No. 91-600
IN THE SUPFU3ME COURT OF THE STATE OF MONTANA
JOHN R. MURRAY and JUDITH R. MURRAY,
husband and wife, ERIK F. NEVA and
LAURA L. NEVA, husband and wife, and
C. GENE ENDRESEN and ARDYCE E. ENDRESEN,
husband and wife,
Plaintiffs and Appellants,
Defendants and Respondents.
APPEAL FROM: District Court of the Thirteenth Judicial ~istrict,
In and for the County of Stillwater,
The Honorable Russell K. Fillner, Judge presiding.
COUNSEL OF RECORD:
For Appellants:
Bruce E. Lee, Attorney at Law, Billings, Montana
For Respondents:
Robert Edd Lee, Crowley, Haughey, Hanson,
Toole & Dietrich, Billings, Montana
Submitted on Briefs: April 23, 1992
Decided: September 29, 1992
Filed:
Justice William E. Hunt, Sr., delivered the opinion of the Court.
This is an appeal from an order of the Thirteenth Judicial
District Court, Stillwater County, ruling that appellants8
"equitableN easement claim is barred by laches. We affirm.
Appellants raise only the "equitable" easement question for
this Court to consider, however we find the following issue raised
by respondents to be dispositive.
Is appellants' claim for an "equitable" easement through
Tract 143 barred by laches?
In 1972, respondents, Charles J. Heringer, Jr., Richard C.
Hoefle, and Donald E. Dubeau formed a limited partnership known as
the Countryman Creek Ranch (hereinafter "partnership"). Sometime
in 1970, Heringer became aware of a 2025 acre ranch situated south
of the Yellowstone River and a few miles west of Columbus which was
being offered for sale. Heringer and Hoefle ultimately purchased
the ranch with the intention of developing it for resale as
recreational homesites.
In 1972, the partnership employed the Bud Hansen Agency for an
initial sales campaign during that summer. In the beginning of the
year, the layout, engineering, and legal work was well underway.
Sales information packets were assembled and closing document forms
were printed. Throughout the early period from 1970 to 1972,
several developments were considered. The final scheme called for
the land to be subdivided into 141 residential tracts, with each
tract containing at least 10 acres.
The initial sales campaign began by June 1972. Dubeau, a
general manager of the project, was also at that time a principal
in the Bud Hansen Agency, a real estate broker operation out of
Billings, Montana. Through DuBeau's activities for the partner-
ship, Bud Hansen Sales' representatives negotiated and closed sales
with tract buyers. A sales office was opened in an existing ranch
house on the partnership ranch land one-half mile from the
Yellowstone River. Diagrammatic maps and aerial photographs were
placed on the walls of the sales office and reduced for
distribution to prospective buyers to aid in location of the tracts
being offered for sale.
The subdivision was subjected to certain use restrictions
defined by the declaration of covenants and restrictions, which
together with the certificate of survey plat, were filed with the
Clerk and Recorder of Stillwater County on July 7, 1972. The
recorded plat and covenants were expressly referenced in all
contracts for sale and warranty deeds for all purchasers of tracts
at the Countryman Creek Ranch development, including the
appellants. One of the first sales went to appellants C. Gene and
Ardyce E. Endresen. On September 8, 1972, the Endresens received
a warranty deed conveying Tract 88. In May 1973, appellant John R.
Murray purchased Tract 62.
In the late 1970s, the Countryman Creek Ranch Homeowners
Association (hereinafter "association") was formed. This was a
nonprofit corporation formed to carry out operational activities
for all tract owners. Platted Tract 142 was designated on the maps
as "recreation area" land and was immediately deeded by the
partnership to the association and held in common for the
association. The recreational land was to be managed for use of
all tract owners by the association as "common area" pursuant to
the declaration of covenants and restrictions as soon as sufficient
tracts had been sold to activate the association. The partnership
retained ownership of adjacent "ranch landv platted as Tract 143
along the river bottom, which the partnership continued to farm,
and across which the association was granted an express
right-of-way for traverse and for access along the bank of the
Yellowstone River.
The original declaration of covenants was amended on two
occasions. The first amendment to the declaration of covenants
concerned changes with respect to grazing and was signed by
appellants on April 9, 1979. The second amendment concerned a sale
of some ranch buildings located on Tract 143. Apparently, this
sale created some confusion between the association and the
partnership because the land sold was originally intended to be a
recreational complex for the subdivision. As a result, an
agreement was reached between the partnership and the association.
The land would be sold in exchange for it being bound by the
declaration of covenants and for some adjacent property to be
deeded over to the association for recreational purposes. This
second amendment was intended to clear up any confusion as to what
was common area land and what was ranch land. Appellants John R.
Murray and C. Gene Endresen signed the amended declaration of
covenants on May 10, 1983.
