IN THE COURT OF APPEALS OF IOWA
No. 15-2047
Filed March 22, 2017
GENE L. FRANKLIN and CONNIE JOHNSON, EXECUTORS OF THE FAE
BLACK ESTATE; GENE L. FRANKLIN, CONNIE JOHNSON, CURTIS L.
FRANKLIN, and GREGORY S. FRANKLIN,
Plaintiffs-Appellees/Cross-Appellants,
vs.
MICHAEL JOHNSTON, ELIZABETH JOHNSTON, STEVE JOHNSTON,
KASONDRA JOHNSTON, JAMES YEAGER, and JUDITH YEAGER,
Defendants-Appellants/Cross-Appellees.
________________________________________________________________
Appeal from the Iowa District Court for Van Buren County, Lucy J. Gamon
(partial summary judgment ruling) and Randy S. DeGeest (trial), Judges.
Adjoining property owners both appeal the district court’s decision
interpreting an easement agreement entered into by the predecessors in title.
AFFIRMED IN PART, MODIFIED IN PART, AND REMANDED.
James E. Nervig of Brick Gentry, P.C., West Des Moines, and Lucas C.
Helling and Vanessa M. Y. Willman of Foss, Kuiken & Cochran, P.C., Fairfield,
for appellants/cross-appellees.
Michael C. Vance of Vance Law Office, Mt. Pleasant, for appellees/cross-
appellants.
Heard by Danilson, C.J., and Vogel and Vaitheswaran, JJ.
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VOGEL, Judge.
Michael Johnston, Elizabeth Johnston, Steve Johnston, Kasondra
Johnston, James Yeager, and Judith Yeager (the Johnstons) appeal, and Gene
Franklin and Connie Franklin, individually and as executors of the Fae Black
Estate, Curtis Franklin, Julie Pedrick, Bruce Franklin, and Gregory Franklin (the
Franklins) cross-appeal the district court’s decisions rendered in this litigation
pertaining to the interpretation of a 1962 “Easement and Agreement.” The
Johnstons and the Franklins are adjoining property owners in rural Van Buren
County. The predecessors in title to the properties entered into the easement
and agreement allowing for the construction of a dam on the Johnstons’ property
that resulted in the creation of a 14-acre lake, which spilled onto and covered a
portion of both properties. After more than fifty years of enjoyment of the lake by
both property owners, the parties are now disputing the extent of each other’s
rights to access and use the lake, along with disputing the boundary line between
the properties. The Johnstons in their appeal raise nine issues related to the
district court’s decisions; in their cross-appeal, the Franklins raise two additional
issues. For the reasons expressed herein, we affirm in part and modify in part
the district court’s decision.
I. Background Facts and Proceedings.
The Johnstons’ predecessors in title, Otto and Pauline Estle, desired to
create a lake on their rural Van Buren County property, but they knew if they
erected a dam the collected water would back up onto the neighboring property,
then owned by James and Fae Franklin. The adjoining property owners signed a
3
document entitled “Easement and Agreement” in April 1962. The document
provided the Estles were granted a “perpetual easement” by the Franklins
for the right to occasion overflow by water from the land of the
[Estles] to and on and over the lands of [James and Fae Franklin]
such as would be occasioned by the construction of a dam not to
exceed forty (40) feet in height in a ditch located on the land of the
[Estles,] which ditch traverse the property of [James and Fae
Franklin], and [the Estles] are hereby granted the perpetual right to
erect and maintain such dam and thereby occasion an overflow of
water onto and over such portion of [James and Fae Franklin’s]
land as may be occasioned by the construction of said dam not to
exceed forty feet, in height.
The agreement went on to provide:
It is stipulated and agreed by and between the parties hereto
that [James and Fae Franklin] shall have the right to pasture their
stock in the fields on to which water may rise on their property and
[James and Fae Franklin] shall have the right to fish in said waters
and to use such area as is overflowed by water for their own proper
and lawful individual purposes.
It is specifically understood and agreed by and between the
parties hereto that [James and Fae Franklin] shall have no right to
commercialize the area so overflowed by water on their own lands
nor to permit the use of said water by parties other than [James and
Fae Franklin] or their successors in ownership of said land.
It is further understood and agreed by way of explanation but
not by limitation, that commercialization is intended to mean that
[James and Fae Franklin] shall permit the construction of no cabins
in said area, shall not permit fishing in such waters by persons
other than themselves and the immediate members of their family;
that they shall not permit the public generally to fish in or use said
overflowed area for boating or other recreational purposes.
It is further specifically understood and agreed that in the
event [James and Fae Franklin] should at any time elect to sell their
premises or in any other manner dispose of or alienate the title to
their lands that they shall and do hereby grant, sell, and convey
unto the [Estles] their heirs, successors, administrators, or assigns,
the first right and option to purchase such overflowed area together
with a strip of land surrounding said overflowed area not to exceed
twenty (20) feet in width from the shoreline of said overflowed area
at and for the same price as [James and Fae Franklin] receive by
way of a bona fide offer for the purchase thereof.
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The dam was constructed, but the Estles died in the late 1960s. The
Estles’ estate conveyed the property, including the dam, to Robert and Imogene
Johnston in 1971, and Robert erected a fence on the north side of the lake
between his property and the Franklin property running from the highway to the
water. Robert informed James Franklin where the boundary line was, and James
believed him. Together the two completed the fence. Thereafter, Clark and Alice
Johnston purchased the property from the Robert Johnston estate in 1986. Clark
and Alice have since conveyed various pieces of that property to their children,
the defendants—the Johnstons—in this case.
James and Fae Franklin divorced in 1979, and ownership of the land in
question was conveyed to Fae alone. Fae then married James Black and
conveyed title to herself and James in joint tenancy, but after James’s death, title
to the property again was solely in Fae’s name. Fae died in June 2012, and her
will left the property to her children, the plaintiffs—the Franklins—in this action.
