Yellowstone River Llc v. Meriwether Land Fund I Llc

• Decision Date: 13 December 2011
• Docket Number: No. DA 10–0436.,DA 10–0436.
• Citation: 362 Mont. 273,2011 MT 263,264 P.3d 1065
• Parties: YELLOWSTONE RIVER, LLC, a Montana limited liability corporation, Plaintiff and Appellant,v.MERIWETHER LAND FUND I, LLC, a Delaware limited liability company, and Meriwether Land Co., LLC, a foreign limited liability company, Defendants and Appellees.
• Court: Montana Supreme Court

362 Mont. 273

264 P.3d 1065

2011 MT 263

YELLOWSTONE RIVER, LLC, a Montana limited liability corporation, Plaintiff and Appellant,

v.MERIWETHER LAND FUND I, LLC, a Delaware limited liability company, and Meriwether Land Co., LLC, a foreign limited liability company, Defendants and Appellees.

No. DA 10–0436.

Supreme Court of Montana.

Submitted on Briefs April 6, 2011.Decided Oct. 25, 2011.Rehearing Denied Dec. 13, 2011.

For Appellant: J. Robert Planalp, Landoe, Brown, Planalp & Reida, PC, Bozeman, Montana, Robert L. Jovick, Attorney at Law, Livingston, Montana.For Appellees: David M. Wagner, Crowley Fleck, PLLP, Bozeman, Montana.Justice JAMES C. NELSON delivered the Opinion of the Court.

¶ 1 Yellowstone River, LLC (hereinafter “YR”) commenced this action against Meriwether Land Fund I, LLC, and Meriwether Land Co., LLC (collectively “Meriwether”) in the Sixth Judicial District Court, Sweet Grass County. YR sought a determination that it has an easement to access its property over Meriwether's adjacent property. YR raised multiple theories in support of its alleged easement; however, through summary judgment proceedings, the issue was narrowed to the sole question whether YR has an easement by necessity. Ultimately, the District Court ruled that an easement by necessity does not exist over Meriwether's property for the benefit of YR's property. YR now appeals.

¶ 2 The sole issue on appeal is whether the District Court erred in granting summary judgment to Meriwether on YR's claim of easement by necessity. We agree with YR that the District Court erred in part of its analysis. We conclude, however, that the District Court nevertheless reached the correct result, and we accordingly affirm.

BACKGROUND

The Properties and the Alleged Easement

¶ 3 The properties at issue are located east of Big Timber, Montana, in Township 1 North, Range 15 East, Montana Principal Meridian. YR owns essentially the western half of Section 22. YR's property is bounded on the west by the Yellowstone River and on the north, east, and south by property owned by Meriwether. Specifically, Meriwether owns Section 15, the east side of Section 22, and the portion of Section 27 north and east of the Yellowstone River. Meriwether's holdings also include Sections 13, 14, and 23, and portions of Sections 10, 11, and 26. Howie Road is a public road that runs east-west along the north lines of Sections 10, 11, and 12. Spannering Road runs south from Howie Road along the boundary between Sections 10 and 11. Spannering Road is a public road for the first half mile south from Howie Road. The layout of these properties and roads is shown below on Diagram I.¹ Meriwether's property is the area enclosed by the semibold line. YR's property is represented by the crosshatching in Section 22.

DIAGRAM I

Image 1 (4.94" X 5.13") Available for Offline Print ¶ 4 Sections 26 and 27 contain steep, cliff-like terrain. Thus, YR claims an easement from the north. As noted, Spannering Road is a public road from Howie Road south to the quarter corner of Sections 10 and 11. The dirt-and-gravel road then continues in a southerly direction, generally following the boundary lines between Sections 10 and 11 and Sections 14 and 15. The road turns southwesterly into Section 15's southeast quarter and then, upon reaching some old ranch buildings, veers southeasterly and continues into Section 23. YR contends that its easement, shown below on Diagram II, follows this road to the old ranch buildings and then proceeds southwesterly to a point where it crosses the north boundary of YR's Section 22 property.

DIAGRAM II

Image 2 (4.83" X 4.66") Available for Offline Print

Land Grants to the Railroads

¶ 5 The basis of YR's easement claim requires an understanding of the land grants by Congress to railroad companies in the nineteenth century. The Supreme Court discussed the history of these grants in detail in Leo Sheep Co. v. U.S., 440 U.S. 668, 99 S.Ct. 1403, 59 L.Ed.2d 677 (1979). In summary, the federal government desired in the mid–1800s to settle the American West, a desire that was intensified by the need to provide a logistical link with California in the heat of the Civil War. To that end, there was a push to construct a transcontinental railroad. The venture was too risky and too expensive for private capital alone, however, and private investors would not move without tangible governmental inducement. Yet, there was serious disagreement as to the forms that inducement could take. One extant school of thought argued that “internal improvements,” such as railroads, were not within the enumerated constitutional powers of Congress and that the direct subsidy of a transcontinental railroad was constitutionally suspect. The response to this constitutional “gray” area, and source of political controversy, was the “checkerboard” land-grant scheme. Leo Sheep, 440 U.S. at 670–72, 99 S.Ct. at 1405–06.

