Case Title: Tiller White, LLC v. Canyon Outdoor Media, LLC

Citation: 

Docket Number: 43482

State: idaho

Court: Idaho Supreme Court (civil)

Date: 2016-06-28T00:00:00Z

Document:
1 
 
 
IN THE SUPREME COURT OF THE STATE OF IDAHO   
Docket No. 43482 
TILLER WHITE, LLC, 
 
          Plaintiff-Respondent, 
 
v. 
 
CANYON OUTDOOR MEDIA, LLC, 
 
          Defendant-Appellant. 
)
)
)
)
)
)
)
)
)
) 
Boise, June 2016 Term  
 
2016 Opinion No. 69 
 
Filed:  June 28, 2016 
 
Stephen W. Kenyon, Clerk 
Appeal from the District Court of the Third Judicial District, State of Idaho, 
Canyon County.  Hon. Christopher S. Nye, District Judge.  
District court order granting summary judgment, affirmed. 
Davison, Copple, Copple & Copple, LLP, Boise, for appellant.  Ed Guerricabeitia 
argued.  
Edwin G. Schiller, Nampa, argued for respondent. 
_________________________________ 
 
BURDICK, Justice 
Canyon Outdoor Media, LLC (Canyon Outdoor) appeals from the Canyon County 
District Court’s grant of summary judgment in favor of Tiller White, LLC (Tiller).1 The district 
court ruled that because Canyon Outdoor’s easement was unrecorded and because Tiller did not 
have actual or constructive notice of the easement, the easement was unenforceable. We affirm.  
I. 
FACTUAL AND PROCEDURAL BACKGROUND 
In February 2003, Glen and Rachel Knapp (Knapps) entered into a written lease 
agreement with Lockridge Outdoor Advertising Agency to place a billboard sign on their 
property in exchange for annual rental payments. The lease was for a period of ten years, 
beginning May 1, 2003, with a five-year renewal provision after the original term expired. 
Lockridge assigned the lease to Canyon Outdoor shortly after it was executed.  
The lease agreement contained a provision that allowed Knapps to sell an easement to 
Canyon Outdoor for a lump sum. In May 2003, Canyon Outdoor paid a $12,000 lump sum, and 
                                                 
1 The property was originally sold to Daniel L. Tiller, P.A., and then transferred to Tiller White, LLC. For 
convenience, “Tiller” will also refer to Dr. Daniel L. Tiller, member of Tiller White, LLC, and Daniel L. Tiller, P.A. 
2 
 
the parties signed an easement agreement. Canyon Outdoor completed construction of the sign in 
May 2003. Neither the lease nor the easement agreement contained a legal description of the 
property. Neither document was recorded.  
In 2006, Knapps sold their property to Tiller and issued to Tiller a warranty deed with no 
restrictions. Tiller had discussions with Knapps about the lease agreement and reviewed the lease 
document prior to purchasing the property. Tiller also had a title policy issued that, due to the 
non-recording, did not disclose the easement. 
Tiller asserted that he was unaware of the easement until May 2013 when Canyon 
Outdoor faxed him a copy of the easement. Thus, Tiller argued that he was a bona fide purchaser 
under Idaho Code sections 55-606 and 55-812. Canyon Outdoor argued that Tiller, at minimum, 
had constructive notice of the easement and therefore did not qualify as a bona fide purchaser. 
The parties stipulated to have the district court decide the case on cross-motions for 
summary judgment. Finding that Tiller did not have actual or constructive notice of the easement 
and that Tiller conducted a reasonable investigation of the property, the district court ruled in 
favor of Tiller and found that the easement agreement executed by Knapps and Canyon Outdoor 
was unenforceable against Tiller. Canyon Outdoor timely appeals.  
II. 
STANDARD OF REVIEW 
We review a district court’s grant of summary judgment de novo, and apply the same 
standard used by the district court in ruling on the motion. Grazer v. Jones, 154 Idaho 58, 64, 294 
P.3d 184, 190 (2013). “The fact that the parties have filed cross-motions for summary judgment 
does not change the applicable standard of review.” Shawver v. Huckleberry Estates, L.L.C., 140 
Idaho 354, 360, 93 P.3d 685, 691 (2004). Summary judgment is appropriate when “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.” I.R.C.P. 56(c). “The facts must be liberally construed in favor of the non-moving party.” 
Capstar Radio Operating Co. v. Lawrence, 153 Idaho 411, 416, 283 P.3d 728, 733 (2012). When 
both parties move for summary judgment, “the trial court as the trier of fact is entitled to arrive at 
the most probable inferences based upon the undisputed evidence properly before it and grant the 
summary judgment despite the possibility of conflicting inferences.” Huckleberry Estates, L.L.C., 
140 Idaho at 361, 93 P.3d at 692. “The test for reviewing the inferences drawn by the trial court is 
3 
 
