East Lizard Butte Water Corp. v. Howell

• Citation: 122 Idaho 679,837 P.2d 805
• Decision Date: 31 August 1992
• Docket Number: No. 19772,19772
• 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. Boise, April 1992 Term
• Court: Idaho Supreme Court

Page 805

837 P.2d 805

122 Idaho 679

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. 19772.

Supreme Court of Idaho,

Boise, April 1992 Term.

Aug. 31, 1992.

William E. Howell, pro se.

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

McDEVITT, Justice.

Defendants appeal from summary judgment in favor of the plaintiff. Plaintiff instituted this action seeking to quiet title to three "well lots" in Hagen's Mobile Estates Subdivision in Canyon County. The plaintiff sought title to the lots in question on the theory of adverse possession. The defendants urged that the plaintiff's use of the lots was permissive and title should be quieted in favor of the defendants. The trial court granted summary judgment in favor of the plaintiff and entered a decree quieting title in favor of the plaintiff. From this decree, defendants appealed and the case was assigned to the Court of Appeals. The Court of Appeals vacated and remanded. 122 Idaho 686, 837 P.2d 812. The plaintiff then petitioned this Court for review of the decision of the Court of Appeals and review was granted. We reverse the decision of the district court and remand to the district court for further proceedings consistent herewith.

FACTS

The following facts are undisputed. In 1971, Mr. and Mrs. John W. Hagen ("the Hagens") formed "Hagen's Mobile Estates Subdivision." In 1972, they formed "Hagen's Mobile Estates Subdivision No. 2." Plats of both subdivisions were filed with Canyon County. Protective covenants were also filed with Canyon County. Lot 6 of Block 2 and Lot A of Block 7, of Hagen's Mobile Estates Subdivision No. 1, and Lot A of Block 8 of Hagen's Mobile Estates Subdivision No. 2 were then used as "well lots" to furnish water to the subdivision. In 1976, the electrical power to the water system was shut off for lack of payment. To alleviate the situation, the owners of the lots within the subdivision formed East Lizard Butte Water Corporation ("ELBWC") to supply water to the subdivision. ELBWC was formed as a nonprofit corporation and the appropriate documentation was filed with the Secretary of State.

Since 1976, ELBWC has installed new pumps, new well houses, new insulation in the well houses, and made other improvements to the well lots. ELBWC has also paid the irrigation taxes assessed on the three well lots since 1976. No property taxes have been assessed against the property because of their use as well lots.

The Hagens transferred the remaining unsold lots in both subdivisions to Contract Mortgage Corporation. In 1978, Contract Mortgage Corporation forfeited its charter. The defendants, William and Mary Howell, were the last known directors of Contract Mortgage Corporation and therefore, pursuant to Idaho law, are the statutory trustees of the corporation.

In the late 1980's, the drinking water became contaminated and unfit for human consumption. This required the residents of the subdivision to bring in their own drinking water. ELBWC has been working with the Farmers Home Administration ("FHA") on a loan/grant package to drill new wells and to replace the water system. In order to obtain the loan/grant, FHA requires that ELBWC have legal title to the well lots. For this purpose, ELBWC filed this action to quiet title to the well lots.

At this point, the parties are in dispute as to the facts. In its complaint, ELBWC claims that its possession of the lots has been "actual, open, visible, notorious, continuous and hostile to the defendants." ELBWC further claims possession under oral and/or written claim of title.

To support its claim to the three well lots, ELBWC filed an affidavit of Earl Binger, President of ELBWC. ELBWC claims that the plats show that the three well lots were designated as such and thus were dedicated for public use. ELBWC also claims that the protective covenants indicate that the well lots were to be transferred to a nonprofit corporation. ELBWC further claims that the defendant and its predecessors represented to prospective purchasers that the well lots and well equipment would be transferred to a nonprofit corporation.

The defendants countered ELBWC's allegations by filing the affidavit of William E. Howell. Mr. Howell asserts that the power was shut off because no one would pay their water bills. He then claims that after the power to the wells was shut off, he attended a meeting several lot owners in the subdivision. In this meeting, Howell asserts that he informed the lot owners that they could operate the water system "until something better could be worked out." Thus, the defendants assert that ELBWC's use of the well lots was permissive and not under a claim of right.

On appeal, we must address the following two issues: (1) did the trial court err in granting summary judgment to the plaintiff and, (2) did the trial court err in awarding attorney fees and costs.

