Case Title: Regan v. Owen

Citation: 

Docket Number: 43848

State: idaho

Court: Idaho Supreme Court (civil)

Date: 2017-09-08T00:00:00Z

Document:
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IN THE SUPREME COURT OF THE STATE OF IDAHO 
 
Docket No. 43848 
 
BRENT REGAN and MOURA REGAN, 
husband and wife, 
  
           Plaintiffs-Appellants, 
 
v. 
 
JEFF D. OWEN and KAREN A. OWEN, 
husband and wife, 
  
           Defendants-Respondents. 
_______________________________________ 
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Boise, April 2017 Term 
 
2017 Opinion No. 98 
 
Filed: September 8, 2017 
 
Karel A. Lehrman, Clerk 
 
Appeal from the District Court of the First Judicial District of the State of Idaho, 
Kootenai County.  Hon. John P. Luster, District Judge. 
 
The judgment of the district court is affirmed. 
 
Macomber Law, PLLC, Coeur d’Alene, for appellant. Arthur B. Macomber argued. 
 
James, Vernon & Weeks, PA, Coeur d’Alene, for respondents. Susan P. Weeks 
argued. 
_____________________ 
 
HORTON, Justice. 
This case presents the issue whether a prescriptive easement across a parcel of land was 
extinguished by operation of former Idaho Code section 63-10091 when that parcel was sold by 
tax deed. The Owens purchased a small parcel of land (“the Orphan Parcel”) from Kootenai 
County after a tax sale. A dispute arose as to whether the Regans had the right to drive across the 
parcel. The Regans sued the Owens to reform the tax deed to include an express easement and to 
establish a prescriptive easement.  
The district court granted summary judgment in favor of the Regans, ruling that the 
Owens’ deed contained a mutual mistake and should be reformed to reflect an express easement 
                                                 
1 In 2016, in direct response to an earlier decision of this Court in this action, the Legislature passed Senate Bill 
1388, which amended Idaho Code section 63-1009. As the bill carried an emergency clause, it took effect when the 
Governor signed the bill on March 30, 2016, 2016 Idaho Sess. L. ch. 273, §§  7, 8, p. 758. Unless explicitly noted, 
all references in this opinion to Idaho Code section 63-1009 relate to the earlier version of the statute. 
 
  
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that the original grantors intended. The Owens appealed and this Court held that the deed should 
not be reformed, vacated a portion of the district court’s judgment, and remanded for further 
proceedings. Regan v. Owen, 157 Idaho 758, 339 P.3d 1162 (2014) (“Regan I”). On remand, the 
district court granted summary judgment in favor of the Owens, finding that any prescriptive 
easement was extinguished by Idaho Code section 63-1009, which provides that tax deeds 
convey property free of all “encumbrances.” The Regans timely appealed. After they filed their 
appeal, the Idaho Legislature amended Idaho Code section 63-1009. 2016 Idaho Sess. L. ch. 273, 
§§  7, p. 758. We affirm. 
      
I. FACTUAL AND PROCEDURAL BACKGROUND 
The underlying facts of this case are set forth in Regan I. 157 Idaho 758, 760–61, 339 
P.3d 1162, 1164–65 (2014). There, we held that the Regans’ claim was not barred by the statute 
of limitations. Id. at 762, 339 P.3d at 1166. We also held that the district court erred in reforming 
the Owens’ deed and concluding, on inadequate evidence, that the Regans had a prescriptive 
easement over the Orphan Parcel. Id. at 763–64, 339 P.3d at 1167–68. Accordingly, the case was 
remanded to the district court. Id. at 765, 339 P.3d at 1169.   
On remand, the Owens filed a third motion for summary judgment, alleging that the 
Regans’ prescriptive easement claim was extinguished by issuance of the tax deed. A hearing 
was held and the district court issued a written decision granting the Owens’ motion. The court 
concluded that the plain language of Idaho Code section 63-1009, together with the definition of 
“encumbrances” and interpretation of section 63-1009 in Regan I required the court to conclude 
that any claim the Regans had to a prescriptive easement over the Orphan Parcel was 
extinguished when the tax deed was issued. Accordingly, the district court entered judgment in 
favor of the Owens.  
On March 30, 2016, several months after Regans filed their appeal, Governor Otter 
signed Senate Bill 1388 into law. Section 1 of Senate Bill 1388 contains a lengthy statement of 
legislative intent wherein this Court’s decision in Regan I is mentioned by name and the district 
court’s subsequent determination that Idaho Code section 63-1009 extinguished the Regans’ 
private access easement is expressly rejected. 2016 Idaho Sess. L. ch. 273, § 1, p. 750. Section 1 
further declares: “[a]s its context should have made evident, the purpose of Section 63-1009, 
Idaho Code . . . has always been to convey title absolutely free and clear of liens and mortgages 
of a monetary nature.” Id. Senate Bill 1388 amended Idaho Code section 63-1009 to remove the 
 
