Riverwood Commercial Park Llc v. Standard Oil Co. Inc.

• Decision Date: 20 May 2011
• Docket Number: No. 20100268.,20100268.
• Citation: 797 N.W.2d 770,2011 ND 95
• Parties: RIVERWOOD COMMERCIAL PARK, LLC, and Tom S. Freidt, Plaintiffs and Appellantsv.STANDARD OIL COMPANY, INC., a/k/a BP, Tesoro Refining and Marketing Company, BNSF Railway Company, and Marmot Properties, LLC, DefendantsTesoro Refining and Marketing Company, Appellee.
• Court: North Dakota Supreme Court

797 N.W.2d 770

2011 ND 95

RIVERWOOD COMMERCIAL PARK, LLC, and Tom S. Freidt, Plaintiffs and Appellants

v.STANDARD OIL COMPANY, INC., a/k/a BP, Tesoro Refining and Marketing Company, BNSF Railway Company, and Marmot Properties, LLC, DefendantsTesoro Refining and Marketing Company, Appellee.

No. 20100268.

Supreme Court of North Dakota.

May 20, 2011.

Chad Christopher Nodland, Bismarck, N.D., for plaintiffs and appellants.Michael J. Geiermann, Bismarck, N.D., for appellee.VANDE WALLE, Chief Justice.

[¶ 1] Riverwood Commercial Park, LLC, and Tom S. Freidt (collectively “Riverwood”) appealed from a summary judgment dismissing Riverwood's action against Standard Oil Company, Inc. (“Standard”) and Tesoro Refining and Marketing Company (“Tesoro”). We conclude the district court did not err in granting summary-judgment dismissal of Riverwood's claims because the court correctly ruled as a matter of law that Standard had been granted an easement rather than a license to operate a sewer pipeline in Morton County. We affirm.

I

[¶ 2] The historical background of this case is described in Riverwood Commercial Park, LLC v. Standard Oil Co., Inc., 2005 ND 118 ¶¶ 2–3, 698 N.W.2d 478 (“ Riverwood I ”):

In 1953, Standard owned an oil refinery in Mandan, and the Northern Pacific Railway Company (“NP”) owned land between the refinery and the Heart River. On March 23, 1953, NP executed a written permit granting Standard permission to “construct, operate, and maintain” a sewer pipeline along NP's right-of-way from the refinery to the Heart River. The permit provided that Standard could not transfer or assign the permit without NP's written consent. A twenty-two inch underground sewer pipeline, including a large manhole, was constructed across NP's property from the refinery several miles south to the Heart River.

In 1998, NP [through its successor in interest, Burlington Northern and Santa Fe Railway Company (“BNSF”) ] sold a portion of its property containing the sewer pipeline to Marmot Properties. Since 1953, Standard has gone through a series of name changes and eventually became British Petroleum (“BP”). In 2001, BP sold the Mandan refinery to Tesoro. On May 17, 2004, Tesoro filed a “Notice of Permit,” with a copy of the 1953 permit attached, with the Morton County Recorder's Office. On June 15, 2004, Marmot Properties sold the property involved in this case, with the sewer pipeline running beneath it, to Riverwood.

[¶ 3] Disputes soon arose between Riverwood and Tesoro over Riverwood's planned development of the property. In Riverwood I, we affirmed the district court's dismissal of Riverwood's summary eviction action against Standard and Tesoro in part because the 1953 written permit did not constitute a lease to support an eviction action under N.D.C.C. § 33–06–01(4), (7), and (8). 2005 ND 118, ¶¶ 11–13, 698 N.W.2d 478. Riverwood then brought this action against Standard and Tesoro alleging trespass, breach of contract, slander of title, right to quiet title, interference with prospective advantage, fraud, and nuisance. In Riverwood Commercial Park, L.L.C. v. Standard Oil Co., Inc., 2007 ND 36, ¶ 1, 729 N.W.2d 101 (“ Riverwood II ”), we reversed the district court's dismissal of this action, concluding that the claims for slander of title, right to quiet title, interference with prospective advantage, fraud and nuisance were not barred by res judicata, collateral estoppel, or the law of the case doctrine. We also held the court erred in dismissing with prejudice Riverwood's claims for trespass and breach of contract for failure to join indispensable parties. Id.

[¶ 4] On remand, the district court granted Tesoro and the other defendants' motions for summary judgment and again dismissed Riverwood's action with prejudice. The court concluded none of Riverwood's theories of recovery could be maintained because, as a matter of law, the 1953 permit created an easement rather than a license.

II

[¶ 5] Riverwood argues the district court erred in ruling as a matter of law that the 1953 permit constituted an easement rather than a license.