The parties’ dispute began after Fae died. It was discovered Mike
Johnston’s house that was believed to be entirely on the Johnstons’ property was
partially located on the Franklins’ property after a 2007 survey determined the
fence line erected by James Franklin and Robert Johnston did not follow the true
boundary line between the properties. In response, the Johnstons told the
Franklins they could no longer use the portion of the lake that covered the
Johnstons’ land. Of the fourteen-acre lake, a little more than four acres covers
the Franklins’ land, while the remaining lake, including the dam, covers the
Johnstons’ property. The Johnstons enlisted the help of the local sheriff to inform
the Franklins that they were not to trespass on the Johnstons’ side of the lake.
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The Franklins filed suit in May 2013, asserting the right of first refusal in
the 1962 easement and agreement was no longer valid and the restrictive
covenants contained in the agreement were stale pursuant to Iowa Code section
614.24 (2013). The Franklins further requested the court declare they had the
right to use the entire lake by way of an easement and asked that the true
boundary line between the properties be established. The Franklins further
amended their petition in May 2014 to add a claim for a civil rights violation under
42 U.S.C. § 1983, alleging the Johnstons worked in collusion with the county
sheriff to deprive the Franklins of their property rights. The Johnstons denied the
allegations in the amended petition, and in August 2014, both parties moved for
partial summary judgment.
After a hearing, the district court granted in part the partial summary
judgment motions on October 10, 2014. The court found the use restriction—
specifically the restriction from commercializing the Franklins’ property—was no
longer valid in light of section 614.24. The court determined the provision in the
easement agreement that gave the Johnstons the right of first refusal to
purchase the Franklins’ property surrounding the lake did not yet violate the rule
against perpetuities in light of the legislative amendment to “wait and see,” but
the court found the right of first refusal did violate the rule against restraints on
alienation of land and was therefore invalid. The court declared the fence line on
the north side of the lake to be the boundary line between the two properties
pursuant to Iowa Code section 650.14—boundary by acquiescence. But the
court denied the motion with respect to establishing a boundary on the south side
of the lake, finding material issues of fact were in dispute. Finally, the court also
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denied the motion with respect to the section 1983 action, finding the Franklins
had made a “prima facie” case. The court noted the ultimate dispute underlying
the section 1983 action was still undecided—whether the Franklins had a right to
use the entire lake. This issue was not before the court as part of the summary
judgment action.
The case then proceeded to a bench trial in September 2015 with the
remaining issues including the extent of the Franklins’ right to use the lake, the
existence of the boundary line through the lake and to the south of the lake,
whether the Johnstons were liable under section 1983, and whether the
Johnstons have the legal right to drain the lake. The court issued its ruling in
November 2015, finding the Franklins were entitled to use the entire lake by way
of an express easement, and alternatively, by way of a prescriptive easement
and an implied easement, and “that each party has a reciprocal easement to use
the other parties’ part of the lake that lies above their land.” The court found the
boundary through and to the south of the lake was the deeded boundary line
after concluding no boundary by acquiescence existed in this area. Thus, from
the last fence post on the shoreline on the north side of the lake, the court
ordered the boundary line would proceed east at a right angle until it connected
with the deeded line. The court concluded the Franklins did not prove their civil
rights violation claim under section 1983 after determining the county sheriff
acted independently and in good faith. Finally, the court concluded the 1962
easement and agreement did not require the Johnstons’ predecessor in title to
construct the dam that created the lake and, therefore, there was nothing to
require the lake exist in perpetuity.
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After the court denied the parties’ posttrial motions, both parties appealed
from the district court’s orders.
II. Scope and Standard of Review.
The parties challenge both the district court’s ruling on partial summary
judgment and the district court’s trial ruling. We review decisions on motions for
summary judgment for the correction of errors at law. Stew-Mc Dev., Inc. v.
Fischer, 770 N.W.2d 839, 844 (Iowa 2009) (“Summary judgment is appropriate
when, after review of the entire record, there is no genuine issue of material
fact.”). The parties both agree the trial on the remaining issues was heard in
equity; therefore, our review is de novo. See Passehl Estate v. Passehl, 712
N.W.2d 408, 414 (Iowa 2006) (“Our review of actions for declaratory judgment
depends upon how the action was tried to the district court. . . . Because this
matter was tried by the district court wholly in equity, we review this appeal de
novo.”). To the extent the parties challenge the district court’s interpretation of
the applicable statutes, our review is for the correction of errors at law. See Van
Sloun v. Agans Bros. Inc., 778 N.W.2d 174, 182 (Iowa 2010) (“The court reviews
issues involving the interpretation of statutes for correction of errors at law.”).
III. The Johnstons’ Appeal.
A. Use Restrictions.
For their first claim on appeal, the Johnstons assert the district court
incorrectly determined the portion of the agreement that contained the use
restriction, preventing the Franklins from commercializing their side of the lake,
was no longer valid by application of Iowa Code section 614.24—the stale use
statute.
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This statutory provision provides in pertinent part:
No action based upon any claim arising or existing by reason of the
provisions of any deed or conveyance or contract or will reserving
or providing for any reversion, reverted interests or use restrictions
in and to the land therein described shall be maintained either at
law or in equity in any court to recover real estate in this state or to
recover or establish any interest therein or claim thereto, legal or
equitable, against the holder of the record title to such real estate in
possession after twenty-one years from the recording of such deed
of conveyance or contract or after twenty-one years from the
admission of said will to probate unless the claimant shall . . . file a
verified claim with the recorder of the county wherein said real
estate is located within said twenty-one year period.
Iowa Code § 614.24(1). “If a claim is properly filed, it extends or preserves the
time to bring an action on the claim for an additional twenty-one years.” Fjords
N., Inc. v. Hahn, 710 N.W.2d 731, 735 (Iowa 2006) (citing Iowa Code § 614.25).
The purpose of the statute was to simplify land transfers by “shortening the title-
search period for these types of claims” but allowing for these claims to be kept
alive if desired. Id.
