Beattie v. State ex rel Grand River Dam Authority, 2001 OK 43 (Okla. 5/15/2001), 91359
| Decision Date | 15 May 2001 |
| Docket Number | No. 91359,91359 |
| Parties | EDWARD T. BEATTIE and WALTER R. BAILEY, JR., Plaintiffs/Appellants v. STATE OF OKLAHOMA, ex rel GRAND RIVER DAM AUTHORITY, Defendant/Appellee. |
| Court | Oklahoma Supreme Court |
¶0 Plaintiffs, who purchased property from the United States, filed suit seeking to enforce relocation and removal rights under a series of utility easements after Defendant, Grand River Dam Authority (GRDA), refused to remove or relocate its facilities which existed upon the purchased property. Both parties filed summary judgment motions. The trial court held Plaintiffs did not acquire the relocation and removal rights and granted summary judgment in favor of GRDA; this summary judgment was upheld by the Court of Civil Appeals. The case presents two primary questions 1) whether the relocation and removal rights held by the seller in connection with five utility easements were assignable so that those rights were transferred to the purchaser through the executed quitclaim deed and 2) did a "subject to" clause in the quitclaim deed reserve the relocation and removal rights in the seller or otherwise prevent those rights from passing to the purchaser of the servient estate. This opinion finds the rights of the U.S. did pass to Plaintiffs and reverses the trial court decision. The case is remanded with instructions to proceed in a manner consistent with the following opinion.
CERTIORARI PREVIOUSLY GRANTED; COURT OF CIVIL APPEALS OPINION VACATED; DECISION OF THE TRIAL COURT REVERSED AND CAUSE REMANDED WITH INSTRUCTIONS TO PROCEED IN A MANNER CONSISTENT WITH THIS OPINION.
K. Clark Phipps, Atkinson, Haskins, Nellis, et al, Tulsa, Oklahoma for Plaintiffs/Appellants.
Thomas L. Vogt, Jones, Givens, Gotcher & Bogan, P.C., Tulsa, Oklahoma, for Defendant/Appellee.
¶1 This matter comes to the Court upon certiorari asking (1) whether certain relocation and removal rights held by the seller in connection with five utility easements were assignable so that those rights were transferred to the purchaser of the servient estate through an executed quitclaim deed, and (2) did a "subject to" clause in the quitclaim deed reserve the relocation and removal rights in the seller or otherwise prevent those rights from passing to the purchaser of the servient estate? We find the relocation and removal rights held by the seller were assignable so that those rights were transferred to the purchaser of the servient estate through the executed quitclaim deed; and the "subject to" clause did not reserve or otherwise prevent the relocation and removal rights from passing to the purchaser of the servient estate. However, as the summary judgment record contains no evidence whether Plaintiffs' proposed use of the land requires either removal or relocation of GRDA's utility facilities, the case must be remanded for further proceedings.
¶2 The essential facts are not in controversy. Plaintiffs, Edward Beattie and Walter Bailey, Jr., purchased property from the United States of America in 1996. The U.S. conveyed the property to Plaintiffs by a quitclaim deed. The property conveyed was burdened by five utility easements that the U.S. had granted to the Defendant, Grand River Dam Authority (GRDA), at various points from 1960 through 1979. Four of the easements were for a limited fifty year term and were given at no cost to GRDA. The fifth, a perpetual easement, was given for nominal consideration. Each of the five easements contained a provision which gave the U.S. the right to require relocation or removal of GRDA's facilities should the property occupied by the facilities be "needed by the United States, or in the event the existence of said facilities shall be considered detrimental to governmental activities[.]"1
¶3 The quitclaim deed from the U.S. to Plaintiffs conveyed "all of its [United States] right, title and interest in the following described property" and specifically reserved to the U.S. certain mineral interests and a flowage easement. The quitclaim deed contained a "subject to" clause that read as follows:
This deed and conveyance is expressly made subject to the following matters to the extent and only to the extent the same are valid and subsisting and affect the property:
a. Existing easements for public roads and highways, rights of way for railroads, pipelines, drainage ditches and public utilities, if any, whether or not shown of record. (Emphasis added).
In addition, the "subject to" clause specifically listed three of the five easements at issue.
