IDAHO FOREST INDUSTRIES INC. v. HAYDEN WATERSHED IMPROVEMENT …

• Decision Date: 18 December 2000
• Docket Number: No. 25524.,25524.
• Citation: 135 Idaho 316,17 P.3d 260
• Parties: IDAHO FOREST INDUSTRIES, INC., an Idaho corporation, Plaintiff-Counterdefendant-Respondent, v. HAYDEN LAKE WATERSHED IMPROVEMENT DISTRICT, Defendant-Counterplaintiff-Respondent. Hayden Lake Watershed Improvement District, Third Party Plaintiff-Respondent, v. State of Idaho, Department of Lands, Third Party Defendant-Appellant. State of Idaho, ex rel., Dirk Kempthorne, Governor, Pete T. Cenarrusa, Secretary of State, Alan G. Lance, Attorney General, J.D. Williams, State Controller, Marilyn Howard, Superintendent of Public Instruction, as the State Board of Land Commissioners, and Stanley F. Hamilton, Director, Department of Lands, Counterplaintiffs-Appellants, v. William Thomas Richards, aka W.T. Richards, Sheila Richards, Sheila Griffiths Richards, aka Sheila Richards, husband and wife, and Idaho Forest Industries, Counterdefendants-Respondents.
• Court: Idaho Supreme Court

17 P.3d 260

135 Idaho 316

IDAHO FOREST INDUSTRIES, INC., an Idaho corporation, Plaintiff-Counterdefendant-Respondent, v. HAYDEN LAKE WATERSHED IMPROVEMENT DISTRICT, Defendant-Counterplaintiff-Respondent.

Hayden Lake Watershed Improvement District, Third Party Plaintiff-Respondent, v. State of Idaho, Department of Lands, Third Party Defendant-Appellant.

State of Idaho, ex rel., Dirk Kempthorne, Governor, Pete T. Cenarrusa, Secretary of State, Alan G. Lance, Attorney General, J.D. Williams, State Controller, Marilyn Howard, Superintendent of Public Instruction, as the State Board of Land Commissioners, and Stanley F. Hamilton, Director, Department of Lands, Counterplaintiffs-Appellants, v. William Thomas Richards, aka W.T. Richards, Sheila Richards, Sheila Griffiths Richards, aka Sheila Richards, husband and wife, and Idaho Forest Industries, Counterdefendants-Respondents.

No. 25524.

Supreme Court of Idaho, Coeur d'Alene, October 2000 Term.

December 18, 2000.

Hon. Alan G. Lance, Attorney General, Boise, for appellant. David J. Barber, Deputy Attorney General, argued.

Scott W. Reed, Coeur d'Alene, for respondents Richards and Idaho Forest Industries.

TROUT, Chief Justice.

This is an appeal from the district court's judgment quieting title in the record title holders to thirty acres on the landward side of a dike. The State of Idaho (the State) claims title to the property under the equal footing and public trust doctrines. We affirm the judgment of the district court.

I. FACTUAL AND PROCEDURAL BACKGROUND

Idaho Forest Industries, Inc. and Tom and Sheila Richards (collectively "IFI") have title of record to approximately thirty acres of land on the landward (west) side of a dike across Honeysuckle Bay on Hayden Lake. The Hayden Lake Protective Association ("Association") owns the remaining five-acre parcel. IFI traces its title through prior title holders to the original patent from the United States issued in 1909. In 1909, Hillyard Townsite Company, which held title to the property at that time, built a dike across the easterly portion of the property to prevent the periodic flooding of the land. In 1920, Atlas Tie Company, which ultimately became IFI, received title to the property and record title remains in IFI at the present time. The 1920 deed conveying the property describes the eastern boundary of the property as the shore line of the lake, which in 1920 would have been to the east of the dike.

The Association's parcel contains a portion of the dike, a spillway, and an area used as a sump. Under a judgment entered in 1962, the Association is charged with keeping the lake from exceeding a high water mark of 2,239 feet above mean sea level (msl). The Hayden Lake Watershed Improvement District (HLWID), formed in the 1960's, has taken over operation of the spillway, but has never had the title to the property transferred to its name. In years when the lake is threatening to exceed the set high water level mark, the HLWID allows water to flow through the spillway and into the sump where it then percolates into the Rathdrum Prairie aquifer. If spring runoff is too great, the sump cannot drain the water fast enough and excess waters from the spillway flood over onto IFI's property.

In the 1980s, HLWID sought to increase public access to the lake by adding a public beach and other improvements. IFI filed suit to quiet title and enjoin the actions of HLWID. HLWID filed an answer and third party complaint, claiming that the State owned the land. The State responded by asserting that the natural high water mark of the lake at the time of statehood was at 2,239 feet above msl and to the extent that navigable waters extended over IFI's property, the State claimed title to the property under the equal footing doctrine. The State further claimed the right to use the land under the navigable waters of Hayden Lake for the benefit of the public pursuant to the public trust doctrine.

