R & S Investments v. Auto Auctions, Ltd., A-04-1098.

• Citation: 725 N.W.2d 871,15 Neb. App. 267
• Decision Date: 19 December 2006
• Docket Number: No. A-04-1098.,A-04-1098.
• Parties: R & S INVESTMENTS, a Partnership, Appellant, v. AUTO AUCTIONS, LTD., a Nebraska Corporation, Appellee.
• Court: Court of Appeals of Nebraska

725 N.W.2d 871

15 Neb. App. 267

R & S INVESTMENTS, a Partnership, Appellant, v. AUTO AUCTIONS, LTD., a Nebraska Corporation, Appellee.

No. A-04-1098.

Court of Appeals of Nebraska.

December 19, 2006.

COPYRIGHT MATERIAL OMITTED

COPYRIGHT MATERIAL OMITTED

Terry K. Barber, Lincoln, for appellant.

Robert B. Creager, of Anderson, Creager & Wittstruck, P.C., Lincoln, for appellee.

INBODY, Chief Judge, and MOORE and CASSEL, Judges.

MOORE, Judge.

INTRODUCTION

R & S Investments (R & S) holds an easement on the property of Auto Auctions, Ltd., for the use of two sanitary sewer lagoons and all necessary piping and connections to the lagoons. After acquiring the property on which R & S' easement lies, Auto Auctions relocated the easement by filling one of the original lagoons with dirt, constructing a new lagoon for use by both property owners, and providing R & S with the necessary connections to the new lagoon. R & S filed suit against Auto Auctions and Phil B. Durst, the president of Auto Auctions, in the district court for Lancaster County, Nebraska, seeking a declaration of the parties' rights with respect to the easement, restoration of the original lagoon to its condition prior to being filled with dirt, and an injunction enjoining the defendants from interfering with R & S' use of the easement. George R. Day and Barbara D. Day, predecessors in interest to both R & S and Auto Auctions, were later named as third-party defendants. During trial Durst was dismissed as an individual defendant. The district court entered judgment in favor of R & S, but it found that R & S was not entitled to the relief it sought. The court found R & S was entitled to have the relocated easement set forth in a new conveyance from Auto Auctions and ordered Auto Auctions to execute such new conveyance. The court subsequently dismissed the third-party complaint. For the reasons set forth herein, we affirm.

BACKGROUND

R & S and Auto Auctions are the owners of certain adjacent tracts of real property located in Lancaster County. Both tracts were originally owned by the Days. The property was then partitioned by the Days and sold. The Days sold the tract currently owned by R & S (Lot 32) to Skelly Oil Company in 1966. R & S acquired title to Lot 32 in 1983. The Days sold the other tract (Lot 31) to Auto Auctions in 2001.

At the time of their conveyance of Lot 32 to Skelly Oil, the Days executed an agreement granting an easement across Lot 31 to Skelly Oil "for a sanitary sewer lagoon and all necessary piping and connections thereto and [agreeing] to construct said lagoon for [Skelly Oil]." The agreement provided:

1. [The Days agree] to construct a sanitary sewer lagoon system on property owned by [the Days], said lagoon to be located no more than 500 feet from the south or east property lines of the parcel . . . conveyed to [Skelly Oil].

2. [The Days agree] that [Skelly Oil], its agents or employees, or any persons or entities under contract with it may enter onto said premises for the maintenance of said lagoon and for the purpose of constructing all portions thereof not agreed to be constructed by [the Days].

3. [Skelly Oil] agrees to provide its own piping from said lagoon to be constructed by [the Days] to the property line of [Skelly Oil].

4. [The Days agree] that said sanitary sewer lagoon to be constructed by [the Days] shall be constructed and built in accordance with the plans and specifications prepared and approved by [Skelly Oil] and presented to [the Days] for said purpose. [The Days agree] to begin said construction within ten (10) days after said plans and specifications are so presented by [Skelly Oil].

5. [The Days agree] to grant a permanent easement no less than 15 feet in width across [the Days'] property for the location, installation, maintenance and repair of the necessary pipes and fittings from [Skelly Oil's] property .. . to the location of said sanitary sewer lagoon, as well as an easement covering the property owned by [the Days] where said lagoon is located, authorizing [Skelly Oil's] continued use of said property for the maintenance and operation of a sanitary sewer lagoon.

[6]. The legal description of the property to be covered by said easements shall be prepared by [Skelly Oil] at its sole expense.

The lagoon, consisting of two separate cells, was constructed per the agreement between the Days and Skelly Oil sometime in the late 1960's and was in use by R & S at the time of Auto Auctions' purchase of Lot 31.

