JRN Holdings, LLC v. Dearborn Meadows Land Owners Ass'n

• Decision Date: 17 August 2021
• Docket Number: DA 20-0517
• Parties: JRN HOLDINGS, LLC, A LIMITED LIABILITY COMPANY, Plaintiff and Appellant, v. DEARBORN MEADOWS LAND OWNERS ASSOCIATION, INC., A Montana Nonprofit Corporation, Its President, JIM BECK, Its Vice President, PAT RACICOT, Its Representative of Record, ART POWELL, AND DOES 1-100, Consisting of all others who claim a non-consensual right of access across Plaintiff's real property, Defendants and Appellees.
• Court: United States State Supreme Court of Montana

2021 MT 204

JRN HOLDINGS, LLC, A LIMITED LIABILITY COMPANY, Plaintiff and Appellant, v. DEARBORN MEADOWS LAND OWNERS ASSOCIATION, INC., A Montana Nonprofit Corporation, Its President, JIM BECK, Its Vice President, PAT RACICOT, Its Representative of Record, ART POWELL, AND DOES 1-100, Consisting of all others who claim a non-consensual right of access across Plaintiff's real property, Defendants and Appellees.

No. DA 20-0517

Supreme Court of Montana

August 17, 2021

Submitted on Briefs: May 12, 2021

APPEAL FROM: District Court of the Eighth Judicial District, In and For the County of Cascade, Cause No. ADV-17-0113 Honorable Gregory G. Pinski, Presiding Judge COUNSEL OF RECORD

For Appellant: David B. Gallik, Gallik Law Office, PLLC, Helena Montana

For Appellee: Frederick F. Sherwood, Anne E. Sherwood, Morrison Sherwood, Wilson & Deola, PLLP, Helena, Montana

OPINION

Beth Baker, Justice

¶1 JRN Holdings, LLC ("JRN"), appeals the Eighth Judicial District Court's ruling that the Dearborn Meadows Land Owners Association, Inc. ("DMLOA") established on behalf of its members an implied easement by preexisting use and a prescriptive easement over Powerline Road across JRN's property. JRN additionally appeals the District Court's order awarding the DMLOA attorney fees. We affirm in part and reverse in part. We address these restated issues:

1. Whether the District Court erred in concluding that both implied and prescriptive easements existed for use by DMLOA members and the general public.

2. Whether the District Court abused its discretion by granting the DMLOA attorney fees under § 27-8-313, MCA.

FACTUAL AND PROCEDURAL BACKGROUND

¶2 This case involves a dispute regarding the use of Powerline Road ("the Road"), an unpaved road in the Dearborn Meadows area within both Cascade and Lewis and Clark Counties. The Road intersects with Dearborn River Road-the main road providing access to the Dearborn Meadows area-which leads to the interstate highway. The Road traverses JRN's property in Cascade County to where it meets the east bank of the Dearborn River ("the River"), where a ford^[1] connects it to the west bank of the river; there, it continues on its path through the Dearborn Meadows area of Lewis and Clark County.

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¶3 Parties to the Case

¶4 The DMLOA was incorporated in 1977 for "[t]he primary and exclusive purposes . . . [of] represent[ing] the interests of the property owners of that land development known as Dearborn Meadows and Upper Sawmill," including "maintain[ing] a viable road system through Dearborn Meadows and Upper Sawmill" and "interact[ing] with any individuals, groups, agencies, or corporations on behalf of the jointly-defined concerns and goals of the property owners[.]" DMLOA "[m]embership is open to landowners of Dearborn Meadows and surrounding areas who own land in recreation developments."

¶5 JRN is a limited liability company whose members are part of the Sechena family- John Sechena, Ruth Sechena, and Nick Sechena. Sechena family members historically and currently own other property in the Dearborn Meadows area. John, Ruth and Nick all live and work in Seattle, but they often spend their holidays in the Dearborn Meadows area. John has a dental practice in Seattle which Ruth manages; Ruth previously worked as a physician. JRN uses the property at issue in this suit to generate income from a vacation rental though Ruth testified that she and John purchased the property with the intent to eventually retire in the area.

¶6 History of Dearborn Meadows

¶7 Prior to 1971, Nina and Fred Dear owned a large area of property on both the Cascade and Lewis and Clark County sides of the lower Dearborn River. The Dears' property encompassed the Dearborn Meadows area, which was undeveloped at the time, including the property now owned by JRN. The Dears subdivided and then sold the Dearborn Meadows area to LDS, Inc., ("LDS") a developer that further subdivided the land and sold the parcels to many different owners over at least the next couple of decades. In 1971, LDS sold the property now owned by JRN to its predecessors in interest.^[2] Neither the deed from the Dears to LDS nor the deed from LDS to JRN's predecessors in interest expressly reserved an easement across the Road in Dearborn Meadows for access to the remainder of the property. JRN's property passed through two more ownerships before JRN purchased it in 2010. In 1981, LDS sold the DMLOA two parcels adjacent to the east bank of the river, which are now private parks designated for DMLOA members' use.