A special distinction was subsequently brought to light that the “use
restrictions” referenced in section 614.24 only apply to negative easements, not
affirmative easements. See Amana Soc’y v. Colony Inn, Inc., 315 N.W.2d 101,
109–10 (Iowa 1982) (“[I]t was not the intent of those who prepared the bill to
include [affirmative grants or reservation of property interests] within the ambit of
the limitation act. What we were trying to do was to limit stale uses and
reversions and not to bar interest in land granted or reserved. We are trying to
distinguish a negative easement or a perpetual right of reentry. An ‘easement’
providing for use and occupancy of land is an entirely different class from a
restriction on use imposed on a grantee of the land.” (alterations in original)
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(citation omitted)). A negative easement is “a restriction[] on the use of one’s
own land,” while an affirmative easement is “the right of a limited use of the land
of another.” Id. at 110 (citation omitted). The stale use statute thus only applies
to the former type of restriction—the negative easement.
The disputed provision in the 1962 easement and agreement provides:
It is specifically understood and agreed by and between the parties
hereto that [James and Fae Franklin] shall have no right to
commercialize the area so overflowed by water on their own lands
nor to permit the use of said water by parties other than [James and
Fae Franklin] or their successors in ownership of said land.
It is further understood and agreed by way of explanation but
not by limitation, that commercialization is intended to mean that
[James and Fae Franklin] shall permit the construction of no cabins
in said area, shall not permit fishing in such waters by persons
other than themselves and the immediate members of their family;
that they shall not permit the public generally to fish in or use said
overflowed area for boating or other recreational purposes.
We agree with the district court’s conclusion that this provision in the
parties’ contract that restricts the Franklins’ use of their own property to
noncommercial purposes only is a negative easement. See id. (“For purposes of
applying the stale use statute, we hold the deed restrictions on the business use
of the properties to be ‘negative’ easements subject to the statute as ‘use
restrictions.’”). The Johnstons assert the 1962 easement and agreement was in
fact “an executory contract establishing an easement by express written grant.”
As shown above, section 614.24 specifically includes contracts among the
instruments that are governed by the stale use restrictions. See Iowa Code
§ 614.24(1) (“No action based upon any claim arising or existing by reason of the
provisions of any deed or conveyance or contract or will . . . .” (emphasis
added)); Fjords N., 710 N.W.2d at 736 (“Thus, the statute applies to claims
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based on three types of provisions (reversion interests, reverted interests, and
use restrictions) contained in one of four types of instruments (deed,
conveyance, contract, or will).” (emphasis added)). The Johnstons do not cite
any law to support their assertion that “executory contracts” are exempt from the
application of the statute, and we find no reason for such a distinction.
The Johnstons also assert that a recent amendment to section 614.24,
enacted after the lawsuit was filed but before the case went to trial, 1
demonstrates that the restrictions at issue in this case are not “use restrictions.”
In 2014, the legislature enacted for the first time a definition of “use restrictions,”
which provided a use restriction in section 614.24 was
[a] limitation or prohibition on the rights of a landowner to make use
of the landowner’s real estate, including but not limited to limitations
or prohibitions on commercial uses, rental use, parking and storage
of recreational vehicles and their attachments, ownership of pets,
outdoor domestic uses, construction and use of accessory
structures, building dimensions and colors, building construction
materials, and landscaping. As used in this section, “use
restrictions” does not include any of the following:
a. An easement granting a person an affirmative right to use
land in the possession of another person including but not limited to
an easement for pedestrian or vehicular access, reasonable
1
In 2014, the legislature officially adopted a definition of “use restrictions.” See 2014
Iowa Acts ch 1067, § 1. The prior version of the statute did not provide a definition, and
thus, the Johnstons assert the added definition “clarified,” but did not change, the
statute. See Bd. of Trs. v. City of W. Des Moines, 587 N.W.2d 227, 230 (Iowa 1998)
(“When confronted with the interpretation of a statute which has been amended prior to
trial, we employ a two-tiered analysis. If the amendment clarifies the statute, the former
statute is interpreted with the aid of the legislative clarification. On the other hand, if the
amendment changes the statute and the change helps resolve the underlying disputed
issue, the amendment becomes the focus of the inquiry and the court must determine if
the legislature intended the change to apply retrospectively or prospectively.” (internal
citation omitted)). Because we conclude the new definition does not alter our analysis of
the facts of this case, we need not address whether the 2014 statutory enactment is a
clarification or whether it changed the substantive law, nor do we need to address
whether it had retroactive effect.
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ingress and egress, solar access, utilities, supporting utilities,
parking areas, bicycle paths, and water flow.
b. An agreement between two or more parcel owners
providing for the sharing of costs and other obligations for real
estate taxes, insurance premiums, and for maintenance, repair,
improvements, services, or other costs related to two or more
parcels of real estate regardless of whether the parties to the
agreement are owners of individual lots or incorporated or
unincorporated lots or have ownership interests in common areas
in a horizontal property regime or residential housing development.
c. An agreement between two or more parcel owners for the
joint use and maintenance of driveways, party walls, landscaping,
fences, wells, roads, common areas, waterways, or bodies of
water.
2014 Iowa Acts ch 1067, § 1. It is the final paragraph (c) that the Johnstons
assert exempts the provision in the parties’ agreement from the definition of “use
restrictions” because the language restricting the commercial use of the
Franklins’ property is an agreement “for the joint use and maintenance of . . .
bodies of water.” However, we do not interpret the 1962 easement and
agreement language so broadly.
Under the Johnstons’ own interpretation of the 1962 agreement, there is
no language that provides for the “joint use” of the water. It is the Johnstons’
position on appeal that the Franklins have no right to use the water flowing above
the Johnstons’ land. According to the Johnstons, the agreement as a whole is
meant to restrict each party to their own side of the lake. Therefore, the provision
at issue in the parties’ agreement only serves to restrict the Franklins from using
their own property for commercial enterprises, and restricts them from permitting
persons, other than family members, from fishing, boating, or other recreational
purposes in the water covering their own land; it does not pertain to the joint use
of the water. Nor does the agreement provide for the joint maintenance of the
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body of water. The only maintenance provision in the agreement states the
Johnstons have a “perpetual right to erect and maintain such dam.” There is no
language pertaining to the sharing of responsibilities for the maintenance of the
lake created by the dam or a cost-sharing agreement for the financial expense of
maintaining the lake as a whole.