In October 2001, counsel for the Days corresponded with R & S, indicating the pending purchase of Lot 31 by Auto Auctions and the Days' intent to close the lagoon based upon alleged concerns of the Nebraska Department of Environmental Quality (DEQ). The sale of Lot 31 to Auto Auctions took place in November 2001. A condition of the purchase agreement between the Days and Auto Auctions was that the Days were to relocate the lagoon and remove the easement from Lot 31 at the Days' expense. Although the Days did not remove the old lagoon or the easement, Auto Auctions proceeded with the purchase of Lot 31.

The south cell of the old lagoon was filled in with dirt in approximately March 2002. In April, a sewerline was installed running from the old lagoon to the new lagoon. During its construction, the new line was plugged and the sewage from Lot 32 continued to flow into the north cell of the old lagoon. Later in 2002, the plug was removed from the new sewerline, at which time the sanitary waste from Lot 32 began flowing to the new lagoon. The construction of the new lagoon and sewerline was completed at the expense of Auto Auctions. The new lagoon is located approximately 900 to 1,000 feet from the nearest corner of Lot 32.

R & S filed the present action against Auto Auctions and Durst on June 6, 2002. R & S alleged that the defendants, knowing that R & S had an easement expressly granted by deed, had interfered with R & S' use of such easement by filling part of the old sanitary sewage lagoon with dirt, reducing the capacity of the lagoon, and hindering R & S from full enjoyment of the lagoon as originally constructed. R & S sought an order declaring its rights as owner of the dominant estate to an easement for use of, access to, and maintenance of the lagoon which existed at the time R & S acquired title to the dominant estate and declaring Auto Auctions' land servient to R & S' estate. R & S also sought an order requiring the defendants to restore the lagoon to its condition prior to the time the defendants began filling the lagoon with dirt. Additionally, R & S sought an order enjoining the defendants from interfering with R & S' enjoyment of the easement for access to and use and maintenance of the old lagoon. R & S also asked for reimbursement of costs and such other relief as the court deemed just.

At some point prior to trial, the Days were named as third-party defendants in the case. The matter was bifurcated, and trial was held before the district court on December 9 and 10, 2003, with respect to the petition filed by R & S.

Evidence was presented at trial concerning the use and maintenance of the old lagoon and the construction and capacity of the new lagoon. Evidence was also presented concerning a meeting between Durst, the president of Auto Auctions, and a partner in R & S to discuss the old lagoon. The record shows that Durst proposed the construction of a new lagoon on Lot 31 for the disposal of waste from both Lots 31 and 32. The evidence is conflicting as to whether the partner in R & S "voiced no opposition or objection to this plan." There is nothing in the record to suggest that the disposal of waste from Lot 32 was interrupted in any way by the construction of the new lagoon or that, as of the time of trial, the new lagoon had proved in any way to be inadequate for the disposal of waste from either lot.

The district court heard testimony from Jeremy Williams, an employee of Design Associates, the firm employed by Auto Auctions to design and construct the new lagoon. Williams testified that typically a lagoon is designed for a maximum "life" of 20 years, after which time liquid would need to be pumped from the lagoon and the sludge disposed of before continued use. Williams testified that considerations in designing the new lagoon included the flow rate of water coming into the lagoon from the contributing source or sources, as well as rates of precipitation, seepage of water from the bottom of the lagoon, and evaporation. Williams testified that there are restrictions on the allowable rate of seepage because of the danger of ground water contamination. Williams testified that one-eighth of an inch per day is the "maximum speed" allowed at which wastewater can leave a lagoon.

Williams testified that in the original calculations by Design Associates, a zero seepage rate was used because Design Associates did not receive clarification from the DEQ as to the particular seepage rate that the DEQ would require on the project. The original calculation also contemplated a waterflow rate into the new lagoon of 825 gallons per day and considered that the new lagoon would be used only by Auto Auctions. The rate of 825 gallons per day was derived from water bills for the previous business facility located on Lot 31, using an average rate over approximately 6 months. The calculations also contemplated that the new facility on Lot 31 would double its business in the first 5 years and maintain that level of business for the remaining 15 years of the life of the new lagoon. The calculations resulted in a design calling for a new lagoon of over 26,000 square feet.

Williams testified that plans were resubmitted for the new lagoon in order to accommodate input of wastewater from both Lots 31 and 32. The new calculations assumed a seepage rate of one-sixteenth of an inch per day, halfway between the "two extremes that are allowed." Design Associates contemplated waterflow from...