Court Opinion

ID: 2669579
Source: CourtListenerOpinion
Date Created: 2014-04-11 13:44:39.967991+00
Date Added: 2024-06-11T13:03:58.393394
License: Public Domain

Nebraska Advance Sheets
	            WOODLE v. COMMONWEALTH LAND TITLE INS. CO.	917
	                         Cite as 287 Neb. 917

         Brad Woodle and Chase Woodle, appellants, v.
         Commonwealth Land Title Insurance Company,
              a Nebraska corporation, and Omaha
                Title & Escrow, Inc., a Nebraska
                     corporation, appellees.
                                    ___ N.W.2d ___

                        Filed April 11, 2014.    No. S-13-111.

 1.	 Summary Judgment: Appeal and Error. In reviewing a summary judgment, an
     appellate court views the evidence in the light most favorable to the party against
     whom the judgment was granted, and gives that party the benefit of all reasonable
     inferences deducible from the evidence.
 2.	 Insurance: Contracts. An insurance policy is a contract, and when the facts
     are undisputed, whether or not a claimed coverage exclusion applies is a matter
     of law.
 3.	 Contracts: Appeal and Error. The interpretation of a contract is a question of
     law, in connection with which an appellate court has an obligation to reach its
     conclusions independently of the determinations made by the court below.
 4.	 Pleadings: Words and Phrases. The use of specific language asserting defenses
     is not required, nor is it necessary to state a defense in any particular form, as
     long as the facts supporting the assertion are stated and sufficient facts are pled
     to constitute the raising of the alleged defense.
 5.	 Appeal and Error. In the absence of plain error, when an issue is raised for the
     first time in an appellate court, it will be disregarded inasmuch as a lower court
     cannot commit error in resolving an issue never presented and submitted to it
     for disposition.
 6.	 Easements: Words and Phrases. An easement is an interest in land owned by
     another person, consisting in the right to use or control the land, or an area above
     or below it, for a specific limited purpose.
 7.	 Easements: Real Estate: Conveyances. An easement by implication from for-
     mer use arises only where (1) the use giving rise to the easement was in existence
     at the time of the conveyance subdividing the property, (2) the use has been so
     long continued and so obvious as to show that it was meant to be permanent,
     and (3) the easement is necessary for the proper and reasonable enjoyment of the
     dominant tract.

   Appeal from the District Court for Sarpy County: Max
K elch, Judge. Affirmed.

  Ronald E. Reagan, Richard W. Whitworth, and A. Bree
Swoboda, Senior Certified Law Student, of Reagan, Melton &
Delaney, L.L.P., for appellants.
    Nebraska Advance Sheets
918	287 NEBRASKA REPORTS

  John D. Stalnaker and Robert J. Becker, of Stalnaker, Becker
& Buresh, P.C., for appellees.

  Heavican, C.J., Wright, Connolly, Stephan, McCormack,
Miller-Lerman, and Cassel, JJ.

  Wright, J.
                     NATURE OF CASE
   Brad Woodle and Chase Woodle commenced this action
against Commonwealth Land Title Insurance Company
(Commonwealth) and Omaha Title & Escrow, Inc., to recover
fees, costs, and indemnification pursuant to a policy of title
insurance issued by Commonwealth insuring property owned
by the Woodles. The district court concluded as a matter of
law that Commonwealth had no duty to indemnify or defend
the Woodles concerning implied easements on the prop-
erty. It sustained Commonwealth’s motion for summary judg-
ment and dismissed the action with prejudice. The Woodles
now appeal the court’s dismissal concerning Commonwealth,
and Omaha Title & Escrow is not at issue in this appeal.
We affirm.

                     SCOPE OF REVIEW
   [1] In reviewing a summary judgment, an appellate court
views the evidence in the light most favorable to the party
against whom the judgment was granted, and gives that party
the benefit of all reasonable inferences deducible from the
evidence. Cartwright v. State, 286 Neb. 431, 837 N.W.2d
521 (2013).
   [2] An insurance policy is a contract, and when the facts
are undisputed, whether or not a claimed coverage exclusion
applies is a matter of law. Miller v. Steichen, 268 Neb. 328,
682 N.W.2d 702 (2004), appeal after remand sub nom. Fokken
v. Steichen, 274 Neb. 743, 744 N.W.2d 34 (2008).
   [3] The interpretation of a contract is a question of law, in
connection with which an appellate court has an obligation to
reach its conclusions independently of the determinations made
by the court below. Fitzgerald v. Community Redevelopment
Corp., 283 Neb. 428, 811 N.W.2d 178 (2012).
                 Nebraska Advance Sheets
	        WOODLE v. COMMONWEALTH LAND TITLE INS. CO.	919
	                     Cite as 287 Neb. 917

