Ecosystem Res., L.C. v. Broadbent Land & Res., LLC

• Decision Date: 05 April 2012
• Docket Number: No. S–11–0143.,S–11–0143.
• Citation: 275 P.3d 413,2012 WY 49
• Parties: ECOSYSTEM RESOURCES, L.C., Appellant (Defendant), v. BROADBENT LAND & RESOURCES, LLC, Appellee (Plaintiff),andSouth & Jones Timber Company, Inc., Appellee (Involuntary Plaintiff).
• Court: Wyoming Supreme Court

2012 WY 49
275 P.3d 413

ECOSYSTEM RESOURCES, L.C., Appellant (Defendant),
v.
BROADBENT LAND & RESOURCES, LLC, Appellee (Plaintiff),andSouth & Jones Timber Company, Inc., Appellee (Involuntary Plaintiff).

No. S–11–0143.

Supreme Court of Wyoming.

April 5, 2012.

[275 P.3d 414]

Representing Appellant: Phillip William Lear of Lear & Lear, LLP, Salt Lake City, UT; James S. Lowrie; and Nathan D. Thomas of Jones Waldo Holbrook & McDonough,

[275 P.3d 415]

PC, Salt Lake City UT. Argument presented by Mr. Lowrie.

Representing Appellees: Anna Reeves Olson and Weston W. Reeves of W.W. Reeves, Casper, WY; Mark W. Gifford of Gifford & Brinkerhoff, Casper, WY; and Clayton Thomas, Evanston, WY. Argument presented by Mr. Gifford.

Before KITE, C.J., and GOLDEN, HILL, VOIGT, and BURKE, JJ.

HILL, Justice.

[¶ 1] This is the second time the present case has been appealed to this Court. In the first appeal, we reversed a judgment on the pleadings and remanded for proceedings to examine the facts and circumstances surrounding Union Pacific's reservations of timber in deeds from the early 1900s in order to determine the parties' intent with regard to the duration of the timber estates. Ecosystem Resources, LC v. Broadbent Land & Resources, LLC, 2007 WY 87, 158 P.3d 685 (Wyo.2007) ( Ecosystem I ). After a bench trial, the district court concluded “in using the term ‘timber,’ Union Pacific intended to reserve only those trees (1) in existence at the time of the grant and (2) of sufficient size to be suitable for use in construction.” The district court also concluded from the facts and circumstances that the parties intended Union Pacific to have a reasonable time to harvest the timber from the encumbered properties. It ruled that Union Pacific's timber reservations had expired because the reserved timber was no longer located on the properties and, in any event, more than a reasonable time had passed. The district court also ruled, in the alternative, that Broadbent had acquired title to the timber by adverse possession. It, therefore, granted judgment in favor of the surface owner, Broadbent Land & Resources, LLC ¹ and against the timber estate owner, Ecosystem Resources, L.C.

[¶ 2] Resolving Ecosystem's appeal, we conclude that the district court properly ruled, on the evidence before it, that Union Pacific intended its reservation of “timber” to include only trees of a suitable size which existed on the subject properties at the time of the deeds. The evidence presented at trial clearly established that such timber no longer exists on the properties. Consequently, we affirm the district court's order granting judgment in favor of Broadbent.

ISSUES

[¶ 3] Ecosystem raises the following issues on appeal:

1. Whether the trial court erred in concluding that the facts and circumstances surrounding the deeds at issue [dated] 1906, 1908 and 1909 indicate an intent of the parties to those deeds to limit the duration of the timber reservation set forth therein.

2. Whether the trial court erred in finding that [Broadbent] had removed timber on disputed lands for a period sufficient to support a finding of adverse possession.

Broadbent offers a more detailed statement of the issues:

1. Whether the district court's finding that the facts and circumstances surrounding the execution of the timber deeds demonstrated an intent to limit the duration of the timber reservation to a reasonable time was clearly erroneous.

2. Whether the district court's finding that the timber reservations applied only to timber existing at the time of the deeds was clearly erroneous.

3. Whether the district court erred in construing the deeds against the drafter.

4. Whether the district court erred in considering the subsequent conduct of the parties.

5. Whether the district court's findings that Broadbent proved the elements of adverse possession [were] clearly erroneous.

[275 P.3d 416]

FACTS

[¶ 4] In 1862, Congress passed an act authorizing organization of the Pacific railroad companies. In that legislation, the federal government provided land grants and credit to induce railroad companies to construct a transcontinental railroad. Union Pacific was established to undertake that effort and received a large grant of land in Wyoming. In the 1890s and early 1900s, Union Pacific sold some of its Wyoming property to private persons. Union Pacific included timber reservations in some of its land contracts and deeds.