whether the record reasonably supports the inferences.” Beus v. Beus, 151 Idaho 235, 238, 254 
P.3d 1231, 1234 (2011).  
III. 
ANALYSIS 
The district court ruled that because Canyon Outdoor’s easement was unrecorded and 
because Tiller did not have actual or constructive notice of the easement when he purchased the 
land, the easement is unenforceable. On appeal, Canyon Outdoor contends that the district court 
erred because Tiller did in fact have notice of the easement when he purchased the land and 
therefore the easement is valid. 
A. The district court was correct in finding that the easement was unenforceable. 
Idaho Code sections 55-606 and 55-812 provide that an unrecorded interest in land is 
void against subsequent purchasers who acquire title in good faith and for valuable 
consideration. “[T]he words “good faith” in [these] statute[s] mean actual or constructive 
knowledge of the prior interest or defect in title.” Benz v. D.L. Evans Bank, 152 Idaho 215, 226, 
268 P.3d 1167, 1178 (2012). “[O]ne who purchases or encumbrances with notice of inconsistent 
claims does not take in good faith, and one who fails to investigate the open and obvious 
inconsistent claim cannot take in good faith.” W. Wood Investments, Inc. v. Acord, 141 Idaho 75, 
86, 106 P.3d 401, 412 (2005); see also I.C. § 55-815 (“An unrecorded instrument is valid as 
between the parties thereto and those who have notice thereof.”). Good faith requires “a 
reasonable investigation of the property.” Langroise v. Becker, 96 Idaho 218, 221, 526 P.2d 178, 
181 (1974). 
Here, the district court found that Tiller did not know about the unrecorded easement 
until 2013 and that Tiller conducted a reasonable investigation of the property prior to purchase 
in 2006. Canyon Outdoor argues that this was an unreasonable inference based on the evidence 
in the record. Specifically, Canyon Outdoor contends that evidence that Knapps told Tiller they 
had received a lump sum payment for the sign and that there was a possibility of having 
advertising space on the sign put Tiller on notice that Canyon Outdoor had an easement. Canyon 
Outdoor also argues that Tiller did not conduct a reasonable investigation of the property. 
Canyon Outdoor points to Glen R. Knapp’s affidavit and Daniel L. Tiller’s deposition 
testimony as evidence that Tiller knew about the lump sum Knapps received in exchange for the 
easement. In Knapp’s affidavit he states: 
4 
 
