Schwend v. Schwend

Decision Date19 August 1999
Docket NumberNo. 98-729.,98-729.
Citation1999 MT 194,983 P.2d 988
PartiesMarvin G. SCHWEND, Plaintiff and Appellant, v. Albert SCHWEND, et al., Defendants and Respondents. Charles Schwend, Plaintiff and Appellant, v. Albert Schwend, et al., Defendants and Respondents.
CourtMontana Supreme Court

Edward A. Murphy, Datsopoulos, MacDonald & Lind, P.C.; Missoula, Montana, For Appellants.

Robert C. Smith, Cavan & Smith; Billings, Montana, Joseph V. Womack, Waller & Womack; Billings, Montana, For Respondents.

Justice TERRY N. TRIEWEILER delivered the opinion of the Court.

¶ 1 Plaintiffs Marvin and Charles Schwend filed separate actions in the Thirteenth Judicial District Court for Carbon County, in which they sought the dissolution of a family ranching partnership and the distribution of its assets. The actions were consolidated, and the parties executed a property settlement agreement, which provided for the distribution of the partnership assets. Marvin and Charles then filed separate motions to enforce the terms of the agreement related to the ownership of certain irrigation pipe and the division of certain ranch property. They now appeal the District Court's order in favor of the defendants, Albert, Dan, and Les Schwend. We affirm the judgment of the District Court.

¶ 2 The issues on appeal are:

¶ 3 1. Did the District Court err when it concluded that the movable irrigation pipe removed from the Jones property was personal property or equipment allocated to Dan and Les Schwend by the terms of the settlement agreement? ¶ 4 2. Did the District Court err when it adopted a subdivision survey which allocated 2.086 acres of real property to Les Schwend?

FACTUAL BACKGROUND

¶ 5 Marvin and Charles Schwend filed separate actions for the dissolution of the Albert Schwend and Sons partnership, a family ranch with assets consisting of real property and ranch equipment located in Carbon County. The parties reached a settlement of those claims in December 1997.

¶ 6 The Settlement Agreement and Mutual Release, dated December 24, 1997, distributed the ranch assets among Marvin, Charles, Dan, and Les Schwend (Albert Schwend died prior to the execution of the settlement agreement). For purposes of this appeal it is sufficient to note that the agreement transferred several of the ranch's real property parcels, including the "Jones Place," to Marvin and Charles. Les occupied a house and curtilage ("Tract 1") on the Jones Place, which was therefore to be subdivided from the agricultural land. The remainder of the ranch properties and equipment went to Dan and Les. The specific provisions of the property settlement agreement relevant to this appeal provide:

2. The real property generally described in Exhibit A and all equipment and machinery and all brands of the Albert Schwend and Sons Partnership are the subject of these proceedings, and shall, subject to the terms of this agreement, be divided between the parties as follows:
(a) To Marvin and Charles as tenants in common: ... all of Tract A—the Jones Place, less the land given to Les and Dan described in 2b) below....
b) To Les and Dan or those taking by, through or under them: Les's home place being approximately 2 acres, more or less, located in the Northwest corner of Tract A—Jones Place (with the boundary of said property defined by the existing hedge plus 10 feet) ... and all machinery and equipment, the brands, and all other assets of the Albert Schwend and Sons Partnership....

¶ 7 The irrigation system at issue consisted of an underground main line to which segments of plastic and aluminum irrigation pipe could be attached at various points. The above ground segments could be picked up and moved by one man. After the execution of the agreement, Marvin marked the pipe, which was stacked for the winter on the Jones property, with paint. Dan and Les later removed that pipe from the Jones Place. They did not disturb any of the underground portion of the irrigation system.

¶ 8 Les also established boundaries for Tract 1, which was to be subdivided from the remainder of the Jones Place for his home. The boundary lines for the property were 10 feet beyond the hedges which framed Tract 1 on three sides, but extended approximately 150 feet beyond the terminus of the hedges on the fourth side of the property. Les testified that the area included in the survey was necessary for a drain field for the property. He further testified that he was required by the county to maintain a drain field of a minimum size, and that he had Tract 1 resurveyed three times in order to arrive at the closest possible acreage which would both accommodate the required drain field and satisfy the property settlement agreement.