This case first came before the Court in 1987, on appeal from the district court's grant of summary judgment to IFI. See Idaho Forest Industries v. Hayden Lake Watershed Improvement District, 112 Idaho 512, 733 P.2d 733 (1987). As to HLWID, this Court concluded there were no disputed issues of fact and that HLWID had no right to use the dike beyond the easement for a roadway over the top of the dike and the proposed expansion to include public beaches, docks and parking areas exceeded that easement. As to the rights asserted by the State, this Court analyzed the applicable doctrines as follows:

The equal footing doctrine grants legal title to the state in all lands below the natural high water mark of navigable waters as they existed at the date of admission into statehood. The public trust doctrine, on the other hand, does not grant title of such lands to the state but merely preserves inviolate the public's use of those lands.

While the public trust includes uses in addition to the navigation use, it is clear that the public trust arises only in land below the natural high water mark of navigable waters. There is no "public trust doctrine" relating to land which is wholly independent or unconnected with such navigable waters.

Id. at 516, 733 P.2d at 737. We reversed and remanded the case, finding that genuine issues of material fact existed as to whether the property was below the ordinary high water mark (OHWM) of the lake when Idaho was admitted to the Union and whether, by virtue of the periodic overflow of water onto IFI's property, there has been navigable water on the disputed property sufficient to result in some public trust rights.

On remand, the district judge, sitting without a jury, heard extensive evidence on the issue of the OHWM, including government survey information, the position of ponderosa pine trees, soil analysis results, and water level trends. On March 16, 1999, the district judge entered a judgment in favor of IFI. The district judge held that the State had failed to prove by a preponderance of the evidence that the land in question had been below the lake's 1890 OHWM; therefore, title to the property was quieted in IFI. The State appeals the district judge's decision.

II. STANDARD OF REVIEW

This Court will review a trial court's decision to ascertain "whether the evidence supports the findings of fact, and whether the findings of fact support the conclusions of law." Alumet v. Bear Lake Grazing Co., 119 Idaho 946, 949, 812 P.2d 253, 256 (1991). This Court does not set aside findings of fact unless they are clearly erroneous. Marshall v. Blair, 130 Idaho 675, 679, 946 P.2d 975, 979 (1997). Thus, if the findings of fact are supported by substantial and competent evidence, although conflicting, this Court will not disturb those findings. Carney v. Heinson, 133 Idaho 275, 281, 985 P.2d 1137, 1143 (1999). In reviewing a lower court's conclusions of law, this Court is not bound by the legal conclusions of the district court, but may draw its own conclusions from the facts presented. Kootenai Elec. Coop. v. Washington Water Power Co., 127 Idaho 432, 435, 901 P.2d 1333, 1336 (1995).

III. DISCUSSION

A. The district judge correctly placed the burden of proof upon the State.

In this case, the district judge determined that the State had the burden of proof because it was alleging title to property in derogation of the rights claimed by IFI. The judge further held that the State's burden was "the usual `preponderance of the evidence.'" On appeal, the State argues that since it claims to be holding the property in trust for the public, IFI should have had the burden of proof and should have been required to prove ownership by clear and convincing evidence.

In support of its contention, the State relies upon this Court's decision in Erickson v. State, 132 Idaho 208, 970 P.2d 1 (1998). There we articulated the general rule that "[o]ne who would claim the ownership of property of which the legal title stands of record in another, or that the same is held by such person in trust for the one so claiming, must establish such claim by evidence that is clear, satisfactory and convincing." Erickson, 132 Idaho at 211, 970 P.2d at 4 (quoting Russ Ballard & F.A.I. v. Lava Hot Springs Resort, Inc., 97 Idaho 572, 579, 548 P.2d 72, 79 (1976)). In Erickson, this Court considered the claim of private landowners to property below the current OHWM of Lake Coeur d'Alene. The Court found there was a presumption that the State was holding the property in trust because it was located below the current OHWM of the lake. "Considering that the current OHWM of the Lake is 2128 feet, it is presumed that the State is holding the title to these lands in trust for the public." Id. at 211, 970 P.2d at 4. Since the State was presumed to be holding the property in trust for the public, the Ericksons were required to prove their title to the property by clear and convincing evidence. The factual and procedural differences between the present case and Erickson, however, lead us to a different result.

The presumption in Erickson was based upon the current OHWM of Lake Coeur d'Alene. Using dams located at Post Falls, the Washington Water Power Company has maintained the level of Lake Coeur d'Alene at 2128 feet above msl throughout the summer and into early fall of every year since 1907. The consistent maintenance of a single water level for over ninety years established a certain current OHWM, justifying the presumption the State was holding the property in trust. The same facts are not present in this case.

The hydrographs submitted by the State demonstrate that from the early 1920's, when gauge records were first kept, until 1950, Hayden Lake never reached the 2239 foot mark. From 1950 until the early 1960s the lake exceeded 2239 feet each year. The regular flooding of lakefront property resulted in the court order of 1962 under which the HLWID is supposed to regulate the high water level of Hayden Lake at 2239 feet. Regulating the...