NO. 96-336 INTHESUPREMECOURTOFTHESTATEOFMONTANA 1996

ROBERTW.LUDWIG, JEANNEM. LUDWIG, GARYG.GUNDERSON,KARENL. GUNDERSON, CRAIGAMBROSE, CONNIEJOAMBROSE, JONE. ENDERSEN, LORIE R. ENDERSEN, MARIE HEITMAN, and BERYLESHOM,

Plaintiffs andAppellants,
v. ROBERTSPOKLIE,

Defendant and Respondent.

APPEAL FROM: District Court of the Eleventh Judicial District,

In and for the County of Flathead, TheHonorable Katherine R.Curtis, Judge presiding.

COUNSELOFRECORD:

For Appellant: Stephen C. Berg; Warden, Christiansen, Johnson &Berg; Kalispell, Montana For Respondent: Douglas Weld; Wold LawFirm; Polson;C Montana '*
Submitted onBriefs: December 5, 1996Justice Terry N. Trieweiler delivered the opinion of the Court.

The appellants, Robert W. Ludwig, et. al., filed an action against the respondent, Robert Spoklie, in the District Court for the Eleventh Judicial District in Flathead County, to enjoin Spoklie from developing and using areserved easement for access which burdens their property. The District Court determined that Ludwigs donot have standing to bring anaction to enjoin Spoklie from developing and using his easement, and dismissed the action. Ludwigs appeal the judgment of the District Court. Weaffirm the District Court. Thedispositive issue onappeal is whether the District Court erred whenit determined that Ludwigs donot have standing to bring
anaction to enjoin Spoklie from developing andusing his easement. FACTUAL BACKGROUND Ludwigs ownproperty which is subject to two valid easements of record. Thefirst is atwo-hundred-foot-wide transmission line easement which wasgranted to the Bonneville Power Administration in 1947. The second is asixty-foot-wide easement for road and utility purposes. It is located within the boundaries of the BPA's easement, and was expressly reserved by Brian and Caroline Yarbrough in 1977. The BPA's transmission line easement is senior in both time andentitlement to the Yarbroughs' reserved easement. Spoklie sought to purchase the Yarbroughs' property. Avalid conveyance of the real property would also convey "all easements attached" to the property. Section 70-20-308, MCA. Inanticipation

2of that acquisition, hebegan using anddeveloping the road located

within the boundaries of the reserved sixty-foot road and utility easement. In response, Ludwigs petitioned the District court for injunctive relief. In November 1992, they obtained atemporary restraining order and, on December 18, 1992, the District Court entered apreliminary injunction which enjoined Spoklie from constructing, improving, repairing orotherwise doing any work upon or traveling upon or allowing any traveling upon his purported existing road upon the westerly most aspect of the property of the Plaintiffs herein. Subsequently, Spoklie acquired the Yarbroughs' property and the sixty-foot road and utility easement attached to it. Healso obtained, from the BPA, a Land Use Agreement in which the BPA recognizes his right to use the land over which it holds senior easement rights. The Agreement also establishes conditions with which Spoklie must comply when he uses and develops his junior easement. Relevant to this appeal is the following provision: PLEASE NOTE: BPAis not the owner of this property and if you are not the owner, you must obtain the owners' permission to usethis property. There mayalso beother uses of the property which might be located within the samearea asyour project. This aqreement is subiect to those other riuhts. Following aseries of motions, apretrial conference washeld
on February 2, 1996. Both parties stipulated that the only remaining issues regarding Ludwigs' petition for a permanent injunction were issues of law, and that the District Court could decide those issues without atrial

3OnFebruary 13, 1996, the District Court ordered that Ludwigs

"do not have standing to restrict [Spoklie's] use of his easement
on the basis of the Land UseAgreement dated November 23, 1993. " Accordingly, it dismissed Ludwigs' action. Ludwigs subsequently filed a motion for new trial, reconsideration, or relief from order. OnApril 18, 1996, the District Court denied Ludwigs' motion; and on May 14, 1996, the District Court dissolved the preliminary injunction which it had previously entered onDecember 18, 1992. DISCUSSION Thedispositive issue onappeal is whether the District Court erred whenit determined that Ludwigs donot have standing to bring
anaction toenjoin Spoklie from developing andusing his easement. When we review a district court's conclusions of law, the standard of review is whether those conclusions are correct. Carbon Countyv.UnionReserveCoalCo. (19951, 271 Mont. 459, 469, 898 P.2d 680,
686. The District Court determined that Ludwigs are not intended third-party beneficiaries of the Agreement between Spoklie andthe BPA and that, therefore, they do not have standing to bring an action to enforce its provisions. Onthat basis, the District Court dismissed Ludwigs' petition for injunctive relief. Onappeal, Ludwigs contend that the District Court erred when it determined that they donot have standing to bring anaction to enjoin Spoklie from using and developing his easement. They

