Waters v. Klippel Water, Inc.

• Decision Date: 13 May 2020
• Docket Number: A165995
• Parties: Scott W. WATERS; Rodney Lee Campuzano; Judy Campuzano; Andrew J. Niedzwiecke; Judith D. Niedzwiecke; Cadwell Family Trust ; and KC Development Group LLC, an Oregon limited liability company, Plaintiffs-Appellants, v. KLIPPEL WATER, INC., an Oregon domestic non-profit corporation, Defendant-Respondent.
• Court: Oregon Court of Appeals

304 Or.App. 251

464 P.3d 490

Scott W. WATERS; Rodney Lee Campuzano; Judy Campuzano; Andrew J. Niedzwiecke; Judith D. Niedzwiecke; Cadwell Family Trust ; and KC Development Group LLC, an Oregon limited liability company, Plaintiffs-Appellants,

v.KLIPPEL WATER, INC., an Oregon domestic non-profit corporation, Defendant-Respondent.

A165995

Court of Appeals of Oregon.

Argued and submitted March 28, 2019.

May 13, 2020

Sara Kobak, Portland, argued the cause for appellants. Also on the briefs was Schwabe, Williamson & Wyatt, P.C.

Megan K. Burgess argued the cause for the respondent. Also on the brief was Peterkin & Associates.

Before DeHoog, Presiding Judge, and Kamins, Judge, and Landau, Senior Judge.^*

KAMINS, J.

This dispute involves plaintiffs' access (or lack thereof) to an unfinished road on defendant's property. Plaintiffs, a group of defendant's neighbors, sought a judgment declaring that they enjoy a prescriptive or, in the alternative, implied easement to use the road, and granting an injunction preventing defendant from blocking it. The trial court dismissed the complaint for failure to state a claim and awarded partial attorney fees to defendant because it concluded that the majority of the plaintiffs' claims were objectively unreasonable. We affirm the trial court's decision that the complaint fails to allege sufficient facts to support a declaratory judgment but reverse the award of attorney fees. We further remand so that the trial court may enter a declaration stating the rights of the parties in accordance with this opinion.

Because the case is before us on a motion to dismiss under ORCP 21 A(8), "we accept as true all well-pleaded factual allegations in the complaint and make reasonable inferences from those allegations in favor of plaintiffs." Kutz v. Lee , 291 Or. App. 470, 472, 422 P.3d 362 (2018). To decide whether plaintiffs are entitled to declaratory relief, we must determine if those allegations are legally sufficient to establish the existence of a justiciable controversy. Hays v. Dept. of Corrections , 280 Or. App. 173, 174, 380 P.3d 1159 (2016). When a trial court dismisses a declaratory judgment action based on a determination of the merits of the claim, we review that determination as a matter of law. Doe v. Medford School Dist. 549C , 232 Or. App. 38, 46, 221 P.3d 787 (2009).

According to the complaint, Carl and Letha Klippel owned a large plot of land in Deschutes County that they partitioned and sold to different buyers over the course of the 1960s and 1970s. The Klippels did not sell their entire plot at that time, but rather maintained ownership over a small portion that included the unfinished roadway at the center of this dispute. In 1982, the Klippels transferred ownership of that piece of land to the defendant, Klippel Water, Inc.

Although none of them purchased the property directly from the Klippels, plaintiffs are the current owners of the properties the Klippels sold. Each of the plaintiffs—and many of the plaintiffs' predecessors—regularly used the unfinished road as the only direct connection between two larger roads, Buck Drive and Palla Lane. Buck Drive and Palla Lane essentially form a "V" that does not connect at the bottom, and plaintiffs have been using the unfinished roadway on defendant's property as a connector to those roads. Only one of the plaintiffs' properties borders defendant's property—the other plaintiffs have used the roadway as a shorter route to their properties than other available roads. In 2014, defendant erected a fence blocking plaintiffs' access to the unfinished road, spurring this lawsuit.

Plaintiffs' complaint alleged that they are entitled to an easement to the road on defendant's property, either by prescription or implication. After plaintiffs filed the operative complaint, the Oregon Supreme Court issued its decision in Wels v. Hippe , which clarified the standard applicable to prescriptive easements. 360 Or. 569, 580, 385 P.3d 1028 (2016), adh'd to as modified on recons. , 360 Or. 807, 388 P.3d 1103 (2017) (holding that, when seeking an easement in a preexisting road, the plaintiff must affirmatively establish adversity). Applying that standard, the trial court dismissed the complaint because plaintiffs had failed to allege facts that, even if true, would be sufficient to establish that they were entitled to either a prescriptive or an implied easement. The trial court also did not allow plaintiffs leave to amend their complaint and awarded partial attorney fees to defendant.