  
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reference to “encumbrances” and to more clearly state that the title conveyed by tax deed is the 
same as that of the “record owner.”2  Finally, section 8 of Senate Bill 1388 declares: “Being a 
clarification of existing law, the Legislature does not view the application of this amendment to 
prior conveyances as retroactive legislation. In any event, the Legislature expressly intends that 
these amendments shall be interpreted to apply to any and all conveyances by tax deed, past or 
future.” 2016 Idaho Sess. L. ch. 273, § 8, p. 758.  
II. STANDARD OF REVIEW 
“This Court reviews summary judgment using the same standard as the court that 
originally ruled on the motion.” State ex rel. Indus. Comm’n v. Bible Missionary Church, Inc., 
138 Idaho 847, 849, 70 P.3d 685, 687 (2003). “[S]ummary judgment is proper if the pleadings, 
depositions, and admissions on file, together with the affidavits, if any, show that there is no 
genuine issue as to any material fact, and that the moving party is entitled to a judgment as a 
matter of law.” Silicon Intern. Ore, LLC v. Monsanto Co., 155 Idaho 538, 544, 314 P.3d 593, 
599 (2013) (internal quotations omitted). 
“[T]he interpretation of a statute is a question of law over which this Court exercises free 
review.” Insight, LLC v. Gunter, 154 Idaho 779, 783, 302 P.3d 1052, 1056 (2013). 
“Constitutional issues are questions of law also subject to free review by this Court.” Brewer v. 
La Crosse Health & Rehab, 138 Idaho 859, 862, 71 P.3d 458, 461 (2003).  
III. 
ANALYSIS 
A. The district court did not err in determining that the Regans’ prescriptive easement 
was an encumbrance extinguished by the tax sale of the Orphan Parcel. 
Prior to its amendment, Idaho Code section 63-1009 provided: 
 The [tax] deed conveys to the grantee the absolute title to the land 
described therein, free of all encumbrances except mortgages of record to the 
holders of which notice has not been sent as provided in section 63-1005, Idaho 
Code, any lien for property taxes which may have attached subsequently to the 
assessment and any lien for special assessments.  
                                                 
2 As amended, Idaho Code section 63-1009 now provides: 
EFFECT OF TAX DEED AS CONVEYANCE. The deed conveys to the grantee the 
right, title, and interest held by the record owner or owners, provided that the title conveyed by the 
deed shall be free of any recorded purchase contract, mortgage, deed of trust, security interest, 
lien, or lease, so long as notice has been sent to the party in interest as provided in sections 63-
201(17) and 63-1005, Idaho Code, and the lien for property taxes, assessments, charges, interest, 
and penalties for which the lien is foreclosed and in satisfaction of which the property is sold. 
I.C. § 63-1009 (2016). 
 
  
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(emphasis added). 
 
In Regan I, this Court addressed the meaning of “encumbrance” in Section 63-1009:  
An encumbrance is “any right or interest in land to the diminution of its value, but 
consistent with the free transfer of the fee.” Hunt v. Bremer, 47 Idaho 490, 494, 
276 P. 964, 965 (1929). Whether something is an encumbrance does not depend 
upon the extent to which it diminishes the value of the land. An encumbrance 
“embraces all cases in which the owner does not acquire the complete dominion 
over the land which his grant apparently implies.” Id. An easement is not an 
encumbrance if the easement is essential to the enjoyment of the land and it 
enhances the land’s value.  
Regan I, 157 Idaho at 765, 339 P.3d at 1169. 
The district court determined, following the direction given in Regan I, that the plain 
language of Section 63-1009 “conveys absolute title free of all encumbrances” and that the 
legislature “delineated certain exceptions that do not apply.” This was so regardless of the 
“inequitable or oppressive results” because “it is not the province of the trial court to rewrite the 
law or impose an application contrary to the clearly stated language.”   
The Regans assert that the language defining “encumbrance” in Regan I is dicta and 
relies on dicta from Hunt, 47 Idaho at 494, 276 P. at 965. The Regans also argue that the district 
court’s interpretation of “encumbrances” in Idaho Code section 63-1009 to include private 
easements is poor public policy. The Regans champion a reading of Section 63-1009 that 
restricts encumbrances to financial interests, as contemplated by Idaho Code section 55-613.  
“Statutory interpretation begins with the literal words of the statute, and this language 
should be given its plain, obvious and rational meaning.” Idaho Youth Ranch, Inc. v. Ada Cnty. 
Bd. of Equalization, 157 Idaho 180, 184, 335 P.3d 25, 29 (2014) (internal citations and 
quotations omitted). “If the statutory language is unambiguous, the clearly expressed intent of 
the legislative body must be given effect, and there is no occasion for a court to consider rules of 
statutory construction.” Id. at 184–85, 335 P.3d 29–30.    
Section 63-1009 expressly states that “the [tax] deed conveys to the grantee absolute title 
to the land . . . free of all encumbrances” with the exception of a few specifically delineated 
exceptions. (emphasis added). As both parties recognize, there is no ambiguity in the statute. The 
only question is whether “encumbrances” in Section 63-1009 includes private easements, such as 
the one at issue here. This question was largely answered in Regan I, when this Court defined 
encumbrance as “any right or interest in land to the diminution of its value, but consistent with 
 
