extent Defendants claim to have any interest in road G, there is an easement by grant across Indian Boulevard in favor of Plaintiffs which is enforceable against the Defendants’ claimed interest. Thus, Defendants and their successors in interest are permanently enjoined by the Court from obstructing in any way Plaintiffs’ use and enjoyment of road G, no matter whom is ultimately decided to be the owner of Indian Boulevard.

Daly does not appeal the issuance of the injunction concerning the boulevard, but rather limits her appeal to the easement determinations. The issuance of the injunction renders the easement issues as to road G moot. As noted above, the jury was purposely made unaware of the fact that the District Court had issued an injunction during trial concerning Indian Boulevard. The jury therefore addressed the issue of easements over road G during its deliberation. Since the issuance of the injunction regarding road G is not before us and since the injunction renders the easements over the boulevard moot, we conclude that a review of the jury findings pertaining to easements on road G is unnecessary.

ISSUE 2

Was there substantial credible evidence to support the jury verdict which found road easements by grant, prescription, and necessity?

We review a jury’s verdict to determine if it is supported by substantial credible evidence. Barthule v. Karman (1994), 268 Mont. 477, 485, 886 P.2d 971, 976 (citing Interstate Prod. Credit Ass’n v. DeSaye (1991), 250 Mont. 320, 322-23, 820 P.2d 1285, 1287). Substantial evidence is defined as that evidence that a reasonable mind might accept as adequate to support a conclusion. Head v. Central Reserve Life (1993), 256 Mont. 188, 201, 845 P.2d 735, 743. Evidence which is inherently weak and conflicting may still be considered substantial. Head, 845 P.2d at 743. When conflicting evidence exists, the weight and credibility given to it are within the province of the jury. Whiting v. State (1991), 248 Mont. 207, 213, 810 P.2d 1177, 1181. When determining if substantial evidence exists, this Court views the evidence in the light most favorable to the prevailing party. Whiting, 810 P.2d at 1181.

Easements by Grant

The jury found that plaintiffs possessed an easement by grant over roads A, Al, A2, and B, based on the 1932 deed transfers from the Mueller Realty Company to Eugenia Rochester and Harry Mueller. Daly argues on appeal that (1) she was a bona fide purchaser without knowledge of the easements, and (2) there was not sufficient evidence indicating that the above-mentioned roads were those referenced in the 1932 deeds.

Daly’s first argument fails for two reasons. The deeds in question which refer to the easements were admitted as plaintiffs’ exhibits “C” and “D” at trial. The exhibits, on their face, indicate they were both recorded in the Lake County land records on October 19, 1932. The parties stipulated that the chain of title documents would be admitted into evidence without foundational testimony. Even though Daly argues on appeal that the deeds bears no signatures or notary seal, Daly did not object when the exhibits were admitted into evidence. She cannot now be allowed to refute the deeds’ authenticity as failure to object to the issue at trial precludes her from raising the issue on appeal. See Hando v. PPG Industries, Inc. (1995), 272 Mont. 146, 900 P.2d 281; Bridger v. Lake (1995), 271 Mont. 186, 896 P.2d 406. Furthermore, Daly admitted that she was aware of the roads across her property when she and her husband purchased the land, thus she had actual knowledge of the roads and therefore cannot now claim bona fide purchaser status.

With respect to Daly’s second argument, she is correct that there is no direct evidence that roads A, Al, A2, and B were those referred to in the 1932 deed. Neither party could find anyone whose memory dated back that far or obtain aerial photographs that old. However, the jury was presented with circumstantial evidence regarding the roads in question. Two elderly witnesses, Sid Walker and Red Tucker, testified that roads A and B existed in the mid-1930s and were well-traveled at the time. Walker identified the roads from a 1937 aerial photograph and testified that he used road A as a youngster to reach the lake. Tucker testified that road A was used at the time to get down to the boulevard and that road B was the old county road. Furthermore, Daly’s attorney admitted in the 1989 letter to the plaintiffs that road A existed in 1932.

The jury was presented with the evidence and weighed the testimony accordingly. Roads Al and A2 are actually a part of road A and are merely different forks, both of which lead to road G on the boulevard. Testimony was received that the public used road Ain the mid-1980s to reach road G and that road B was the old county road. We conclude there was substantial credible evidence to support the jury’s finding that plaintiffs possessed an easement by grant over roads A, Al, A2, and B, and therefore affirm that portion of the jury’s verdict.

Easements by Prescription

The jury determined that Tanner possessed a prescriptive easement over roads D and E and that McFarland possessed a prescriptive easement over road E. Daly argues that there was no evidence in the record which established that plaintiffs’ use of roads D and E was not permissive. Daly relies on a theory of neighborly accommodation alleging there was never any discussion between the parties or their predecessors regarding use of the roads and argues that courtesy by neighbors is not adverse and cannot ripen into a prescriptive easement.

Plaintiffs concede that the jury erred in finding a prescriptive easement over road E in McFarlands’ favor. The McFarlands did not testify that they used road E and therefore they did not establish a prescriptive use of the road. The Tanners, however, claim they were using roads D and E adversely under a belief of right based on the language of the 1932 deeds and argue that the burden was on Daly to show that the use was permissive.

To establish an easement by prescription, the party claiming the easement must show open, notorious, exclusive, adverse, continuous, and uninterrupted use of the easement claimed for the full statutory period of five years. Public Lands Access v. Boone & Crockett (1993), 259 Mont. 279, 283, 856 P.2d 525, 527 (citing Keebler v. Harding (1991), 247 Mont. 518, 521, 807 P.2d 1354, 1356). The burden is on the party seeking to establish the prescriptive easement and all elements must be proved. Public Lands Access, 856 P.2d at 527 (citing Downing v. Grover (1989), 237 Mont. 172, 175, 772 P.2d 850, 852). To be adverse the use of the alleged easement must be exercised under a claim of right and not as a mere privilege or license revocable at the pleasure of the owner of the land. Public Lands Access, 856 P.2d at 527 (citing Keebler, 807 P.2d at 1356-57). Such claim must be known to and acquiesced in by the owner of the land. Public Lands Access, 856 P.2d at 527 (citing Keebler, 807 P.2d at 1357).

If the owner shows permissive use, no easement can be acquired since the theory of prescriptive easement is based on adverse use. Public Lands Access, 856 P.2d at 527 (citing Rathbun v. Robson (1983), 203 Mont. 319, 322, 661 P.2d 850, 852). We have stated that “ ‘where the use of a way by a neighbor was by express or implied permission of the owner ... continuous use of the way by the neighbor [is] not adverse and [does] not ripen into a prescriptive right.’ ” Public Lands Access, 856 P.2d at 528 (quoting Wilson v. Chestnut (1974), 164 Mont. 484, 491, 525 P.2d 24, 27).

Roads D and E branch off of road A and lead to the Tanners’ garage which has been there for at least fifty years. Mr. Tanner testified that he has used the roads openly and continuously and without permission for as long as he has owned his property — over twenty years. The Tanners believed they had a right to use the roads based on the language of the 1932 deed and therefore permission from Daly was unnecessary. The Tamers were under no duty to communicate to Daly they were using the roads under a claim of right and adversely to her. See Woods v. Houle (1988), 235 Mont. 158, 162, 766 P.2d 250, 252.

Daly was aware of the 1932 deeds and their reservation of easements, and was also aware of the Tanners’ use of the roads. The Tamers and Daly had unsuccessfully attempted to work out a cooperative maintenance agreement for roads. Daly was therefore aware of the right created by the deeds and acquiesced in the Tanners’ use of the roads for a number of years. The Tanners established a presumption of adverse use of roads D and E under a claim of right based on their 1932 deed.

We have stated that “ ‘[i]n order to overcome [the claim of right] presumption, thereby saving its title from the encumbrance of an easement, the burden is on the defendant to show that the use was permissive.’ ” Woods, 766 P.2d at 252 (quoting Groshean, et al. v. Dillmont Realty Co. (1932), 92 Mont. 227, 239-40, 12 P.2d 273, 275). The burden therefore shifted to Daly to present evidence of permissive use in support of her theory of neighborly accommodation.