In evaluating whether the plaintiffs are entitled to an easement, we recognize that easements that do not explicitly arise from a property deed are generally disfavored. Dressler et al. v. Isaacs et al. , 217 Or. 586, 596, 343 P.2d 714 (1959) (concluding that implied easements are disfavored); Wels , 360 Or. at 578, 385 P.3d 1028 (concluding that prescriptive easements are disfavored).

We turn first to plaintiffs' contention that they obtained an easement to the roadway by prescription. A prescriptive easement arises when a plaintiff can demonstrate open, notorious, and adverse use of another's property that is continuous for a period of 10 years. Thompson v. Scott , 270 Or. 542, 546, 528 P.2d 509 (1974). Generally, open and notorious use of another's property gives rise to the presumption that the use is adverse. Wels , 360 Or. at 579, 385 P.3d 1028. However, if a plaintiff claims an easement to a road that already exists, the plaintiff's "use of the road—no matter how obvious—does not give rise to a presumption that it is adverse to the owner." Id . Rather, "it is more reasonable to assume that the use was pursuant to a friendly arrangement between neighbors *** than to assume that the user was making an adverse claim." Id . (quoting Woods v. Hart , 254 Or. 434, 436, 458 P.2d 945 (1969) (internal quotation marks omitted). Accordingly, plaintiffs bear the burden to demonstrate that their use of the preexisting road is adverse. To meet that burden, the question is whether plaintiffs' use "interfered with the owner's own use of the road , not *** the extent to which [plaintiffs'] use of the road somehow interfered with the owner's use or enjoyment of the property generally." Id. at 580, 385 P.3d 1028 (emphasis in original).

Here, there is no question that the road was preexisting—according to the complaint, Carl Klippel established the road himself. As a result, plaintiffs bear the burden of establishing adversity; that is, they must allege facts that would demonstrate that their use of the road on defendant's property interfered with defendant's use of that road. The complaint, however, fails to allege sufficient facts to support that conclusion. Plaintiffs allege that they have used the road for a number of nonintrusive activities, including driving home, visiting neighbors, running, and riding horses. Nothing about those activities suggests interference with defendant's use. Cf. Wels , 360 Or. at 581, 385 P.3d 1028 (creating noise and dust observable from landowners' home did not amount to interference with landowners' use of road). Absent any allegation establishing that plaintiffs' use interfered with defendant's, the trial court correctly concluded that the complaint failed to establish adversity.

On appeal, plaintiffs contend that they need not make that showing. Rather, according to plaintiffs, they must only allege that defendant "knew or should have known that the [plaintiffs] believed that [they] had a right to use the road." In support, plaintiffs point to language in Wels stating that one way a plaintiff can meet its burden to show that its use of a preexisting road is adverse is to prove that the plaintiff "used the road under a claim of right." 360 Or. at 580, 385 P.3d 1028. According to plaintiffs' argument, allegations reflecting the fact that defendant knew that plaintiffs and others were using the road for many years creates the inference that defendant was on notice that these plaintiffs believed they had a legal right to the road. That reflects a misunderstanding of Wels .

In Wels , the plaintiff also sought a prescriptive easement to a preexisting road on the defendant's property. Id. at 571, 385 P.3d 1028. The parties agreed that the plaintiff had been—and believed he had the right to—use the preexisting road openly for many years, but they disagreed over the import of that fact. Id. at 573-74, 385 P.3d 1028. The plaintiff argued that he had met his burden to establish adversity because of his belief that he had the right to use the road with or without defendant's permission. Id. at 574, 385 P.3d 1028. The defendant countered that the plaintiff's uncommunicated belief failed to put the defendant on notice of adversity. Id. at 575, 385 P.3d 1028. In a divided opinion, we sided with the plaintiff, concluding that the plaintiff's belief that he had the right to use the road was adequate to demonstrate adversity. Wels v. Hippe , 269 Or. App. 785, 804, 347 P.3d 788 (2015), rev'd , 360 Or. 569, 385 P.3d 1028 (2016).

The Oregon Supreme Court reversed. 360 Or. at 583, 385 P.3d 1028. The court explained that a "principal justification" for the doctrine of a prescriptive easement is that "a diligent occupant should be rewarded at the expense of a careless owner." Id. at 577, 385 P.3d 1028. Because the creation of a prescriptive easement "penalizes the property owner who sleeps on his or her rights," the Supreme Court reasoned that it is essential that the owner "must have reason to know of the adverse use of his or her property before being held responsible for failing diligently to take action to protect it." Id. Accordingly, "an uncommunicated belief in a right to use property provides no notice to the owner of such a belief. It therefore cannot satisfy the essential requirement of adverse use, that is, that it inform the owner of the servient property that the claimant is asserting a right of use hostile to the rights of that owner." Id .

That reasoning...