Title: BEATTIE v. STATE ex. rel. GRAND RIVER DAM AUTHORITY
Citation: 2001 OK 43, 72OBJ1504
Docket Number: 
State: Oklahoma
Issuer: Oklahoma Supreme Court
Date: May 15, 2001

BEATTIE v. STATE ex. rel. GRAND RIVER DAM AUTHORITY Annotate this Case BEATTIE v. STATE ex. rel. GRAND RIVER DAM AUTHORITY 2001 OK 43 72 OBJ 1504 Case Number: 91359 Decided: 05/15/2001 Modified: 01/15/2002 NOTICE: THIS OPINION HAS BEEN WITHDRAWN FROM PUBLICATION AND REPLACED WITH 2002 OK 3 . WITHDRAWN *** WITHDRAWN *** WITHDRAWN *** WITHDRAWN EDWARD T. BEATTIE and WALTER R. BAILEY, JR., Plaintiffs/Appellants v. STATE OF OKLAHOMA, ex rel GRAND RIVER DAM AUTHORITY, Defendant/Appellee ON CERTIORARI TO THE COURT OF CIVIL APPEALS, DIVISION 4 ¶0 Plaintiffs, who purchased property from the United States, filed suit seeking to enforce relocation and removal rights under a series of utility easements after Defendant, Grand River Dam Authority (GRDA), refused to remove or relocate its facilities which existed upon the purchased property. Both parties filed summary judgment motions. The trial court held Plaintiffs did not acquire the relocation and removal rights and granted summary judgment in favor of GRDA; this summary judgment was upheld by the Court of Civil Appeals. The case presents two primary questions 1) whether the relocation and removal rights held by the seller in connection with five utility easements were assignable so that those rights were transferred to the purchaser through the executed quitclaim deed and 2) did a "subject to" clause in the quitclaim deed reserve the relocation and removal rights in the seller or otherwise prevent those rights from passing to the purchaser of the servient estate. This opinion finds the rights of the U.S. did pass to Plaintiffs and reverses the trial court decision. The case is remanded with instructions to proceed in a manner consistent with the following opinion. CERTIORARI PREVIOUSLY GRANTED; COURT OF CIVIL APPEALS OPINION VACATED; DECISION OF THE TRIAL COURT REVERSED AND CAUSE REMANDED WITH INSTRUCTIONS TO PROCEED IN A MANNER CONSISTENT WITH THIS OPINION K. Clark Phipps, Atkinson, Haskins, Nellis, et al, Tulsa, Oklahoma for Plaintiffs/Appellants. Thomas L. Vogt, Jones, Givens, Gotcher & Bogan, P.C., Tulsa, Oklahoma for Defendant/Appellee. BOUDREAU, J. ¶1 This matter comes to the Court upon certiorari asking (1) whether certain relocation and removal rights held by the seller in connection with five utility easements were assignable so that those rights were transferred to the purchaser of the servient estate through an executed quitclaim deed, and (2) did a "subject to" clause in the quitclaim deed reserve the relocation and removal rights in the seller or otherwise prevent those rights from passing to the purchaser of the servient estate? We find the relocation and removal rights held by the seller were assignable so that those rights were transferred to the purchaser of the servient estate through the executed quitclaim deed; and the "subject to" clause did not reserve or otherwise prevent the relocation and removal rights from passing to the purchaser of the servient estate. However, as the summary judgment record contains no evidence whether Plaintiffs' proposed use of the land requires either removal or relocation of GRDA's utility facilities, the case must be remanded for further proceedings. I. Factual Background ¶2 The essential facts are not in controversy. Plaintiffs, Edward Beattie and Walter Bailey, Jr., purchased property from the United States of America in 1996. The U.S. conveyed the property to Plaintiffs by a quitclaim deed. The property conveyed was burdened by five utility easements that the U.S. had granted to the Defendant, Grand River Dam Authority (GRDA), at various points from 1960 through 1979. Four of the easements were for a limited fifty year term and were given at no cost to GRDA. The fifth, a perpetual easement, was given for nominal consideration. Each of the five easements contained a provision which gave the U.S. the right to require relocation or removal of GRDA's facilities should the property occupied by the facilities be "needed by the United States, or in the event the existence of said facilities shall be considered detrimental to governmental activities[.]" This deed and conveyance is expressly made subject to the following matters to the extent and only to the extent the same are valid and subsisting and affect the property: a. Existing easements for public roads and highways, rights of way for railroads, pipelines, drainage ditches and public utilities, if any, whether or not shown of record. (Emphasis added). In addition, the "subject to" clause specifically listed three of the five easements at issue. ¶4 After Plaintiffs acquired the property, they began making plans to develop the tract as a waterfront subdivision. Plaintiffs asked GRDA to relocate its