¶ 9 Marvin and Charles brought motions before the District Court in which they requested that the District Court order the return of the irrigation pipe and that it order that the border of Tract 1 on the side of the property where there was no hedge, be drawn between two points extending 10 feet beyond the terminus of the hedges. The District Court denied the motions and this appeal followed.

ISSUE 1

¶ 10 Did the District Court err when it concluded that the movable irrigation pipe removed from the Jones property was personal property or equipment allocated to Dan and Les Schwend by the terms of the settlement agreement?

¶ 11 Marvin and Charles contend that the District Court erred when it concluded that the irrigation pipe was not a fixture, pursuant to § 70-15-103, MCA. We review a district court's conclusion of law for correctness. See Carbon County v. Union Reserve Coal Co. (1995), 271 Mont. 459, 469, 898 P.2d 680, 686.

¶ 12 Marvin and Charles contend that because the irrigation pipe removed by Dan and Les was affixed to the Jones Place, it was distributed to them as part of the real property by the property settlement agreement, rather than distributed to Dan and Les, as the ranch equipment.

¶ 13 Real Property includes: "(1) land; (2) that which is affixed to land; (3) that which is incidental or appurtenant to land; (4) that which is immovable by law." Section 70-15-101, MCA (emphasis added).

¶ 14 Personal property and equipment may become a fixture, permanently attached to the real property, pursuant to § 70-15-103, MCA, which provides:

A thing is deemed to be affixed to land when it is:
(1) attached to it by roots, as in the case of trees, vines, or shrubs;
(2) imbedded in it, as in the case of walls;
(3) permanently resting upon it, as in the case of buildings; or
(4) permanently attached to what is thus permanent as by means of cement, plaster, nails, bolts, or screws.

¶ 15 To determine whether an object has become a fixture or not, we consider the following factors: "(1) annexation to the realty, (2) an adaptation to the use to which the realty is devoted and (3) intent that the object become a permanent accession to the land. Of those three, the intent of the parties has the most weight and is the controlling factor." Pacific Metal Co. v. Northwestern Bank of Helena (1983), 205 Mont. 323, 329, 667 P.2d 958, 961 (emphasis added) (citing Grinde v. Tindall (1977), 172 Mont. 199, 201-02, 562 P.2d 818, 820).

¶ 16 This Court has never addressed the specific question of whether an irrigation system is a fixture. However, there are several other jurisdictions which have done so, and from our analysis of those cases it is clear that other jurisdictions continue to apply the annexation, adaptation, and intent factors of the fixtures test, with special emphasis on the intent of the person who originally brought the personalty to the property, to the specific facts of each case.

¶ 17 The Supreme Court of Wyoming addressed a question similar to the issue in this case, in Wyoming State Farm Loan Board v. Farm Credit System Capital Corp. (Wyo. 1988), 759 P.2d 1230.

¶ 18 The Wyoming Court first examined whether real or constructive annexation of the pipe to the land occurred. It concluded that because the pipe was attached to the riser pipes only intermittently during the irrigation season and stored away from the field when not in use, it had never undergone a real annexation. It further concluded that the irrigation pipe was not constructively annexed to the land because it was not a necessary and integral part of the land, nor was it of little or no value if separated from the land. The majority concluded that the adaptation factor was the weakest part of the fixture test, because almost anything that is used on the property could be considered a fixture by virtue of its "necessity" for continuing to put the land to that use. Finally, the Court concluded that there was no evidence that the appellants intended to make the pipe a fixture, but that there was some evidence that they thought of the pipe as equipment because it was listed in security agreements as after acquired machinery and equipment. See Wyoming State Farm Loan Bd., 759 P.2d at 1235-36.

¶ 19 In Western Ag. Land Partners v. Washington Department of Revenue (1986), 43 Wash.App. 167, 716 P.2d 310, the Washington Court of Appeals considered whether a center pivot irrigation system was a fixture which passed on sale of the land without assessment of a sales tax, or "personal property" subject to sales tax. The irrigation system at issue consisted of an underground pipe which conveyed water to a riser pipe, bolted onto concrete slabs, through which it rose to the main arm of the system, which extended from the slabs, resting on wheeled towers eight to ten feet in height, which circled the pivot point by electronic control. ¶ 20 The Washington Court applied the annexation, adaptation, and intent tests; however the appellant conceded that the system was adapted to the land and the Court did not discuss that factor in its decision. The Court concluded that the system was affixed to the land, by virtue of its concrete center pivot and underground water lines, as well as by...

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