¶4 After Plaintiffs acquired the property, they began making plans to develop the tract as a waterfront subdivision. Plaintiffs asked GRDA to relocate its facilities underground or remove them from the newly purchased property. In support of their request, Plaintiffs referenced the provision contained in each of the easements which granted the U.S. the right to demand relocation or removal should the U.S. need the property. Plaintiffs contended the relocation or removal rights were transferred or assigned to them by the U.S. through the quitclaim deed.
¶5 GRDA refused to either remove or relocate the facilities. As a result Plaintiffs filed this lawsuit seeking to enforce their rights under the easements. Both Plaintiffs and GRDA moved for summary judgment. The trial court granted GRDA's motion and denied Plaintiffs', resulting in this appeal. The Court of Civil Appeals affirmed the decision of the trial court, upholding the summary judgment in favor of Defendant, GRDA. This Court then granted certiorari.
¶6 This Court's standard of review upon summary judgment is de novo, meaning without deference, because Carmichael v. Beller, 1996 OK 48, 914 P.2d 1051, 1053 (citations omitted).
¶7 Plaintiffs acquired the real property burdened by GRDA's easements from the U.S. by quitclaim deed. A quitclaim deed executed in a form prescribed by statute conveys all right, title and interest of the grantor of the land. 16 O.S. 1991 § 18; Bonebrake v. McNeill, 1971 OK 146, 491 P.2d 269. Accordingly, Plaintiffs acquired every interest of the U.S. in the real property that was not reserved in the quitclaim deed, unless that interest was not freely assignable. GRDA contends the relocation and removal rights held by the U.S. in connection with the utility easements were not assignable and therefore did not pass to Plaintiffs when they received the quitclaim deed.
¶8 The relocation and removal rights held by the U.S. were created in paragraph 11 of the easement grants between the U.S. and GRDA. When interests in or rights to property are created by deed, the deed should be interpreted and meaning of the parties thereto ascertained in the same manner as govern other written contracts. Jennings v. Amerada Petroleum Corp., 1937 OK 228, 179 Okla. 561, 66 P.2d 1069, 1071. In determining whether the rights under a contract are assignable the Court must look at the construction of the contract itself and "every case must turn at last upon the intention of the parties." Minnetonka Oil Co. v. Cleveland Vitrified Brick Co., 1910 OK 279, 27 Okla. 180, 111 P. 326, 329.
¶9 Oklahoma has long held that rights under a contract are presumed to be assignable, unless the parties expressly provide otherwise.2 The instant controversy involves an attempted assignment of rights and not a delegation of duties. Id. at 332; See also Earth Products Co. v. Oklahoma City, 1968 OK 39, 441 P.2d 399, 404. This presumption of assignability is in keeping with a long tradition to encourage economic and commercial development, "with a view that whatever one owns cannot be rendered valueless as an asset in business and trade." Minnetonka, 111 P. at 332. Another commentator has suggested that a presumption of assignability for all contracts is consistent with the fundamental policy that "free alienability . . . is essential to commerce." JOHN D. CALAMARI & JOSEPH M. PERRILLO, CONTRACTS 633, n. 138 (3d ed. 1987).
¶10 However, Oklahoma case law has also recognized that certain rights and duties under a contract are too personal in character to permit them to be assigned. Minnetonka, 111 P. at 329; Earth Products Co., 441 P.2d at 404. These cases rest on the proposition that when the personal qualities of either party are material to the contract, an assignment would amount to a material change in the terms of the contract.3 In Minnetonka Oil v. Cleveland Vitrified Brick Co., 111 P. 326 (Okla. 1910), the Court examined an assigned gas supply contract. Although the gas supply contract contained no express provision prohibiting assignment, the obligor gas company sought to relieve itself of its obligation under the contract by asserting that the assignment of the contract breached its terms. Although the Minnetonka court rejected this argument, it recognized that even in the absence of an explicit provision prohibiting assignment, a contract may by its nature or terms be too personal in character to be freely assigned. The Minnetonka Court observed that in some contracts the "skill, credit, or some other personal quality or circumstances" of a party may be a material inducement to the contract.4 A similar rational has been used to prohibit the assignment of a contract which relies for its performance on the...
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