[¶ 6] Our standard of review for summary judgment is well established:

“Summary judgment is a procedural device for the prompt resolution of a controversy on the merits without a trial if there are no genuine issues of material fact or inferences that can reasonably be drawn from undisputed facts, or if the only issues to be resolved are questions of law. A party moving for summary judgment has the burden of showing there are no genuine issues of material fact and the moving party is entitled to judgment as a matter of law. In determining whether summary judgment was appropriately granted, we must view the evidence in the light most favorable to the party opposing the motion, and that party will be given the benefit of all favorable inferences which can reasonably be drawn from the record. On appeal, this Court decides whether the information available to the district court precluded the existence of a genuine issue of material fact and entitled the moving party to judgment as a matter of law. Whether the district court properly granted summary judgment is a question of law which we review de novo on the entire record.”

Missouri Breaks, LLC v. Burns, 2010 ND 221, ¶ 8, 791 N.W.2d 33 (quoting Lucas v. Riverside Park Condominiums Unit Owners Ass'n, 2009 ND 217, ¶ 16, 776 N.W.2d 801). Summary judgment is appropriate if reasonable minds could reach only one conclusion on the evidence submitted. Ackre v. Chapman & Chapman, P.C., 2010 ND 167, ¶ 6, 788 N.W.2d 344.

[¶ 7] Grants of interests in real property are “interpreted in like manner with contracts in general ...” N.D.C.C. § 47–09–11; Valley Honey Co., LLC v. Graves, 2003 ND 125, ¶ 12, 666 N.W.2d 453; Schulz v. Hauck, 312 N.W.2d 360, 363 (N.D.1981); see also Mougey Farms v. Kaspari, 1998 ND 118, ¶¶ 18–20, 579 N.W.2d 583. In Kuperus v. Willson, 2006 ND 12, ¶ 11, 709 N.W.2d 726, we explained:

Contracts are construed to give effect to the mutual intention of the parties at the time of contracting. The parties' intention must be ascertained from the writing alone if possible. A contract must be construed as a whole to give effect to each provision, if reasonably practicable. We construe contracts to be definite and capable of being carried into effect, unless doing so violates the intention of the parties. Unless used by the parties in a technical sense, words in a contract are construed in their ordinary and popular sense, rather than according to their strict legal meaning.

If a written contract is unambiguous, extrinsic evidence is not admissible to contradict the written language. However, if a written contract is ambiguous, extrinsic evidence may be considered to show the parties' intent. Whether or not a contract is ambiguous is a question of law. An ambiguity exists when rational arguments can be made in support of contrary positions as to the meaning of the language in question.

(quoting Lire, Inc. v. Bob's Pizza Inn Rests., Inc., 541 N.W.2d 432, 433–34 (N.D.1995) (citations omitted)).

[¶ 8] We briefly described the difference between an easement and a license in Riverwood I, 2005 ND 118, ¶ 10, 698 N.W.2d 478:

A license ... merely grants permission to use the land for a specific purpose under certain conditions and restrictions. See Lee

[ v. North Dakota Park Serv., 262 N.W.2d 467, 473 (N.D.1977) ]

; see also Hector v. Metro Centers, Inc., 498 N.W.2d 113, 117 (N.D.1993) (a license is merely a privilege to do what otherwise would be unlawful). An easement is an interest in land “consisting in the right to use or control the land, or an area above or below it, for a specific limited purpose (such as to cross it for access to a public road).” Black's Law Dictionary 548 (8th ed.2004); see also 4 Powell on Real Property § 34.01[1] (2005) (an easement “may grant to A the right to do acts that, were it not for the easement, he would not be privileged to do, such as maintaining a driveway or a sewage pipe across B's land”).

[¶ 9] A license differs from an easement “in one crucial particular, namely, that its duration is at the will of the servient owner.” 4 Richard R. Powell, Powell on Real Property § 34.25, at 34–222 (2010); see also Hector, 498 N.W.2d at 117 (license “ ‘is generally revocable at will without notice’ ”) (internal citation omitted). Lee, 262 N.W.2d at 471 (“ ‘a license is, ordinarily, revocable at the will of the licensor’ ”) (internal citation omitted). “Occasionally, but not often, an easement may be created subject to a power of termination, exercisable upon a breach of some stipulated condition. Where a breach occurs and the power of termination is exercised, the easement ends in accordance with the terms of its creation.” 4 Richard R. Powell, Powell on Real Property § 34.19, at 34–180 (2010) (footnote omitted). Comment h to Restatement (Third) of Property § 2.2 (2000), which addresses “Intent to Create a Servitude,” explains:

h. Was a servitude or license intended? The principal difference between a servitude and a license is that a license is revocable at will. An easement or profit, by contrast, is normally irrevocable. Easements and profits can be revoked only if the right to revoke is expressly reserved and properly exercised. Several factors may be important in determining whether a license or a servitude was intended.

Payment of consideration and use of formality appropriate to a land transaction usually indicate that the parties intended a servitude. Lack of formality or words of conveyance, and lack of consideration, tend to indicate that a license was intended. The existence of a close personal relationship between the parties may buttress the conclusion that a license was intended.

....

If an investment by the grantee is contemplated by the parties, at the time the permission to use the grantor's land is sought, the extent to which the value of that investment is related to the permission to use the...