Daly testified as follows:

Q: Now, you would agree, would you not, that you never gave anybody permission to use Roads B, C, D, E, F or G?
A: I never told them not to.
Q: Well, would you agree that, in your deposition, you admitted that you never gave anyone permission to use my of those roads?
A: Right
Q: You didn’t, in fact, socialize with them, did you?
A: No.
Q: You didn’t have much contact at all with them, did you?
A: No.
Q: You didn’t ever do anything—
A: No.
Q: —that led them to believe that you were granting them permission?
A: No.

The jury was presented with evidence and weighed the testimony concerning whether or not Daly granted permission to plaintiffs to use the roads in support of her theory of neighborly accommodation. The jury concluded that permissive use had not been established. The District Court stated that “there has been anything but neighborly accommodation on the part of Defendants regarding Plaintiffs’use of the roads in question.”

We conclude that there was substantial credible evidence to support the jury’s finding that the Tanners possessed a prescriptive easement over roads D and E and therefore affirm that portion of the jury’s verdict. We further conclude that the jury’s finding that McFarland possessed a prescriptive easement over road E is not supported by substantial credible evidence. We reverse that portion of the jury’s verdict and remand for further proceedings in that regard.

Easements by Necessity

The jury determined that Farrell possessed an easement by necessity over roads A and Al. Daly argues that this issue should not have gone to the jury and that no easements by necessity were established as a matter of law, citing Schmid v. McDowell (1982), 199 Mont. 233, 649 P.2d 431.

In Issue 2 we held that all of the plaintiffs possessed an easement by grant over roads A, Al, A2, and B. We therefore need not reach the issue of whether Farrell possessed an easement by necessity over roads A and Al.

ISSUE 3

Did the District Court err in instructing the jury regarding prescriptive easements?

The District Court instructed the jury as follows:

The use of a neighbor’s land based on neighborly accommodation or courtesy is not adverse and cannot ripen into a prescriptive easement. Thus, where the use of a right-of-way by a neighbor was by express or implied permission of the owner, the continuous use of the way by the neighbor is not adverse and does not ripen into a prescriptive right. The mere use of a way for the required time is not sufficient to give rise to the presumption of a grant. Some circumstances or act, in addition to the use, tending to indicate that the use was not merely permissive, is required.
To establish an easement by prescription, the burden is on the Plaintiffs to show several elements. Plaintiffs or their predecessors in interest must have used the route openly, notoriously, exclusively, adversely, continuously, and uninterrupted for the full statutory period of five years.
Once the Plaintiffs establish these elements, adverse use is presumed, and the burden is then on the Defendants to show that the use was permissive.
The Plaintiffs and their predecessors were under no duty to communicate by word of mouth to Defendants, or their predecessors in interest, that Plaintiffs were using the roadway under a claim of right and adversely to Defendants.

Daly argues that on the one hand the District Court instructed the jury that the use of a neighbor’s land based on neighborly accommodation is not adverse and cannot ripen into a prescriptive easement. Yet, on the other hand, the District Court instructed the jury that adverse use is presumed once the remaining elements for prescriptive easement are established. Daly claims that where the defense is permissive use through neighborly accommodation the presumption of adverse use should not apply.

The plaintiffs counter that the presumption of adverse use applies in both express permission and implied permission situations and in any event Daly still had the burden to establish permissive use. The plaintiffs argue that even if the instruction was improper, it was harmless error because Daly did not come forward with sufficient evidence showing neighborly accommodation or permissive use.

The general rule in Montana is that ‘[i]f the given instructions, when viewed in their entirety, state the correct law applicable to the case, there is no reversible error.’ ” Buhr v. Flathead County (1994), 268 Mont. 223, 235, 886 P.2d 381, 388 (quoting Walden v. State (1991), 250 Mont. 132, 137, 818 P.2d 1190, 1193). We have stated that “ ‘[w]hen examining whether certain jury instructions were properly given or refused, we must consider the jury instructions in their entirety and in connection with other instructions given and the evidence introduced at trial.’ ” Buhr, 886 P.2d at 388 (quoting Story v. City Bozeman (1993), 259 Mont. 207, 222, 856 P.2d 202, 211).

We conclude that the jury instruction given by the District Court correctly states the law applicable to the case. The substance of the instruction was taken from our holdings in Public Lands and Woods and it embodies the requirement that Daly has the burden to present evidence of permissive use. Plaintiffs believed they were using the roads adversely under a claim of right derived from the 1932 deed and Daly failed to adequately rebut this presumption. We affirm the District Court on this issue.

ISSUE 4

Did the District Court abuse its discretion in concluding that an equitable award of attorney fees was not proper for either party in this case?

In its July 22, 1994, opinion and order denying Daly’s motion for summary judgment on the issue of compensatory damages, the District Court stated that “should Plaintiffs prevail on their malice claims, equity may require an award of attorneys’ fees under the Foy exception in order to fully compensate Plaintiffs in this action.”

However, in its August 30, 1994, opinion and order the District Court concluded that “[t]his Court has been presented with no facts which would justify the imposition of attorneys’ fees under the Foy exception, and the equitable awarding of attorneys’ fees is not proper as to either party in this case.”

The District Court further ordered that neither party would be allowed to present evidence of attorney fees to the jury, thus concluding as a matter of law that any compensatory damages which might be awarded would not include attorney fees.

Plaintiffs argue that the District Court misconstrued their claim for attorney fees. Plaintiffs rely on Boz-Lew Builders v. Smith (1977), 174 Mont. 448, 571 P.2d 389, and Cate v. Hargrave (1984), 209 Mont. 265, 680 P.2d 952, and argue that when Daly erected the fence and denied them access to their lake shore properties, dock, and boat house, she set in motion a sequence of events under which they would inevitably incur attorney fees. Plaintiffs contend that the District Court erred by analyzing the issue under Foy v. Anderson (1978), 176 Mont. 507, 580 P.2d 114, and maintain that the issue should have gone to the jury as part of its determination of compensatory damages.

Daly counters that the decision of whether or not to award attorney fees involves a question of equity and therefore lies within the discretionary powers of the District Court. Daly argues that resolution of the issue is controlled by Rasmussen v. Fowler (1990), 245 Mont. 308, 800 P.2d 1053, and urges us to affirm the District Court’s grant of summary judgment in her favor.

The longstanding rule in Montana is that absent statutory or contractual authority attorney fees will not be awarded. Howell v. State (1994), 263 Mont. 275, 285, 868 P.2d 568, 574 (citing Goodover v. Lindey’s, Inc. (1992), 255 Mont. 430, 445, 843 P.2d 765, 774; Bitney v. School Dist. No. 44 (1975), 167 Mont. 129, 137, 535 P.2d 1273, 1277; Ehly v. Cady (1984), 212 Mont. 82, 100, 687 P.2d 687,696). Our review of a district court’s legal conclusion that no basis for attorney fees exists is plenary. Howell, 868 P.2d at 574 (citing Steer, Inc. v. Dept. of Revenue (1990), 245 Mont. 470, 474-75, 803 P.2d 601, 603).

In isolated instances a district court may award attorney fees to make an injured party whole under its equity powers. See Stickney v. State (1981), 195 Mont. 415, 636 P.2d 860; Holmstrom Land Co. v. Hunter (1979), 182 Mont. 43, 595 P.2d 360; Foy. Furthermore, in certain instances in which bad faith or malicious behavior are involved this Court has made an equitable award of attorney fees. See Matter of Estate of Lindgren (1994), 268 Mont. 96, 102, 885 P.2d 1280, 1284.

In Foy we created an exception to the general rule in order to compensate a party who, through no fault of her own, had been forced to hire an attorney to write and argue a motion to dismiss. We have subsequently explained the distinguishing characteristics of Foy by stating: “The Foy exception has been narrowly drawn and is applicable only where the action into which the prevailing party has been forced is utterly without merit or frivolous.” Goodover, 843 P.2d at 776 (citing State ex rel. Wilson v. Dept. of Natural Resources (1982), 199 Mont. 189, 202, 648 P.2d 766, 772).

