Bear Island Water Ass'n, Inc. v. Brown

• Decision Date: 21 April 1994
• Docket Number: No. 20097,20097
• Parties: BEAR ISLAND WATER ASSOCIATION, INC., Plaintiff-Counterdefendant Appellant-Cross Respondent, v. Lloyd C. BROWN and Shannon Brown, Husband and Wife, Defendants-Counterclaimants Cross Appellants. Idaho Falls, April 1993 Term
• Court: Idaho Supreme Court

Page 528

874 P.2d 528

125 Idaho 717

BEAR ISLAND WATER ASSOCIATION, INC., Plaintiff-Counterdefendant Appellant-Cross Respondent, v. Lloyd C. BROWN and Shannon Brown, Husband and Wife, Defendants-Counterclaimants Cross Appellants.

No. 20097.

Supreme Court of Idaho,

Idaho Falls, April 1993 Term.

April 21, 1994.

Rehearing Denied June 22, 1994.

Anderson, Pike & Bush, Idaho Falls, for appellant/cross-respondent. W. Joseph Anderson, argued.

Holden, Kidwell, Hahn & Crapo, Idaho Falls, for respondents/cross-appellants. Kumen L. Taylor, argued.

SILAK, Justice.

This appeal involves a dispute over property rights to a well which was mistakenly drilled on the wrong lot. The district court granted a partial summary judgment quieting title to the well in Lloyd and Shannon Brown, the owners of the property on which the well is located. Bear Island Water Association (BIWA) appeals, asserting that the district court should have quieted title to the well in BIWA and granted BIWA an easement to maintain pipelines over the Browns' land to connect the well to BIWA's existing water distribution system. The Browns cross-appeal, contesting the district court's denial of their request for attorney fees. For the reasons set forth below, we affirm the order of partial summary judgment, vacate the order denying the Browns' request for attorney fees and remand to the district court.

I. FACTS AND PROCEDURAL BACKGROUND

The following facts are undisputed. In 1972, Ray Andrus and members of his family (Andrus) subdivided farm land to create a residential development called Bear Island Estates. In September, 1972, Andrus formed BIWA, a non-profit corporation organized to develop and maintain a culinary and domestic water distribution system for the Bear Island Estates subdivision. Andrus split Bear Island Estates into two divisions and proceeded to subdivide and develop Division 1 into thirty residential lots. A well (Well 1), which was developed on land in Division 2, provided the culinary water supply for the lots in Division 1.

About five years later, on June 1, 1977, Andrus contracted to sell Division 2 to David and Mina Jones (the Joneses). The sales contract also contained the following provision:

PURCHASERS [the Joneses] agree that they will, prior to June 15, 1978, drill and develop a well and culinary water system and will cause the same to be connected with an existing well [Well 1] and water system now located on and serving Bear Island Estates Division No. 1, ¹ and that the two wells so connected will have sufficient capacity to provide adequate culinary water to all lots in Divisions No. 1 and No. 2 as platted.

Pursuant to the contract, Andrus deeded Division 2 to the Joneses. On November 15 The Joneses hired Ellsworth Engineering, Inc., to do platting and engineering work on Division 2, including designing a water distribution system to provide the culinary water needed by residents of both Divisions 1 and 2. When the plat of Division 2 was completed, it consisted of a twenty-nine lot residential subdivision with a separate 100 square foot lot designated as the "Well Lot." The Well Lot was platted so that the pre-existing Well 1 was located on the Well Lot. In accordance with the Andrus/Jones contract, the plan of the water distribution system called for the development of a second well (Well 2) to be connected to Well 1. The plat of Division 2 specified that Well 2 would also be located on the Well Lot. The Joneses had Well 2 drilled in February of 1979, but it was mistakenly drilled not on the Well Lot, but thirty-five feet onto one of the residential lots, Lot 9, located adjacent to the Well Lot. Although the hole for Well 2 was drilled at this time, the diversion works for the well (the pump, electrical supply, and connecting pipelines) were not installed until about nine years later, in 1987 and 1988. The hole for Well 2 remained capped and unused until that time.

[125 Idaho 720] 1977, the Joneses granted the Federal Land Bank of Spokane (FLB) a mortgage on Division 2. The Joneses granted a second mortgage on Division 2 to Andrus.

In November of 1984, due to the Joneses' default, FLB foreclosed on the Joneses' mortgage. On January 14, 1986, a sheriff's deed conveyed to FLB the mortgaged property, which included the Well Lot, Lot 9, and lots 6, 7 and 8.