facilities underground or remove them from the newly purchased property. In support of their request, Plaintiffs referenced the provision contained in each of the easements which granted the U.S. the right to demand relocation or removal should the U.S. need the property. Plaintiffs contended the relocation or removal rights were transferred or assigned to them by the U.S. through the quitclaim deed. ¶5 GRDA refused to either remove or relocate the facilities. As a result Plaintiffs filed this lawsuit seeking to enforce their rights under the easements. Both Plaintiffs and GRDA moved for summary judgment. The trial court granted GRDA's motion and denied Plaintiffs', resulting in this appeal. The Court of Civil Appeals affirmed the decision of the trial court, upholding the summary judgment in favor of Defendant, GRDA. This Court then granted certiorari. II. Standard of Review ¶6 This Court's standard of review upon summary judgment is de novo, meaning without deference, because "the ultimate decision turns on purely legal determinations, i.e. whether one party is entitled to judgment as a matter of law because there are no material disputed factual questions. We, like the trial court, will examine the pleadings and evidentiary materials submitted by the parties to determine if there is a genuine issue of material fact. Further, all inferences and conclusions to be drawn from the evidentiary materials must be viewed in the light most favorable to the non-moving party." Carmichael v. Beller, 1996 OK 48, 914 P.2d 1051 , 1053 (citations omitted). III. Were the Relocation and Removal Rights Assignable? ¶7 Plaintiffs acquired the real property burdened by GRDA's easements from the U.S. by quitclaim deed. A quitclaim deed executed in a form prescribed by statute conveys all right, title and interest of the grantor of the land. 16 O.S. 1991 § 18 ; Bonebrake v. McNeill, 1971 OK 146, 491 P.2d 269 . Accordingly, Plaintiffs acquired every interest of the U.S. in the real property that was not reserved in the quitclaim deed, unless that interest was not freely assignable. GRDA contends the relocation and removal rights held by the U.S. in connection with the utility easements were not assignable and therefore did not pass to Plaintiffs when they received the quitclaim deed. ¶8 The relocation and removal rights held by the U.S. were created in paragraph 11 of the easement grants between the U.S. and GRDA. When interests in or rights to property are created by deed, the deed should be interpreted and meaning of the parties thereto ascertained in the same manner as govern other written contracts. Jennings v. Amerada Petroleum Corp., 1937 OK 228, 179 Okla. 561 , 66 P.2d 1069 , 1071. In determining whether the rights under a contract are assignable the Court must look at the construction of the contract itself and "every case must turn at last upon the intention of the parties." Minnetonka Oil Co. v. Cleveland Vitrified Brick Co., 1910 OK 279, 27 Okla. 180 , 111 P. 326, 329. ¶9 Oklahoma has long held that rights under a contract are presumed to be assignable, unless the parties expressly provide otherwise. ¶10 However, Oklahoma case law has also recognized that certain rights and duties under a contract are too personal in character to permit them to be assigned. Minnetonka, 111 P. at 329; Earth Products Co., 441 P.2d at 404. These cases rest on the proposition that when the personal qualities of either party are material to the contract, an assignment would amount to a material change in the terms of the contract. ¶11 Relying on this exception, GRDA argues that the easement instruments created a relationship of personal confidence or trust between it and the U.S. with respect to the relocation and removal rights, accordingly these rights were not assignable. Specifically, GRDA asserts that it relied upon the personal confidence or trust of the U.S. regarding the manner and frequency at which the U.S. would exercise the relocation and removal rights. GRDA contends that it received assurances from the U.S. that it would exercise the rights only infrequently and that without such assurances, GRDA would never have made substantial improvements on the property. In support of this argument, GRDA attached an affidavit to its motion for summary judgment in which a long time GRDA employee explained the negotiation process for easements of this type and the general expectations of GRDA with respect to a continuing easement relationship. ¶12 In evaluating GRDA's contention that the U.S. held the relocation and removal rights imbued with an obligation of trust and confidence, and thus, those rights were too personal in nature to be assigned without the consent of GRDA, we are presented with a question of contract construction. Id. The instruments must serve as the seminal gauge of the parties' intent, including the evaluation of any relationship