We first note that the present case presents neither a statutory nor a contractual basis for the award of attorney fees. Furthermore, we conclude this case does not fit within any of the narrow exceptions to the general rule. The Foy exception is not applicable, as here the plaintiffs obtained an attorney to initiate legal action. They were not forced to defend wholly frivolous litigation through no fault of their own. We stated in Goodover that “Goodover’s position as the plaintiff in this litigation ... will preclude an award of attorney’s fees under Foy.” Goodover, 843 P.2d at 775. Nor does the exception involving malicious action apply to the present case. Even though plaintiffs sought punitive damages due to Daly’s alleged malicious conduct, the jury determined that punitive damages should not be awarded. The plaintiffs did not appeal that finding.

Plaintiffs’ reliance on Cate is misplaced. There we affirmed the jury’s award of attorney fees to Hargrave, a senior water appropriator, who suffered damages to a dam and headgate due to Cate’s interference with the dam and headgate. Cate filed suit for a judicial determination as to whether Hargrave was wasting water by failing to maintain the dam and whether Hargrave was exceeding his lawful appropriation of water. We affirmed the jury’s award of attorney fees stating:

The Hargraves as defendants were compelled to expend substantial sums of money to prove that which was obvious to them from the start: their valid senior right to thirteen cubic feet per second of McGregor Creek.

Cate, 680 P.2d 957 (emphasis added).

We distinguish the present case from Cate by noting that here the plaintiffs were not forced to defend a frivolous legal action nor were the easement rights they claimed as definitive as those associated with Hargrave’s senior water right. Finally, while we do not condone Daly’s actions in erecting the fence around her property we cannot conclude that such action is so reprehensible as to fall in line with our holding in Cate.

InRasmussen the plaintiff operated a dry-land wheat farm on state leasehold property. When the defendant erected a gate across a road used by Rasmussen to reach the property, Rasmussen filed suit and requested injunctive relief. We determined that a prescriptive easement existed across the road but affirmed the district court’s denial of attorney fees. Rasmussen, 800 P.2d at 1057.

We have held that absent an abuse of discretion this Court will not reverse the district court’s decision concerning attorney fees. Sage v. Rogers (1993), 257 Mont. 229, 242, 848 P.2d 1034, 1042 (citing Joseph Russell Realty Co. v. Kenneally (1980), 185 Mont. 496, 505, 605 P.2d 1107, 1112). The test for abuse of discretion is whether the trial court acted arbitrarily without employment of conscientious judgment or exceeded the bounds of reason resulting in substantial injustice. Gaustad v. City of Columbus (1995), 272 Mont. 486, 488, 901 P.2d 565, 567. We conclude that the District Court did not abuse its discretion in determining that an equitable award of attorney fees was not proper for either party in this case. We affirm the District Court on this issue.

JUSTICES GRAY, HUNT, NELSON and TRIEWEILER concur.


source: Caselaw Access Project

author: JUSTICE LEAPHART JUSTICE HUNT

license: Public Domain

text:
    EDWIN A. TAYLOR, Petitioner and Appellant, v. STATE COMPENSATION INSURANCE FUND, Respondent and Insurer for, MONTANA DEPARTMENT OF HIGHWAYS, Employer and Respondent.
    No. 95-484.
    Submitted on Briefs February 1, 1996.
    Rehearing Denied April 22, 1996.
    Decided March 18, 1996.
    53 St.Rep. 201.
    275 Mont. 432.
    913 P.2d 1242.

      For Appellant: Wade J. Dahood, Bernard J. Everett, Knight, Dahood, McLean & Everett, Anaconda.
    For Respondent: Oliver H. Goe, Browning, Kaleczyc, Berry & Hoven, Helena.
   JUSTICE LEAPHART

delivered the Opinion of the Court.

Edwin A. Taylor (Taylor) appeals from the Findings of Fact, Conclusions of Law and Judgment of the Workers’ Compensation Court determining that two of three workers’ compensation claims filed by Taylor were fraudulent. We affirm.

We consider the following dispositive issues on appeal:

1. Does substantial credible evidence support the Workers’ Compensation Court’s finding that Taylor filed fraudulent claims for injuries?

2. Did the Workers’ Compensation Court err when it failed to find that the insurer’s conduct was unreasonable and in failing to award Taylor his attorney’s fees, costs, and the statutory penalty?

Taylor began working for the Montana Department of Transportation (DOT) in 1988. At the time of Taylor’s alleged accidents, Taylor’s job classification was a truck driver. Taylor filed claims for industrial accidents that allegedly occurred on February 26, 1990, November 15,1990, and March 4,1991. At the time of the alleged injuries, State Fund was the workers’ compensation insurer for the DOT. State Fund accepted liability for each claim and began paying Taylor wage loss and medical benefits. Although State Fund began an investigation of Taylor’s claims and requested the Montana Criminal Investigations Bureau to conduct an investigation, State Fund continued to pay benefits until April of 1994.

Taylor alleges that he injured his neck in an industrial accident on February 26, 1990. Taylor underwent neck surgery for this injury. Similarly, Taylor alleges that he suffered a work-related injury on November 15, 1990, while he was working in the maintenance shed of the DOT’s Bozeman, Montana facility. No one witnessed this accident. He alleges that he bumped the left side of his head near his ear while he was standing up from checking bolts on the plow. Taylor asserts that he hit his head so hard that it knocked him to his knees. Following this incident, Taylor consulted Dr. Pamela Hiebert for treatment. Taylor was admitted to Bozeman Deaconess Hospital overnight for observation. The next day, Taylor was discharged from the hospital and sought no further treatment for this injury. State Fund accepted liability for this claim.

On March 4,1991, Taylor was working with a road crew fixing pot holes on Main Street in Bozeman, Montana. Taylor testified that near the end of his shift he was directed to pick up the safety cones and signs that marked the job area. He alleges that while picking up the cones he stumbled and fell, hitting his head, neck, and shoulders and landing on his hips and back. Again, this accident was unwitnessed. After the incident, Taylor got into the truck and drove approximately one mile back to the DOT shop where he reported the accident to his acting supervisor, Dan Noyes (Noyes), and asked Noyes to drive him to the hospital. Taylor was admitted to the hospital and, while hospitalized, he complained of lumbar pain and pain in his left extremities. Taylor was discharged from the hospital on March 8, 1991. Two days later, Taylor was readmitted to the hospital for injuries related to his cervical and lumbar spine. He was treated with an anesthetic and an anti-inflammatory and was again released from the hospital on March 15, 1991.

Taylor was admitted to St. Vincent’s Hospital in Billings, Montana, on August 27,1991, by Dr. James Johnson, and was released the next day. On August 29, 1991, at the request of Dr. Johnson, Taylor was examined by Dr. Robert Snider, an orthopedic surgeon, who stated that surgery may not be of any value because he was not sure of the source of Taylor’s back pain. Another doctor concurred in the opinion that surgery was not warranted.

In the fall of 1993, Taylor was seen by another orthopedic surgeon, Dr. J ames Lovitt, who opined that Taylor had two choices, to live with his pain or to consider surgery. Dr. Lovitt noted that Taylor was not a good candidate for surgery, which included spinal fusion, because of his history of smoking and, further, that surgery might lead to additional complications.

State Fund asserted that Taylor did not suffer a disabling injury on March 4, 1991, and, therefore, terminated Taylor’s benefits on April 20, 1994. State Fund filed a petition for hearing before the Workers’ Compensation Court alleging that Taylor did not suffer any industrial injuries and that his claims were fraudulent. Taylor responded by filing a petition for hearing in order to reinstate his benefits. The Workers’ Compensation Court consolidated the petitions and trial was held in February of 1995.

At trial, State Fund offered the testimony of several witnesses to prove that Taylor’s claims were fraudulent. Elizabeth Larain (Larain) and Robert Beebe (Beebe) testified that Taylor allegedly told them that he was “scamming the system” and that his claims were fraudulent. Beebe testified that he called the Workers’ Compensation Fraud Hotline and reported Taylor’s fraudulent claim. Larain testified that she had telephoned Lance Zanto, an adjuster with State Fund, and told him that Taylor’s claims were fraudulent. Several other witnesses, including a claims adjuster with State Fund, an investigator with the Montana Criminal Investigations Bureau, Taylor’s former supervisor from the DOT, and Taylor’s ex-wife testified at trial. The Workers’ Compensation Court acknowledged that “the credibility of witnesses testifying at trial is critical to the resolution of this case.”