I told [Tiller] I had received a lump sum payment of $12,000 and 
that the agreement provided free advertising if one face was vacant 
and asked if that was a deal breaker . . . . My wife and I kept a 
folder of documents concerning the billboard sign.  
To the best of my knowledge, I would have received a copy 
of all the documents that my wife and I signed that were related to 
the billboard sign.  
To the best of my knowledge, I would have given the file 
pertaining to the billboard sign to Dr. Tiller or the closing agent 
prior to or at the time of closing as we would have had no further 
need for the file. 
Regarding the same incident Tiller’s deposition testimony revealed the following: 
Q: Now were there any discussions with either Mr. Knapp or Mrs. 
Knapp with regards to the sign itself at the time you entered into 
this agreement on February 27, 2006? 
A: Only to say that he was concerned that originally it would have 
been a deal breaker. This ten year lease. And that there is only 
seven years to go. And at that point we could start collecting rent 
that would help pay the taxes. 
. . . . 
Q: And Mr. Knapp’s conversation about collecting rent, what 
information did he provide you with regards to the rent on the 
lease? 
A: Well, we know how much it was. A lump sum. So for those ten 
years we didn’t receive anything. 
. . . . 
Q: And I presume that it was Mr. Knapp that told you he received 
a lump sum on the lease? 
A: All he said was at the end of seven more years we could start 
receiving rent if we wanted to continue. 
Q: What did Mr. Knapp tell you after the ten year lease was 
expired? 
A: That if we elected to continue with this lease we could receive 
rent to help pay for the taxes.  
Q: What other conversations did you have with the Knapps in this 
time frame in 2006 when you were acquiring the property? 
A: That was all. 
Q: What documentation did the Knapps provide to you as it relates 
to the billboard at this time in 2006? 
A: I think this [the Sign Lease] is all we had. 
Q: Did they provide you a folder with other information that was 
pertinent to the billboard? 
A: No. 
Q: What information did you request from them specifically 
related to the billboard that was situated on the property? 
5 
 
A: Well, we had this. Exhibit 1 [the Sign Lease]. And then at 
closing that is all the paperwork we had.  
Neither Tiller’s nor Knapp’s account of their conversation regarding the lump sum 
payment and the billboard makes any mention of an easement. While there is mention of a lump 
sum in both recollections there is nothing in Knapp’s affidavit to contradict Tiller’s assertion that 
Knapp indicated the lump sum was for payment of the lease through the ten-year term and that 
Tiller could expect to receive rent after the end of the ten-year term. Knapp alludes to the free 
advertising agreement that is part of the addendum to the easement, but Knapp does not say 
anything about an easement or otherwise indicate that the advertising agreement and the lump 
sum where part of a separate and distinct agreement not contained within the lease. Although 
Knapp asserts that “to the best of his knowledge” he would have had a “copy of all the 
documents that my wife and I signed that were related to the billboard sign” (which would 
presumably contain a copy of the easement) and that, again to “the best of his knowledge,” those 
documents would have been given to Tiller, there is no physical evidence that such a folder 
existed and there is no testimonial evidence from either Knapp or Tiller that Tiller ever saw, 
received, or heard about the easement before it was faxed to him by Canyon Outdoor in 2013. 
Based on this evidence, it was reasonable for the district court to conclude that Tiller did not 
have knowledge of the easement until 2013. 
Canyon Outdoor attempts to make much of the fact that the only place in the lease that 
mentions a lump sum is the provision in the lease that allowed Knapps to sell an easement to 
Canyon Outdoor. That provision reads as follows: “Lessor reserves the right to, at any time 
throughout the term of the lease, to sell Lessee a permanent easement with ingress and egress 
right to service structure for a one time lump sum of $10,000 thus voiding the yearly contractual 
payment aforementioned.” Canyon Outdoor argues that this provision combined with Tiller’s 
knowledge that Knapps received a lump sum payment was enough to put Tiller on notice that 
there was an easement attached to the property and trigger Tiller’s duty to further investigate. 
Canyon Outdoor further contends that Tiller did not conduct a reasonable investigation of 
the property because he did not “attempt to contact Canyon Outdoor to confirm whether or not it 
may or possibly had an easement interest in the subject property.” In support of this argument 
Canyon Outdoor relies on Wood v. Simonson, 108 Idaho 699, 701 P.2d 319 (Ct. App. 1985). In 
that case, the Idaho Court of Appeals stated in dicta that: 
6 
 