4maintain that, as intended third-party beneficiaries of the

Agreement between Spoklie andthe BPA, they have standing to bring
anaction to enforce its terms. Specifically, they seek to enforce the following provision: PLEASE NOTE: BPAis not the owner of this property and if you are not the owner, you must obtain the owners' permission to use this property. There mayalso beother uses of the property which might be located within the samearea asyour project. This agreement is subiect to those other rights. Ludwigs assert that, because Spoklie did not obtain their permission to use their property, he failed to comply with the express terms of the Agreement. Therefore, they claim that, pursuant to the Agreement, they are entitled to bring anaction to enjoin Spoklie from developing andusing his easement. In Hovmanv.MIAServiceContracts (1993), 260 Mont. 67, 858 P.2d 19,
weadopted the following definition of anintended beneficiary:

(1) Unless otherwise agreed between promisor and promisee, a beneficiary of a promise is an intended beneficiary if recognition of aright to performance in the beneficiary is appropriate to effectuate the intention of the parties andeither

. . . (b) the circumstances indicate that the promisee intends to give the beneficiary the benefit of the promised performance. Harman, 260 Mont. at 72, 850 P.2d at 22-23 (citing Restatement (Second) of Contracts 5302 (1981)). Therefore, in order to establish the existence of acontract for the benefit of athird party, it must beshown that it wasthe intention of the contracting parties to benefit the third party. 5See,e.g.,R.H.Grover, Inc.v.FlynnIns.Co. (1989) , 238 Mont. 278, 284, 777 P.2.d

338, 342. The relevant provision of the Agreement states that, "[the] BPAis not the owner of this property andif youare not the owner, you must obtain the owners' permission to use this property." We conclude that this provision merely acknowledges the limits onthe BPA's authority to consent to the use anddevelopment of land that is owned byLudwigs, andthat it is not intended to benefit Ludwigs by taking away rights derived from someother source. The BPA and Spoklie both have easements to use the same property for different purposes. Although the BPA's easement was first in time and is, therefore, the senior easement, it is a nonexclusive easement andadditional easements, such asSpoklie's,
can lawfully becreated onthe sameland. 25 Am. Jur

.2dEasements andLicenses §89 (1966). Therefore, Spoklie, asthe holder of avalid reserved and recorded easement, is entitled to use anddevelop his easement without being required to obtain Ludwigs' permission. Asthe holder of the senior easement, the BPAhasthe right to object to and preclude any use of a junior easement which unreasonably interferes with its senior easement. SeeGabriel v.Wood (1993), 261 Mont. 170, 176, 862 P.2d 42, 45. In fact, the BPA could bring an action to enforce the terms of the Agreement if Spoklie, through the use and development of his junior easement, unreasonably interfered with the BPA's senior easement. However, while the Agreement maybear upon the question of what constitutes
6unreasonable interference with the BPA's senior easement, it does

not give Ludwigs standing to enforce the specific terms and conditions contained within it. Ludwigs are the owners of the servient tenement, and their interests are subordinate to the interests of both Spoklie andthe BPA. Their only cause of action against Spoklie regarding the use of his easement would have tobebased onthe terms of the easement grant. It is undisputed, however, that Spoklie holds avalid reserved and recorded easement for road and utility purposes; therefore, he has anactual interest in the land. Kuhlman v.Rivera (1985), 216 Mont. 353, 358, 701 P.2d 982, 985. WhenSpoklie acquired the dominant tenement, healso acquired the reserved easement that is attached to it. Therefore, at the time the Agreement with the BPAwasentered into, Spoklie did, in fact, have the "owners' permission to usethe property." Heis not required to obtain Ludwigs' permission to do what he is already legally entitled to do--in this case, use and develop his valid reserved and recorded easement. In sum, the Agreement cautioned Spoklie to make sure that, before he took any action, he had the legal right to use the underlying property. It put him onnotice that hewould need to obtain the owners' permission if hedid not already owneither the property or the legal right to use it. Spoklie, pursuant to his valid easement, owns the legal right to use the underlying property, and the relevant provision in the Agreement does not,therefore, provide Ludwigs with standing to bring an action to

terminate or restrict his easement rights. We conclude that Ludwigs are not intended third-party beneficiaries of the Land Use Agreement between Spoklie and the BPA. Accordingly, wehold that the District Court did not err when it held that Ludwigs do not have standing to bring anaction to enjoin Spoklie from developing and using his easement. The judgment of the District Court is affirmed.

Weconcur:

ief Justice