Miller v. Georgia-Pacific Corp., GEORGIA-PACIFIC

• Decision Date: 27 October 1980
• Docket Number: No. 39760,GEORGIA-PACIFIC,39760
• Citation: 48 Or.App. 1007,618 P.2d 992
• Parties: Tim MILLER and Myrl F. Miller, Appellants, v.CORPORATION, a Georgia Corporation, Respondent. ; CA 16165.
• Court: Oregon Court of Appeals

Page 992

618 P.2d 992

48 Or.App. 1007

Tim MILLER and Myrl F. Miller, Appellants, v. GEORGIA-PACIFIC CORPORATION, a Georgia Corporation, Respondent.

No. 39760; CA 16165.

Court of Appeals of Oregon.

Argued and Submitted Aug. 20, 1980.

Decided Oct. 27, 1980.

J. Rion Bourgeois, Portland, argued the cause for appellants. With him on the briefs was Evans, Grebe, Gross, Jensen & Peek, P. C., Portland.

Donald A. Gallagher, Jr., Eugene, argued the cause for respondent. With him on the brief was Jaqua & Wheatley, P. C., Eugene.

Before GILLETTE, P. J., and ROBERTS and CAMPBELL, JJ.

CAMPBELL, Judge.

This is a suit by the plaintiffs for a declaratory judgment as to the "meaning and effect" of a written instrument by which the plaintiffs had previously granted a road easement to the defendant. In the alternative the plaintiffs sought reformation of the instrument on the grounds of mistake. ¹ The trial court held that the defendant's interpretation of the written instrument was correct. It also held that the instrument was not ambiguous and denied reformation. The plaintiffs have appealed. We affirm.

The plaintiffs are husband and wife. They are loggers and ranchers in the Siletz area of Lincoln County. The defendant is a forest products corporation and the owner of a rock quarry near a part of the plaintiffs' land.

In July, 1963, the defendant entered into an agreement with Macco Corporation whereby that corporation was given the right to haul rock from the quarry to repair and extend the north jetty at Yaquina Bay. The defendant granted Macco Corporation the right of ingress and egress to Highway 229 over the Root Creek road. The defendant and Macco Corporation also contracted to cooperate in acquiring an alternate truck road right-of-way along Cedar Creek to Highway 229. The proposed right-of-way along Cedar Creek would cross lands owned by the plaintiffs.

The negotiations for the Cedar Creek easement were conducted by Tim Miller on behalf of the plaintiffs and by Harold Rumery on behalf of the defendant. Rumery was the local logging manager for the defendant. The negotiations between Tim Miller and Rumery were conducted in Lincoln County between the 1st and the 15th of August, 1963. It was agreed that the defendant would convey to the plaintiffs approximately 221/2 acres of land in exchange for a 60 foot right-of-way along Cedar Creek. ² On August 15th all the documents were prepared by the defendant's in-house counsel in Portland. The counsel then forwarded the documents to Rumery in Lincoln County. On August 19, 1963, the plaintiffs executed the following easement in the office of their local attorney in Lincoln County:

"ROAD EASEMENT

"KNOW ALL MEN BY THESE PRESENTS, That for and in consideration of the sum of One Dollar ($1.00) and other good and valuable consideration, receipt of which is hereby acknowledged, TIM MILLER and MYRL F. MILLER, husband and wife, hereinafter called 'Grantors', do hereby grant, bargain, and convey to GEORGIA-PACIFIC CORPORATION, a Georgia corporation, and its successors and assigns, hereinafter called 'Grantee', an easement and right of way, sixty (60) feet in width, for the purpose of locating, constructing, maintaining, repairing and using a roadway over and across portions of the SW 1/4 NW 1/4 and the W 1/2 SW 1/4 of Section 8, Township 9 South, Range 10 West of Willamette Meridian, the centerline of which is described as follows:

" * * * (Description omitted.)

"PROVIDED, however, that Grantee's right to use said easement and right of way for commercial rock hauling shall be limited to a period of ten (10) years from the date hereof unless the period for commercial rock hauling shall be extended for a further and continuous ten (10) year period by the exercise of the option to do so hereby granted to Grantee by Grantors, which option shall be exercised by Grantee placing the record on the Official Records of Lincoln County, Oregon notice of exercise of said option.

"RESERVING unto Grantors the personal right to use for ingress and egress and without fee any road constructed on said easement and right of way, provided that such use does not interfere with the use thereof by Grantee or its licensees.

