McNaughton v. Chartier, 19-1681

CourtUnited States State Supreme Court of Iowa
Writing for the CourtMCDONALD, JUSTICE.
PartiesWILLARD B. McNAUGHTON, Appellant, v. STANLEY E. CHARTIER, JEANINE K. CHARTIER, CHAR-MAC, INC., CITY OF LAWTON, and ABILIT HOLDINGS, LLC, Appellees. STANLEY E. CHARTIER, JEANINE K. CHARTIER, and CHAR-MAC, INC., Counterclaim Plaintiffs, v. CITY OF LAWTON, Defendants to Counterclaim.
Decision Date24 June 2022
Docket Number19-1681

WILLARD B. McNAUGHTON, Appellant,
v.

STANLEY E. CHARTIER, JEANINE K. CHARTIER, CHAR-MAC, INC., CITY OF LAWTON, and ABILIT HOLDINGS, LLC, Appellees.

STANLEY E. CHARTIER, JEANINE K. CHARTIER, and CHAR-MAC, INC., Counterclaim Plaintiffs,
v.

CITY OF LAWTON, Defendants to Counterclaim.

No. 19-1681

Supreme Court of Iowa

June 24, 2022


Submitted November 17, 2021

On review from the Iowa Court of Appeals. Appeal from the Iowa District Court for Woodbury County, Jeffrey A. Neary, Judge.

The defendant requests further review of a court of appeals decision declaring the parties' rights in an easement and reversing an award of attorney

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fees under the common law.

Angie J. Schneiderman and Coyreen R. Weidner of Moore, Corbett, Heffernan, Moeller & Meis, L.L.P., Sioux City, for appellant.

Chad C. Thompson of Thompson, Phipps & Thompson LLP, Kingsley, for appellees Stanley E. Chartier, Jeanine K. Chartier, and Char-Mac, Inc.

Kevin H. Collins and Sarah J. Gayer of Nyemaster Goode, PC, Cedar Rapids, for appellee AbiliT Holdings, LLC.

Douglas L. Phillips of Klass Law Firm, L.L.P., Sioux City, for appellee City of Lawton.

McDonald, J., delivered the opinion of the court, in which Appel, Waterman, Mansfield, and Oxley, JJ., joined. McDermott, J., filed a dissenting opinion, in which Christensen, C.J., joined.

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MCDONALD, JUSTICE.

Willard McNaughton entered into an easement agreement with Jeanine and Stanley Chartier to allow a small part of a road to pass through McNaughton's property. The road was used to access the Chartiers' business on their adjacent property. The agreement provided that it was a" 'private' easement granted for the use and benefit of the parties . . . and [was] not to be construed as an easement for the use and benefit of the general public." When the Chartiers later sold their business and property, litigation regarding a paved portion of the easement ensued. The district court held McNaughton's right and interest in the disputed area had been extinguished. In the district court's view, McNaughton had "dedicated [a] concrete portion of the easement to the [c]ity" because, among other things, the public had used the easement as the parties had agreed and because McNaughton had "never attempted to restrict the use of the concrete portion of the easement area." The court of appeals reversed the district court, and we granted the Chartiers' application for further review. For the reasons expressed below, we affirm the decision of the court of appeals.

I.

In 1998, McNaughton purchased property bordering the southern edge of the City of Lawton (City). The property was located directly south of U.S. Highway 20 (which runs east to west) and was accessible from the highway via a private driveway leading to a garage on McNaughton's property.

In 1999, Jeanine and Stanley Chartier, McNaughton's sister and brother-in-law, purchased the adjoining lot east of McNaughton's property. The

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Chartiers purchased the property to develop an assisted living facility. To get access from the assisted living facility to the highway, McNaughton and the Chartiers sought approval from the Iowa Department of Transportation (IDOT) for a special access connection. IDOT approved the request but required the special access connection to line up directly with Cedar Street, a north-south street located across the highway from McNaughton's property. The Chartiers agreed to the location of the special access connection, which was to be a short road running south off Highway 20 abutting McNaughton's driveway. The short road connected with an east-west road, now known as East Char-Mac Drive, which provided access to the Chartiers' business and property. Below is a trial exhibit depicting the properties and roadways at the time of trial.

Image Omitted

To accommodate the special access connection to Highway 20, the Chartiers entered into a written easement agreement with McNaughton in 1999.