  
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the free transfer of the fee” and declared that “[a]n easement is not an encumbrance if the 
easement is essential to the enjoyment of the land and it enhances the land’s value.” 157 Idaho at 
765, 339 P.3d at 1169.  
Thus, the prescriptive easement asserted by the Regans over the Orphan Parcel survives 
issuance of the tax deed only if the easement is essential to the enjoyment and enhances the value 
of the Orphan Parcel. In his affidavit in support of his Third Motion for Summary Judgment, Jeff 
Owen stated that the easement was not essential to his use or enjoyment and that it diminished 
the value of the Orphan Parcel. Additionally, the Regans and the district court cite deposition 
testimony from Brent Regan indicating that Regan “couldn’t say” whether the easement over the 
Orphan Parcel increased the value of the Owens’ land. However, the key inquiry is not whether 
the easement over the Orphan Parcel increased the value of the Owens’ land, but rather, whether 
the easement increases the value of the Orphan Parcel itself. Brent Regan’s deposition testimony 
is thus irrelevant, because it addresses the wrong question. 
 The easement over the Orphan Parcel did not increase the Orphan Parcel’s value in such 
a way that it cannot be considered an encumbrance. The Kootenai County assessor indicated that 
the Orphan Parcel had been given a placeholder value from the time it was first assessed in 2000 
and that placeholder values are typically given to “parcels that are unbuildable and to remainder 
parcels that are used for private roadways.” In his opinion, “the [O]rphan [P]arcel did not appear 
to be a buildable lot and its utility was limited by the existing roadway running the length of the 
parcel.” Because the utility of the Orphan Parcel lay in providing private access to surrounding 
parcels, its value was limited. There was no evidence presented to the district court that the 
Regans’ prescriptive easement over the Orphan Parcel increased the Orphan Parcel’s value. 
Thus, the district court correctly concluded that the easement was an encumbrance for purposes 
of Idaho Code section 63-1009 and was extinguished by issuance of the tax deed.   
The Regans challenge the district court’s application of our discussion of encumbrances 
in Regan I to this case, complaining that such language is dicta and contending that the definition 
in Idaho Code section 55-613, which defines encumbrances as including “taxes, assessments, 
and all liens upon real property” is more appropriate.  
Although the encumbrance language in Regan I was not strictly necessary to the Court’s 
holding in that case, we included it in order to provide guidance to the trial court on remand. 
“Where an appellate court reverses or vacates a judgment upon an issue properly raised, and 
 
  
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remands for further proceedings, it may give guidance for other issues on remand.” Urrutia v. 
Blaine Cnty., 134 Idaho 353, 359, 2 P.3d 738, 744 (2000).  The guidance we offered for 
resolution of the issues on remand is controlling for disposition of the issues in this case.  
B. The current version of Section 63-1009 does not apply retroactively. 
Following its amendment in 2016, Idaho Code section 63-1009 now provides:  
The deed conveys to the grantee the right, title, and interest held by the 
record owner or owners, provided that the title conveyed by the deed shall be free 
of any recorded purchase contract, mortgage, deed of trust, security interest, lien, 
or lease, so long as notice has been sent to the party in interest as provided in 
sections 63-201(17) and 63-1005, Idaho Code, and the lien for property taxes, 
assessments, charges, interest, and penalties for which the lien is foreclosed and in 
satisfaction of which the property is sold. 
Retroactive legislation refers to newly enacted statutes or amendments that affect vested 
or already existing rights. Schoorl v. Lankford, 161 Idaho 628, 629, 389 P.3d 173, 174 (2017). 
Because the amendments to Section 63-1009 became effective after the district court adjudicated 
the rights of the parties regarding the Orphan Parcel, and because the rights concerned—
ownership and a claim to a prescriptive easement—were vested at the time of adjudication, 
application of the amendments to Section 63-1009 would be retroactive.  
  
“[T]he restrictions that the [United States] Constitution places on retroactive legislation 
‘are of limited scope.’ ” Bank Markazi v. Peterson, 136 S.Ct. 1310, 1324 (2016) (quoting 
Landgraf v. USI Film Products, 511 U.S. 244, 267 (1994)).  
The Ex Post Facto Clause flatly prohibits retroactive application of penal 
legislation. Article I, § 10, cl. 1, prohibits States from passing . . . laws “impairing 
the Obligation of Contracts.” The Fifth Amendment’s Takings Clause prevents 
the Legislature (and other government actors) from depriving private persons of 
vested property rights except for a “public use” and upon payment of “just 
compensation.” The prohibitions on “Bills of Attainder” in Art. I, §§ 9–10, 
prohibit legislatures from singling out disfavored persons and meting out 
summary punishment for past conduct. See, e.g., United States v. Brown, 381 U.S. 
437, 456–462 (1965). The Due Process Clause also protects the interests in fair 
notice and repose that may be compromised by retroactive legislation; a 
justification sufficient to validate a statute’s prospective application under the 
Clause “may not suffice” to warrant its retroactive application. Usery v. Turner 
Elkhorn Mining Co., 428 U.S. 1, 17 (1976). 
Landgraf, 511 U.S. at 266 (footnote omitted). “Absent a violation of one of those specific 
provisions,” when a new law makes clear that it is retroactive, the arguable “unfairness of 
 