Ultimately, the Workers’ Compensation Court determined that both the November 15, 1990 and the March 4, 1991 claims were fraudulent. The court concluded that State Fund failed to carry its burden of proof that the February 26, 1990 claim was fraudulent. Taylor appeals from the determination that two of his claims were fraudulent.

1. Does substantial credible evidence support the Workers’ Compensation Court’s finding that Taylor filed fraudulent claims for injuries?

In reviewing findings of the Workers’ Compensation Court, we determine whether the findings are supported by substantial credible evidence. Wilson v. Liberty Mut. Fire Ins. Co. (1995), [273 Mont. 313], 903 P.2d 785, 787 (citing Miller v. Frasure (1991), 248 Mont. 132, 137, 809 P.2d 1257, 1260). Substantial evidence is more than a mere scintilla of evidence but may be less than a preponderance of the evidence. Wilson, 903 P.2d at 787. We will not substitute our judgment for that of the trial court where the issue relates to the weight given to certain evidence or the credibility of the witnesses. Wilson, 903 P.2d at 787 (citing Burns v. Plum Creek Timber Co. (1994), 268 Mont. 82, 84, 885 P.2d 508, 509); Rose v. Burdick’s Locksmith (1994), 265 Mont. 178, 180-81, 875 P.2d 337, 339.

The Workers’ Compensation Court determined that State Fund satisfied its burden of proving that Taylor committed actual fraud. To sustain a claim of fraud, State Fund was required to plead and prove each of the nine elements of fraud. Haag v. Montana Sch. Group Ins. Auth. (1995), [274 Mont. 109], 906 P.2d 693, 697. Fraud can never be presumed but must be proved by a preponderance of the evidence. Barrett v. Holland & Hart (1993), 256 Mont. 101, 106, 845 P.2d 714, 717 (citing Batten v. Watts Cycle & Marine (1989), 240 Mont. 113, 117, 783 P.2d 378, 381, cert. denied, 494 U.S. 1087, 110 S.Ct. 1826, 108 L.Ed.2d 955 (1990)). The court found that, as to the November 15, 1990 and March 4, 1991 claims, State Fund satisfied its burden and proved each of the nine elements of fraud. The elements are: (1) a representation; (2) falsity of the representation; (3) materiality of the representation; (4) speaker’s knowledge of the falsity of the representation or ignorance of its truth; (5) the speaker’s intent it should be relied upon; (6) the hearer’s ignorance of the falsity of the representation; (7) the hearer’s reliance on the representation; (8) the hearer’s right to rely on the representation; and (9) the hearer’s consequent and proximate injury caused by the reliance on the representation. Lee v. Armstrong (1990), 244 Mont. 289, 293, 798 P.2d 84, 87; Batten, 783 P.2d at 380-81.

The court noted that Taylor made specific statements acknowledging that two of his claims were fraudulent. While the court recognized that “it is ultimately [Taylor’s] word against the words of Larain and Beebe, I found the latter witnesses to be credible and believable. Ultimately, however, this case doesn’t rely solely on their evidence. The finding of fraud is supported by other significant evidence.” The court made extensive findings relating to the medical evidence, the testimony of the witnesses, and the credibility of the witnesses.

Taylor asserts that State Fund did not rebut the testimony of the numerous physicians who have treated Taylor for his multiple injuries. The findings of the Workers’ Compensation Court, however, reflect otherwise. The court’s findings indicate that several of Taylor’s treating physicians could not find an objective basis for Taylor’s pain complaints and, further, that Taylor’s pain complaints were abnormal and that his subjective complaints were out of line with the objective medical findings. Nonetheless, Taylor argues that the medical testimony regarding his injuries was “unrefuted” and should not be disregarded based on the testimony of Larain and Beebe. However, in its order supplementing findings of fact and otherwise denying claimant’s post-trial motions, the court noted that “there is nothing in the medical evidence to indicate an acute injury as opposed to long term degeneration, or, other than Taylor’s own report, to prove that his back problems stemmed from an industrial accident.” Further, the court noted that:

Significantly, claimant testified about cuts and scratches he had when he went to the hospital on March 4th, even mentioning a “pretty good nick on the side of my head or maybe in my jaw area.” (Tr. II at 112.) His complaints of hip pain changed from the left side on March 4, to the right side on March 11th. He insisted on hospitalization and claimed he could not perform ordinary tasks of daily living. Yet, the medical records and testimony of the physicians who examined him show that they did not see any objective evidence of any injury.

Thus, even without Beebe’s and Larain’s testimony there is evidence in the record which casts doubt on Taylor’s claims of industrial injuries.

According to Taylor, both Larain’s and Beebe’s testimony should be disregarded because Larain and Beebe, who were friends with one another and acquaintances of Taylor’s, had a motive to testify against Taylor because of a dispute regarding some money Taylor allegedly took from Beebe. Taylor asserts that the Workers’ Compensation Court erred in finding that Larain’s and Beebe’s testimony was credible. However, this Court will not substitute its judgment for that of the trial court on questions of witness credibility when substantial credible evidence supports the trial court’s determination. Wilson, 903 P.2d at 787. Here, the findings of fact and the record reflect that the court could have found these witnesses to be truthful in some areas of their testimony and untruthful in others. The trial court was in the best position to judge the credibility and demeanor of the witnesses while testifying. Where there is conflicting evidence in the record, it is within the provence of the trial court to pass on the credibility of witnesses and the sufficiency of the evidence. Wilson, 903 P.2d at 787-88.

Beebe stated that, following the March 4, 1991 injury, he saw Taylor working on his car and replacing the drive line. Beebe testified that the parts weighed between seventy and eighty pounds and that Taylor worked at this heavy labor for over four hours. Taylor testified that the part weighed approximately twenty pounds and that he would have completed the job much more quickly but for his injuries. Larain testified that Taylor was very interested in, and asked questions about, her own workers’ compensation claim and confided in her that his claims were fraudulent. Taylor denies that he made any such admissions to Larain.

The findings reflect Taylor’s inconsistent explanations of how the March 4,1991 incident occurred. For example, Taylor’s ex-wife testified that Taylor told her that he had injured his back operating a j ack-hammer. Larain testified that Taylor told her that he had tripped over some road cones, and Beebe testified that Taylor told him that he slipped on some road oil and fell.

As to Taylor’s own testimony, the court found that “claimant has made as great a negative impression on me as any witness I have observed during the last two years. Listening to him and observing him, I simply did not believe him and concluded that he was perpetuating a fraudulent scheme.” In its order supplementing findings of fact and otherwise denying claimant’s post-trial motions, the court also noted that “Taylor’s confident, forceful testimony at trial stood in stark contrast to the complaining, depressed, non-functional individual who appears in the many medical and psychological records presented in this case. ... He had a smooth answer for everything presented against him.”

The Workers’ Compensation Court findings also reflect evidence and testimony showing that Taylor had been reprimanded at work and placed on probation for his performance, had a problem with alcohol abuse, had received citations for DUI’s, was in “severe financial straits,” was having his wages attached by creditors, and owed both the Internal Revenue Service and the State of Montana for unpaid taxes. Taylor maintains that, regardless of his financial situation and job performance, he did indeed suffer industrial injuries. Our standard, however, is not whether the evidence supports findings different than those made by the Workers’ Compensation Court, but whether substantial credible evidence supports the court’s findings. Wilson, 903 P.2d at 787 (citing Caekaert v. State Compensation Mut. Ins. Fund (1994), 268 Mont. 105, 110, 885 P.2d 495, 498). In the instant case, we conclude that substantial credible evidence in the record supports the findings of the Workers’ Compensation Court that two of Taylor’s three claims were fraudulent.

2. Did the Workers’ Compensation Court err when it failed to find that the insurer’s conduct was unreasonable and in failing to award Taylor his attorney’s fees, costs, and the statutory penalty?

Although the court found that two of Taylor’s three claims were fraudulent, Taylor nonetheless asks this Court to find State Fund’s conduct unreasonable under § 39-71-611, MCA, and award the twenty-percent statutory penalty against State Fund pursuant to § 39-71-2907, MCA. Reasonableness is a question of fact. Stordalen v. Ricci’s Food Farm (1993), 261 Mont. 256, 258, 862 P.2d 393, 394. We must determine whether substantial credible evidence supports the court’s finding that State Fund’s actions were reasonable and that Taylor was not entitled to the statutory penalty.

