Wheeldon v. ELK Feed Grounds House, LLC

• Decision Date: 28 May 2021
• Docket Number: S-20-0200
• Citation: 488 P.3d 916
• Court: Wyoming Supreme Court
• Parties: Chancy and Kim WHEELDON, Appellants (Plaintiffs), v. ELK FEED GROUNDS HOUSE, LLC, a Wyoming limited liability company, Appellee (Defendant).

488 P.3d 916

Chancy and Kim WHEELDON, Appellants (Plaintiffs),

v.ELK FEED GROUNDS HOUSE, LLC, a Wyoming limited liability company, Appellee (Defendant).

S-20-0200

Supreme Court of Wyoming.

May 28, 2021

Representing Appellant: James R. Salisbury of The Salisbury Firm, P.C., Cheyenne, Wyoming.

Representing Appellee: Mark D. Sullivan of Mark D. Sullivan, P.C., Wilson, Wyoming.

Before DAVIS, C.J., and FOX, KAUTZ, BOOMGAARDEN, and GRAY, JJ.

BOOMGAARDEN, Justice.

[¶1] Spouses Chancy and Kim Wheeldon (the Wheeldons) sued their neighbor Elk Feed Grounds House, LLC (Elk Feed) for quiet title and a declaratory judgment that they have an implied easement across Elk Feed's property for commercial recreational activities. After a bench trial, the district court decided the Wheeldons failed to establish the alleged easement is necessary and beneficial to the enjoyment of their property—an element required to establish an implied easement. The Wheeldons appeal on two grounds. First, they claim the court applied the incorrect standard to determine necessity. Second, they contend the court erroneously found Elk Feed was a bona fide purchaser entitled to statutory and common law protections. We affirm.

ISSUES

[¶2] We restate the issues as:

I. Whether the district court applied the correct "necessity" standard to establish an implied easement.

II. Whether the district court found Elk Feed was a bona fide purchaser entitled to statutory and common law protections, and whether the court's bona fide purchaser references were pertinent to the "necessity" analysis.

FACTS

[¶3] The Wheeldons own and operate the "Mill Iron Ranch" near Horse Creek Road in Jackson, Wyoming. The ranch has been in operation as a family-run business for many decades. It offers various recreational activities to visitors throughout the year. Pertinent to this appeal, those activities include horseback trail rides in summer and sleigh rides in winter.

[¶4] Several property transactions are central to this appeal. In May 2007, the Wheeldons divided approximately 80 acres they owned into five separate tracts, creating the Wheeldon Family Subdivision. They retained ownership of Tract 5 (60 acres) for the ranch. They gifted the adjacent tract, Tract 2 (5 acres), to their son Coby Wheeldon on May 10. In September 2008, Coby conveyed Tract 2 to himself and his then-wife so they could obtain financing to build a home on the property. Each conveyance reflected the property was unencumbered except for encumbrances of record. No deed or other instrument for any of these conveyances reserved an express easement for trail or sleigh rides. There is no dispute the Wheeldons used Tract 2 for each type of ride before and after giving Coby Tract 2.¹

[¶5] In 2014, the Wheeldons sold the northern 40 acres of Tract 5 to the Wyoming Game & Fish Commission. Around the same time, they conveyed an easement to Game & Fish so its employees could use Horse Creek Road to drive through Mill Iron Ranch to access the elk feeding grounds.

[¶6] When Coby and his wife divorced around 2014, the court ordered them to sell Tract 2. They sold the property to Elk Feed in June 2017. Elk Feed's sole member, John Boerschig, knew the Wheeldons claimed they had an implied easement across Tract 2, but he purchased the property believing their claim had no merit. After purchasing the property, Elk Feed installed a fence that blocked access to the trails.

[¶7] The Wheeldons filed their complaint for quiet title and declaratory judgment in August 2017. They sought rights to a 60 foot wide implied easement across Tract 2 for "commercial and/or recreational uses that all originate on and are headquartered within Tract 5, including, but not limited to, their wagon rides, sleigh rides, horseback rides, and outfitting business; with the exact location of such [t]rails easement to be established by a survey." They alleged their trail use has been apparent, obvious, and continuous, and that an easement over Tract 2 is necessary and beneficial to the ranch.

[¶8] It took approximately two and a half years for the case to make its way to trial. During that time, the court granted the Wheeldons a preliminary injunction, allowing them to use the trails pending trial. The parties engaged in settlement negotiations and completed discovery. The court denied the Wheeldons’ motion for summary judgment.

[¶9] The court held a fact-intensive three-day bench trial in February 2020. It heard testimony from both parties, several expert witnesses, and third-party witnesses. It admitted dozens of exhibits.