  
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retroactive civil legislation is not a sufficient reason for a court to fail to give [that law] its 
intended scope.” Bank Markazi, 136 S.Ct. at 1325 (quoting Landgraf, 511 U.S. at 267–68).  
Similarly, in Idaho, legislation does not have retroactive effect in the absence of an 
express legislative statement of intent to that effect. I.C. § 73-101. “A statute should be applied 
retroactively only if the legislature has clearly expressed that intent or such intent is clearly 
implied by the language of the statute.” Guzman v. Piercy, 155 Idaho 928, 938, 318 P.3d 318, 
928 (2014) (quoting Kent v. Idaho Pub. Utils. Comm’n, 93 Idaho 618, 621, 469 P.2d 745, 748 
(1970)). As with new legislative enactments, amendments to statutes are also not given 
retroactive effect unless there is an “express legislative statement to the contrary.” Id. (citing 
Nebeker v. Piper Aircraft Corp., 113 Idaho 609, 614, 747 P.2d 18, 23 (1987)). Thus, the 
applicability of the current version of Idaho Code section 63-1009 to the instant case depends on 
whether Senate Bill 1388 contains an express provision declaring the Legislature’s intention that 
it apply retroactively.  
Section 8 of Senate Bill 1388 provides that: “Being a clarification of existing law, the 
legislature does not view the application of this amendment to prior conveyances as retroactive 
legislation. In any event, the Legislature expressly intends that these amendments shall be 
interpreted to apply to any and all conveyance by tax deed, past or future.” 2016 Idaho Sess. L. 
ch. 273, § 8, p. 758 (emphasis added). This statement does not convey with clarity the 
Legislature’s intent that Senate Bill 1388 be applied retroactively—which is what the law 
requires. If the Legislature wished to clearly convey retroactive intent it could do so—and has in 
other instances. See e.g., I.C. § 7-1107(2) (“This section shall apply retroactively . . . . ); 2016 
Idaho Sess. L. ch.188, § 2, p. 512 (“[T]his act shall be in full force and effect on and after its 
passage and approval, and retroactively to January 1, 2016”); 2013 Idaho Sess. L. ch. 4, § 6, p. 
13 (“Sections 1, 2, 4 and 5 of this act shall be in full force and effect on and after passage and 
approval, and retroactively to January 1, 2013”); State v. Leary, 160 Idaho 349, 353, 373 P.3d 
404, 408 (2016) (“The Legislature clearly knows how to expressly declare retroactive effect 
when drafting a statute . . . ).  
The Legislature’s statement of how it viewed application of the amendment has no 
bearing on how this Court interprets it. Idaho Const. Article V, § 13 (“The legislature shall have 
no power to deprive the judicial department of any power or jurisdiction which rightly pertains to 
it . . . ”). The Legislature is empowered to make laws, and this Court is empowered to interpret 
 
  
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them. Holly Care Ctr. v. State Dept. of Emp’t, 110 Idaho 76, 82, 714 P.2d 45, 51 (1986). The 
Legislature’s statement of how it “viewed” the amendment of Section 63-1009 in Senate Bill 
1388 overstepped the constitutional limits of its power. It cannot direct this Court’s interpretation 
of statutes. State v. Barnes, 55 Idaho 578, 588, 45 P.2d 293, 297 (1935) (Morgan, J., concurring) 
(“It is not, in the constitution, anywhere directed or permitting that the legislature, having 
enacted a law, shall dictate the interpretation or construction to be placed upon it”). Thus, this 
statement is of no effect in determining retroactivity of the amended statute.  
Finally, neither of the parties seek retroactive application of the amendments to Section 
63-1009. We see no reason to give relief that no party seeks. Accordingly, we hold that the 
amendments to Section 63-1009 have only prospective effect.  
C. The district court did not err in rejecting the Regans’ due process argument.  
The Regans argue that the district court erred in dismissing their prescriptive easement 
claim because they were denied due process of law because they did not receive notice of the 
pending issuance of the tax deed for the Orphan Parcel. This argument is based on Mennonite 
Board of Missions v. Adams, 462 U.S. 791 (1983), which held that the Due Process clause 
required more than notice of publication to a mortgagee of a pending tax sale on the mortgaged 
property.  
Notice of the issuance of a tax deed is governed by Idaho Code section 63-1005, which 
requires that written notice by certified mail be served on “the record owner or owners and 
parties in interest of record” at their last known address no more than 5 months, but no less than 
2 months prior to the tax sale. I.C. § 63-1005(2), (2)(a). A “party in interest” is “a person who 
holds a properly recorded mortgage, deed of trust or security interest.” I.C. § 63-201(17).   
The Regans claim that they are the holders of a valid prescriptive easement over the 
Orphan Parcel. A prescriptive easement is established by the continuous, uninterrupted, open and 
notorious use of property belonging to another—with their knowledge and without their 
permission—for the statutory period.3 Backman v. Lawrence, 147 Idaho 390, 396, 210 P.3d 75, 
                                                 
3 In 2006, the Legislature amended Idaho Code section 5-203 to extend the statutory possession period from five 
years to twenty years. 2006 Idaho Sess. L. ch. 158, § 1, p. 474; see also Fuquay v. Low, 162 Idaho 373, 377, 397 
P.3d 1132, 1136 (2017) (“Under Idaho Code section 5-203, the statutory period is five years for prescriptive 
easement claims established prior to the amendment of the statute in 2006, or twenty years if established after the 
amendment.”) 
   
 
  
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81 (2009). It is the use of the property that generates the right, not any official transaction or 
filing. Because of this, the county would likely not have had knowledge of the easement, even if 
it was valid. The Regans argue that whether the county knew of the easement is immaterial; the 
county should have provided notice of the tax deed issuance to all the surrounding property 
owners because it would only be a slight administrative burden and it would assure that the due 
process rights of those who may have an interest in the property would have their interests 
protected. This argument is unavailing. Idaho Code section 63-1005 requires notice of tax deed 
issuance to record owners or parties in interest. This statute is constitutionally sufficient under 
notice standard articulated in Mennonite Board of Missions.  
Further, Mennonite Board of Missions requires notice by mail or other means to any 
affected party whose name and address are ‘reasonably ascertainable’ if such notice is not unduly 
burdensome. Mennonite Bd. of Missions, 462 U.S. at 799–800. However, here, the nature of the 
Regans’ claim rendered their interest not readily ascertainable to the county. Thus, the district 
court did not err in dismissing the Regans’ due process claim, because they were not record 
owners or parties in interest pursuant to Idaho Code 63-1005, nor was their identity as claimants 
readily ascertainable.   
D. Idaho Code section 55-603 does not conflict with Idaho Code section 63-1009. 
   