¶ 6 At this point, a short diversion is necessary. Pursuant to acts of Congress passed in the late 1700s and early 1800s, the public lands of the United States north of the Ohio River and west of the Mississippi River (except Texas) were surveyed into rectangular tracts called “townships.” Joyce Palomar, Patton and Palomar on Land Titles vol. 1, § 116, 291, 294 (3d ed., West 2003); see also Walter G. Robillard & Donald A. Wilson, Brown's Boundary Control and Legal Principles 125–66 (6th ed., John Wiley & Sons 2009) (discussing the development of the Public Land Survey System); Curtis M. Brown, Walter G. Robillard, & Donald A. Wilson, Evidence and Procedures for Boundary Location 179–200 (2d ed., John Wiley & Sons 1981) (same). With some exceptions not applicable here, each township is six miles square. A particular township's location is identified relative to an east-west base line and a north-south principal meridian. See Palomar, Patton and Palomar on Land Titles at 294–95. In some states, there is more than one base line or principal meridian. In Montana, however, there is just one of each, as shown below on Diagram III.² The Montana Principal Meridian was adopted in 1867. It and Montana's base line intersect in Gallatin County, near Willow Creek, Montana.

DIAGRAM III

Image 3 (4.53" X 3.01") Available for Offline Print

As noted, YR's and Meriwether's properties are located in Township 1 North, Range 15 East, Montana Principal Meridian—meaning they are in the first east-west strip of townships lying north of the base line, and in the fifteenth north-south strip of townships lying east of the Montana Principal Meridian (each “strip” being six miles wide).

¶ 7 Townships are subdivided into 36 tracts called “sections.” In theory, each section is one mile square and contains 640 acres.³ The sections are numbered consecutively, commencing with section 1 at the northeast corner and proceeding west to section 6; thence in the next tier proceeding east from section 7 to section 12; and so on, back and forth, until section 36 is reached in the southeast corner. Palomar, Patton and Palomar on Land Titles at 296. A subdivided and numbered township is shown in Diagram IV.⁴

DIAGRAM IV

Image 4 (3.7" X 3.35") Available for Offline Print Of significance to the present discussion, it should be noted that even-numbered sections are bounded on four sides by odd-numbered sections, and vice versa. For example, section 22 is bounded by sections 15, 21, 23, and 27. This resulted in the “checkerboard” land-grant scheme referred to above and described below.

¶ 8 The backdrop of the Leo Sheep case was the Act of July 1, 1862, 12 Stat. 489, which granted public lands to the Union Pacific Railroad for each mile of track that it laid. Land surrounding the railway right-of-way was divided into “checkerboard” blocks. Odd-numbered sections were granted to Union Pacific, and even-numbered sections were reserved by the federal government, thus resulting in a checkerboard of public and private lots. Hence, Union Pacific land in the area of the right-of-way was usually surrounded by public land, and vice versa. The price of the government's reserved sections was doubled so that it could be argued, in order to disarm the “internal improvement” opponents, that by giving half the land away and thereby making possible construction of the railroad, the government would recover from the reserved sections as much as it would have received from the whole. Leo Sheep, 440 U.S. at 672–73, 99 S.Ct. at 1406.

¶ 9 The land grants made by the Union Pacific Act included the odd-numbered sections within 10 miles on either side of the track. But when Union Pacific's original subscription drive for private investment proved a failure, the land grant was doubled by extending the checkerboard grants to 20 miles on either side of the track. See 13 Stat. 356, 358 (1864). The Union Pacific Act specified a route west from the 100th meridian (in central Nebraska) to California. Construction commenced in July 1865, and thus began a race with the Central Pacific Railroad, which was laying track eastward from Sacramento, for the federal land grants which went with each mile of track laid. The race culminated in the driving of the golden spike at Promontory, Utah, on May 10, 1869. Leo Sheep, 440 U.S. at 676–77, 99 S.Ct. at 1408–09. Notably, the policy of subsidizing railroad construction by lavish grants from the public domain incurred great public disfavor, Great N. Ry. Co. v. U.S., 315 U.S. 262, 273, 62 S.Ct. 529, 533, 86 L.Ed. 836 (1942), and in 1872, the House of Representatives enacted a resolution condemning the policy, Leo Sheep, 440 U.S. at 677 n. 13, 99 S.Ct. at 1408 n. 13.

¶ 10 The backdrop of the present case is the Act of July 2, 1864, 13 Stat. 365, which created the Northern Pacific Railroad Company.⁵ The Northern Pacific Act granted the company the right-of-way through the public lands for the construction of a railroad and telegraph line, contemplated to be about 2,000 miles in length, from Lake Superior to Puget Sound. The...