The statutory penalty set forth in § 39-71-2907, MCA, was not intended to eliminate an insurer’s assertion of a legitimate defense to liability. Paulson v. Bozeman Deaconess Found. Hosp. (1984), 207 Mont. 440, 444, 673 P.2d 1281, 1283. Here, State Fund pled and proved the nine elements of fraud in defending its decision to terminate Taylor’s benefits. Further, the court determined that State Fund’s actions were not unreasonable and that Taylor was not entitled to attorney’s fees or the statutory penalty. As is illustrated by the court’s findings that two of Taylor’s three claims were fraudulent, substantial credible evidence supports the court’s finding that State Fund’s actions in terminating Taylor’s benefits were reasonable. Accordingly, we conclude that the Workers’ Compensation Court did not err in failing to award attorney’s fees, costs, or the statutory penalty.

Affirmed.

JUSTICES NELSON, GRAY and ERDMANN concur.

JUSTICE HUNT

specially concurs.

I concur in the conclusions reached by the majority but do not agree with all that is said in the opinion.


author: JUSTICE LEAPHART

text:
    DENNIS RUANA, ROBERT W. BIELBY, CARLA J. BIELBY, PAM McCOY and KARL HEINZ-FINKEN, Plaintiffs and Respondents, v. LEONARD GRIGONIS and KATHY J. GRIGONIS, Defendants and Appellants.
    No. 95-421.
    Submitted on Briefs February 1, 1996.
    Decided March 28, 1996.
    53 St.Rep. 216.
    275 Mont. 441.
    913 P.2d 1247.

      For Appellants: Don Torgenrud, Attorney at Law, St. Ignatius.
    For Respondents: Zane K. Sullivan; Sullivan & Tabaracci, Missoula.
   JUSTICE LEAPHART

delivered the Opinion of the Court.

The Grigonises appeal from the Ravalli County, Twenty-first Judicial District Court’s Order and Judgment granting Dennis Ruana, Robert W. Bielby, Carla J. Bielby, Pam McCoy and Karl HeinzFtaken, Respondents, summary judgment. The Respondents, Bielby and Ruana, are the developers of “Paradise Acres,” Pam McCoy and Karl Heinz-Finken are purchasers of one of the “Paradise Acres” lots which abuts the Grigonis property. Together, the Respondents moved for summary judgment arguing that they have a reserved sixty-foot easement crossing the Grigonises’ property as a matter of law. They base their argument on two recent decisions by this Court, Halverson v. Turner (1994), 268 Mont. 168, 885 P.2d 1285, and Bache v. Owens (1994), 267 Mont. 279, 883 P.2d 817. The District Court granted the Respondents’ motion. We reverse.

The following issues are presented by the Grigonises:

1. Did the District Court err in holding, as a matter of law, that Respondents have an easement by reservation across a sixty-foot wide private road and public utility easement on the Grigonises’ property, where the certificate of survey for Respondents’ property does not include or depict the easement nor is it recorded on any other pertinent documents?
2. Are the Grigonises entitled to summary judgment on the issue of easement by prescription?
3. Are the Grigonises entitled to summary judgment on the issue of easement by implication?
4. Are the Grigonises entitled to judgment on the issue of laches?
5. Are the Grigonises entitled to summary judgment on the issue of trespass, based on the Respondents’ construction of Blue Sky Lane and the raising of the surface of North Hidden Valley Road?
6. Are the Grigonises entitled to attorney’s fees expended in defense of their land?

The property at issue is located in Ravalli County, Montana, and is situated north and south of the section line between Sections 8 and 17 of Township 10 North, Range 19 West, M.RM. The Respondents allege that they have rights to two easements. The first is a sixty-foot private road and public utility easement running east-west just south of the 8-17 section line. North Hidden Valley Road runs roughly through the center of this easement continuing east to a dead end, and continuing west until it joins the East Side Bitterroot Highway. The second potential easement, Blue Sky Lane, comes off North Hidden Valley Road. Respondents built Blue Sky Lane to access their 56-lot “Paradise Acres” subdivision to the north of North Hidden Valley Road. Blue Sky Lane originates on the Grigonises’ property.

The properties owned by the Grigonises and the Respondents were originally contained in a much larger parcel of property, the Cook Ranch. In 1976, the Cooks sold a portion of the ranch to Wilbur and Ila Hensler. The Henslers’ property encompassed the parcels now owned by the Grigonises and the Respondents. In 1977, the Henslers sold a portion of their property to John Reely, William Reely, and Delbert Ashmore (Reely-Ashmore). The Henslers to Reely-Ashmore sale included property south of the 8-17 section line including within it the property now owned by the Grigonises. The Henslers retained the property to the north of the 8-17 section line that is now owned by the Respondents. Thus, it was this 1977 sale that split the properties now at issue from single ownership. In 1988, the Grigonises purchased 10.76 acres south of the 8-17 section line from Reely-Ashmore’s successors in interest. In 1990, the Henslers sold Respondents approximately 133 acres north of the 8-17 section line, including the land just to the north of the Grigonises. The northern border of the Grigonis property abuts the property of the Respondents.

When the Grigonises purchased their property, there was a grassy strip extending southward approximately fifteen feet from the northern border of their property. The grassy strip contains public utility lines. North Hidden Valley Road abuts the grassy strip to the south and runs roughly down the center of the sixty-foot wide public utility, private road easement. North Hidden Valley Road is a dirt road, approximately twenty to twenty-five feet wide that runs east-west. Both the grassy strip and North Hidden Valley Road fall within the “private road and public utility easement” that extends south sixty feet from the 8-17 section line into the Grigonises’ property (see diagram).

The Grigonises acknowledge that when they bought their property it was plainly subject to the North Hidden Valley Road east-west easement. This easement allowed homeowners to the east to access their properties. However, they argue that this easement does not extend north, that is, no easement to the north off of North Hidden Valley Road such as Blue Sky Lane was ever reserved or created.

A fence separates the Respondents’ and Grigonises’properties. In 1991, without the Grigonises’ permission, Bielby, one of the Respondents, took down the fence and constructed a dirt road, Blue Sky Lane. Blue Sky Lane originates from North Hidden Valley Road in the Grigonises’ property and heads north through the grassy strip into Respondents’property. Blue Sky Lane provides access onto North Hidden Valley Road for the 56-lot “Paradise Acres” subdivision.

The Grigonises were unhappy with the construction of Blue Sky Lane on their property and offered to sell Respondents easement rights. Respondents did not reply to the Grigonises’ offer and there were no further negotiations. Leonard Grigonis re-erected the fence and posted signs stating that use of Blue Sky Lane was unpermitted trespass. Bielby removed the signs and a portion of the fence and Respondents continued to use Blue Sky Lane as their access to North Hidden Valley Road.

Respondents sought and obtained an injunction to prevent the Grigonises from interfering with Respondents’ use of Blue Sky Lane. Respondents asserted easement rights based on a number of theories: easement by reservation, easement by grant, public road by prescription, and easement by necessity, all with the accompanying right to build an access road, i.e., Blue Sky Lane. The Grigonises asserted that Respondents have no easement rights in North Hidden Valley Road, have no right to build an access road to intersect North Hidden Valley Road, and that in building Blue Sky Lane, Respondents wrongfully occupied, trespassed, converted, and physically damaged the Grigonises’ property. The Grigonises sought Rule 11, M.R.Civ.R, sanctions against Respondents in the form of attorney’s fees and costs, as well as damages under the tort theories of wrongful occupation, trespass, conversion and property damage. The parties filed numerous motions and cross-motions for summary judgment on the following grounds: public prescriptive easement, tortious interference with easement rights, easement by estoppel, trespass, wrongful occupation, easement by grant, easement by reservation, easement by necessity, laches and Rule 11, M.R.Civ.R, sanctions.