The Regans assert that the district court erred in interpreting then-applicable Idaho Code 
section 63-1009 because the court’s interpretation conflicts with other provisions which were not 
considered below, most notably Idaho Code section 55-603.  
 
Idaho Code 55-603 declares that “[a] transfer of real property passes all easements 
attached thereto . . . in the same manner and to the same extent as such property was obviously 
and permanently used by the person whose estate is transferred . . . at the time when the transfer 
was agreed upon or completed.” The Regans contend that this rule—that easements pass with 
property conveyances—conflicts with the district court’s reading of Idaho Code section 63-1009 
that extinguished the Regans’ prescriptive easement when the tax deed was issued. 
Statutes pertaining to the same subject are construed, as far as reasonably possible, to be 
in harmony with one another. Christensen v. West, 92 Idaho 87, 88, 437 P.2d 359, 360 (1968). 
Here, the statutes in question can easily be read in harmony. Idaho Code section 55-603 declares 
the general rule that easements survive conveyances, whereas Idaho Code section 63-1009 is 
concerned with a specific exception to that rule—the issuance of tax deeds. Just as statutes must 
 
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be construed to be in harmony with one another when reasonably possible, when a conflict 
between statutes arises, the more specific statute will control. Christensen, 92 Idaho at 90–91, 
437 P.2d at 362–63. Because the instant case involves the issuance of a tax deed, the district 
court correctly applied the more specific rule of Idaho Code section 63-1009. 
E. The validity of the tax deed will not be considered for the first time on appeal. 
The Regans contend that the tax deed is void because the legal description of the Orphan 
Parcel in the tax deed does not meet the requirements of Idaho Code section 63-1006(6)(c). 
Specifically, the Regans argue that the Orphan Parcel tax deed does not include an acreage 
statement, block or lot numbers, a city plat description or a tax number. Idaho Code Section 63-
1006(6)(c) requires that a tax deed contain “[a]n accurate description of the property using 
township, range, section and division of section, together with a statement as to acreage, or in the 
appropriate case, using block and lot numbers or as described in a city plat; and if appropriate, 
include the tax number.”  
Neither the sufficiency of the legal description nor the validity of the tax deed were 
challenged below. Because they were not raised below, this Court will not consider these issues 
for the first time on appeal. See Row v. State, 135 Idaho 573, 580, 21 P.3d 895, 902 (2001).  
F. The Owens’ request to receive a single tax assessment did not constitute relocation of 
the express easement. 
The Regans argue that the Owens’ act to combine the taxes for their parcel and the 
Orphan Parcel into a single assessment served to relocate the Regans’ express easement over the 
northern thirty feet of the Owen parcel. The Regans rely on Idaho Code section 55-313 for this 
argument, asserting that the Owens’ request to combine their tax assessments amounted to 
relocating “access” by way of the easement. Section 55-313 provides that when “for motor 
vehicle travel, any access which is less than a public dedication, has . . . been . . . constructed 
across private lands, the person or persons owning or controlling the private lands shall have the 
right at their own expense to change such access to any other part of the private lands.” I.C. § 55-
313. 
In addition to the prescriptive easement at issue here, in Regan I, this Court determined 
that the Regans had “an express easement across the northern thirty feet of the Owen Parcel.” 
Regan I, 157 Idaho 758, 765, 339 P.3d 1162, 1169 (2014). The Regans misunderstand the 
combination of the parcels for tax purposes as combination of the parcels for all purposes. The 
 
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Regans essentially argue that because the Owens and Orphan Parcel have been combined that 
their express easement over the northern thirty feet of the Owens’ parcel is now an easement 
over the Orphan Parcel, which is conveniently consistent with the Original Grantor’s purpose as 
discussed in Regan I.  
A close reading of the Owens’ document requesting combination of the parcels for tax 
assessment purposes clearly indicates that the request is limited to combination of the parcels for 
tax assessment purposes only. The Owens’ request for a single assessment bill did not constitute 
a relocation of the Regans’ express easement over the Orphan Parcel—where use of the private 
access road had been hotly contested since 2010.  
G. Neither party is entitled to attorney’s fees. 
The Regans argue that they are entitled to costs on appeal pursuant to Idaho Code section 
12-107 and Idaho Appellate Rule 40(a). They also seek attorney’s fees on appeal under Idaho 
Code section 12-121, asserting that the Owens’ arguments in response are frivolous. The Owens 
argue that they should be awarded attorney’s fees under Section 12-121 for responding to several 
of the Regans’ issues on appeal which they deem frivolous.  
In Hoffer v. Shappard, 160 Idaho 868, 883, 380 P.3d 681, 696 (2016), this Court 
determined that Idaho Rule of Civil Procedure 54(e)(1), which interpreted Idaho Code section 
12-121 to permit attorney’s fees when a civil case was “brought, pursued or defended 
frivolously, unreasonably or without foundation,” was no longer applicable. Instead, this Court 
looked to an uncodified provision of Idaho law which declared that “prevailing parties in civil 
litigation have to right to be made whole for attorney fees they have incurred ‘when justice so 
requires.’” Hoffer, 160 Idaho at 883, 380 P.3d at 696. This Court determined that the new rule 
would to take effect March 1, 2017. Id. In the interim, the Idaho Legislature amended Idaho 
Code section 12-121 to mirror the language of the previous Idaho Rule of Civil Procedure 
54(e)(1), with the express purpose of reinstating the law as it existed prior to Hoffer. 2017 Idaho 
Sess. L. ch. 47, §§ 1, 2, p. 75–76. Idaho Code section 12-121 now provides that: “[i]n any civil 
action, the judge may award reasonable attorney’s fees to the prevailing party or parties when the 
judge finds that the case was brought, pursued or defended frivolously, unreasonably, or without 
foundation.” I.C. § 12-121.  
 