[¶ 5] This case involves timber reservations in three Union Pacific deeds from the early 1900s.² The earliest was a 1906 warranty deed from Union Pacific to James Graham for 634 acres in Uinta County, Wyoming for which he paid $463. The deed stated, in relevant part:

Excepting and Reserving to said Union Pacific Railroad Company, its successors and assigns, the exclusive right to cut and remove timber from said land and the right to ingress, egress and regress upon said land and the right to use as much of the surface thereof as may be necessary for the proper conduct of said business thereon.

[¶ 6] In 1908, Union Pacific executed a deed granting 15,941 acres in Uinta County to Heber Land and Livestock Company in consideration for $7,970.57. The deed contained the following pertinent language:

Excepting and reserving to Union Pacific Railroad Company, the exclusive right to cut and remove all timber from said lands and the right of ingress, egress and regress upon said land, and the right to use so much of the surface thereof as may be necessary for the proper conduct of said business thereon. ³

[¶ 7] In 1909, Union Pacific executed a deed conveying 5,037 acres to James Chesney in exchange for $3,779.52. The deed excepted and reserved to:

Union Pacific Railroad Company, its successors and assigns, all timber on said lands, and the exclusive right to cut and remove the same from said lands and the right of ingress, egress and regress upon said lands, and the rights to use so much of the surface thereof as may be necessary for the proper conduct of said business thereon.

[¶ 8] In 2005, a dispute arose between Broadbent, the successor in interest to each of the grantees of the surface estate, and Ecosystem, the successor in interest to Union Pacific's timber interests. Initially, the district court granted Broadbent's motion for a judgment on the pleadings, holding as a matter of law that the timber reservations were limited to a reasonable time because Union Pacific did not expressly state in the deeds that the reservations were perpetual. Ecosystem I, ¶ 1, 158 P.3d at 686. The district court based this ruling on what it concluded was a majority rule across the country. Id., ¶ 21, 158 P.3d at 691. Ecosystem argued that it should have been allowed to present evidence about the facts and circumstances surrounding the execution of the deeds to inform the court as to the parties' intent with regard to the timber interests. Id., ¶ 7, 158 P.3d at 687. This Court agreed, citing our deed interpretation rule that facts and circumstances evidence is available to help determine the plain meaning of the deed language even if such language is not ambiguous on its face. Ecosystem I, ¶¶ 9–10, 158 P.3d at 688.

[¶ 9] In Ecosystem I, we acknowledged existing authority stating that timber reservations were understood to include a reasonable time limitation. We, however, eschewed a formalistic rule based upon such case law and held that facts and circumstances evidence should be consulted to determine the parties' general intent regarding the duration

[275 P.3d 417]

of the timber estates. Appropriate facts and circumstances evidence could include case law interpreting timber reservations and conveyances from the same era as the Union Pacific deeds, the nature of the parties, the type of land covered by the deeds, the purposes of the conveyances and/or reservations, the railroad's use of timber in its business activities, and the consideration paid by the surface owners for the conveyances. Id., ¶¶ 34–36, 158 P.3d at 693–94.

[¶ 10] Upon remand, the district court held a bench trial and considered facts and circumstances evidence in accordance with our direction. The court concluded the facts and circumstances demonstrated that, by using the term “timber” in the reservations, Union Pacific intended only to reserve the trees, then in existence, which were of sufficient size to use in its railroad operations. The district court further concluded the facts and circumstances established that Union Pacific was limited to a reasonable time to remove the timber. In the alternative, the district court ruled that Broadbent had obtained title to the timber estate by adverse possession. Ecosystem appealed.

STANDARD OF REVIEW

[¶ 11] Because the case was tried to the court, we apply the following standard of review:

Following a bench trial, this court reviews a district court's findings and conclusions using a clearly erroneous standard for the factual findings and a de novo standard for the conclusions of law. Piroschak v. Whelan, 2005 WY 26, ¶ 7, 106 P.3d 887, 890 (Wyo.2005).

The factual findings of a judge are not entitled to the limited review afforded a jury verdict. While the findings are presumptively correct, the appellate court may examine all of the properly admissible evidence in the record. Due regard is given to the opportunity of the trial judge to assess the credibility of the witnesses, and our review does not entail re-weighing disputed evidence. Findings of fact will not be set aside unless they are clearly erroneous. A finding is clearly erroneous when, although there is evidence to support it, the reviewing court on the entire evidence is left with the definite and firm conviction that a mistake has been committed.

Piroschak, ¶ 7, 106 P.3d at 890. Findings may not be set aside because we would have reached a different result. Harber v. Jensen, 2004 WY 104, ¶ 7, 97 P.3d 57, 60 (Wyo.2004). Further,

we assume that the evidence of the prevailing party below is true and give that...