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The easement gave the Chartiers and their business invitees the right to access a small portion of McNaughton's property. The easement extended twenty-three feet west from the Chartiers' property line and eighty feet south from the highway. As relevant here, the easement agreement (which referred to the Chartiers collectively as "Chartier") provided:

3. Chartier desires to acquire an easement for ingress and egress across a portion of McNaughton's real estate to provide Chartier with an access between their real estate and U.S. Highway 20
4. McNaughton is willing to grant an easement to Chartier pursuant to the terms and conditions set forth in this Agreement
6. The Easement rights granted herein are for the exclusive use and benefit of Chartier, and the residents, guests, and other invitees of the assisted living facility located on Chartiers' property. The easement rights granted herein may not be assigned by Chartier to any other party or parties without the express written consent of McNaughton or his successors or assigns. It is specifically understood that this Agreement creates a "private" easement granted for the use and benefit of the parties identified in this paragraph and is not to be construed as an easement for the use and benefit of the general public.
7. As additional consideration for the grant of easement herein, Chartier shall be obligated to take all action necessary to [e]nsure that the town of Lawton, Iowa, becomes contractually obligated to maintain the easement area for use consistent with the easement rights granted hereunder.
8. This instrument may not be modified except by written instrument executed by all of the parties hereto or by their legal successors and/or assigns.

(Emphases added.) Shortly after McNaughton and the Chartiers entered into the easement agreement, the City paved and completed other improvements to the

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access road. The paved access road is thirty-six feet across. Only thirteen feet by sixty feet of the paved access road is within the parties' private easement. Traffic entering the assisted living facility now treats the portion of the access road within the parties' private easement as a southbound lane before turning east onto East Char-Mac Drive.

The City asked McNaughton on several occasions in the early 2000s to dedicate the paved portion of the easement to the City. McNaughton refused each request. His testimony regarding his refusal was corroborated by a letter he wrote to the City in January 2004 regarding maintenance of the street. In that letter, he referred to the "easement that [he] gave [his] sister." He explicitly rejected the City's request that he give the City an "easement [through his] property." He said "there is not a chance in hell that I will cooperate with any concession to the town." It appears one of the reasons McNaughton refused to dedicate the easement to the City was the City's failure to maintain the paved portion of the easement. The private easement agreement required the Chartiers to ensure the City would maintain the paved portion of the easement. The City sent McNaughton a letter promising to provide snow removal, maintenance, and repairs. McNaughton testified the City removed snow only a few times and generally had failed to maintain the paved portion of the easement. For their part, the Chartiers did not dedicate East Char-Mac Drive to the City until 2012.

Around 2018, Jeanine began experiencing health problems that necessitated the sale of the Chartiers' business and property. AbiliT Holdings, LLC, emerged as a potential buyer. The Chartiers informed AbiliT about the

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easement. They discovered McNaughton had never recorded the easement agreement. Jeanine asked McNaughton to sign a Clarification of Easement, which stated the Chartiers' successors or assigns could access Highway 20 using the easement. She offered McNaughton $15,000 in exchange for his agreement. McNaughton refused. McNaughton then filed a copy of the easement agreement with the county recorder.

Although McNaughton would not sign the Clarification of Easement, McNaughton told the Chartiers he would not stand in the way of the sale to AbiliT. The Chartiers and AbiliT finalized the sale in April 2018. The Chartiers did not assign or attempt to assign any rights in the easement to AbiliT. After the deal was finalized, McNaughton demanded various forms of compensation from the Chartiers for the easement. He initially asked for $100,000 and later asked for $160,000. He next offered to sell his entire property (including his home) for $410,000. He later said he would convey the easement in exchange for a guarantee from Jeanine that he could purchase fifty acres of farmland from the estate of their deceased sister, for which Jeanine served as executor. The Chartiers declined each proposal.

After these failed negotiations regarding the rights in the private easement, McNaughton filed a petition for declaratory judgment, injunctive relief, and damages against the Chartiers, their business entity Char-Mac, Inc., and AbiliT. McNaughton sought a declaration that he had not consented to any assignment of the private easement and that AbiliT did not have any rights under the easement agreement. The Chartiers answered and filed a counterclaim against

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McNaughton. The Chartiers sought injunctive relief and common law attorney fees based on McNaughton's alleged improper motives in bringing the suit.

The Chartiers also named the City as a third-party defendant, contending the City had rights in the easement and was an indispensable party to the litigation. The City contested this and moved to dismiss the claims against it. The City argued it was not a necessary party to the dispute because it was "not a party to the easement agreement," did "not own any portion of the property covered by the agreement," and the easement agreement "granted no...

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