Ecosystem Res. v. Broadbent Land & Res.

• Decision Date: 23 May 2007
• Docket Number: No. 05-277.,05-277.
• Citation: 158 P.3d 685,2007 WY 87
• Parties: ECOSYSTEM RESOURCES, L.C., Appellant (Defendant), v. BROADBENT LAND & RESOURCES, L.L.C., Appellee (Plaintiff).
• Court: Wyoming Supreme Court

158 P.3d 685

2007 WY 87

ECOSYSTEM RESOURCES, L.C., Appellant (Defendant), v. BROADBENT LAND & RESOURCES, L.L.C., Appellee (Plaintiff).

No. 05-277.

Supreme Court of Wyoming.

May 23, 2007.

Representing Appellant: Phillip William Lear of Lear & Lear, L.L.P., Salt Lake City, Utah.

Representing Appellee: Clayton B. Thomas, Evanston, Wyoming; M. David Eckersley of Prince, Yeates & Geldzahler, Salt Lake City, Utah. Argument by Mr. Eckersley.

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

KITE, Justice.

[¶ 1] In the early 1900s, Union Pacific Railroad Company (Union Pacific) conveyed real property located in Uinta County to Broadbent Land & Resources, LLC's (Broadbent) predecessors in interest, but reserved and excepted "all timber" on said lands. Nearly one hundred years later, Ecosystem Resources, L.C. (Ecosystem) acquired the timber rights and proceeded to harvest the timber. As surface owner, Broadbent asked the district court to quiet title to the timber in it. Relying on a rule of law adopted in other jurisdictions, Broadbent argued that, because Union Pacific's timber interests were not expressly made perpetual in the deeds, they were limited to a reasonable time and more than a reasonable time had passed since Union Pacific reserved its timber interests. The district court agreed with Broadbent and granted its motion for judgment on the pleadings declaring Ecosystem's timber interests had lapsed and title to the timber reverted to the surface land owner, Broadbent.

[¶ 2] On appeal, we are called upon to determine, as a matter of first impression, the duration of an interest in timber created in a deed when no time limit is set out in the language of the deed. We reject a rigid rule of interpretation which does not consider the parties' intent. Instead, we reverse the district court's judgment on the pleadings and remand for consideration of evidence of the facts and circumstances surrounding execution of the deeds.

ISSUES

[¶ 3] Ecosystem presents the following issues for review on appeal:

1. Did the trial court err as a matter of law in holding that a reservation of "all timber" created an estate in timber limited to a reasonable time rather than an estate in perpetuity?

2. Assuming Wyoming law requires words of duration to create a perpetual timber easement, did the trial court err in holding that the reservation did not contain such language?

Broadbent does not offer a separate statement of the issues.

FACTS

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

Excepting and reserving to Union Pacific Railroad Company, the exclusive right to cut and remove all timber from said land and the right of 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. . . .

[¶ 5] In 1909, Union Pacific executed a warranty deed granting approximately 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 the land, together with the "exclusive right to cut and remove" it from the land, the "right of ingress, egress and regress" upon the land and the right to use so much of the surface as necessary to properly conduct its business.

[¶ 6] Ecosystem is the successor in interest to Union Pacific's interests, and Broadbent is the successor in interest to Heber's and Chesney's interests. In 2005, Ecosystem communicated its plans to harvest the timber, prompting Broadbent to file a complaint seeking to have Ecosystem's timber rights under the deeds extinguished and title to the timber quieted in it. Broadbent argued that Union Pacific and its successors were required to remove the timber within a reasonable time and, having failed to do so, lost the timber rights.

[¶ 7] Ecosystem answered claiming its timber rights were perpetual and counterclaimed seeking quiet title. Broadbent filed a motion for judgment on the pleadings. Ecosystem responded arguing the plain language of the deeds reserved a perpetual right to the timber, and the district court should consider the facts and circumstances surrounding execution of the deeds before implying a "reasonable time" limitation into the deeds. To that end, Ecosystem proffered evidence about the nature of the railroad's business operations at the time the deeds were executed and the need to have a sufficient supply of timber to sustain those operations. It also presented evidence suggesting the grantees paid a lower price for their properties because of the reservations included in the deeds. The district court did not consider Ecosystem's evidence. Instead, it granted Broadbent's motion for judgment on the pleadings holding, as a matter of law, because the timber reservations were "silent as to their duration" they were for a reasonable amount of time; ninety-five years was an unreasonable amount of time; the reservations lapsed; and, consequently, Broadbent owned the timber situate on the lands.