[¶10] In its order, the court found the claimed easement impacted only two of the ranch's business activities: the four-hour horse trail rides and the sleigh rides.² It included the following "rough diagram" of the claimed easement across Tract 2 for illustrative purposes:³

The court then decided the Wheeldons failed to carry their burden to prove the claimed easement is necessary and beneficial to the enjoyment of Tract 5. Accordingly, they did not have an implied easement over Elk Feed's property. This appeal followed.

STANDARD OF REVIEW

[¶11] "After a bench trial, we review the district court's factual findings for clear error and its conclusions of law de novo." Fuger v. Wagoner , 2020 WY 154, ¶ 8, 478 P.3d 176, 181 (Wyo. 2020) (citing Mattheis Co. v. Town of Jackson , 2019 WY 78, ¶ 18, 444 P.3d 1268, 1275 (Wyo. 2019) ). The only "factual findings" the Wheeldons challenge are the district court's references to Elk Feed's bona fide purchaser status. "We review the question of whether the district court applied the proper legal standard de novo. " CBM Geosolutions, Inc. v. Gas Sensing Tech. Corp. , 2009 WY 113, ¶ 6, 215 P.3d 1054, 1057 (Wyo. 2009) (citing Hopper v. All Pet Animal Clinic, Inc. , 861 P.2d 531, 538 (Wyo. 1993) ); see also Hansuld v. Lariat Diesel Corp. , 2015 WY 12, ¶¶ 12–15, 341 P.3d 428, 432–33 (Wyo. 2015) ( Hansuld III ).

DISCUSSION

I. The district court applied the correct necessity standard.

[¶12] The Wheeldons had to prove three elements to establish an implied easement:

(1) common ownership followed by a conveyance separating the unified ownership; (2) before severance, the common owner used part of the property for the benefit of the other part, a use that was apparent, obvious, and continuous; and (3) the claimed easement is necessary and beneficial to the enjoyment of the parcel previously benefitted.

O'Hare v. Hulme , 2020 WY 31, ¶ 30, 458 P.3d 1225, 1237 (Wyo. 2020) (quoting Hansuld v. Lariat Diesel Corp. , 2010 WY 160, ¶ 10, 245 P.3d 293, 298 (Wyo. 2010) ( Hansuld II )). Only the third element, "necessity," is in dispute here. The Wheeldons argue the district court required them to establish strict necessity rather than reasonable necessity.

[¶13] More specifically, the Wheeldons assert the court blurred the line between easements by necessity (strict necessity) and implied easements (reasonable necessity) when it explained:

30. Implied Easements. Implied easements are recognized in the law, designed to create an easement where the parties to a transaction did not record an express easement.

The failure to record an easement is often due to an oversight or a lack of sophistication in the transaction. Restatement of Property § 476 cmt. a.

31. Implied easements are seen in cases for pipelines and roads, both of which are physical infrastructure serving the dominant property. In Wyoming, some of the central cases are In re Estate of Shirran , 987 P.2d 140 (Wyo. 1999), Hansuld v. Lariat Diesel Corp. (Hansuld I) , 2003 WY 165, ¶ 17, 81 P.3d 215, 219 (Wyo. 2003), and Hansuld v. Lariat Diesel Corp. (Hansuld II) , 2010 WY 160, 245 P.3d 293 (Wyo. 2010).

32. This case is unique in that body of case law. This case is not for access to the [Wheeldons’] property for necessary infrastructure like a pipeline or road. This is a claim for an entirely commercial and recreational use, that provides no access to [the Wheeldons’] property but only provides access from [the Wheeldons’] property, by guests and for a solely commercial and recreational purpose.

33. If this Court were to find that [the Wheeldons] have an implied easement for entirely commercial and recreational use across the property of a neighbor, this case would be unique in Wyoming's case law.

* * * *

42. As noted above, this is an unusual easement case. The use of [Elk Feed's] property is not necessary for the [Wheeldons] to use their property. [The Wheeldons’] property is fully accessible without the necessity of additional easements for roads, water, or other infrastructure. As the evidence showed at trial, alternative routes for the sleigh rides and trail rides are available which do not require the use [of Elk Feed's] property. Therefore, the Court will need to evaluate the proportionate expense to [the Wheeldons] and burden to [Elk Feed] of the claimed easements to determine necessity. The claimed easements are only purported to be necessary for continued commercial and recreational operations, a type of use to which the doctrine of implied easements may not be easily adapted. While the law of implied easements seems to be ill-suited to this scenario, the Court analyzes the matter as the parties presented it, applying the facts presented to the contested element of necessity.

* * * *

100. The Court again notes [ ] that implied easement law seems more suited to address physically necessary access to property such as for roads, utilities, water, and sewer. Implied easement law may not be well-suited for entirely commercial and recreational use of a neighbor's property. Recognizing an implied easement in the facts of this case, after the comparison of expenses and burdens, and after considering the Restatement factors, would appear to be an unwarranted and significant expansion of implied easement law in Wyoming.

According to the Wheeldons these paragraphs suggest the court took the position that because their property is not landlocked or deprived of utility access, the...