Initially, the court denied summary judgment to either party for easement by grant and/or reservation and for public road by prescription; denied both parties summary judgment for laches, tortious interference, trespass and/or wrongful occupation; granted summary judgment in favor of the Grigonises on Respondents’ claim of easement by estoppel; dismissed Respondents’ claim of easement by necessity and substituted a claim of easement by implication in its place; granted summary judgment to Respondents as to whether any rights to use North Hidden Valley Road automatically included rights to use and build within the entire sixty-foot easement area thereby limiting argument at trial to whether Respondents have rights in the sixty-foot easement containing North Hidden Valley Road, and; granted summary judgment to Respondents for the Grigonises’ claims of Rule 11, M.R.Civ.R, violations and abuse of process. The Grigonises sought and were denied a Motion for Reconsideration.

Respondents subsequently filed another motion for summary judgment based on this Court’s recent decisions in Halverson v. Turner (1994), 268 Mont. 168, 885 P.2d 1285, and Bache v. Owens (1994), 267 Mont. 279, 883 P.2d 817. After reconsideration, and relying on Halverson and Bache, the District Court granted Respondents’ Motion for Summary Judgment on their claim of easement by grant or reservation. The court ruled that Respondents have:

as a matter of public record, a sixty (60’) foot road/ utility easement by reservation which crosses Defendants’ [Grigonises’] property and lies adjacent to Plaintiffs’ [Respondents’] property as described in Certificate of Survey 1733. Such easement right includes the accompanying right to build access roads or drive ways, such as Blue Sky Lane, in order to exercise their easement right to use North Hidden Valley Road which lies within the north and south boundaries of their sixty foot easement and any other use consistent with the road and utility purposes of the easement.

The Grigonises appeal the District Court’s grant of summary judgment as well as its prior rulings denying their cross-motions for summary judgment.

1. Did the District Court err in holding, as a matter of law, that Respondents have an easement by reservation across a sixty-foot wide private road and public utility easement on the Grigonises’ property, where the certificate of survey for Respondents’ property does not include or depict the easement nor is it recorded on any other pertinent documents?

Our standard of reviewing a grant of summary judgment is the same as that used by the district court. Halverson, 885 P.2d at 1288; Wild River v. Board of Trustees (1991), 248 Mont. 397, 399-400, 812 P.2d 344, 345. Summary judgment is proper when there are no genuine issues of material fact and the moving party is entitled to judgment as a matter of law. Rule 56(c), M.R.Civ.P.; Bache, 883 P.2d at 820. Thus, we determine whether a genuine issue of material fact exists and whether the moving party is entitled to judgment as a matter of law. Motarie v. Northern Mont. Joint Refuse Disposal Dist. (1995), [274 Mont. 239], 907 P.2d 154, 156.

An easement is a non-possessory interest in land, a right which one person has to use the land of another for a specific purpose or a servitude imposed as a burden upon land. Kuhlman v. Rivera (1985), 216 Mont. 353, 358, 701 P.2d 982, 985 (citations omitted). “An easement is an interest in land that cannot be created, granted or transferred except by operation of law, by an instrument in writing, or by prescription.” Wild River, 812 P.2d at 846 (quoting Prentice v. McKay (1909), 38 Mont. 114, 118, 98 P. 1081, 1083). An easement by reservation must arise from the written documents of conveyance. Halverson, 885 P.2d at 1288. In determining the existence of an easement by reservation in documents of conveyance, it is necessary that the grantee of the property being burdened by the servitude have knowledge of its use or its necessity. Halverson, 885 P.2d at 1288.

Concerning North Hidden Valley Road, the District Court noted that:

the public record clearly evidenced the long term existence of the 60’private road/public utility easement dating at least as far back as the 1970s, and that the public record, as well as testimony before the Court, evidenced the existence of the road which lies within the boundaries of the easement dating as far back as the early 1900s. However, there did not appear to be any instruments of conveyance containing specific language “creating” the easement of record and/or the road.

Because an easement by reservation must arise from the written documents of conveyance, we examine the chains of title in question. Halverson, 885 P.2d at 1288. Examination of the chain of title to the Grigonises’ property reveals when the North Hidden Valley Road easement was created for the properties at issue. Property must be divided between or among separate owners for an easement to be created because it is fundamental that one property owner cannot have an easement across his or her own land. Wild River, 812 P.2d at 347. The first time the properties that are now the Grigonises’ and the Respondents’ were divided from a singly owned property was in 1977, when the Henslers sold part of their property to Reely-Ashmore. Thus, this transfer of title is decisive in establishing the granted or reserved easement rights as between the Respondents and the Grigonises. The Henslers retained the part of their property to the north of the 8-17 section line that they ultimately sold to Respondents in 1990. The 1977 deed from the Henslers to Reely-Ashmore, which included the 10.76 acres south of the 18-7 section line now owned by the Grigonises, stated:

SUBJECT TO an access easement being sixty (60) feet wide and lying south of and adjacent to the following continuous line; the north line of the NE1/4NW1/4 of Section 17; the north line of the NE1/4 of Section 17; and the north line of the NW1/4 of Section 16 [i.e., North Hidden Valley Road],

The deed also stated:

Section 17: All of the NE1/4 except that land as recorded on Certificate of Survey No. 1316; also all of the NW1/4 except that land as recorded on Certificate of Survey No. 1316.

Certificate of Survey (COS) number 1316 does not depict the sixty-foot private road (North Hidden Valley Road) and public utility easement just south of the 8-17 section line.

Reely-Ashmore assigned the parcel of land to Hidden Valley Ranches in 1977. The deed to Hidden Valley Ranches contained the same “subject to” language and reference to COS number 1316 stated above. In 1978, Hidden Valley Ranches sold twenty-one and one-half acres to John Reely. However, rather than the “subject to” language and reference to COS number 1316, the deed from Hidden Valley Ranches to John Reely recited the property description and stated “ [according to survey data, monuments and easements as shown on Certificate of Survey No. 1503.” Certificate of Survey number 1503 clearly depicts the sixty-foot private road and public utility easement just south of the 8-17 section line.

In 1978, John Reely, in anticipation of splitting his acreage further, had COS number 1733 prepared. Certificate of Survey number 1733 also clearly depicts the sixty-foot private road and public utility easement just south of the 8-17 section line. Neither COS number 1503 nor COS number 1733 depict any property north of the 8-17 section line, they only portray property south of the section line. The subsequent deeds that continued to split the property into smaller parcels up and until the 1988 sale to the Grigonises, included a reference to COS number 1733.

In Wild River, we held that, normally, the words “subject to” do not create an easement. Wild River, 812 P.2d at 346.

The words “subject to” used in their ordinary sense, mean subordinate to, subservient to or limited by. There is nothing in the use of the words “subject to,” in their ordinary use, which would even hint at the creation of affirmative rights or connote a reservation or retention of property rights.

Wild River, 812 P.2d at 346-47 (citations omitted). Thus the “subject to” clause in the 1977 Hensler to Reely-Ashmore deed did not create or reserve easement rights in North Hidden Valley Road.

On the other hand, we held in Bache and Halverson that an easement by reservation can be established when, in conjunction with a division of land, the subject easement is shown on the certificate of survey and the certificate of survey is referred to and incorporated in the deed of conveyance. Halverson, 885 P.2d at 1289; Bache, 883 P.2d at 822. Halverson concerned two tracts of land, originally owned by one person, Dahlia Halverson. Halverson filed and recorded a COS subdividing her land with the office of the clerk and recorder. The COS concerning the tracts in question showed an easement providing access to a street. This Court held that Dahlia Halverson created an easement by reservation when she quitclaimed one of the tracts and made reference to the COS which showed the easement in question. We concluded that the reference in the document of conveyance to a recorded COS which adequately described the easement was sufficient to establish the easement. Halverson, 885 P.2d at 1289.

In the instant case, COS number 1316, filed in June 1977 in conjunction with the Hensler to Reely-Ashmore deed when the properties in question were split, does not depict the sixty-foot wide private road and public utility easement just south of the 8-17 section line. However, COS number 1503, filed in July of 1978 in conjunction with the Hidden Valley Ranches to John Reely deed, clearly shows the sixty-foot wide private road and public utility easement just south of the 8-17 section line. Certificate of Survey number 1503 identifies the easement clearly and specifically. Bache, 883 P.2d at 822. Certificate of Survey number 1733, prepared for John Reely in 1978, splitting his twenty-one and one-half acres into two 10.76 acre lots, also clearly depicts the sixty-foot wide, east-west easement.