Therefore, assuming without deciding the 2014 statutory addition to
section 614.24 is applicable to the dispute in this case, the added definition of
“use restrictions” does not exempt this agreement from the application of the
twenty-one-year limitation. Because more than twenty-one years has passed
since the parties entered into the agreement and it is undisputed no party filed a
verified claim within that time period, so as to extend the life of the use restriction,
we agree with the district court this use restriction has expired and is no longer
enforceable.
B. Right of First Refusal.
Next, the Johnstons assert the district court incorrectly determined the
language in the agreement giving them the right of first refusal to purchase the
Franklins’ property encompassing the lake and twenty feet of shoreline is no
longer enforceable. While the district court did find the right of first refusal did not
yet violate the rule against perpetuities in Iowa Code section 558.68 in light of the
“wait-and-see” approach, see Iowa Code § 558.68(2)(a), the court did conclude
the provision was unenforceable under the common law rule against restraints on
the alienation of land. See Trecker v. Langel, 298 N.W.2d 289, 291 (Iowa 1980)
13
(“Preemptions[2] are subject to the rule against perpetuities and the rule against
restraints on alienation. The rules share the common objective of keeping
property freely alienable. The rule against perpetuities does so by fixing the time
within which a future interest must vest, whereas the rule against restraints on
alienation bars direct restraints on the alienability of present or future vested
interests.”).
The district court noted that for the right of first refusal to be valid under
the rule against restraints on alienation it must be reasonable. Id. at 292 (noting
a right of preemption at a fixed price must be “reasonable under the
circumstances” in order to be valid (citation omitted)); see also Restatement
(Third) of Property (Servitudes) § 3.4 (2000) (“A servitude that imposes a direct
restraint on alienation of the burdened estate is invalid if the restraint is
unreasonable. Reasonableness is determined by weighing the utility of the
restraint against the injurious consequences of enforcing the restraint.”). The
district court analyzed the factors enunciated in Trecker to determine whether the
right of first refusal was reasonable; those factors, if found, that make the right
reasonable include:
1. the one imposing the restraint has some interest in land
which he is seeking to protect by the enforcement of the restraint;
2. the restraint is limited in duration;
3. the enforcement of the restraint accomplishes a
worthwhile purpose;
2
The Trecker court distinguished between an option and a preemption, and defined
preemption to be the right to “require[] the owner, when and if he decides to sell, to offer
the property first to the person entitled to the preemption.” 298 N.W.2d at 290–91
(citation omitted); see also Imperial Refineries Corp. v. Morrissey, 119 N.W.2d 872, 876
(Iowa 1963) (noting the conditional or contingent right to purchase is interchangeably
referred to as both a right of preemption and a right of first refusal).
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4. the type of conveyances prohibited are ones not likely to
be employed to any substantial degree by the one restrained;
5. the number of persons to whom alienation is prohibited is
small[;]
6. the one upon whom the restraint is imposed is a charity.
298 N.W.2d at 292; see also Restatement (Third) of Property (Servitudes) § 3.4,
cmt. f (Am. Law Inst. 2000) (“Whether a right of first refusal is valid depends on
the legitimacy of the purpose, the price at which the holder may purchase the
land, and the procedures for exercising the right.”).
The right of first refusal in the parties’ 1962 easement and agreement
provides:
It is further specifically understood and agreed that in the
event [James and Fae Franklin] should at any time elect to sell their
premises or in any other manner dispose of or alienate the title to
their lands that they shall and do hereby grant, sell, and convey
unto the [Estles,] their heirs, successors, administrators, or assigns,
the first right and option to purchase such overflowed area together
with a strip of land surrounding said overflowed area not to exceed
twenty (20) feet in width from the shoreline of said overflowed area
at and for the same price as [James and Fae Franklin] receive by
way of a bona fide offer for the purchase thereof.
The district court noted only one of the Trecker factors favored finding the right of
first refusal reasonable—the Johnstons, as adjoining landowners, had some
interest in the land that they were seeking to protect by the enforcement of the
restraint. The court concluded the restraint was unreasonable because it was of
unlimited duration, the restraint did not accomplish a worthwhile purpose, the
provision restrained all types of conveyances, the number of people restrained
was not small, and the Franklins are not a charity. The Johnstons take issue with
three of these factors.
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1. Duration. The Johnstons note that the court had determined the right
of first refusal would expire under the wait-and-see approach of the rule against
perpetuities after the passage of twenty-one years from the death of Fae—June
21, 2033. Therefore, the Johnstons assert the district court was incorrect to
determine the duration of the right of first refusal was unlimited. The language
used in the agreement is of unlimited duration, and it is only after the application
of the rule against perpetuities following the death of the measuring life that the
parties have any sense of the timing of the termination of the right. Assuming we
can use that end date in our assessment of the duration of the right, instead of
the interminable language used by the contracting parties, we still conclude that
a right of first refusal lasting over seventy-one years is not “limited in duration” so
as to make this provision reasonable. See Trecker, 298 N.W.2d at 292. We
additionally note there is no limit to the amount of time the Johnstons have to
decide whether to exercise their right of first refusal upon notification that a third
party has made an offer to purchase the property. See Girard v. Myers, 694 P.2d
678, 684 (Wash. Ct. App. 1985) (focusing the duration analysis on the time
“within which the holder [of the right] must act”). Again, an unlimited duration is
not reasonable.