of trust between the original parties to the contract. Id. at 331; See also Earth Products, 441 P.2d at 404-05. In every case, this question must turn upon the intention of the parties as manifested in the agreement itself. Minnetonka, 111 P. at 329. ¶13 The instruments themselves contain no express provisions limiting or prohibiting assignment of the relocation and removal rights. Since the instruments do not expressly state that they are nontransferable, the question remains whether they contain equivalent expressions or language which indicates the rights are so personal that they may not be freely assigned. A close examination of paragraph 11, the paragraph in the easement instruments containing the relocation and removal rights, provides no indication that the parties impliedly intended that personal confidence or trust be vested in the U.S. in the exercise of the relocation and removal rights. Paragraph 11 does not specifically limit or restrict in any substantial fashion the manner in which the U.S., as owners of the servient estate, can exercise the rights. On the contrary, the instruments allowed the U.S. to exercise the relocation and removal rights if the land occupied by the facilities was merely "needed" or the facilities were "detrimental to governmental activities[.]" The language of the provision does not reveal the parties intended to repose personal confidence or trust in the U.S. or limit in any significant fashion the manner in which the U.S. exercised the relocation and removal rights. ¶14 Although GRDA argued at the trial court that the provision in the easement instruments creating the relocation and removal rights was not ambiguous, it submitted the affidavit of an employee attempting to establish a relationship of personal confidence between it and the U.S. ¶15 As a second argument, GRDA contends that an assignment of the relocation and removal rights would change the character of its obligation under the instruments by materially increasing the risk imposed upon it under paragraph 11. ¶16 We disagree. Although GRDA contends there is some fundamental difference in the nature of property use when that property is owned by the U.S., as opposed to a private land owner, it offers nothing more than its own statement to support its contention. It failed to provide the trial court with any specific example of land use that would be at a private owner's disposal which would not also be available to the U.S. GRDA merely argued the U.S. would not and did not need this piece of property for waterfront subdivision development and therefore GRDA should not now be forced to relocate its facilities because that is the "need" proposed by the new owners. ¶17 GRDA has failed to demonstrate that the assignment would materially change its interest in the easement. First, the U.S. has historically proven itself capable of using property in a myriad of ways including, commercial and residential development, grazing livestock, farming, parks and recreation, creating reservoirs or dams, landfill and waste disposal. Second, we can find nothing in paragraph 11 which confines the servient owner to a particular list or variety of "needs" to be deemed acceptable to the easement holder, GRDA. The paragraph does not restrict the manner in which the land may be developed. As a result, this Court cannot conclude the assignment of relocation and removal rights to Plaintiffs would mark a material increase in the risk imposed upon GRDA under paragraph 11. ¶18 In fact, if this Court determined that the relocation and removal rights were unassignable, as GRDA urges, GRDA would now hold easements considerably more substantial in nature than when the U.S. owned the servient property. Prior to the quitclaim deed to the Plaintiffs, GRDA possessed five easements relatively insubstantial in nature, for which it had paid virtually no consideration. GRDA held the utility easements subject to the right of the U.S., upon a simple showing of "need", to insist that GRDA's facilities be relocated or removed. GRDA now seeks a judgment that would result in easements which would effectively contain no relocation and removal rights, completely shifting the balance of authority between the servient estate and easement holder. This would grant GRDA easements far more substantial in nature than it had reason to expect when it contracted with the U.S. ¶19 As a final argument, GRDA tenders the case of Caseyville Township Road Dist. v. Union Electric Co., 274 N.E.2d 133 (Ill.App. 1971), as one similar to the one at bar. In Caseyville, an assignee purchased property from a railroad and after purchase attempted to compel the electric company to relocate its power lines at its own expense, pursuant to an easement agreement which existed between the railroad and electric company. The Illinois court held that the rights were limited to the railroad company