Based on Wild River, Bache and Halverson, the North Hidden Valley Road easement was not granted or reserved as to the Grigonises’ property until there was a reference in a document of conveyance to a recorded COS adequately describing the easement. Accordingly, the easement was not granted or reserved when the Henslers sold to Reely-Ashmore because neither the language of the deed nor COS number 1316 established the easement. Thus, the easement was not granted or reserved when what are now the Grigonises’ and Respondents’ properties were split from single ownership. The Grigonis property was not subjected to the easement until 1978 when Hidden Valley Ranches sold twenty-one and one-half acres to John Reely. It was granted by the 1978 deed which described the property according to the data, monuments and easements shown on COS number 1503. Certificate of Survey number 1503 clearly depicts the east-west private road and public utility easement just south of the 8-17 section line. This easement by reservation could only apply to east-west travel on North Hidden Valley Road because the parcels of land being divided were to the east and west of each other, and because the land to the north of section line 8-17, i.e., the Respondents’ property, had been split off earlier without reservation of an easement. Additionally, both COS number 1503 and COS number 1733 only depict property south of the 8-17 section line, neither portray nor refer to property north of the 8-17 section line. Consequently, under Wild River, Bache and Halverson, the conveying documents in the Grigonises’ chain of title establish that their property cannot be servient to an easement by grant or reservation held by the Respondents to the north because Respondents’ predecessors in interest, the Henslers, did not reserve or create any easement rights in North Hidden Valley Road when they sold that portion of their property south of the 8-17 section line. The Grigonises’ property is only servient to the east-west easement created by the 1978 deed from Hidden Valley Ranches to John Reely.

The Respondents’ chain of title supports this conclusion that the Henslers did not grant or reserve any easement rights to North Hidden Valley Road or Blue Sky Lane. In 1990, the Henslers sold Respondents 133 plus acres north of the 8-17 section line. The August 2,1991, deed from the Henslers to the Respondents granting the 133 plus acres did not contain any language referring to the claimed easements at issue. Subsequent to the filing of this lawsuit, on October 29, 1993, the Henslers executed an Amended Deed expressing their intent to replace and supersede the August 2, 1991 deed. The Amended Deed from the Henslers to Respondents included the following provision:

8. An easement for access over the 60 foot private road and public utility easement known as North Hidden Valley Road, to the extent of those rights reserved by the Grantors.

However, as explained above, the Henslers had not created or reserved easement rights to North Hidden Valley Road when they retained the property to the north of the 8-17 section line in their 1977 conveyance to Reely-Ashmore. The Hensler to Reely-Ashmore deed did not create or reserve an easement because the language “subject to” is insufficient to grant or reserve an easement. Wild River, 812 P.2d at 347. Additionally, COS number 1316 referred to in the Hensler to Reely-Ashmore deed did not delineate the easement. It was not until Hidden Valley Ranches sold the property to John Reely, with the deed’s reference to COS number 1503 clearly describing the easement, that the easement was granted or reserved. Halverson, 885 P.2d at 1289. This grant or reservation was after the Hensler to Reely-Ashmore sale and thus could not inure to the Henslers’ benefit. Consequently, the Henslers could not convey easement rights to Respondents because the Henslers did not have any easement rights to convey. Their amended deed could not remedy the failure to reserve an easement in 1977. Therefore, we hold that the District Court erred in determining that Respondents have, as a matter of public record, a sixty-foot road/utility easement by reservation as described in COS number 1733.

Appellate review of the remaining issues:

Having reversed the District Court’s 1995 Final Order and Judgment, a question arises as to whether the court’s earlier rulings on various motions for summary judgment are now also reviewable. Once a final judgment has been entered, all nonappealable intermediate orders or decisions, to which there has been a proper objection, are reviewable on appeal from the final judgment. Kirchner v. Western Mont. Mental Health Ctr. (1993), 261 Mont. 227, 230, 861 P.2d 927, 929; Brown v. Midland Nat’l Bank (1967), 150 Mont. 422, 435 P.2d 878. In Brown, we established that

although a motion for summary judgment is a non-appealable order at the time it is made because of its interlocutory character ... all non-appealable intermediate orders or decisions properly excepted or objected to which involve the merits or necessarily affect the judgment are reviewable on appeal from a final judgment. ... This review includes reviewing an order denying a motion for summary judgment.

Brown, 435 P.2d at 881-82 (citations omitted).

In its order of May 1994, the District Court granted summary judgment with regard to the following issues:

1. easement by estoppel
2. Rule 11, M.R.Civ.P., violations and abuse of process.

Since these issues have not been appealed, we need not discuss them. The court denied summary judgment as to the following issues:

1. easement by public prescription
2. laches
3. tortious interference
4. trespass and/or wrongful occupation.

The court dismissed Respondents’ claim of easement by necessity and, sua sponte, substituted a claim of easement by implication in its place. The court also granted Respondents summary judgment as to whether any rights to use North Hidden Valley Road automatically included rights to build within the entire sixty-foot easement area. The Grigonises appeal from the court’s denial of summary judgment in their favor as to the above issues.

Our standard of reviewing a grant, or in the present case, denial, of summary judgment is the same as that used by the district court. Halverson, 885 P.2d at 1288; Wild River, 812 P.2d at 345. Summary judgment is proper when there are no genuine issues of material fact and the moving party is entitled to judgment as a matter of law. Rule 56(c), M.R.Civ.P.; Bache, 883 P.2d at 820. Thus, we determine whether a genuine issue of material fact exists and whether the moving party is entitled to judgment as a matter of law. Motarie, 907 P.2d at 156. Easement by Prescription:

We agree with the District Court that material questions of fact remain as to whether Respondents have an easement by prescription, including the issue of whether the construction of Blue Sky Lane exceeds the use allegedly made of North Hidden Valley Road during the period of prescription. We remand for trial on this issue. Easement by Implication:

We note that the District Court made no ruling on the issue of easement by implication. Rather, in its May, 1994 Order and Opinion addressing Respondents’ claim of easement by necessity, the District Court found sufficient evidence to support a claim of an implied easement over the Grigonises’ property based on this Court’s decision in Graham v. Mack (1984), 216 Mont. 165, 699 P.2d 590. The District Court stated “easement by implication, rather than easement by necessity, is the proper claim.’’ The court ordered that Respondents’ Amended Complaint be conformed to the evidence by substituting a claim of easement by implication in place of Respondents’ claim of easement by necessity. See Rule 15(b), M.R.Civ.P. Sua sponte, the court found material questions of fact regarding the intent of the parties and whether an easement by implication had been created.

The Grigonises argue that Respondents cannot meet the high standard of establishing an easement by implication. They argue that Respondents cannot produce evidence to show manifest, obvious or permanent use of what is now Blue Sky Lane prior to 1977. Graham, 699 P.2d at 596. We agree with the Grigonises that this is the burden Respondents must meet, however, they must be granted the opportunity to do so. Because the District Court has not ruled on this theory, we remand for a trial on the issue of easement by implication including the issue of whether or not the evidence supports a finding that, in the 1977 separation of title, Reely-Ashmore (Grigonises’ predecessors) bought the property with notice that the Henslers (Respondents’ predecessors) had an easement that included north bound traffic on what is now Blue Sky Lane.

Do rights to use the sixty-foot easement containing North Hidden Valley Road automatically include rights to build an access road such as Blue Sky Lane?

The District Court holding that any easement rights Respondents might have in the sixty-foot easement containing North Hidden Valley Road automatically include the right to build Blue Sky Lane is in error. Based on our discussion of easement by prescription and easement by implication, it is apparent that any right Respondents may have to use North Hidden Valley Road does not automatically include a right to build Blue Sky Lane to the north. “No use may be made of the right of way, different from that established at the time of creation so as to burden the servient estate to a greater extent than was contemplated at the time of the grant.” Titeca v. State, Dep’t of Fish & Game (1981), 194 Mont. 209, 214, 634 P.2d 1156, 1159; see also Sampson v. Grooms (1988), 230 Mont. 190, 195, 748 P.2d 960, 963. Similarly, for prescriptive easements, the use of a roadway cannot exceed the use made of it during the prescriptive period. Warnack v. Coneen Family Trust (1994), 266 Mont. 203, 218, 879 P.2d 715, 723. Further, the extent of an easement is governed by § 70-17-106, MCA, which states:

The extent of a servitude is determined by the terms of the grant or the nature of the enjoyment by which it was acquired.