2. Worthwhile Purpose. Next, the Johnstons assert the purpose behind
the right of first refusal is worthwhile—their ability to protect and safeguard their
property, including the dam, from commercial development. However, the
Johnstons desire for us to interpret the written agreement to restrict the Franklins’
use of the lake to the water flowing only above the Franklins’ land. It is unclear
how the use of this portion of the lake would have any effect, let alone an
16
adverse effect, on the Johnstons’ ability to protect and safeguard their property
on the other side of the lake. Essentially, the Johnstons want to prohibit
commercial development on the lake and protect their solitude and exclusive use
of the lake for their own benefit. While this purpose is not malicious, capricious,
or spiteful, it only serves to benefit the Johnstons’ property values. See Trecker,
298 N.W.2d at 292 (noting a right of first refusal is considered unreasonable if it
is capricious or imposed for spite or malice); Cape May Harbor Vill. & Yacht Club
Ass’n, Inc. v. Sbraga, 22 A.3d 158, 169 (N.J. Super. Ct. App. Div. 2011) (“The
enforcement of the restraint accomplishes a worthwhile purpose by preserving
the stable residential character of the community. That character has never
before been marked by weekly rentals to vacationers, and the Association
members had a rational basis for believing that the peace and tranquility of the
community would be disrupted if such rentals were permitted.”). But see Kerley
v. Nu-W., Inc., 762 P.2d 631, 636 (Ariz. Ct. App. 1988) (“[T]he law assumes that
encouraging the development and resale of real estate is worthwhile.”); City of
Oceanside v. McKenna, 264 Cal. Rptr. 275, 279 n.4 (Cal. Ct. App. 1989) (“The
traditional rule against restraints on alienation is based on the public policy notion
that the free alienability of property fosters economic and commercial
development.”). We agree with the district court that this factor leans toward
finding the right of first refusal unreasonable.
3. Number Restrained. Finally, the Johnstons assert the district court was
wrong to focus on the number of people affected by the restraint—the restraint
now impacts Fae’s heirs under her will, her six children. The Johnstons assert
that “common sense dictates” that this factor should focus on the size of parcels
17
restrained and not how many people own a particular parcel. Because only one
parcel is restrained—now jointly owned by Fae’s children under the will—the
Johnstons assert the restraint should be found to be reasonable.
The Johnstons cite no authority for their assertion we should focus on the
size or number of parcels involved, and we note the factor is described in Trecker
as “the number of persons to whom alienation is prohibited.” 298 N.W.2d at 292
(emphasis added). At this time six people have an ownership interest in the
Franklins property, and the Johnston property surrounding the lake has been
divided into three parcels now owned by six people. The 1962 agreement is
unclear whether the right of first refusal extends to the Johnstons individually or
only en masse.
Beyond the Trecker factors, the right also suffers from a lack of clarity as
to how and when notice is to be given, how swiftly the Johnstons must respond,
and what portion of the Franklins’ property is subject to the right in light of the
fluctuating nature of a “shoreline.” We agree with the district court’s
determination that the right of first refusal violates the rule against restraints on
the alienation of land and is therefore unenforceable.
C. Easement.
Next, the Johnstons assert the Franklins only have the right to use that
part of the lake that covers their land, a little more than four acres of the west end
of the lake. The district court concluded the Franklins have the right to enjoy the
entire lake, including the water that flows above the Johnstons’ property. The
district court found the Franklins’ right flows from an express easement, a
prescriptive easement, and an implied easement resulting in each party having a
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reciprocal easement to use the other party’s portion of the lake. Because we
conclude a prescriptive easement exists, we need not address the issue of
express easement or implied easement.
A prescriptive easement is established “when a person uses another’s
land under a claim of right or color of title, openly, notoriously, continuously, and
hostilely for ten years or more.” Johnson v. Kaster, 637 N.W.2d 174, 178 (Iowa
2001); see also Iowa Code § 564.1. A claim for a prescriptive easement is
similar to adverse possession, except an easement concerns the use of the
property and adverse possession concerns the acquisition of title to the property.
Johnson, 637 N.W.2d at 178. Whenever a party seeks to prove a prescriptive
easement, Iowa Code section 564.13 requires proof of adverse possession apart
from mere use of the property and requires the owner of the servient estate to
have express notice of the claim. “An express easement for a limited use may
be expanded by prescription.” Larman v. State, 552 N.W.2d 158, 161 (Iowa
1996). However, the permissive use of land may become a prescriptive
easement “only [where] the party claiming the easement has expended
substantial amounts of labor or money in reliance upon the servient owner’s
consent or his oral agreement to the use.” Id. (alteration in original) (citation
omitted). Unless a landowner knows another has a hostile claim to use its land,
“the landowner may incorrectly assume the other’s use results merely from the
landowner’s willingness to accommodate the other’s desire or need to use the
land.” Id. at 162.
The Johnstons assert there is no prescriptive easement because the
Franklins’ use of the Johnstons’ side of the lake was not hostile or under a claim
19
of right or color of title. The Johnstons claim the Franklins’ use of their side of the
lake was merely permissive, asserting their predecessors in title had allowed the
Franklin family to use the entire lake without requiring them to ask for permission
as a neighborly courtesy. They claim the Franklins never notified them of their
claim of right, either verbally or in writing, until immediately before the litigation
was imminent.
1. Hostility. Hostility does not imply ill-will but instead refers to
declarations made or acts done that reveal a claim of exclusive right to the land.
Johnson, 637 N.W.2d at 178. As stated above, mere use of the land does not
ripen into an easement, but a party claiming an easement must prove its claim
through some other specific act or conduct. Id. Actions such as maintaining or
improving the land can support a claim of a prescriptive easement. Id. at 179.
“This court has relaxed the traditional requirements for a prescriptive easement
‘in those situations in which the party claiming the easement has expended
substantial amounts of labor or money in reliance upon the servient owner’s
consent or his oral agreement to the use.’” Brede v. Koop, 706 N.W.2d 824, 828
(Iowa 2005) (citation omitted).
Until this action was filed, both families in this case have continued to use
the entire lake for over fifty years without ever seeking the other parties’
permission. But use alone is not sufficient to establish a prescriptive easement.
