Idaho Land Law

A Blog Discussing Current Issues of Land Use, Real Estate, and Construction Law in the State of Idaho.

Idaho Supreme Court Awards Attorneys Fees in Easement Case

Another Idaho easement case…  

 @Depositphotos_4987607

@Depositphotos_4987607

Unfortunately, easements are the equivalent of a full-time employment act for land use attorneys.  You can just count on a dispute arising over an improperly located or undefined easement. The following case gives us some guidance on not only easements but also on why a court will award attorney’s fees in a frivolously filed case.    

On January 23, 2015, the Supreme Court of Idaho issued its decision in The Jim & Maryann Plane Family Trust v. Skinner, Docket No. 41448.

In an appeal from Bear Lake County, the Idaho Supreme Court affirmed the district court’s decision denying the Jim and Maryann Plane Family Trust’s motion to void a portion of an earlier stipulated judgment regarding a ten-foot wide driveway easement. The parties’ predecessors in the case stipulated to an entry of a judgment creating a five-foot driveway easement over land currently belonging to Jason and Janae Skinner with the other five-foot of the driveway easement being located on land that might (according the parties’ predecessors) be State highway right-of-way.  Already you can see the potential problem for future landowners.

The Plane Family Trust argued the stipulated judgment was void for lack of jurisdiction and illegal because the State was not a party to the stipulated judgment. The Trust asked the district court to delete portions of the stipulated judgment referring to the location of the driveway on the State highway right-of-way. This would have had the effect of doubling the width of the Trust’s easement across the Skinners’ property. 

The Supreme Court determined that Rule 60(b)(4) did not authorize the district court to modify a judgment in such a fashion and that the judgment was not void or illegal. The Supreme Court also ruled the district court had not abused its discretion when it awarded attorney fees to the Skinners for their defense of a frivolous action. The Supreme Court found the appeal to be frivolous, and imposed sanctions against the Trust and its attorneys, ordering them to pay the attorney fees and costs incurred by the Skinners in the defense of the appeal.

It should be noted that the Trust failed to mention the State had granted the Trust a license to use the State highway right-of-way for purposes of ingress and egress to the Trust’s property.  While this is not discussed in-depth in the decision, I cannot help but think this played a critical role in the award of attorneys fees.

The case is a good read and can be found in its entirety at:

http://www.isc.idaho.gov/opinions/41448.pdf

New Mechanic's Lien Decision from the Idaho Supreme Court

The Idaho Supreme Court recently issued another mechanic's lien decision in  a case styled ACI Northwest Inc. v. Monument Heights, LLC – Docket No. 41269 [January 21, 2015].  A link to the full decision is here:  http://www.isc.idaho.gov/opinions/41269.pdf

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@Depositphotos-nenovbrothers.jpg

In a case arising out of Kootenai County, where ACI Northwest Inc. (ACI) sought judicial foreclosure of its two mechanic’s liens on property encumbered by two deeds of trust. The district court determined that ACI’s liens were lost and unenforceable against the property because ACI failed to name or join the trustees in its action within the six-month statute of limitations in Idaho Code section 45-510. Thus, the district court granted summary judgment to Monument Heights LLC, Dan Jacobson, Sage Holdings LLC, Steven Lazar, the Mitchell A. Martin and Karen C. Martin Family Trust dated August 9, 2005, Devon Chapman, HLT Real Estate LLC, Anthony St. Louis, Andrea Stevens, and Lilly Properties Inc. ACI appealed to the Idaho Supreme Court. 

The Idaho Supreme Court reaffirmed its holding in ParkWest Homes, LLC v. Barnson (ParkWest II), 154 Idaho 678, 302 P.3d 18 (2013), that an action to enforce a mechanic’s lien on property encumbered by a deed of trust must name the trustee, who hold legal title to the property, within the statutory time limitation in Idaho Code section 45-510. Failure to name the trustee within the prescribed time limitation results in the mechanic’s lien being lost against legal title, the trustee’s interest in the property. This Court determined that the district court properly applied ParkWest II and therefore affirmed the district court’s decision.

The lesson for those with potential mechanic's lien claims is to make sure you name or join the trustee to your cause of action within the six-month deadline.  Failure to do so will result in a loss of mechanic's lien rights.


Undead Land Encumbrances – How to Kill a Blanket Access Easement in Idaho

 @Depositphotos-fergregory

@Depositphotos-fergregory

Happy Halloween… One of the things we often encounter when reviewing real estate title issues are blanket access easements.  These easements are ugly and an appropriate topic for a Halloween blog post.  In essence they never die… they just sit there clogging title and leaving everyone wondering what to do about them.  In a way, they are the equivalent of the undead in the real estate world… lurking, waiting to rise up at the most inopportune moment.

Fortunately, Idaho has a great statute that allows a landowner to relocate access easements. The statute is not a silver bullet so think garlic instead of a stake in the heart. 

The statute, Idaho Code Section 55-313 states the following:

Where, for motor vehicle travel, any access which is less than a public dedication, has heretofore been or may hereafter be, constructed across private lands, the person or persons owning or controlling the private lands shall have the right at their own expense to change such access to any other part of the private lands, but such change must be made in such a manner as not to obstruct motor vehicle travel, or to otherwise injure any person or persons using or interested in such access.