STANDARD OF REVIEW

[¶ 8] We review a district court's decision granting a judgment on the pleadings, pursuant to W.R.C.P. 12(c), de novo by applying the same standards used by the district court in ruling on the motion. See, Box L Corp. v. Teton County, 2004 WY 75, ¶ 2, 92 P.3d 811, 813 (Wyo.2004); Rodriguez v. Casey, 2002 WY 111, ¶ 4, 50 P.3d 323, 325 (Wyo.2002):

A defendant is entitled to judgment on the pleadings if the undisputed facts appearing in the pleadings, supplemented by any facts of which the district court may take judicial notice, establish that no relief can be granted. A judgment on the pleadings is appropriate if all material allegations of fact are admitted in the pleadings and only questions of law remain.

Greeves v. Rosenbaum, 965 P.2d 669, 671 (Wyo.1998) (citations omitted). Review of a judgment on the pleadings is akin to review of a dismissal under W.R.C.P. 12(b)(6) for failure to state a claim upon which relief can be granted. Id. at 672. The facts are reviewed in the light most favorable to the party opposing the motion and the motion is granted only if "those facts dictate that judgment should be entered as a matter of law." Wilson v. Town of Alpine, 2005 WY 57, ¶ 4, 111 P.3d 290, 291 (Wyo.2005). If an issue of fact exists, the motion should not be granted. Reno v. Reno, 626 P.2d 552, 554 (Wyo.1981).

DISCUSSION

[¶ 9] We are charged with interpreting Union Pacific's deeds to determine the duration of the timber interests reserved in those documents. Although we have never had occasion to address this issue before,¹ a well-established paradigm for interpreting deeds exists to guide our analysis. Our deed interpretation rules focus on deriving the intentions of the parties. Mullinnix LLC v. HKB Royalty Trust, 2006 WY 14, ¶ 22, 126 P.3d 909, 919 (Wyo.2006); Caballo Coal Co. v. Fid. Exploration & Prod. Co., 2004 WY 6, ¶ 11, 84 P.3d 311, 314 (Wyo.2004). We start with the language utilized by the parties to the deed, giving that language its plain and ordinary meaning. Hickman v. Groves, 2003 WY 76, ¶ 6, 71 P.3d 256, 258 (Wyo.2003). If the language is clear and unambiguous, we look only to the "four corners" of the deed in ascertaining the parties' intent. Caballo Coal, ¶ 11, 84 P.3d at 314.

[¶ 10] However, we have also recognized that, even if a contract is unambiguous, we can examine evidence of the circumstances surrounding the execution of the deed to arrive at the parties' intent. Hickman, ¶¶ 6-11, 71 P.3d at 257-58. Relevant considerations may include the relationship of the parties, the subject matter of the contract, and the parties' purpose in making the contract. Id.

[I]t has long been the law that we look to the meaning of terms at the time of execution of an unambiguous deed. In 1899, we stated in Balch, 9 Wyo. at 29, 59 P. at 436: "The rule in such cases [involving deed interpretation] is that the intention of the parties is to be ascertained by considering all the provisions of the deed, as well as the situation of the parties, and then to give effect to such intention if practicable." (emphasis added). Understanding the importance of the use of "surrounding circumstances" evidence is not difficult when you take into account the definition of "plain meaning" as used in contract interpretation cases. The "plain meaning [of a contract's language] is that `meaning which [the] language would convey to reasonable persons at the time and place of its use.'" Newman, ¶ 12, 53 P.3d at 544, quoting Moncrief v. Louisiana Land and Exploration Company, 861 P.2d 516, 524 (Wyo. 1993) (emphasis added).

Mullinnix, ¶ 23, 126 P.3d at 919.

[¶ 11] The plain language included in Union Pacific's deeds reserved "all timber" and did not limit the time for removing the timber. Nevertheless, the district court accepted Broadbent's claim that there is a general rule across the country which states that, unless expressly made perpetual, a timber right created by contract or deed will be interpreted as expiring after a reasonable time for removing the timber has passed. Ruling from the bench after the parties argued the motion for a judgment on the pleadings, the district court stated:

The question presented is whether the reservation of the timber rights runs in perpetuity without an express reservation that contains the language in perpetuity. The majority rule appears to be that a conveyed or reserved right to growing timber is a terminable estate unless a specific term of years or a perpetual right is stated in the document of conveyance. Here, there is no such language. If there is no language defining the period of time the timber may be harvested, then it must be a reasonable time. Ordinarily, what is reasonable is a question of fact unless reasonable minds could not...