The district court noted the Franklins, specifically Fae and James Black,
improved the lake by constructing a silt basin to prevent silt from coming down
the main channel of water. From the invoices submitted as evidence, the
construction of the silt basin occurred in the summer of 2001. In addition, Mike
20
Johnston, one of the defendants, admitted to being aware of the construction of
this silt basin. The testimony of plaintiff Gene Franklin, and of Keith Johnson,
who is married to plaintiff Connie Johnson, also established that Mike Johnston
and Fae both paid to install a “draw down tube” at the dam area on the
Johnstons’ side of the lake. In addition, hedge posts were installed to further
prevent silt from coming into the lake. Finally, plaintiff Greg Franklin testified
James Black told him he paid to stock bass and catfish in the lake in the 1990s,
and Mike Johnston suspected the Franklins had stocked the water when some
bullheads showed up in the lake. We agree with the district court that the
Franklins have proved hostility.3
2. Claim of Right or Color of Title. The Johnstons also dispute whether
the Franklins have proven the Franklins used the Johnstons’ side of the lake
under a claim of right or color of title. “Color of title is that which in appearance is
title but in reality is no title.” Grosvenor v. Olson, 199 N.W.2d 50, 52 (Iowa 1972).
3
The Johnstons assert the current owners of the Franklin property—Fae’s six children—
did not expend any money to improve the lake, only their predecessors in title. Thus, the
Johnstons claim the Franklins cannot take advantage of the “relaxed standard.” See
Brede, 706 N.W.2d at 828 (noting the relaxing of the traditional requirements for
prescriptive easements). However, courts have looked to predecessors in title to
determine the agreements and expenditures when determining prescriptive easements.
See Pascal v. Hynes, 152 N.W. 26, 27 (Iowa 1915) (noting the work done on the
drainage ditch was done by the defendant’s predecessor in title with the consent of the
plaintiff’s predecessor in title); Hatton v. Cale, 132 N.W. 1101, 1106 (Iowa 1911)
(focusing on the work performed and expense incurred by the plaintiff’s predecessor in
title to create and maintain a drainage ditch on the defendant’s property); Vanneat v.
Fleming, 44 N.W. 906, 908 (Iowa 1890) (“It is shown by the evidence . . . that the ditch
referred to in the first count was made upon defendant’s land, before he owned it, by the
farmer who then owned and cultivated the land. It seems that defendant’s grantor, and
the plaintiff or his grantor, were in accord in their views as to the ditch, and its course
through the two tracts of land, and, either by express agreement or by mutual and silent
acquiescence in the manner pursued by each in the improvement, by drains, of their
respective lands, agreed upon the construction of the ditch, and the line it should
pursue.”).
21
A claim of right is closely related to hostility and can be shown by declarations or
actions. Brede, 706 N.W.2d at 828. As expressed above, we find hostility has
been proven in this case. In addition, it was the Franklins’ belief the 1962
easement and agreement gave them the right to use the entire lake. While we
do not address whether that document created an express easement, “[a] void
deed taken in good faith affords sufficient color of title to sustain the plea and
claim of adverse possession by one who, relying thereon has taken and held the
possession for the required length of time.” Grosvenor, 199 N.W.2d at 52. So
even if the Franklins and their predecessor in title are mistaken on whether the
1962 agreement gave them the right to use the entire lake, that document is
sufficient to prove color of title, especially when considered with the actions taken
by the Franklins over the years to maintain that easement. See 2 Am. Jur. Proof
of Facts 3d § 125, at 146 (1st ed. 1988) (“Use based on mistake, such as a
mistaken belief of ownership, is sufficient to prove adverse intent.”). Upon our
review, we agree with the district court that the Franklins have proven a
prescriptive easement to use the entire lake.
D. South Side Boundary Line.
Next, the Johnstons assert the district court erred in failing to establish the
“mowed path” south of the lake was the boundary line established by
acquiescence. While the district court found a boundary by acquiescence on the
north side of the lake that followed the fence line in the ruling on the motion for
summary judgment, the court declined to find such a boundary as a matter of law
on the south side of the lake. The court stated there were disputed material
issues of fact because the Johnstons asserted there were remnants of a fence
22
located on the southern border, but the Franklins denied that those indistinct
markers constituted the boundary line. The court determined, “A fact-finder must
determine whether such a line actually exists, and whether the parties knew it
existed and agreed to its existence as a boundary line, before ‘recognition and
acquiescence’ can be concluded.” The parties disputed the existence of this
boundary line at trial, and the court ultimately determined the Johnstons had not
proven the boundary line by clear evidence. The court stated,
There were signs that a fence may have been there at some time.
There was some mowing done at some time, but it was never
shown by clear evidence that a fence or boundary even existed.
No one consented or could even consent to the boundary because,
as the Court finds, there was no clear boundary in existence.
The Johnstons assert the silence of the Franklins with respect to the
southern boundary should be inferred as acquiescence, especially since the
county assessor’s cadastral lines prior to 2007 placed the boundary at the
mowed path. The Johnstons also claim the court was wrong to focus on a lack of
a fence because there is no requirement that a fence exist in order for the
boundary to be established.
To establish a boundary by acquiescence, the party asserting the
boundary line must show
mutual recognition by two adjoining landowners for ten years or
more that a line, definitely marked by fence or in some manner, is
the dividing line between them. Acquiescence exists when both
parties acknowledge and treat the line as the boundary. When the
acquiescence persists for ten years the line becomes the true
boundary even though a survey may show otherwise and even
though neither party intended to claim more than called for by his
deed.
23
Egli v. Troy, 602 N.W.2d 329, 333 (Iowa 1999) (citation omitted). The standard
of proof requires “‘clear’ evidence.” Id. While silence or inaction can infer
acquiescence, there must still be proof that the silent party knew the other party
claimed the line as the boundary line for a period of ten years. Id.
