Beattie v. STATE EX REL. GRDA

• Decision Date: 15 January 2002
• Docket Number: No. 91,359.,91,359.
• Citation: 41 P.3d 377,2002 OK 3
• 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

41 P.3d 377

2002 OK 3

Edward T. BEATTIE and Walter R. Bailey, Jr., Plaintiffs/Appellants, v. STATE of Oklahoma, ex rel. GRAND RIVER DAM AUTHORITY, Defendant/Appellee.

No. 91,359.

Supreme Court of Oklahoma.

January 15, 2002.

K. Clark Phipps, Atkinson, Haskins, Nellis, et al, Tulsa, OK, for Plaintiffs/Appellants.

Thomas L. Vogt, Jones, Givens, Gotcher & Bogan, P.C., Tulsa, OK, for Defendant/Appellee.

PER CURIAM.

¶ 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 that there are controverted material facts relating to whether 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. We also find, if the rights are determined to be assignable, the "subject to" clause did not reserve or otherwise prevent the relocation and removal rights from passing to the purchaser of the servient estate.

I. Factual Background

¶ 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.

II. Standard of Review

¶ 6 This Court's standard of review upon summary judgment is de novo, meaning without deference, because "the ultimate decision turns on purely legal determinations, i.e. whether one party is entitled to judgment as a matter of law because there are no material disputed factual questions. We, like the trial court, will examine the pleadings and evidentiary materials submitted by the parties to determine if there is a genuine issue of material fact. Further, all inferences and conclusions to be drawn from the evidentiary materials must be viewed in the light most favorable to the non-moving party." Carmichael v. Beller, 1996 OK 48, 914 P.2d 1051, 1053 (citations omitted).

III. Were the Relocation and Removal Rights Assignable?

¶ 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 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., 27 Okla. 180, 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 In these situations, "performance by another would be an essentially different thing from that contracted for."⁵Minnetonka, 111 P. at 329.

¶ 11 Relying on this exception, GRDA argues that the relocation and removal rights created in the easements are too personal in character to permit them to be assigned. Specifically, GRDA asserts that it expected the U.S., and no one else, to exercise the relocation and removal rights. GRDA argues that it would never have made substantial improvements to the property otherwise.

¶ 12 In evaluating GRDA's contention that the U.S. possessed relocation and removal rights too personal in nature to be assigned without the consent of GRDA, we are presented with a question of contract construction. Id. The easement instruments must serve as the seminal gauge of the parties' intent. Id. at 331; See also Earth Products, 441 P.2d at 404-05

. In every case, this question must turn upon the intention of the parties as manifested in the agreement itself. Minnetonka, 111 P. at 329. If the intention of the parties to the deed is plain and unambiguous, that intention must be ascertained solely from the language used in the conveyance. Messner v. Moorehead, 787 P.2d 1270, 1990 OK 17. If the court determines the deed is ambiguous, extrinsic evidence may be used to determine the intent of the parties. Crockett v. McKenzie, 867 P.2d 463, 1994 OK 3.

¶ 13 In our view, the language of paragraph 11 does not unambiguously resolve the issue of whether the relocation and removal rights are too personal in character to permit them to be assigned. The instruments themselves contain no express provisions limiting or prohibiting assignment of the relocation and removal rights. Paragraph 11 does not specifically limit or restrict in any substantial fashion the...