Lodging North, Inc. v. Century Partners, LP, No. S0 438-04 CnC (Norton, J.,

June 24, 2005)

[The text of this Vermont trial court opinion is un official. It has been reformatted from the original. The accuracy of the text and the accompanying data included in the Vermont trial cou rt opinion database is not guaranteed.]

STATE OF VERMONT SUPERIOR COURT Chittenden County, ss.: Docket No.S0438-04 CnC

LODGING NORTH, INC.

v.

CENTURY PARTNERS, LP

ENTRY

Plaintiff Lodging North, Inc. filed a four-count c omplaint against Defendant Century Partners, LP seeking a judgment d eclaring that it has an easement across Century Partners’ property for the use of a storm drain. Century Partners’ amended nine-count counterclaim s eeks judgment declaring that no storm water easement exists and r equests damages under a variety of theories. Lodging North has moved for s ummary judgment on all counts. Century Partners has made a cross moti on for partial summary judgment on all of Lodging North’s counts and count s one through five andeight of its counterclaim. For the reasons stated below, summary judgment

is granted in favor of Century Partners on three co unts. Summary judgment is granted “if the pleadings, dep ositions, answers to interrogatories, and admissions on file, together with the affidavits, if any . . . show that there is no genu ine issue as to any material fact and that any party is entitled to judgment as a matter of law.” V.R.C.P. 56(c)(3). In determining whether a genuine issue o f fact exists, the nonmoving party receives the benefit of all reasona ble doubts and inferences. Robertson v. Mylan Labs., Inc. , 2004 VT 15, ¶ 15. Allegations to the contrary must be supported by specific facts sufficient to create a genuine issue of material fact. Id . Where opposing parties both seek summary judgment, each is entitled to the benefit o f all reasonable doubts and inferences in determining whether a genuine iss ue of material fact exists when the opposing party’s motion is being ju dged. Toys, Inc. v. F.M. Burlington Co. , 155 Vt. 44, 48 (1990).

FACTS

The following facts are undisputed. In October 19 87 Lodging North purchased an 8.7 acre parcel in South Burlington, V ermont, on which a hotel was located . In 1990, Lodging North subdivi ded the parcel into a 6.1 acre parcel containing the hotel (“Hotel Parcel”) a nd a 2.6 acre undeveloped parcel. On August 29, 1990, Lodging No rth conveyed to Century Partners’ predecessor, TAP Development Corp oration, the 2.6 acre parcel by warranty deed. TAP subsequently merged w ith parent company Judge Development Corporation. On March 23, 1994, Judge Development conveyed the 2.6 acre parcel to Century Partners.

The conveyance of the 2.6 acre parcel from Lodging North to Century Partners’ predecessor included reservations , restrictions, and rights-of-way of record, but did not reference the existence of a storm water system from the Hotel Parcel or a right to discharg e storm water acrossCentury Partners’ property. The conveyance include d a 24-foot wide rightof-way to be used “for purposes of general ingress and egress (including but not limited to motor vehicle traffic)” to the H otel Parcel. Neither party was aware of the existence of the storm water syste m on the 2.6 acre parcel until development of that parcel began in 1995 or 1 996.

In 2003, Lodging North expanded its hotel by addin g 33 units. This expansion increased its discharge into the storm wa ter system. A representative of Century Partners appeared at a he aring before the District Environmental Commission on Lodging North’s Act 250 application for the expansion and objected on the grounds that no s torm water easement existed. Century Partners appealed the Commission’ s approval on the same

basis.

DISCUSSION

Lodging North seeks summary judgment on the basis of existence of an easement by implication or necessity. Century P artners’ cross motion seeks summary judgment on the same issues as well a s the remaining counts of Lodging North’s complaint, easement by es toppel and a declaration that the express easement includes stor m water. Century Partners also seeks summary judgment on several of its counterclaims involving the same issues, as well as a prescriptiv e easement and the

burden on the servient estate of increased storm wa ter discharge.

I. Easement by Implication

An easement by implication may exist where there i s (1) unity and subsequent separation of title, (2) obvious benefit to the dominant estate and burden to the servient portion of the premises existing at the time of the conveyance, (3) use of the premises by the common o wner in their altered condition long enough before the conveyance to show that the change wasintended to be permanent, and (4) strict necessity for the easement.

Chevalier v. Tyler , 118 Vt. 448, 450–51 (1955); Read v. Webster , 95 Vt. 239, 244 (1921). All four elements must have exist ed at the time of conveyance, in this case August 29, 1990. Chevalie r , 118 Vt. at 451. The first element is undisputed. The remaining three r equire discussion.