                            FACTS
   On November 28, 2008, the Woodles entered into a contract
to purchase real property described as “Lot 2, Sun Country
Addition, an addition in Sarpy County, Nebraska” (Lot 2). At
the time of purchase, Commonwealth issued its policy of insur-
ance. Lot 2 was subject to two express easements that were
executed in favor of the owners of the adjacent lots in Sun
Country Addition (collectively Lots 1 and 3).
   After purchasing Lot 2, the Woodles filed a quiet title
action against the owners of Lots 1 and 3, seeking a declara-
tion that the express easements granted in favor of Lots 1 and
3 (which were specifically excepted from coverage under the
policy issued by Commonwealth) were invalid. The owners of
Lot 1 (William and Sandy Curlis) and Lot 3 (David and Susan
Zajac) filed counterclaims asserting that the express easements
were valid or, in the alternative, they were entitled to ease-
ments or ownership of the disputed property under an implied
easement, adverse possession, or easement by proscription.
The Curlises used the west part of the driveway located on
Lot 2 to access their garage, shed, septic tank, and propane
tank. Their use of the western portion of the driveway loop
for ingress and egress has been continuous. The Zajacs have
exercised continuous use of a portion of the driveway on Lot 2
to access the south and west sides of their cabinet shop located
on Lot 3. (These easements would allow ingress and egress
for Lots 1 and 3 in the same manner whether the easements
were express or implied.) When the counterclaims were filed,
the Woodles submitted to Commonwealth a claim for defense.
Commonwealth denied the claim, asserting there was no cov-
erage under the policy for indemnification or defense of any
of the counterclaims.
   In the quiet title action, the court found that Lot 2 was
advertised for sale at auction to be held on November 25,
2008. Sandy Curlis and the Woodles attended an open house
on the property 2 days before the auction was to be held.
The next day, Sandy Curlis requested a preliminary title
search and was advised that there was a 1992 easement on
the west side which was of questionable validity because of
a later quitclaim deed and another easement document on file
    Nebraska Advance Sheets
920	287 NEBRASKA REPORTS

pertaining to the east side, which easement was also of ques-
tionable validity.
   According to Sandy Curlis, on the evening of November 24,
2008, she and the Woodles went to the property and met with
David Zajac, who informed them that both of the adjoining
lot owners had easements to use portions of the driveway on
Lot 2. Sandy Curlis and the Woodles saw the existing drives on
both the east and west sides of the lot prior to the auction and
knew they were used by someone. In the quiet title action, the
Woodles alleged that previous written easements on Lot 2 had
been extinguished, but the owners of Lots 1 and 3 asserted that
they had continuing rights to use and travel upon Lot 2, which
cast a cloud upon the title of Lot 2.
   The district court extinguished the express easements and
denied the counterclaims of the owners of Lots 1 and 3 regard-
ing express easement, public easement, and adverse possession.
However, the court concluded that the owners of Lots 1 and
3 possessed implied easements for ingress and egress arising
from prior use.
   While the quiet title action was pending, the Woodles filed
the present action against Commonwealth, seeking a determi-
nation that Commonwealth had breached its duty under the title
insurance policy by refusing to provide a defense to the coun-
terclaims and seeking damages for any diminution in value of
Lot 2 as a result of the counterclaims filed in the underlying
action. Commonwealth answered, asserting that the policy, by
its terms, did not provide coverage for the counterclaims in the
quiet title action. The relevant portions of the policy provide
as follows:
                          COVERED RISKS
         SUBJECT TO THE EXCLUSIONS FROM COV­
      ERAGE, THE EXCEPTIONS FROM COVERAGE
      CONTAINED IN SCHEDULE B, AND THE CONDI­
      TIONS, COMMONWEALTH LAND TITLE INSUR­
      ANCE COM­ ANY, a Nebraska corporation . . . insures,
                     P
      as of Date of Policy . . . against loss or damage, not
      exceeding the Amount of Insurance, sustained or incurred
      by the Insured by reason of:
         1. Title being vested other than as stated in Schedule A.
                 Nebraska Advance Sheets
	        WOODLE v. COMMONWEALTH LAND TITLE INS. CO.	921
	                     Cite as 287 Neb. 917