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We hold that neither the Owens nor the Regans proffered frivolous arguments on appeal.  
Because there was no frivolous conduct, no attorney’s fees are awarded on appeal. Costs on 
appeal are awarded to the Owens as the prevailing party. I.A.R. 40(a).    
IV.  CONCLUSION 
For the foregoing reasons, we affirm the judgment of the district court and award costs on 
appeal to the Owens.  
 
 
Chief Justice BURDICK and Justice EISMANN CONCUR. 
 
BRODY, Justice, dissenting. 
 
I respectfully dissent from the Court’s decision today because I do not agree that a 
prescriptive easement is an “encumbrance” as that term is used in Idaho Code section 63-1009. 
The context in which the term “encumbrance” was used when Idaho Code section 63-1009 
statute was originally passed makes it clear that the term “encumbrance” is being used in the 
statute in its narrow sense as a financial interest such as a mortgage, judgment lien, assessment or 
tax. While there is certainly support for the Court’s interpretation of the statute and this case is a 
close call, the constitutional issues the Court’s interpretation raises (the taking of a property 
interest without compensation or due process of law in case of an easement of record) lead me to 
resolve any doubt in favor of a narrow interpretation of the term “encumbrance.”  
 
Before addressing the interpretation of section 63-1009, it is necessary to address whether 
the Court’s definition of “encumbrance” in Regan I has become the “law of the case.”  This 
Court first explained the “law of the case” doctrine in Suitts v. First Sec. Bank of Idaho, 110 
Idaho 15, 713 P.2d 1374 (1985). This doctrine requires that when “the Supreme Court, in 
deciding a case presented states in its opinion a principle or rule of law necessary to the 
decision, such pronouncement becomes the law of the case, and must be adhered to throughout 
its subsequent progress, both in the trial court and upon subsequent appeal . . . .” 110 Idaho at 21, 
713 P.2d at 1380 (quoting Fiscus v. Beartooth Elec. Coop., Inc., 180 Mont. 434, 591 P.2d 196, 
197 (1979)) (emphasis added). The law of the case is a well-established doctrine that is intended 
to avoid relitigating issues that have already been decided, and it functions much like stare 
decisis. Frazier v. Neilsen & Co., 118 Idaho 104, 106, 794 P.2d 1160, 1162 (Ct. App. 1990).  
The Court’s discussion of Idaho Code section 63-1009 and Hunt v. Bremer in Regan I 
was dictum—it was not necessary to the decision. The Court concluded that the district court 
 
  13 
 
erred in finding the existence of a prescriptive easement when there were no findings as to width 
of the easement or that the easement had been established by clear and convincing evidence. 
Regan v. Jeff D., 157 Idaho 758, 765, 339 P.3d 1162, 1169 (2014).  The Court appears to have 
raised the issuance of the tax deed and the definition of the word “encumbrance” in the last 
paragraph of the decision. This statement of the law was not necessary to the decision and, as 
such, is dicta. Because the Court’s statement of the law was dicta, it is appropriate to address the 
interpretation of section 63-1009 here. 
 
It appears section 63-1009 has been the law in Idaho since 1887. It “appears” because 
record keeping related to laws passed prior to that time was less than ideal and sometimes 
mistakes in indexing and updating occurred. Suffice it to say, 1887 is the date that it is clear that 
the law existed. Section 63-1009 has been re-codified over the years as the laws passed by the 
Idaho Legislature have expanded, but the statute has basically remained the same for nearly 130 
years. The law when it was originally passed read as follows: 
The deed conveys to the grantee the absolute title to the lands described therein, 
free of all incumbrances, except any lien for taxes which may have attached 
subsequently to the assessment. 
Rev. St. § 1557 (1887). 
 
In 1932, the Legislature added the provision that a mortgage is not extinguished by a tax 
deed unless the mortgage holder was given notice of the proposed sale. The statute was changed 
to read:  
The deed conveys to the grantee the absolute title to the land described therein, 
free of all encumbrances except mortgages of record to the holders of which 
notice has not been sent as provided in section 61-1027 and except any lien for 
taxes which may have attached subsequently to the assessment.  
I.C.A. § 61-1032 (1932). The only other part of the statute that changed in 1932 was the spelling 
of the word “incumbrance”. It went from “incumbrance” to “encumbrance” to reflect the more 
modern spelling preference. The statute remained the same from 1932 until the Legislature 
modified it in 2016 in response to Regan I.  
What does the term “encumbrance” mean and does it include a prescriptive easement? In 
Regan I, the Court answered these questions by using a definition articulated in Hunt v. Bremer, 
47 Idaho 490, 494, 276 P. 964, 965 (1929). In Hunt, encumbrance was defined as “any right or 
interest in land to the diminution of its value, but consistent with the free transfer of the fee. It 
does not depend on the extent or amount of diminution in value, but embraces all cases in which 
 