Appellants believed that they had acquired certain
recreational rights on or over the ranch land of the partnership
similar to those enjoyed in the vvcommon
area." On November 14,
1980, they filed a complaint against the partnership with the
Montana Realty Board. The Montana Realty Board cleared the
partnership of any wrong doing.
In 1988, the partnership subdivided a river front "ranchettev1
from a portion of Tract 143 and sold it to Wayne Schile, a person
who is not part of this action. Schile placed a fence around his
"ranchette" and limited tract owners to a 50-foot river bank
easement described in the declaration of covenants. This sparked
a long-smoldering resentment of the appellants who, since 1980, had
argued with the partnership overtheir understanding concerning the
ranch land.
In 1989, appellants filed their claim in District Court. The
case was originally scheduled as a jury trial. Prior to trial, the
District Court bifurcated the cause and set the matter for hearing
before the court, without a jury, on what were perceived to be
equitable issues. Appellants Nevasv claim was severed from the
other appellants because the Nevas had not purchasedtheir property
directly from respondents.
On May 2, 1991, the District Court entered its findings of
fact and conclusions of law, finding that appellants did not have
an vvequitablevl
easement for common use and enjoyment of the lands
in question. The court held that no implied covenant of good faith
and fair dealing existed, and with regard to a contract claim for
recreational improvements, the court awarded appellants the return
of ten percent of their purchase price of their lots. Appellantsv
appeal is limited to the easement question.
The only question we need to discuss is whether appellantsv
claim for an "equitable" easement through Tract 143 is barred by
the equitable doctrine of laches.
Respondents contend that by at least 1980 there was not an
easement of any nature or any other intangible undefined rights
over partnership ranch land when the partnership changed its
ownership maps to preclude any implication that the partnership
ranch land was to be included as recreation or common area, and
therefore, the doctrine of laches applies.
We have previously stated that:
Laches exists where there has been an unexplainable delay
of such duration or character as to render the
enforcement of an asserted right inequitable, and is
appropriate when a party is actually or presumptively
aware of his rights but fails to act.
Larson v. Undem (1990), 246 Mont. 336, 340, 805 P.2d 1318, 1321.
The appropriate time to apply laches to a certain set of facts
can be evaluated by an analogy to the equivalent statute of
limitations:
Under ordinary circumstances, a suit in equity will not
be stayed for laches before, and will be stayed after,
the time fixed by the analogous statute, but if unusual
conditions or extraordinary circumstances make it
inequitable to allow the prosecution of a suit after a
briefer, or to forbid its maintenance after a longer,
period than that fixed by the analogous statute, a court
of equity will not be bound by the statute, but will
determine the extraordinary case in accordance with the
equities which condition it. When a suit is brought
within the time fixed by the analogous statute, the
burden is on the defendant to show, either from the face
of the complaint or by his answer, that extraordinary
circumstances exist which require the application of the
doctrine of laches. On the other hand, when the suit is
brought after the statutory time has elapsed, the burden
is on the complainant to aver and prove circumstances
making it inequitable to apply laches to his case.
Brabender v. Kit Manufacturing Co. (1977), 174 Mont. 63, 68-69, 568
P.2d 547, 550 (quoting Shell v. Strong (10th Cir. 1945), 151 F.2d
In this instance, appellants stipulated that they had known of
their rights prior to this action but did not enforce them. In
1980, the partnership changed its ownership maps to preclude any
implication that the partnership ranch land was to be included as
recreation or common area. The maps clearly distinguish between
Tract 142 (common area) retained by the association and Tract 143
(ranch land) retained by the partnership. It was the recording of
the common area deed to the association and the allocation of farm
lease proceeds between the association and the partnership, based
upon their respective ownerships, as well as the change in the maps
to show the distinction, which gave rise to the 1980 complaint with
the Montana Board of Realty.
These actions placed the appellants on notice since 1980 that
there was not an easement of any nature or any other intangible
undefined rights over partnership lands. Appellants admittedly
knew of their rights for nine years and failed to exercise them.
Without determining that an wequitablew easement exists, w e hold
that appellants' claim for an "equitable" easement is barred by
laches.
We affirm the District Court.
We concur:
Chief Justice
Chief Justice J. A. Turnage, specially concurring:
I concur with the result in this opinion. I would like to make
it clear that the Court has not indicated that there is such a legal
theory as "equitable easement."
Such a theory does not exist in Montana law and certainly
should not be considered as possibly existing because of any state-
ments in this opinion.
September 29, 1992
CERTIFICATE OF SERVICE
I hereby certify that the following order was sent by United States mail, prepaid, to the
following named:
Bruce E. Lee
Attorney at Law
P.O. Box 1222
Billings, MT 59103
Robert Edd Lee
Crowley, Haughey, Hanson, Toole & Dietrich
P.O. Box 2529
Billings, MT 59103-2529
ED SMITH
CLERK OF THE SUPREME COURT
STATE OF MONTANA