Consequently, assuming Respondents can establish an easement to use North Hidden Valley Road, they must then either: 1) establish that construction and use of Blue Sky Lane is encompassed within and does not exceed the scope of their easement, whether by implication or prescription, on North Hidden Valley Road, or; 2) establish that, in addition to their easement on North Hidden Valley Road, they have an easement by prescription or implication on Blue Sky Lane. The questions of laches, trespass, and attorney’s fees:

Concerning the issues of laches, trespass, and attorney’s fees, the District Court, in its May 1994 Order and Opinion, stated:

Until the issues are resolved as to whether Plaintiffs [Respondents] have any rights in the easement, ruling on issues regarding damages for interference with or trespass on property rights is premature.

We agree. The issues of laches, trespass, and the propriety of attorney’s fees must await determination of the easement question.

Accordingly, we remand for trial on all remaining issues. Reversed and remanded for proceedings consistent with this opinion.

CHIEF JUSTICE TURNAGE, JUSTICES NELSON, GRAY, ERDMANN, HUNT and TRIEWEILER concur.


author: JUSTICE HUNT

text:
    STATE OF MONTANA, Plaintiff and Respondent, v. ORIN SCOTT HOFMAN, Defendant and Appellant.
    No. 95-231.
    Submitted on Briefs December 7, 1995.
    Decided March 28, 1996.
    53 St.Rep. 223.
    275 Mont. 455.
    913 P.2d 1256.

      For Appellant: John M. Kading, Butte.
    For Respondent: Joseph P. Mazurek, Attorney General, Pamela P. Collins, Assistant Attorney General, Helena; George H. Corn, Ravalli County Attorney, Hamilton.
   JUSTICE HUNT

delivered the Opinion of the Court.

Appellant, Orin Scott Hofman, was sentenced by the Twenty-First Judicial District Court, Ravalli County, for aggravated assault, felony assault, and two misdemeanors, with the sentences to run concurrently. In. addition, the defendant was designated as a persistent felony offender and a dangerous offender. Defendant appeals both his sentence and his designation as a dangerous offender.

Affirmed.

On appeal, defendant raises four issues which we restate as follows:

1. Did the District Court err in designating Hofman a dangerous offender?

2. Did the District Court err in ordering Hofman to undergo alcohol treatment?

3. Did the District Court err in not stating the reasons why Hofman was designated a dangerous offender?

4. Did the District Court err by failing to inform Hofman of the possible maximum penalties provided by law, including the effect of penalty enhancements and parole restrictions?

FACTS

On the night of December 12, 1993, officers responded to an emergency call at the home of defendant and Ms. Angela Raines. Earlier in the evening, defendant had been lying down on the couch when Raines’ two young sons ran to play with him. Defendant struck the younger four-year old child and then attacked Ms. Raines. Defendant left the home but returned later. When he returned, Ms. Raines refused to let him in. Defendant gained re-entry by breaking down the door, and, again, he attacked Ms. Raines.

Officers responding to the call found Ms. Raines, who had a bloody nose, broken ribs, and multiple contusions and her son, who had a swollen cheek. Ms. Raines was taken to the hospital. After returning home, she discovered that $1,600 in cash was missing from her strongbox.

Defendant was charged by information on December 22,1993, with five felonies and two misdemeanors: Charge I, aggravated assault; Charge II, two counts of felony assault; Charge III, misdemeanor assault; Charge IV, aggravated burglary; Charge V, burglary; Charge VI, felony theft, and Charge VII, criminal mischief. Defendant entered a “not guilty plea” to all charges. On the same day, defendant signed a “Acknowledgment of Rights” form which was filed with the District Court.

On January 12, 1994, defendant requested to withdraw his “not guilty” pleas pursuant to a plea arrangement with the State. On January 19, 1994, defendant entered a guilty plea to the charges of aggravated assault, felony and misdemeanor assault, and criminal mischief. Thé remaining charges were dismissed. Defendant was sentenced on February 16,1994, to 20 years for aggravated assault, 5 years for felony assault, 6 months for misdemeanor assault, and 6 months for misdemeanor criminal mischief. The District Court designated defendant a persistent felony offender, as well as a dangerous offender. Defendant appeals.

ISSUE 1

Did the District Court err in designating Hofman as a dangerous offender?

Defendant argues the record does not contain substantial credible evidence to support his designation as a dangerous offender. He contends this designation should be removed as a matter of law, and that he should be designated as a nondangerous offender pursuant to § 46-18-404, MCA (1993)(repealed).

The scope of our review on appeal is limited to those issues raised before the District Court. Section 46-20-104, MCA. A defendant’s failure to object to an issue at the District Court bars the defendant from raising the issue on appeal. Sections 46-20-104 and 46-20-701, MCA; State v. Arlington (1994), 265 Mont. 127, 151, 875 P.2d 307, 321.

At the sentencing hearing, the County Attorney recommended to the court that defendant be designated a dangerous offender. At the conclusion of the hearing the Judge gave parties an opportunity to add anything to the record but there was nothing further from anyone. Defendant did not object to his designation as a dangerous offender. In order to preserve this issue on appeal, defendant had to object to this designation during the sentencing hearing. Section 46-20-104 (2), MCA; State v. Nelson (1995), [274 Mont. 11], 906 P.2d 663, 667.

We conclude that defendant is barred from raising the issue of his designation as a dangerous offender on appeal.

ISSUE 2

Did the District Court err in ordering Hofman to undergo alcohol treatment?

As in Issue 1, defendant failed to preserve this issue for appeal by failing to object at the time he was sentenced. On appeal, defendant does not assert an error that is prejudicial as to guilt or punishment and therefore he fails to meet the requirements of § 46-20-701, MCA. This Court will not consider this issue further.

ISSUE 3

Did the District Court err in not stating the reasons why Hofman had been designated a dangerous offender?

Defendant alleges that his prior record, coupled with this offense and his apparent lack of rehabilitation, does not merit designation as a dangerous offender. Defendant further alleges that the record lacks the required “articulated reasons” for this designation. State v. Ford (1985), 218 Mont. 215, 221, 707 P.2d 16, 20.

Upon review of the record, we conclude there is ample evidence supporting the designation. At the sentencing hearing, prior to designating defendant as a dangerous offender, the District Court stated its reasons for the sentence. The Judge referred to defendant’s propensity for violence. In support of this, the court pointed out that Ms. Raines’ injuries were extensive, that defendant had assaulted a four-year old boy, and that defendant had previously assaulted his mother. The court pointed out that defendant had been given multiple opportunities in the past to “straighten himself out...none of [which] seem to have taken.” These reasons were again set forth in the judgment issued on February 25, 1994.

The record shows that the District Court stated its reasons for the defendant’s designation as a dangerous offender. We affirm the District Court on this issue.

ISSUE 4

Did the District Court err by failing to inform Hofman of the possible maximum penalties provided by law, including the effect of the penalty enhancements and parole restrictions?

As stated in Issue 1, the scope of our review on appeal is limited to those issues raised before the District Court and a defendant’s failure to object to an issue at the District Court bars him from raising the issue on appeal. Nelson, 906 P.2d at 667 (citing Arlington, 875 P.2d at 321). Defendant alleges he was not advised of the maximum penalties provided by law. Defendant contends that nowhere in the record does the District Judge inform him of the possibility of enhancement for a persistent felony offender or the implications of being designated a dangerous offender.

The defendant’s failure to raise this issue at the District Court by way of a motion to withdraw his guilty plea bars him from raising the issue on appeal. As in Issues 1 and 2, defendant failed to preserve this issue for appeal. See, Nelson, 906 P.2d at 665-66; State v. Enoch (1994), 269 Mont. 8, 11-12, 887 P.2d 175, 177.

We conclude the defendant was properly advised of the consequences of pleading guilty.

Affirmed.

CHIEF JUSTICE TURNAGE, JUSTICES NELSON, ERDMANN and TRIEWEILER concur.