  14 
 
the owner does not acquire the complete dominion over the land which his grant apparently 
implies.” Id. at 494, 276 P. at 965.  
The Hunt case did not address the meaning of the term “encumbrance” in the context of 
the tax deed statute. In Hunt a landowner divided a parcel into 14 lots. Id. at 492, 276 P. at 964. 
There was one water right that was shared among all of the lots, and the irrigation company 
refused to split the right into fractional shares. Id. at 493, 276 P. at 965. The landowner sold two 
of the lots to a single purchaser on contract. Id. at 492, 276 P. at 964. The purchaser defaulted 
and argued as a defense that the landowner had failed to deliver good title because the water 
contract was an encumbrance. Id. at 492–93, 276 P. at 964–65. The purchaser argued that the 
irrigation company could place a lien on all of the lots for any one owner’s failure to pay his 
fractional share of the maintenance costs. Id. at 493, 276 P. at 964–65. The Court decided that a 
water right enhanced the value of the land and that a lien for unpaid maintenance charges that 
might accrue in the future was not an encumbrance for purposes of warranty of title. Id. at 495–
96, 276 P. at 966. Again, the Court never examined the meaning of the term “encumbrance” as it 
was used in the tax deed statute.  
To understand what “encumbrance” means in the tax deed statute it is important to 
understand the history of the law. In 1885, the Legislature authorized the formation of a three-
person commission to revise, simplify, arrange and consolidate all statutes of the Territory. See 
Introduction, Rev. St. of Idaho Territory (1887). The 1887 Revised Statutes were the final work 
product of that commission. The Revised Statutes were organized into four parts: (1) the Political 
Code (“enactments relating to the machinery of government”); (2) the Civil Code (relating to 
personal and private rights and private property); (3) the Code of Civil Procedure (regulating 
civil procedure in the courts); and (4) the Penal Code (crimes, criminal procedure, the Territorial 
prison and county jails). Id. 
 The Revised Statutes had general provisions which applied to the laws in all four codes. 
Section 15 of the general provisions set forth how statutes were to be interpreted. It stated: 
Words and phrases are construed according to the context and the 
approved usage of the language, but technical words and phrases, and such others 
as have acquired a peculiar and appropriate meaning in law, or are defined in the 
succeeding section, are to be construed according to such peculiar and appropriate 
meaning or definition. 
 
 
  15 
 
Rev. St. § 15 (1887). This provision is still part of Idaho law today. See I.C. § 73-113(3) (setting 
forth rules of construction for statutes).  
The term “incumbrance” is a word that has acquired a “peculiar and appropriate” 
meaning in law. Under section 15 of the general provisions, the word should be given its 
“peculiar and appropriate” legal meaning or the meaning that has been provided by the 
legislature in a “succeeding section.” The tax deed statute appeared in Title X of the Political 
Code which was titled “Revenue.” Title X was broken down into eleven chapters. Chapter VII is 
titled “Collection of Property Taxes,” and that is where the tax deed statute was codified. There 
was no definition of the word “incumbrance” in the code section that followed the tax deed 
statute or in Title X or anywhere in the Political Code.  
There was a definition of the term “incumbrances” (emphasis on the plural) in Title VI of 
the Civil Code. See Rev. St. § 2936. Title VI, Chapter II of the Civil Code governed transfers of 
real property. Section 2935 codified a warranty of title that was implicit in every transfer of real 
property. One of the warranties was “[t]hat such estate is at the time of the execution of such 
conveyance free from incumbrances done, made, or suffered by the grantor.” Rev. St. § 2935(2) 
(emphasis on plural added). Section 2936, the “succeeding section”, then provided a definition of 
the word incumbrances, “The term ‘incumbrances’ includes taxes, assessments, and all liens 
upon real property.” Rev. St. § 2936. The warranty of title provision and the subsequent 
definition of the term “incumbrances” still exist in Idaho law today. See I.C. §§ 55-612, 55-613. 
In fact, the Regans contend that the definition of “encumbrances” set forth in Idaho Code section 
55-613 (which is identical to Rev. St. § 2936) should control this dispute. 
I agree that the Court should narrowly construe the term “encumbrance” to mean a 
financial interest such as a mortgage, judgment lien, assessment or tax, but I do not agree that the 
Court can take a definition of a word adopted by the Legislature in a completely different context 
(in this case it was originally adopted as part of an entirely different code) and necessarily apply 
it here. In addition, this Court has previously held that the definition of the term “encumbrances” 
in Idaho Code section 55-613 is inclusive, rather than exclusive, meaning that the law may 
recognize forms of encumbrances that are not listed in the statute. See Hoffer v. Callister, 137 
Idaho 291, 294, 47 P.3d 1261, 1264 (2002). While I agree the law takes us to the end result the 
Regans advocate, the route is different. 
 
  16 
 
Since there is no applicable statutory definition of the term “incumbrance” and the word 
must be defined in its “peculiar and appropriate” legal sense, it is reasonable to consult a legal 
dictionary. Black’s Law Dictionary at the time the tax deed statute was adopted defined the term 
“incumbrance” in the following ways: 
Any right to, or interest in, land which may subsist in third persons, to the 
diminution of the value of the estate of the tenant, but consistently with the 
passing of the fee. 8 Neb. 8; 2 Greenl. Ev. § 242. 
A claim, lien, or liability attached to property; as a mortgage, a registered 
judgment, etc. 
Black’s Law Dictionary (1st ed. 1891).  
It is evident from these definitions that the word “encumbrance” can be construed in a 
general sense that could potentially encompass an easement (i.e., the Hunt definition stated in 
Regan I), and it can also be used in a narrower, more specific sense that means a financial 
interest (the definition advocated by Regans). If a word used in a statute is reasonably subject to 
more than one meaning, the statute is ambiguous, and the Court must construe the statute to 
mean what the Legislature intended. Ada Cnty. Highway Dist. v. Brooke View, Inc., 162 Idaho 
138, 142, 395 P.3d 357, 361 (2017). To determine the Legislature’s intent, the Court must 
examine the words of the statute, the reasonableness of proposed constructions, the public policy 
behind the statute, and its legislative history. Id. There is no legislative history to be found other 
than record of the tax deed statute’s passage so the focus must be on the other factors. 
 