" * * * * *." (Acknowledgment omitted.)

Tim Miller testified that he did not remember reading the instrument before he signed it. He signed it because his attorney (now deceased) said: "It looks all right." Myrl Miller testified that she did not read the easement before she signed it.

Between August 15th and August 19th as a part of the same transaction there were also prepared by the defendant and executed by the appropriate parties: (1) a letter to Tim Miller confirming defendant's obligation to construct fence, gates, culverts, and cattleguards; (2) deeds conveying the 221/2 acres to Tim Miller; (3) a letter to Tim Miller confirming defendant's agreement to pay the taxes on the easement; (4) a common boundary agreement between the plaintiffs and other land owners in the area; and (5) a letter to Tim Miller confirming that the defendant would not grant some people by the name of Calkins the right to use the road to be constructed on the easement.

The road constructed upon the Cedar Creek easement was used by Macco Corporation to haul jetty rock from 1964 through 1966. Since 1966, with the exception of three years, the easement has been used by the defendant and its licensees for the hauling of non-jetty rock. For example, in 1967, Pacific Crushing hauled 73,000 plus cubic yards of non-jetty rock and in 1977 the defendant hauled 100,000 plus cubic yards.

On August 8, 1973, the defendant exercised its option to extend the period of commercial rock hauling for an additional ten years by recording a notice in the "Official Records of Lincoln County" as required by the easement.

On February 5, 1974, plaintiffs' attorney wrote the defendant's president that Tim Miller was concerned because the easement was currently being used to haul non-jetty rock. ³

On April 27, 1978, the plaintiffs filed their complaint for a declaratory judgment in this case. The second amended complaint alleged by reference the August 19, 1963 road easement and set forth the contentions of the parties as to the "justiciable controversy" as follows:

" * * *

"IV

"Plaintiffs contend the easement granted thereby was for a term of 10 years, with an option for an additional 10 years upon payment of further consideration, with the extent of use limited to jetty rock hauling.

"V

"It is the defendant's contention that the road easement granted may be used for any purpose including commercial rock hauling until August 18, 1983, can be used by defendant for any purpose other than commercial rock hauling thereafter, and has an unlimited duration.

" * * *."

The defendant by its answer admitted paragraphs IV and V as set out above. ⁴

The alternative count of the plaintiffs' second amended complaint alleged in part:

" * * * If this court decides the instrument fails to have that effect, then the failure is due either to the mutual mistake of the parties, or to the unilateral mistake of the plaintiffs and the inequitable conduct of the defendant, and should therefore be reformed * * *."

The trial court ruled as a pretrial matter that the easement was not ambiguous. After the trial on the merits the trial court again ruled that the easement was not ambiguous and denied reformation. The decree entered reads in part:

"IT IS HEREBY ORDERED, ADJUDGED AND DECREED that the August 19, 1963 ROAD EASEMENT grants defendant a permanent easement and right-of-way for the purpose of locating, constructing, maintaining, repairing and using a roadway over and across the lands of the plaintiffs reserving unto plaintiffs the personal right to use said roadway for ingress and egress and without fee provided such use does not interfere with the use thereof by defendant or its licensees; provided however, that the right-of-way can only be used for commercial rock hauling for a period of 20 years from August 19, 1963; * * *.

" * * *." ⁵

The plaintiffs have set out numerous assignments of error. The chief thrust of these assignments is that the trial court erred in finding that the easement of August 19, 1963 was not ambiguous. Sub-parts of this general assignment are that the trial court erred in failing to consider all of the writings constituting the contract of the parties and in failing to apply the rule of construction that an ambiguous contract is to be construed against the party who drafted it. The plaintiffs also claim in the alternative that the trial court erred in not reforming the contract.

The plaintiffs claim that the easement is ambiguous in at least five particulars: (1) Use of easement-limited to the hauling of rock? (2) Type of rock-jetty rock or commercial rock? (3) Term of agreement-limited to 10 or 20 years or unlimited? (4) Further consideration-was the 221/2 acre conveyance consideration for only the first ten years? (5) Licensees-were the defendant's licensees limited to Macco Corporation?

It is the plaintiffs' position that each of the five alleged ambiguities should be resolved in their favor and against the defendant who drafted the easement. Meskimen v. Larry Angell Salvage Co., 286 Or. 87, 592 P.2d 1014 (1979). Th...