[I]f facts appear which would cast suspicion upon the vendor in the 
eyes of the reasonably prudent person, the purchaser “does not 
discharge his duty [to investigate] by making inquiry of his vendor 
alone, and hence the fact that the purchaser is misled by the 
vendor’s false statements is usually not sufficient to protect him.”  
108 Idaho at 703–04, 701 P.2d at 323–24 (quoting 92 C.J.S. Vendor & Purchaser § 326 (1955)) 
(second alteration in original). 
Here, when interpreting the facts in a light most favorable to Canyon Outdoor, the 
provision in the lease that references a lump sum payment in exchange for an easement of 
ingress and egress would be sufficient to “cast suspicion” on Knapp’s statement that the lump 
sum payment was only for prepayment of the lease. However, unlike in Simonson, Tiller did 
more than simply rely on the word of his vendors. In addition to the conversation he had with 
Knapp about the sign, Tiller had the signed lease, he had a warranty deed free of restrictions, and 
he had a title policy issued by a title company that indicated that the property was free of 
encumbrances. Despite Canyon Outdoor’s contention otherwise, the fact that Tiller did not 
contact Canyon Outdoor directly is not dispositive. The test is whether Tiller conducted a 
reasonable investigation of the property. Langroise, 96 Idaho at 221, 526 P.2d at 181. A 
reasonable investigation of the property does not rely solely on the performance or failure to 
perform any one specific act. Rather, a reasonable investigation is one that a reasonable prudent 
person would conduct under similar or like circumstances. Simonson, 108 Idaho at 703–04, 701 
P.2d at 323–24. Having received a representation that the lump sum payment was prepayment on 
the lease and having obtained a title policy and a warranty deed showing no easements attached 
to the property, it would be reasonable for Tiller to conclude that the property was free of 
encumbrances after the term of the lease had run. Thus, under the facts of this case, it was 
reasonable for the district court to conclude that Tiller had conducted a reasonable investigation 
of the property.2  
In sum, the only evidence that there might have been an easement was Knapp’s mention 
of a lump sum payment and Knapp’s passing mention of the advertising agreement. Based on (1) 
Tiller’s uncontested testimony that Knapp told him the lump sum was prepayment on the lease, 
                                                 
2 During oral argument Canyon Outdoor repeatedly insisted that a reasonable investigation of the property would 
include Tiller contacting Canyon Outdoor and that all Tiller had to do was make “one phone call” to Canyon 
Outdoor and all this could have been avoided. We note that the same can be said of Canyon Outdoor’s failure to 
record its easement. Arguably, it would be reasonable and just as easy for Canyon Outdoor to have recorded its 
easement. Yet, although recording the easement would have cleared up the matter, the law does not require Canyon 
Outdoor to do so. 
7 
 
(2) the presence of an unrestricted warranty deed, and (3) the fact that the title policy did not 
disclose the easement, we hold that “the record reasonably supports the inferences” drawn by the 
district court that Tiller did not have notice of the easement until 2013 and that Tiller conducted 
a reasonable investigation of the property. Shawver v. Huckleberry Estates, L.L.C., 140 Idaho 
354, 361, 93 P.3d 685, 692 (“[T]he trial court as the trier of fact is entitled to arrive at the most 
probable inferences based upon the undisputed evidence properly before it and grant the 
summary judgment despite the possibility of conflicting inferences.”). Therefore, we find no 
error. 
Because we hold that the district court did not err in concluding that Tiller took the 
property free of the unrecorded Canyon Outdoor easement we do not address whether the 
easement was unenforceable due to a lack of a proper description of the property.  
B. Whether Canyon Outdoor is entitled to attorney fees on appeal. 
Canyon Outdoor asserts that it is entitled to attorney fees on appeal under Idaho Code 
section 12-121. “Under I.C. § 12–121, attorney fees are awarded to the prevailing party if the 
court is left with the belief that the proceeding was brought, pursued or defended frivolously, 
unreasonably, or without foundation.” Harris v. State, ex rel. Kempthorne, 147 Idaho 401, 406, 
210 P.3d 86, 91 (2009). Canyon Outdoor is not prevailing party. Tiller does not request fees. 
Therefore, each side will bear its own fees on appeal. 
IV. 
CONCLUSION 
Because the evidence in the record reasonably supports the district court’s ruling, the 
district court is affirmed. Costs to Tiller. 
Chief Justice J. JONES and Justices EISMANN, W. JONES and HORTON, CONCUR.