There is some disagreement between the parties reg arding whether the storm water system was “obvious” at the time of conveyance. Vermont recognizes both actual and inquiry notice with resp ect to interests in land. Myers v. LaCasse , 176 Vt. 29, 40 (2003). In addition, the modern v iew is that underground utilities, including drainage pipe s, are per se apparent. Restatement (Third) of Property (Servitudes) § 2.12 cmt. g (2000); cf. Implied Easement in Respect of Drains, Pipes, or Se wers Upon Severance of Tract, 58 A.L.R. 832 (“the majority of cases whi ch have considered the question have taken the view that appearance and vi sibility are not synonymous, and that the fact that the pipe, sewer, or drain may be hidden underground does not negative its character as an a pparent condition; at least, where appliances connected with and leading to it are obvious.”). The existence of the storm water system was per se apparent.

Lodging North must show use of the storm water sys tem long enough before the conveyance to show that the chang e was intended to be permanent. Lodging North asserted in it Statement of Undisputed Material Facts that the storm water system has been in conti nuous use since 1968 and has been used by Lodging North since it purchas ed the property in 1987. There is no support in the record for this a ssertion, however. Where Century Partners has disputed the fact, the court f inds the issue of length of use to be a disputed material fact. See V.R.C.P. 5 6(c)(2) & (3) and 2003 Reporter’s Notes (Supp. 2004).

Contrary to the majority of jurisdictions, Vermont requires that an implied easement in favor of the grantor be of “str ict necessity.” SeeRestatement (Third) of Property (Servitudes) § 2.12 cmt. e and Reporter’s

Note (collecting cases). The Court’s reasoning for a strict necessity requirement has been forcefully stated:

To say that a grantor reserves to himself something out of the property granted, wholly by implication, not only o ffends the rule that one shall not derogate from his own grant, but conflicts with the grantor’s language in the conveyance, which, by the rule, is to be taken against him, and is wholly inconsistent wi th the theory on which our registry laws are based. If such an illo gical result is to follow an absolute grant, it must be by virtue of s ome legal rule of compelling force. The correct rule is, we think, t hat where, as here, one grants a parcel of land by metes and boun ds, by a deed containing full covenants of warranty and without a ny express reservation, there can be no reservation by implica tion, unless the easement claimed is one of strict necessity, within the meaning of that term as explained in Dee v. King , 73 Vt. 375 [(1901)].

Howley v. Chaffee , 88 Vt. 468, 474 (1915). The standard for strict necessity set forth in Dee v. King is, more than convenience or usefulness, whether there is any viable alternative. 73 Vt. at 377– 78. A strict necessity has also been described as the only “reas onable” option.

Chevalier , 118 Vt. at 453-54.

There is a clear factual dispute concerning the st rict necessity of an easement for the current storm water system. Both parties have submitted affidavits by expert engineers. The experts reach opposite conclusions concerning the feasibility of alternative storm wat er drainage systems. In determining strict necessity, the court must consid er alternatives to discharge across Century Partners’ property. See C hevalier , 118 Vt. at 452 (uncontradicted evidence that were no alternatives for sewage disposal required finding of necessity). There is a factual dispute concerning the availability of viable alternative storm water drai n systems.Both parties’ motions for summary judgment are den ied with respect

to the existence of an implied easement by continuo us use due to factual disputes concerning several of the elements.

II. Easement by Necessity

Unlike an implied easement based on use, where the basis is the intent of the parties, an easement by necessity is based on the public policy interest of providing accessibility to all land so that it may be made useful.

Traders, Inc. v. Bartholomew , 142 Vt. 486, 491 (1983). An easement by necessity has traditionally been understood in Verm ont as being about access to a landlocked parcel. The Vermont Supreme Court recently stated: “A way of necessity is ‘a fiction of law,’ that ari ses when the division and transfer of commonly owned land results in a parcel left entirely without access to a public road.” Myers , 176 Vt. at 36 (internal citation omitted). However, Myers was a case specifically about overland access. Furthermore, the court went on to cite approvingly of the current Restatement’s assertion that an easement by necessi ty

avoids the costs involved if the property is depriv ed of rights necessary to make it useable, whether the result is that it remains unused, or that the owner incurs the costs of acqui ring rights from landowners who are in a position to demand an extor tionate price because of their monopolistic position.

Id . (citing Restatement (Third) of Property (Servitud es) § 2.15 cmt. a (2000)). This understanding is in keeping with the modern trend to broaden the use of easements by necessity to include utilit ies and, perhaps, other

services. [T]he increasing dependence in recent years on elec tricity and telephone service, delivered through overland cable s, justify the conclusion that implied servitudes by necessity wil l be recognized for those purposes. Whether access for other utili ties and serviceshas also become necessary to reasonable enjoyment o f property depends on the nature and location of the property and normal land uses in the community.

Restatement (Third) of Property (Servitudes) § 2.15 cmt. d; see, e.g., Richards v. Land Start Group, Inc. , 593 N.W.2d 103, 108-09 (applying principles of the Restatement (Third) of Property ( Servitudes) to consider whether an easement for utilities was reasonably ne cessary for the needs of the dominant estate). Whether or not an easement b y necessity exists depends largely of the necessity for running the st orm water system across Century Partners’ land. That issue, as stated in t he discussion on implied easements above, remains a disputed material fact.