In this case, we agree with the district court that the evidence was far from
clear that the Franklins or their predecessor in title knew of the existence of a
mowed path, knew the mowed path was the claimed boundary line and did
nothing, and that those two conditions existed for ten years. The Franklins
testified the mowed path occurred much more recently, after the death of Fae in
2012. While the Johnstons submitted into evidence an aerial photograph of the
area from 1970 indicating a clearing running south of the lake, there was not
clear evidence this clearing and the “mowed path” that Franklins observed after
2012 were in the same location, nor was there evidence the Franklins recognized
this clearing and knew the Johnstons or their predecessors in title regarded that
area as the property line until this lawsuit was filed. The district court credited the
testimony of the Franklins over that of the Johnstons, and we give deference to
that determination. Tim O’Neill Chevrolet, Inc. v. Forristall, 551 N.W.2d 611, 614
(Iowa 1996) (“The trier of fact—here, the district court—has the prerogative to
determine which evidence is entitled to belief. The district court has a better
opportunity than we do to evaluate the credibility of witnesses. So we think
factual disputes depending heavily on such credibility are best resolved by the
district court.” (internal citation omitted)). We affirm the district court’s rejection of
the Johnstons’ claim of a boundary by acquiescence on the south side of the
lake.
24
E. Frivolous Litigation Sanctions.
For their final claim on appeal, the Johnstons assert the district court
incorrectly denied their request for sanctions against the Franklins under Iowa
Rule of Civil Procedure 1.413. The sanctions that the Johnstons seek are related
to the Franklins’ failed claim that the Johnstons violated the Franklins’ civil rights
under 42 U.S.C. § 1983 when the Johnstons enlisted the help of the local sheriff
to keep the Franklins off the Johnstons’ side of the lake.
Rule 1.413 permits the court to sanction a party, including ordering the
payment of attorney fees, when “a motion, pleading, or other paper is signed” but
the attorney does not have “knowledge, information, and belief, formed after
reasonable inquiry,” that the pleading or motion “is well grounded in fact and is
warranted by existing law or a good faith argument for the extension,
modification, or reversal of existing law” or when the pleading is “interposed for
any improper purpose, such as to harass or cause an unnecessary delay or
needless increase in the cost of litigation.” The Johnstons assert the Franklins
have failed to produce any evidence to support their assertions under section
1983 and, accordingly, the Franklins should pay their attorney fees.
In their motion for summary judgment, the Johnstons asked the court to
declare as a matter of law that no section 1983 violation took place. The court
rejected the Johnstons’ motion on this ground, concluding the Franklins had
established “a prima facie section 1983 action.” The court noted the parties
disputed whether the Franklins had the right to use the entire lake, and because
of this disputed issue of material fact, along with the dispute over whether the
sheriff and the Johnstons were in a conspiracy to deprive the Franklins of their
25
property rights, summary judgment was not appropriate. After trial, the district
court concluded the sheriff was wrong in determining the Johnstons could keep
the Franklins off the Johnstons’ side of the lake, but the court went on to reject
the Franklins’ section 1983 claim because the court found the county sheriff
“acted independently and in good faith, following the input of the State Attorney
General’s office.”
Upon our review of the record, we cannot find the court abused its
discretion in declining to award attorney fees under rule 1.413. See Everly v.
Knoxville Cmty. Sch. Dist., 774 N.W.2d 488, 492 (Iowa 2009) (noting we employ
the abuse of discretion standard when reviewing the court’s decision on whether
to impose sanctions under rule 1.413). As noted by the court in the summary
judgment motion, the Franklins established a prima facie case to support their
section 1983 action; therefore, the section 1983 action was “well grounded in fact
and . . . warranted by existing law.” While the Franklins ultimately did not prevail
on the claim, this does not mean that making such claim was in violation of rule
1.413.
We affirm the district court’s decision on the Johnstons’ appeal and turn
our attention to the Franklins’ cross-appeal.
IV. The Franklins’ Cross-Appeal.
For their cross-appeal, the Franklins raise two additional issues. They
assert the district court erred in determining the Johnstons have a legal right to
drain the lake and assert the district court’s decision lacks the specificity needed
to establish an easement for Mike Johnstons’ dock, which is on their property by
26
virtue of the district court’s denial of the Johnstons’ claim to establish a boundary
by acquiescence through and to the south of the lake.
A. Right to Drain the Lake.
The district court noted in its order following the trial that, while very little
testimony or legal precedent was presented on the issue of whether the lake can
be drained, the 1962 easement and agreement did not require the Estles to build
a dam or make a lake, it only permitted such construction, and therefore, the
document does not require the lake to exist in perpetuity.
The widely accepted rule is “the owner of a dam is not obliged to maintain
it for the benefit of other riparian owners who benefit from the formation of an
artificial pond by the erection of the dam.” Hood v. Slefkin, 143 A.2d 683, 687
(R.I. 1958).
[T]he rule supported by most courts is that the mere fact that one
has used or improved his or her property with reference to the
artificial condition created by the maintenance of a dam by another,
so that the person would suffer loss or inconvenience by the
removal or alteration of such dam, confers upon that person no
right to the continued maintenance thereof for his or her benefit or,
at least, imposes upon the proprietor of the dam no affirmative
obligation with respect to such maintenance. In the absence of any
covenant to keep a lake at a certain level by the maintenance of a
dam, the owner of the dam may abandon and destroy it.
78 Am. Jur. 2d Waters § 270 (2013) (footnote omitted).
In Kiwanis Club Foundation, Inc. v. Yost, the Nebraska Supreme Court
held
that where a dam has been built for the private convenience and
advantage of the owner, he is not required to maintain and operate
it for the benefit of an upper riparian proprietor who obtains
advantages from its existence; and that the construction and
maintenance of such a dam does not create any reciprocal rights in
27
upstream riparian proprietors based on prescription, dedication, or
estoppel.
139 N.W.2d 359, 361 (Neb. 1966); see also 1972 Op. Iowa Att’y Gen. 72-4-5
(citing with approval the Yost case in rendering an opinion on the rights of
downstream landowners to require the continued maintenance of an upstream
dam).
The Franklins assert the language in the agreement that grants the
Johnstons the “perpetual right to erect and maintain such dam” imposes on them
the responsibility to maintain it once the dam is erected. The Franklins assert the
erection of the dam and subsequent creation of the lake gave them valuable
property rights that the Johnstons should not be allowed to unilaterally destroy.
