Regan v. Owen

• Decision Date: 05 March 2018
• Docket Number: Docket No. 43848
• Citation: 413 P.3d 759,163 Idaho 359
• Court: Idaho Supreme Court
• Parties: Brent REGAN and Moura Regan, husband and wife, Plaintiffs-Appellants, v. Jeff D. OWEN and Karen A. Owen, husband and wife, Defendants-Respondents.

163 Idaho 359

413 P.3d 759

Brent REGAN and Moura Regan, husband and wife, Plaintiffs-Appellants,

v.Jeff D. OWEN and Karen A. Owen, husband and wife, Defendants-Respondents.

Docket No. 43848

Supreme Court of Idaho, Boise, December 2017 Term.

Filed: March 5, 2018

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

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

BRODY, Justice.

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

The district court granted summary judgment in favor of the Regans, ruling that the Owens’ deed contained a mutual mistake and should be reformed to reflect an express easement that the original grantors intended. The Owens appealed and this Court held that the deed should not be reformed. We vacated a portion of the district court's judgment and remanded the case for further proceedings. Regan v. Owen , 157 Idaho 758, 339 P.3d 1162 (2014) (" Regan I "). On remand, the district court granted summary judgment in favor of the Owens, finding that any prescriptive easement was extinguished by Idaho Code section 63-1009, which provides that tax deeds convey property free of all "encumbrances." The Regans timely appealed. After they filed their appeal, the Idaho Legislature amended Idaho Code section 63-1009. 2016 Idaho Sess. L. ch. 273, § 7, p. 758. On September 8, 2017, this Court released its original decision in this appeal. We thereafter granted the Regans’ petition for rehearing. We vacate the judgment entered in favor of the Owens and remand this case for further proceedings.

I. FACTUAL AND PROCEDURAL BACKGROUND

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

On remand, the Owens filed a third motion for summary judgment, alleging that the Regans’ prescriptive easement claim was extinguished by issuance of the tax deed. The motion was based on the last paragraph of this Court's decision in Regan I which stated:

The tax deed conveyed to the county absolute title to the Orphan Parcel "free of all encumbrances except mortgages of record to the holders of which notice has not been sent as provided in section 63-1004, Idaho Code, any lien for property taxes which may have attached subsequently to the assessment and any lien for special assessments. I.C. § 63-1009. An encumbrance is "any right or interest in land to the diminution of its value, but consistent with the free transfer of the fee." Hunt v. Bremer , 47 Idaho 490, 494, 276 P. 964, 965 (1929). Whether something is an encumbrance does not depend upon the extent to which it diminishes the value of the land. An encumbrance "embraces all cases in which the owner does not acquire the complete dominion over the land which his grant apparently implies." An easement is not an encumbrance if the easement is essential to the enjoyment of the land and it enhances the land's value. Id. There is no finding by the district court that the alleged prescriptive easement across the Orphan Parcel increased its value.

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

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

On March 30, 2016, several months after the Regans filed their appeal, Governor Otter signed Senate Bill 1388 into law. Section 1 of Senate Bill 1388 contains a lengthy statement of legislative intent wherein this Court's decision in Regan I is mentioned by name and the district court's subsequent determination that Idaho Code section 63-1009 extinguished the Regans’ private access easement is expressly rejected. 2016 Idaho Sess. L. ch. 273, § 1, p. 750. Section 1 further declares: "[a]s its context should have made evident, the purpose of Section 63-1009, Idaho Code, ... has always been to convey title absolutely free and clear of liens and mortgages of a monetary nature." Id . Senate Bill 1388 amended Idaho Code section 63-1009 to remove the reference to "encumbrances" and to more clearly state that the title conveyed by tax deed is the same as that of the "record owner." As amended, Idaho Code section 63-1009 now provides:

EFFECT OF TAX DEED AS CONVEYANCE. The deed conveys to the grantee the right, title, and interest held by the record owner or owners, provided that the title conveyed by the deed shall be free of any recorded purchase contract, mortgage, deed of trust, security interest, lien, or lease, so long as notice has been sent to the party in interest as provided in sections 63-201(17) and 63-1005, Idaho Code, and the lien for property taxes, assessments, charges, interest, and penalties for which the lien is foreclosed and in satisfaction of which the property is sold.

I.C. § 63-1009 (2016).

II. STANDARD OF REVIEW

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

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

III. ANALYSIS

A. The district court erred in determining that the Regans’ prescriptive easement was an encumbrance extinguished by the tax sale of the Orphan Parcel.

1. The district court was not bound by dicta in Regan I .

Before addressing the interpretation of Idaho Code section 63-1009 and whether the issuance of a tax deed extinguishes a prescriptive easement, it is necessary to address whether the Court's definition of "encumbrance" in Regan I has become the "law of the case." This Court first explained the "law of the case" doctrine in Suitts v. First Sec. Bank of Idaho, 110 Idaho 15, 713 P.2d 1374 (1985). This doctrine requires that when "the Supreme Court, in deciding a case presented states in its opinion a principle or rule of law necessary to the decision , such pronouncement becomes the law of the case, and must be adhered to throughout its subsequent progress, both in the trial court and upon subsequent appeal...." 110 Idaho at 21, 713 P.2d at 1380 (emphasis added) (quoting Fiscus v. Beartooth Elec. Coop., Inc., 180 Mont. 434, 437, 591 P.2d 196, 197 (1979) ). The law of the case is a well-established doctrine that is intended to avoid relitigating issues that have already been decided, and it functions much like stare decisis. Frazier v. Neilsen & Co. , 118 Idaho 104, 106, 794 P.2d 1160, 1162 (Ct. App. 1990).

The Court's discussion of Idaho Code section 63-1009 and Hunt v. Bremer in Regan I was dicta—it was not necessary to the decision. The Court concluded that the district court erred in finding the existence of a prescriptive easement when there were no findings as to width of the easement or that the easement had been established by clear and convincing evidence. Regan I , 157 Idaho at 765, 339 P.3d at 1169. This Court appears to have raised the issuance of the tax deed and the definition of the word "encumbrance" on its own accord in the last paragraph of the decision. This statement of the law was not necessary to the decision of whether the district court's grant of summary judgment in favor of the Regans was error, and, as such, it was dicta.

After the case was remanded, the parties litigated the meaning of "encumbrance" in connection with the Owens’ third motion for summary judgment. The district court granted the Owens’ motion in large part because it viewed this Court's discussion of Hunt v. Bremer as mandatory "guidance" which must be followed. To be sure, the district court was in a difficult position because the effect of the Court's discussion of Hunt v. Bremer was unclear. Even today the justices who have heard this appeal do not agree on the effect of the Hunt v. Bremer discussion. When this Court issued "guidance" in Urrutia v. Blaine County , 134 Idaho 353, 359, 2 P.3d 738, 744 (2000), the decision expressly stated that the Court was doing so: "We will therefore address the remainder of the arguments presented by the County on appeal for the purpose of providing guidance on remand." In Price v. Payette County Board of Commissioners , 131 Idaho 426, 431, 958 P.2d 583, 588 (1998), the...