¶8 The Road has existed since at least the 1960s. A power company originally built the Road to access its overhead power lines, and it obtained an express easement over the properties the Road traversed. The Road appears on a 1961 United States Geological Survey ("USGS") map (depicted above) and on aerial photographs taken since the 1960s. It is apparent on the ground and is marked by its own "Powerline Road" sign. The Road exists on both sides of the river. Although the location of the fords that cross the river has changed over time, the location of the Road through JRN's property has remained the same. The Road historically has not been blocked with a gate or other barrier, but previous landowners have posted "no trespassing" signs. The parties dispute the extent to which the DMLOA has maintained the Road-DMLOA witnesses testified that it has maintained the full length of the Road; JRN argues that the Road "was deeply rutted and dangerous to drive" at the time it purchased the subject property in 2010, and that since this time it has handled the Road's maintenance over its property on the Cascade County side of the river. Since Dearborn Meadows was developed, many nearby landowners used Powerline Road to access the river for recreation and to reach the properties on the Lewis and Clark County side of the river.

¶9 In the early 1970s, LDS constructed a ford about two hundred yards upstream from the Road ("upstream ford"). The river flooded in 1974 or 1975, washing out and rendering unusable the ford adjacent to the Road ("downstream ford") until it was reconstructed in 1985. DMLOA landowners during this time thus used the upstream ford to access the properties on the Lewis and Clark County side of the river; for example, Dale Rugwell- who owns land directly across from the downstream ford-testified that he would drive down the Road until he reached the river and then drive upstream along the east bank of the river until he reached the upstream ford. Sometime after 1996, nearby landowners allegedly blocked the upstream ford so that it was no longer usable.

¶10 Events Relevant to this Case

¶11 In 2012, JRN provided to the DMLOA landowners who access their property via the Road notice of its intent to erect a gate across the Road. It explained in this notice letter the purpose of its intended action:

THE PROBLEMS WE ALL FACE:

Unauthorized use of our properties - Some Dearborn Community members, as well as outsiders, have used Powerline Road to access the Dearborn River, your properties and ours. The result has been property vandalism; forest fires set on the south side of the river by people who had no right to be there; garbage and litter by the roadside 4-wheelers and hunters using land without permission; and unauthorized wood cutting. Some campers believe it is their right to use Powerline Road as an access to camp on our property and have threatened and intimidated our family and friends. Some of you have recommended locking the gate and we agree it will help solve many of our mutual problems.

Degradation of Powerline Road - Unauthorized traffic has degraded Powerline Road significantly. We have provided gravel to improve its safety and accessibility especially when wet. Decreasing traffic will slow the degradation process and make the road safer for all of us. There may be times that road repair is needed and we hope that we can collaboratively work on this as neighbors because the [DMLOA] has limited resources.

Poor Condition of All Dearborn Community Roads - We believe that preventing unauthorized Dearborn River access may encourage Dearborn Landowners to pay their [DMLOA] dues especially if Community Park usage is made contingent upon payment of dues. This additional revenue will help maintain all our roads.

JRN's notice letter advised the landowners to submit a request for a key or combination to a lock it would be placing on the gate. It stated that "[i]n the process of doing this we are sending letters to landowners who may use Powerline Road as it traverses our property to get to their property on the south and west side of the Dearborn River . . . per the recommendation of our attorney." The attached "Lock Combination/Key Form" to be filled out by the landowners stated: "I would like to receive the lock combination/key to that gait [sic] for the sole purpose of gaining access to my property on the south and west side of the Dearborn River"; "Use of this private road and/or adjacent property is prohibited for any other reason, including gaining access from our property or the road to the Dearborn River for fishing, floating, swimming, hiking, etc." JRN alleges that it "cleared [its plan to erect and lock the gate] with the fire department, law enforcement, [the] power company, and sought and received a legal opinion that nobody had an easement across its property at Powerline Road."

¶12 JRN sent a second letter to the landowners in November 2012 indicating that it was "proceed[ing] slowly to ensure that everyone whose sole property access is via this gate has been identified and that they have received notification of our intent to close and lock the gate." It also stated that it was "confident" it had notified...