I. THE MOTION FOR SUMMARY JUDGMENT

Standard of Review

In an appeal from a motion for summary judgment, this Court's standard of review is the same as the standard used by the trial court in passing upon a motion for summary judgment. McDonald v. Paine, 119 Idaho 725, 810 P.2d 259 (1991); Meridian Bowling Lanes v. Meridian Athletic, 105 Idaho 509, 670 P.2d 1294 (1983). All facts and inferences from the record will be viewed in favor of the nonmoving party to determine whether the motion should be granted. Treasure Valley Bank v. Butcher, 117 Idaho 974, 793 P.2d 206 (1990); Doe v. Durtschi, 110 Idaho 466, 716 P.2d 1238 (1986); Farmers Ins. Co. of Idaho v. Brown, 97 Idaho 380, 544 P.2d 1150 (1976). The burden of proving the absence of material facts is upon the moving party. Petricevich v. Salmon River Canal Co., 92 Idaho 865, 452 P.2d 362 (1969). However, the adverse party "may not rest upon the mere allegations or denials of his pleadings, but his response, by affidavits or as otherwise provided in this rule, must set forth specific facts showing that there is a genuine issue for trial." I.R.C.P. 56(e); Anderson v. City of Pocatello, 112 Idaho 176, 731 P.2d 171 (1987). In addition, the affidavits submitted in support of or against the motion "shall set forth facts as would be admissible in evidence." I.R.C.P. 56(e); Evans v. Twin Falls County, 118 Idaho 210, 796 P.2d 87 (1990); Gardner v. Evans, 110 Idaho 925, 719 P.2d 1185 (1986). A mere scintilla of evidence is insufficient to create a material issue of fact. Id. Judgment shall be rendered if the pleadings, depositions, admissions, and affidavits on file show that there is no genuine issue of material fact. I.R.C.P. 56(c); Anderson v. Ethington, 103 Idaho 658, 651 P.2d 923 (1982).

Adverse Possession

First, ELBWC asserts its claim to the well lots under adverse possession pursuant to a written claim and/or an oral claim of right. I.C. §§ 5-207 and 5-208. ELBWC asserts its written claim based upon the subdivision plats and protective covenants filed with Canyon County. Section 6 of the Protective Covenants states:

Water is to be supplied through a system operated by a nonprofit 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. No development shall disturb present water courses conveying water to adjacent farm lands.

Each lot owner shall install and maintain a septic tank or other sewer system as required by the health laws of the State of Idaho, and Canyon County Zoning regulations. Three acres of land have been dedicated by grantors for use as a central sewage system.

While the protective covenants do provide for a nonprofit corporation to maintain and operate the water system, the covenants are silent as to the ownership of the well lots. Likewise, the recorded subdivision plats fail to designate the lots involved as "well lots." There is no indication that the three lots involved were to be treated any differently than the rest of the lots that were to be sold as residential lots. The plats also do not indicate that the well lots were dedicated for public use. The plats are silent as to the proposed use of the three lots. Neither of these documents is a sufficient written instrument upon which a written claim to adverse possession can be based.

ELBWC also claims title to the well lots pursuant to I.C. §§ 5-209 and 5-210, adverse possession based upon an oral claim to title. In Cluff v. Bonner County, 121 Idaho 184, 824 P.2d 115 (1992), this Court restated the principles concerning adverse possession under an oral claim or right. These principles are: "(1) a person claiming title not founded upon a written instrument is not required to prove an oral claim of title, (2) continuous occupation of property for five years creates a presumption that the possession has been adverse and under a claim of right, and (3) the requirement of occupation with hostile intent merely refers to occupation without permission by the owner of the property." Cluff, 121 Idaho at 184-85, 824 P.2d at 115-16. The burden of proving adverse possession is upon the party seeking title thereunder. Berg v. Fairman, 107 Idaho 441, 690 P.2d 896 (1984). Further, the claimant must prove each element of adverse possession by clear and convincing evidence. Loomis v. Union Pacific Railroad Co., 97 Idaho 341, 544 P.2d 299 (1975).

In support of ELBWC's claim of adverse possession, Mr. Binger stated in his affidavit that:

[S]ince the date of incorporation, this corporation has been operating the wells on the three lots in question in this lawsuit. That the plaintiff corporation has done the following things on said lots: Put in new pumps, new well houses, new tanks, new insulation in the well houses, a new outside spigot on one well; and has mowed the weeds off of...