During this time, FLB was informed by the Idaho Department of Health and Welfare that water associations should have fee simple ownership of the land from which their water supply is diverted. FLB subsequently negotiated with BIWA for the transfer of the Well Lot to BIWA. On April 22, 1987, FLB granted a warranty deed to BIWA conveying the Well Lot. Neither FLB nor BIWA were aware that Well 2 had been drilled on Lot 9 instead of the Well Lot. Accordingly, when BIWA acquired ownership of the Well Lot, it believed it was acquiring ownership of Well 2. However, the deed from FLB to BIWA did not include any portion of Lot 9, where Well 2 was located, nor did the deed grant an easement or any other right to BIWA to access or use any portion of Lot 9.

On September 17, 1987, FLB quitclaimed lots 6, 7, 8 and 9 to Jefferson County to satisfy back taxes and other assessments. Thus, after September 17, 1987, BIWA owned the Well Lot which contained Well 1 and the water distribution system, and Jefferson County owned Lot 9, which contained the as yet unconnected and unused Well 2.

In November, 1987, BIWA entered onto Lot 9 and dug a trench to install pipes connecting Well 2 to the water distribution system located on the Well Lot. In March, 1988, BIWA entered onto Lot 9 and deepened the hole for Well 2. On September 6, 1988, BIWA applied to the Idaho Department of Water Resources for a permit to appropriate water from Well 2 for the domestic culinary needs of the residents in the Bear Island Estates subdivision. In about November 1988, BIWA completed installation of the diversion works for Well 2, and the well became operational. On February 3, 1989, the Department of Water Resources approved BIWA's application for a water permit. One of the conditions placed on approval of BIWA's application stated, "[t]he issuance of this permit in no way grants any right-of-way or easement across the land of another."

In September 1989, Jefferson County conveyed Lot 9 to Lloyd and Shannon Brown by quitclaim deed. Prior to purchasing, the Browns inspected Lot 9 and observed that Well 2, which was then in operation, was located on Lot 9. The Browns searched Jefferson County records to ascertain whether a prior or conflicting interest in Well 2 had been recorded. Finding no recorded interest in Well 2, the Browns proceeded to purchase Lot 9. When the Browns purchased Lot 9, a water line crossed the lot carrying irrigation water to Lot 9 and other lots in the subdivision. After purchasing Lot 9, the Browns disconnected this irrigation line so that it would no longer service the other lots, and they began using the line to irrigate Lot 9 and the adjacent Well Lot. BIWA contacted the Browns and asked them In September, 1991, BIWA filed this suit against the Browns, seeking to quiet title to Well 2 in BIWA, and an easement across the Browns' property so that BIWA could maintain the pipelines connecting Well 2 to BIWA's water distribution system on the Well Lot. Additionally, BIWA requested the district court to enjoin the Browns from irrigating the Well Lot and to order them to reconnect the irrigation line that had supplied irrigation water to the other lots. The Browns counterclaimed asserting that they owned Well 2, that BIWA had trespassed upon Lot 9 to install the diversion works in Well 2, and therefore BIWA should be ordered to remove the diversion works. The Browns asked the district court to quiet title to Well 2 in them. After discovery, both parties moved for summary judgment.

[125 Idaho 721] to reconnect the irrigation line to the other properties and to stop irrigating the Well Lot. The Browns refused both requests. The Browns further asserted ownership of Well 2 and demanded that BIWA remove its personal property (the pump, pipe, and electrical supply line) from the well.

The district court granted partial summary judgment in favor of the Browns, concluding that, as a matter of law, BIWA had failed to establish any right or interest in Well 2, and that title to the well should be quieted in the Browns. Specifically, the court's order granting partial summary judgment stated that "title to the well ... is quieted in defendants as against any and all claims by plaintiff and defendants are hereby declared to be the fee simple owners of the same, including the exclusive right to appropriate water therefrom." The court ruled that there were genuine issues of fact regarding the property rights in the irrigation line, thus summary judgment was denied as to that issue. BIWA filed motions to amend the judgment, and the Browns sought an award of attorney fees from BIWA. The district court denied the Brown's motion for attorney fees and BIWA's motions to amend the judgment; however, it certified the partial summary judgment as a final judgment pursuant to I.R.C.P. 54(b), from which an appeal could be taken. BIWA filed a timely appeal from the partial summary judgment, and the Browns cross-appealed from the district court's denial of their motion for attorney fees. The Browns also seek attorney fees on appeal.

II. ANALYSIS

This appeal poses two questions: (1) did the district court err by granting partial summary judgment quieting title to Well 2 in the Browns; and (2) did the district court err in denying the Browns' motion for attorney fees.

A. SUMMARY JUDGMENT QUIETING TITLE TO WELL 2 IN THE BROWNS.

In an appeal from an order of summary judgment, this Court's standard of review is the same as the standard used by the district court in ruling on the motion for summary judgment. East Lizard Butte Water Corp. v. Howell, 122 Idaho 679, 781, 837 P.2d 805, 807 (1992). All disputed...