This is a great tool for developers and owners wanting to clear title to their property.  It is an effective method to take control of how your property will develop and relocate existing access easements to get the most value out of your property.  Hopefully you will remember Section 55-313 in your next battle against the Frankin-Easement. 

Royals vs. Giants and What a 3rd grader’s Game Watching Contract can Teach us about Business

It’s the World Series and my team the Kansas City Royals has not sniffed an appearance in 29 years.  The Giants on the other hand suffer from a plethora of riches in terms of World Series appearances.  They also have some great fans that know what it is like to win and how to be a good sport at the same time.  My neighbors are some of those Giants fans.

As the MLB playoffs have unfolded, my neighbor and I have both been rooting for our teams with hopes that they would meet in the World Series.  My daughter and my neighbor’s twin boys, all 3rd graders, have been sitting in my living room cheering both teams as they fought their way through the American and National League Championship Series.   As luck would have it both teams made it and we are now watching the games together in my living room.  Both families… divided in loyalties yet still watching together for the love of baseball. 

As soon as I realized both teams were going to be in the World Series, I became super excited that we would be able to watch games together.  It was going to be a great experience that all the kids would remember for the rest of their lives.  I also realized that eventually some of us were going to be disappointed.  Maybe really disappointed… 

Now, kids are generally smarter than adults at many things and this dilemma concerning disappointment and how a loss by either team could impact our relationships was something the kids had already considered.  In fact, they had thought about it so much that they drafted a contract for both families to sign before we started watching the World Series games.  They titled the contract a “Contract of Friends” and it is shown below:

What really struck me about the Contract of Friends was that these 3rd graders had clearly planned for an event that was certain to occur… some of us were going to lose and feel bad.  They also added terms that required the parties to “remain friends. Wether your team wins or ours wins the World Series!” 

Spelling aside, these kids understand some fundamental lessons for success in business… make a plan before the event happens, get acceptance from all parties with clearly defined terms, and then try to maintain those relationships even if everyone doesn't win.  That is how you build a great business over the course of your lifetime.  It is also a great way to keep friendships.

Third graders can teach us a lot about the right way to do things.  We should listen.  And when we are done listening… we should cheer for the Royals!

Construction Arbitration Award May Not Always Bar Participants' Future Lawsuits

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@depositphotos-art-siberia

Today’s blog post focuses on an opinion from the Sixth Circuit Court of Appeals dealing with arbitration and the ability to have a “second bite at the apple” after an arbitration award. There has been a lot of discussion of this case recently on construction forums and I thought Idaho Land Law blog readers would be interested. While this case comes to us from Michigan, it does raise some questions for construction contractors in Idaho.   

The case, W.J. O’Neil Co. v. Shepley, Bulfinch, Richardson, et al., has your usual players, an owner, construction manager, subcontractor, design professionals, and of course a large claim for design errors and mismanagement of the project. Typical construction case… what is not typical is the Sixth Circuit’s holding.    

After losing millions of dollars because of delays and coordination failures in building a hospital, W.J. O’Neil Company sued its construction manager, Barton Malow Company, in Michigan state court. The two ended up in arbitration. Shepley, Bulfinch, Richardson & Abbott, Inc., the project’s architect, and Smith Seckman Reid, Inc., the project’s MEP design professional, (additional defendants in this case), were added to the arbitration on indemnity claims. 

In the arbitration, O’Neil did not formally assert claims against Shelpley or Reid despite the fact that O’Neil’s claims against Barton Mallow arose from Shelpley and Reid’s alleged defective and inadequate design of the hospital. O’Neil won the arbitration against Barton Malow. Barton Malow lost on its indemnity claims against Shelpley and also against Reid. And no party sought judicial confirmation or review of the arbitration award.

After winning its arbitration claims, O’Neil then sued the design professionals, Shelpley and Reid, in federal court. The federal district court dismissed O’Neil’s claims, finding them barred by Michigan’s doctrine of res judicata. The Sixth Circuit  found the district court’s conclusion in error and held an arbitration award cannot bar a claim that the arbitrator lacked authority to decide.  

The Sixth Circuit went on to state that an arbitrator lacks authority to decide a claim that the parties did not agree to arbitrate. In this case, the Court found that O’Neil did not agree to arbitrate its claims against the design professionals and only agreed to arbitrate its claims against the construction manager, Barton Mallow. The Court reversed the district court’s orders, vacated the judgment, and remand for further proceedings.

The Court focused on the arbitration flow-through provisions of the contract between O’Neil and Barton Mallow. The defendants argued that O’Neil agreed to arbitrate its claims against the defendants in its contract with Barton Mallow. The defendants also pointed to the contract between Barton Mallow and the owner, which required arbitration of all claims between the owner and any member of the construction team.  The Court found that O’Neil was not required to arbitrate its claims against the defendants simply because it “had an arbitration agreement with one company, that company had arbitration agreements with the defendants, and disputes among the parties arose from the same circumstances.”  The Court called the legal reasoning behind this… “the contagion theory of arbitration” and stated it “has no basis in law or the relevant contracts.”       

So what are some practice tips for those wanting to arbitrate all disputes on construction projects?  First, a thorough review of all arbitration flow-through provisions in your construction contract is essential to making the argument that everyone consented to arbitration.  Second,  have the award confirmed by the court immediately after it is issued by the arbitrator.  These two steps may prevent a party from having a “second bite at the apple” after completing arbitration.    


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