East Lizard Butte Water Corp. v. Howell

• Decision Date: 29 November 1991
• Docket Number: No. 18583,18583
• Parties: EAST LIZARD BUTTE WATER CORPORATION, an Idaho non-profit corporation, Plaintiff-Respondent, v. William E. HOWELL and Mary J. Howell, the statutory trustees of Contract Mortgage Corp., a defunct Idaho corporation, Defendants-Appellants.
• Court: Idaho Court of Appeals

Page 812

837 P.2d 812

122 Idaho 686

EAST LIZARD BUTTE WATER CORPORATION, an Idaho non-profit corporation, Plaintiff-Respondent, v. William E. HOWELL and Mary J. Howell, the statutory trustees of Contract Mortgage Corp., a defunct Idaho corporation, Defendants-Appellants.

No. 18583.

Court of Appeals of Idaho.

Nov. 29, 1991.

William E. Howell and Mary J. Howell, pro se.

Schiller & Schiller, Nampa, for plaintiff-respondent. James A. Schiller, argued.

SILAK, Judge.

This case involves a summary judgment in an adverse possession case. East Lizard Butte Water Corporation (ELBWC) operates a water system in a mobile home development in Canyon County. ELBWC brought a claim to quiet title to the lots on which the water wells are located, claiming title to the lots under a theory of adverse possession. The district court granted summary judgment to ELBWC on the basis that it had adversely possessed the well lots for more than five years. The defendants appeal from this decision, arguing that factual disputes exist regarding whether the possession was adverse or permissive. We vacate the judgment of the district court and remand this case for further proceedings.

John and Betty Hagen owned and developed Hagen's Mobile Estates. The development contains two separate residential subdivisions. The Protective Covenants and Regulations for the two subdivisions were recorded in 1971 and 1972 respectively. The two subdivisions contain three separate well lots. Both the 1971 and 1972 protective covenants contain a clause which states:

Water is to be supplied through a system operated by a non-profit cooperative water association, which shall maintain and operate various wells in the subdivision. Each lot owner shall receive a certificate for shares in such association.

One of the lot-owners stated in an affidavit submitted in support of summary judgment that representations had been made to several of the owners, at the time they purchased their own lots, that the well lots would be transferred to a non-profit corporation which, in turn, would operate the water system.

Sometime in the mid-1970s, the Hagens sold their remaining interest in the mobile home development. The lots which had not been sold to individual owners, including the well lots, were transferred to Contract Management Corporation (CMC). CMC forfeited its corporate status on November 30, 1978. The last known directors of the corporation were William E. Howell and Mary J. Howell. They are the statutory trustees of CMC and the named defendants in this case.

ELBWC is a non-profit Idaho corporation which was formed in 1976 for the purpose of operating the water system in the two subdivisions. At the time the corporation was formed, no one was operating the water system for the subdivision and the power to the wells was shut off because the bills had not been paid. The residents of the subdivision formed their own water corporation, which is the plaintiff in this case. ELBWC installed new equipment, paid the irrigation taxes, and kept the well lots landscaped.

In the late 1980s, the water from the wells became unfit for human consumption. The residents of the subdivision had to carry in their own drinking water. ELBWC applied for a loan from the Farmers' Home Administration to improve the wells, but the lender requires that the entity applying for the loan have title to the well lots. Because ELBWC needs legal title to the well lots in order to obtain the federal grant to improve the water system, it sued to quiet title to the well lots which were still held in the name of Contract Mortgage Corporation. In the amended complaint, the plaintiff asserts that it has been in possession of the well lots for five years, and that the possession has been "actual, open, visual, notorious, continuous and hostile to the defendants."

The district court held a hearing on the motion for summary judgment. On the day of the hearing, William Howell submitted an affidavit in opposition to the motion for summary judgment, which essentially stated that ELBWC's use of the lots was permissive and not hostile. The affidavit stated specifically that: "CMC entered into an agreement with a Mr. Vaughn and some other lot owners in the subdivision whereby they [Mr. Vaughn and the other lot owners] would operate the wells and collect from the users until something better could be worked out." The district court accepted the affidavit over an objection from the plaintiff. The question presented to us on appeal is whether a triable issue of fact exists regarding the alleged hostile possession of the well lots which...