Again, we will not interpret the agreement so broadly. The agreement only gives
the Johnstons the right to maintain the dam in perpetuity but does not impose on
them the obligation to maintain the dam once constructed. There is a difference
between a legal right and an obligation. Compare Right, Black’s Law Dictionary
(10th ed. 2014) (“A power, privilege, or immunity secured to a person by law.”),
with Obligation, Black’s Law Dictionary (10th ed. 2014) (“A legal or moral duty to
do or not do something.”). As the Yost court concluded:
Construction and maintenance of a dam over a long period of years
may well tend to lead persons owning property above the dam to
believe that a permanent and valuable right has been acquired, or
is naturally present. The very fact that a manmade dam is
obviously present, however, is sufficient to charge them with notice
that the water level above the dam is artificial as distinguished from
natural, and that its level may be lowered or returned to the natural
state at any time.
139 N.W.2d at 361. We agree with the district court there is no requirement the
Johnstons must maintain the dam in perpetuity.
28
B. Specifications of the Dock.
Finally, the Franklins assert more specificity and direction is needed to
describe the easement now created with respect to the shoreline and dock
existing and serving the Mike Johnston property that is located on the Franklins’
property. The court declared a boundary by acquiescence north side of the lake
along the existing fence line, but from the final fence post on the north side of the
lake, which is still north of the shoreline and the dock,4 there is now a right angle
to the deeded property line. The right angle imposed by the court from this
southernmost fence post to the deeded property line results in part of the
shoreline and the dock near Mike Johnston’s house to be on the Franklins’
property. In its posttrial motion, the Franklins requested the district court enlarge
its decision to
limit the dock’s size and location to that which presently exists,
however, allowing for repairs, but not expansion of or changes in
the height of the dock from the land below the water surface, nor
any other change in location on the Plaintiffs’ land; and provide that
if the dock is removed, it may not be replaced, or alternatively
define the replacement limitations.
The district court summarily denied this claim along with the other posttrial
motions filed by the parties.
On appeal the Franklins request this court to provide specific dimensions
and terms of use to avoid future litigation over Mike Johnston’s use of this
shoreline and dock. The Johnstons also assert the boundary created by the
court is “disjointed, unworkable, [and] impracticable.” The Johnstons contend
4
Counsel for the Franklins described at oral argument that the southernmost fence post
was approximate three to five feet north of the shoreline.
29
there was no evidence the Franklins ever used this piece of the shoreline or Mike
Johnston’s dock or that they ever disputed the location of the deed line in that
area from when the fence line was built in 1971 until 2007.
There is a dearth of evidence in the record about the size, location,
condition, and history of the shoreline and dock that exists near Mike Johnston’s
property on the north side of the lake. However, this is understandable because
it was the district court’s decision, ending the boundary by acquiescence at the
southernmost fence post and then running the property line due east until it
intersects with the deed line, that created the parties current dispute over the use
of this shoreline and dock. In order to prevent further future litigation over this
shoreline and dock, we remand this case to the district court so that it may
expand its ruling as to the boundary line north of the lake so that the shoreline
and dock near Mike Johnston’s house remain part of Mike Johnston’s property.
The parties may offer evidence and legal argument to the district court as to the
proper designation of this piece of property. However the parties and the district
court resolve the language, the size and location of the dock should never
impede the prescriptive easement of the Franklins to access and enjoy the
Johnstons’ side of the lake as described above.
V. Conclusion.
With the death of the Franklin family matriarch, so died the respectful,
courteous, and reciprocal use of the fourteen-acre lake in question. We echo the
district court’s sediments that all of this litigation may well have been resolved in
an amicable way had Fae lived. As there appears to be no way for the parties to
resolve this case in a peaceable way, we must now rule on the multitude of
30
issues raised on appeal. We conclude the use restrictions in the 1962 easement
and agreement have expired and are no longer enforceable because more than
twenty-one years has passed since the parties entered into the agreement and it
is undisputed no party filed a verified claim within that time period pursuant to
Iowa Code section 614.24. We agree with the district court’s determination that
the right of first refusal violates the rule against restraints on the alienation of land
and is therefore unenforceable. We also agree with the district court’s conclusion
that the Franklins have proven a prescriptive easement to use the entire lake.
We affirm the district court’s rejection of the Johnstons’ claim of a boundary by
acquiescence through and on the south side of the lake due to the lack of clear
evidence to support the claim, and we also conclude the district court did not
abuse its discretion in declining to award attorney fees under rule 1.413.
With respect to the Franklins’ cross-appeal, we agree with the district court
there is no requirement the Johnstons must maintain the dam in perpetuity.
However, we remand this matter to the district court so that it may expand its
decision with respect to the shoreline and dock near Mike Johnston’s property.
On remand the parties may offer to the district court evidence and legal argument
to support their claim for the proper designation of this property. However, Mike
Johnston’s use of this dock should never impede the Franklins’ prescriptive
easement to use the entire lake. We do not retain jurisdiction.
AFFIRMED IN PART, MODIFIED IN PART, AND REMANDED.
Vaitheswaran, J., concurs; Danilson, C.J., concurs specially.
31
DANILSON, Chief Judge. (concurring specially)
I specially concur because I agree in all respects and with the result
except I would conclude that even if the legislature intended retroactive effect of
the 2014 amendment to Iowa Code section 614.24, the retroactive application
could not restore or resurrect a use restriction that was otherwise stale and had
long ago expired. To do so would recreate or reincarnate a property-use
restriction that had fully expired causing chaos in real estate titles and past title
searches. Here, the use restriction was stale and had expired decades before
the amendment. Accordingly, the majority has unnecessarily attempted to
interpret section 614.24(5)(c) to support its analysis, an interpretation with which I
disagree.
Gene L. Franklin and Connie Johnson, Executors of the Fae Black Estate Gene L. Franklin, Connie Johnson, Curtis L. Franklin, and Gregory S. Franklin, plaintiffs-appellees/cross-appellants v. Michael Johnston, Elizabeth Johnston, Steve Johnston, Kasondra Johnston, James Yeager, and Judith Yeager, defendants-appellants/cross-appellees.
Combined Opinion