and did not pass to plaintiff by virtue of its conveyance from the railroad. We find this case distinguishable. In contrast to the case now before this Court, the original easement grant in Caseyville contained numerous paragraphs in which various rights of the railroad were specifically reserved to the railroad's "successors or assigns," yet the paragraph containing the railroad's right to compel electric company to relocate the lines at its own expense did not contain such language. It was the absence of this language in the relocation paragraph and the presence of the language in so many of the other provisions that the Caseyville court found so compelling. Id. at 718-19. This is not the situation the Court is faced with in the instant case. The easement instruments between the U.S. and GRDA do not contain the systematic inclusion or omission of language that is present in Caseyville and this Court's analysis cannot rest upon the same premise used by the Illinois court. IV. The "Subject to" Clause in the Quitclaim Deed from the U.S. to Plaintiffs Did Not Reserve the Relocation and Removal Rights in the U.S. or Prevent Those Rights from Passing to the Plaintiffs ¶20 The quitclaim deed executed by the U.S. stated the conveyance to Plaintiffs was "subject to" existing easements for public utilities. The Court of Civil Appeals opinion implies the "subject to" clause reserved all the referenced servient easement rights, including the relocation and removal rights in the U.S. Plaintiffs argue on certiorari that the Court of Civil Appeals incorrectly analyzed the legal impact of the "subject to" clause. Because GRDA could prevail in the event the "subject to" clause either reserved the relocation and removal rights in the U.S. or otherwise prevented those rights from passing to the Plaintiff, this Court must address the effect of the "subject to" clause. ¶21 The "subject to" clause in the quitclaim deed did not reserve the relocation and removal rights in the U.S. The words "subject to" are frequently used in conveyances and have historically been interpreted as meaning "subordinate to," " subservient to," "limited by," or "charged with." Hendrickson v. Freericks, 620 P.2d 205 , 209 (Alaska 1980). The Hendrickson court observed that: When used in a deed these words are generally regarded as terms of qualification, not contract. They serve to put a purchaser on notice that he is receiving less than a fee simple. There is nothing in their use which connotes a reservation or retention of property rights. Hendrickson ¶22 Similarly, the language of the "subject to" clause did not prevent the relocation and removal rights from passing to the Plaintiffs. V. The Summary Judgment Record Contains No Evidence on the Issue of Whether Plaintiffs' Proposed Use of the Land Requires Either Removal or Relocation of GRDA's Utility Facilities. ¶23 The relocation and removal rights in the five utility easements require GRDA to accommodate the needs and activities of the U.S. The effect of holding these rights freely assignable so that they were transferred to the Plaintiffs as purchasers of the servient estate through the executed quitclaim deeds is to place the Plaintiffs in the shoes of the U.S. Accordingly, Plaintiffs must demonstrate that the needs or the activities of their proposed waterfront subdivision required either removal or relocation of GRDA's utility facilities. Because the summery judgment record is lacking proof on this issue, the case must be remanded to the trial court for resolution. VI. Conclusion ¶24 In summary, we find that GRDA failed to overcome the presumption that the relocation and removal rights were assignable. Specifically, it failed to establish that the U.S. held the relocation and removal rights imbued with an obligation of trust and confidence, and thus failed to establish those rights were too personal in nature to be assigned without the consent of GRDA. It also failed to establish that the assignment of the relocation and removal rights would change the character of its obligation under the easement instruments by materially increasing the risk imposed upon it. Finally, the "subject to" clause in the quitclaim deed from the U.S. to Plaintiffs did not reserve the relocation and removal rights in the U.S. or prevent those rights from passing to the Plaintiffs. However, as the summary judgment record contains no evidence whether Plaintiffs' proposed use of the land requires either removal or relocation of GRDA's utility facilities, the case must be remanded for further proceedings. ¶25 CERTIORARI PREVIOUSLY GRANTED; COURT OF CIVIL APPEALS OPINION VACATED; DECISION OF THE TRIAL COURT REVERSED AND CAUSE REMANDED WITH DIRECTIONS TO PROCEED IN A MANNER CONSISTENT WITH THIS OPINION. ¶26 WATT, V.C.J., HODGES, OPALA, SUMMERS, BOUDREAU, J.J. Concur. HARGRAVE, C.J., LAVENDER, KAUGER, WINCHESTER, J.J. Dissent. FOOT