Summary judgment is therefore denied on the issue of easement by necessity.

III. Easement by Estoppel

A claim of easement by estoppel is analyzed using the ordinary elements of equitable estoppel. See Tallarico v. B rett , 137 Vt. 52, 60 (1979). “The party who invokes equitable estoppel has the burden of establishing all four of the following elements: (1 ) the party to be estopped must know the facts; (2) the party being estopped m ust intend that his conduct shall be acted upon or the acts must be suc h that the party asserting the estoppel has a right to believe it is so intend ed; (3) the party asserting estoppel must be ignorant of the true facts; and (4 ) the party asserting estoppel must rely on the conduct of the party to b e estopped to his detriment.” Westco, Inc. v. City of Montpelier , 169 Vt. 520, 524 (1999).

Lodging North’s claim of easement by estoppel is t wofold: (1)Century Partners sought Lodging North’s permission to re-route the storm

drain when Century North developed the 2.6 acre par cel in the mid 1990s and (2) Lodging North reasonably relied upon Centur y Partners’ failure to object to the storm drain when it expanded its hote l in 2003. In support of its motion for summary judgment, Century Partners’ Statement of Material Facts states only that objection to the hotel expan sion was raised at the time of the Act 250 application hearing.

The evidence currently in the record concerning th e 1996 re-routing of the storm water system is enough to support an i nference that Century Partners undertook a course of conduct upon which L odging North reasonably relied, but it is not dispositive withou t additional facts concerning the actions and understandings of the pa rties. Furthermore, there is a dispute as to whether the objection made by Century Partners at the time of the Act 250 hearing was sufficient to p revent Lodging North from acting to its detriment in investing in hotel expansion. There are currently insufficient undisputed facts to support judgment as a matter of law on the issue of easement by estoppel.

IV. Scope of the Express Easement

The scope of an express easement, like all contrac t terms, is to determined first by the words used in the agreement . Tilley v. Green Mountain Power Corp. , 156 Vt. 91, 93–94 (1991). Only if there is an ambiguity, will the court consider surrounding circ umstances to discern the intent of the parties. Id . Lodging North contends that the express easement contained in the deed for the 2.6 acre parcel “for purposes of general ingress and egress (including but not limited to mo tor vehicle traffic)” to

the Hotel Parcel can be construed to include a stor m water system.Lodging North specifically points to the language “ including but not

limited to motor vehicle traffic” and suggests that the easem ent is general.

The express easement, unambiguous on its face, all ows only for “general ingress and egress.” This provides for a right of entry and departure from the Hotel parcel. See Black’s Law D ictionary (8th ed.) 798 & 555 (defining “ingress” and “egress” as the acts of entering and leaving). Cases cited by Lodging North for its proposition th at a right-of-way should be construed broadly are distinguishable on this po int because they involve terms written much more general than the deed here. See, e.g., Birdsey v.

Kosienski , 101 A.2d 274, 275 (Conn. 1953) (easement was for “the right of passway from the north end to the south end of said piece of land”). The express easement for ingress and egress, as a matte r of law, does not include a right to install a storm water system wit hin the right-of-way. Thompson v. Pendleton , 697 A.2d 56, 59 (Me. 1997) (easement for ingress and egress did not include right to install utiliti es); U.S. Cablevision Corp.

v. Theodoreu , 596 N.Y.S.2d 485, 487 (N.Y. App. Div. 1993) (“The grant of a mere right- of- way for ingress and egress does not, however, inclu de the right to install underground pipes or utility lines .”).

Summary judgment is granted in favor of Century Pa rtners on the issue of scope of the express easement.

V. Prescriptive Easement

Century Partners has moved for a summary judgment ruling that Lodging North does not have a prescriptive easement for the storm water system. To obtain an easement by prescription, Lod ging North’s adverse use must have been continuous for fifteen years. C mty. Feed Store, Inc. v.Northeastern Culvert Corp. , 151 Vt. 152, 155 (1989). Lodging North sold

the 2.6 acre parcel in August 1990, development did not begin until 1995, and Century Partner’s counterclaim was filed May 5, 2004. Thus, Lodging

North cannot establish hostile use for the full fif teen-year statute of limitations. See 12 V.S.A. § 501. Summary judgmen t on this issue is uncontested by Lodging North and is granted.

VI. Burden of Increased Storm Water Discharge

Century Partners has moved for summary judgment on the issue of whether the additional storm water discharge across its property as a result of hotel expansion has placed an undue burden on th e servient estate. Because the court has not, at this stage, found an easement to exist, this issue is not ripe for review.

Based on the foregoing, Century Partners’ motion f or summary judgment is granted in part and denied in part. Lo dging North’s motion for summary judgment is denied.

Dated at Burlington, Vermont this ____ day of June , 2005.

____________________________ Hon. Richard W. Norton Presiding Judge