In 1887, our Territory taxed real and personal property at the rate of 35 cents per one 
hundred dollars of assessed value. Rev. St. § 1410. The taxes assessed each year on both 
personal and real property were considered a judgment and became a lien upon the owner’s real 
property. Rev. St. §§ 1412–14. The Territory taxed not only real property, but also water ditches, 
wagon toll roads, and telegraph lines. Rev. St. §1460. Railroads had a particularly noteworthy 
tax structure and were required to list for assessment their road-bed superstructure, rights of way 
and all structures thereon, rolling stock, side track, telegraph lines, furniture and fixtures, and 
other personal property. Rev. St. § 1463. The Territorial Board of Equalization was charged with 
valuing and assessing railroad property based on the number of miles of each road or line. Id. 
The county assessors were responsible for assessing real property owned by railroads outside of 
the rights of way. Id.  
 
When taxes became delinquent, the owner’s real property upon which the taxes were a 
lien could be sold at public auction. Rev. St. § 1531. If there was no good faith purchaser after 
 
  17 
 
being put up for sale twice, then the property was “struck off” the Tax Collector’s list to the 
county as the purchaser. Rev. St. § 1539. The Tax Collector had to issue the county a certificate 
of sale. Rev. St. § 1544. The owner of the real property had the right to redeem the property for 
at least one year, or up until the time the county disposed of it. Rev. St. §§ 1548, 1554. Once the 
redemption period expired, the Tax Collector had to issue a deed which mirrored the certificate 
of sale. Rev. St. §§ 1555–56. Once the deed was issued, the statute at issue came into play: “[t]he 
deed conveys to the grantee the absolute title to the lands described therein, free of all 
incumbrances, except any lien for taxes which may have attached subsequently to the 
assessment.” Rev. St. § 1557. 
 
The effect of tax deeds is something courts have wrestled with for years. The decisions 
are not in agreement and are driven in part by statutory provisions unique to each state. See Holly 
Piehler Rockwell, Annotation, Easement, Servitude, or Covenant as Affected by Sale for Taxes, 7 
A.L.R.5th 187 (1992); see also Annotation, Easement or Servitude or Restrictive Covenant as 
Affected by Sale for Taxes, 168 A.L.R. 529 (1947). One case that is particularly instructive in 
analyzing the issue is Engel v. Catucci, 197 F.2d 597 (D.C. Cir. 1952). 
In Engel, the court explained that an easement is not an encumbrance in the ordinary 
sense and is actually carved out of the landowner’s estate and becomes part of the easement 
user’s property: 
It is true, as Engel and the District say, that in the District of Columbia a tax deed 
extinguishes all liens, encumbrances and equities in and upon the parcel 
conveyed. But an easement is an interest in land which has peculiar 
characteristics of its own, being neither an estate nor a lien, an encumbrance 
nor an equity, in the ordinary sense of those terms. An easement appurtenant to 
another lot, when created by conveyance, attaches to the possession of that other 
lot and ‘follows it into whosesoever hands it may come.' The owner of the 
dominant estate owns the easement. So the owner of the servient estate cannot by 
conveyance strip that estate of an easement which has by prior conveyance 
become part of the property right of the possessor of another parcel of land, 
unless, of course, the conveyance by which the easement was created permits it. 
We refer to the Restatement of Property, Division V, Part I, for a full discussion 
of these underlying considerations. These special characteristics of an easement 
appurtenant should carry through into the tax field. ‘(T)he appurtenant easement’, 
as the Restatement says, ‘presents a situation which calls for exceptional 
treatment.' An easement which lies upon one lot but is appurtenant to another lot 
is really part of the latter. It is carved out of the former. So it would appear that, 
when the servient lot is sold for taxes not paid upon it, the easement ought not 
 
  18 
 
to pass to the purchaser; the lot should pass subject to the easement, or, to 
express it another way, the lot less the easement should pass.). 
   
Engel, 197 F.2d at 599-600 (emphasis added).  
The Engel court’s analysis makes sense in Idaho not only as it relates to appurtenant 
easements (i.e., those that are attached to the easement user’s land), but also easements in gross 
(easements which belong to another person such as a utility company or railroad). In 1887, 
easement holders were actually taxed on their interests. Water ditches were taxed. Telegraph 
lines were taxed. Wagon toll roads were taxed. Railroad rights of way were taxed. In other 
words, the Territory had two sources of tax revenue. The Territory taxed the owner of the land 
where the easement was located and the holder of the easement. If we were to construe the tax 
deed statute to extinguish all easements, then we would also extinguish a source of revenue for 
the Territory and counties and deprive the easement holder of an important property interest 
without notice, compensation, or due process of law in the case of a recorded easement. That 
construction is unreasonable and is why I have concluded that the Legislature intended the term 
“encumbrance” to be construed narrowly in the sense of a financial interest. 
 
 
 
Justice Jones concurs.