        ....
        The following matters are expressly excluded from the
     coverage of this policy, and [Commonwealth] will not pay
     loss or damage, costs, attorneys’ fees, or expenses that
     arise by reason of:
        ....
        3. Defects, liens, encumbrances, adverse claims, or
     other matters
        (a) created, suffered, assumed, or agreed to by the
     Insured Claimant;
        ....
        (d) attaching or created subsequent to Date of Policy
     ....
        ....
                        OWNER’S POLICY
                            SCHEDULE B
                EXCEPTIONS FROM COVERAGE
        ....
        This policy does not insure against loss or damage (and
     [Commonwealth] will not pay costs, attorneys’ fees or
     expenses) which arise by reason of:
        1. Rights or claims of parties in possession not shown
     by the public records.
        2. Unrecorded easements, discrepancies or conflicts
     in boundary lines, shortage in area and encroachments
     which an accurate and complete survey would disclose.
        ....
        7. Easement recorded March 17 1993 . . . granted to
     Owners of Lots 2 and 3 Sun Country over a portion of
     property described therein for Ingress and Egress.
        8. Lot Line Adjustment recorded June 17 2003 . . .
     granted to Owners of Lots 2 and 3 Sun Country over a
     portion of property described therein for Lot line adjust-
     ment to Plat.
        9. Right of Way Easement dated July 18, 2002, recorded
     April 30, 2008 . . . .
   Commonwealth moved for summary judgment, asserting
that under “Exclusion 3(d),” the policy did not provide cov-
erage for “defects, liens, encumbrances, adverse claims or
    Nebraska Advance Sheets
922	287 NEBRASKA REPORTS

other matters . . . created subsequent to the date of policy.”
The district court found that although the implied easements
may have existed prior to judgment, neither easement had
significance, such as enforceability, until the easement was
judicially recognized by a court judgment. It concluded that
the easements attached when the judgment was entered in
the quiet title action, which judgment held that implied ease-
ments existed over Lot 2 in favor of Lots 1 and 3. Because
there was no court order or judgment in place establishing
either easement by implication as of the date of the title
insurance policy, Exclusion 3(d) applied, and as a result,
Commonwealth was not required to provide a legal defense
to the Woodles in regard to the counterclaim filed by the
owners of Lots 1 and 3. The court concluded that there was
no genuine issue as to any material fact and that therefore,
Commonwealth was entitled to judgment as a matter of
law. It sustained the motion for summary judgment filed by
Commonwealth and dismissed the cause of action against
Commonwealth with prejudice.
   The Woodles timely appealed. We moved the case to our
docket pursuant to our authority to regulate the dockets of this
court and the Nebraska Court of Appeals. See Neb. Rev. Stat.
§ 24-1106(3) (Reissue 2008).

                ASSIGNMENTS OF ERROR
   The Woodles allege, restated, that the district court erred in
relying on Exclusion 3(d), which was not raised as an affirma-
tive defense by Commonwealth; concluding that the implied
easements did not attach until they were judicially recognized;
finding no coverage under the policy; sustaining summary
judgment in favor of Commonwealth; and overruling sum-
mary judgment in their favor.

                         ANALYSIS
   The Woodles’ claims against Commonwealth were based
upon their expenses incurred in the quiet title action described
above. They argue that because the title insurance policy did
not expressly exclude the implied easements, Commonwealth
breached its contract by not defending and indemnifying the
                 Nebraska Advance Sheets
	        WOODLE v. COMMONWEALTH LAND TITLE INS. CO.	923
	                     Cite as 287 Neb. 917

Woodles regarding the counterclaims established by the own-
ers of Lots 1 and 3 concerning the implied easements over
Lot 2.
                      Exclusion 3(d) of Title
                         Insurance Policy
   The Woodles claim the district court erred in relying
upon Exclusion 3(d) of the title insurance policy, because
Commonwealth had not raised Exclusion 3(d) in its denial of
coverage or as an affirmative defense. The Woodles contend
they were not put on notice that Commonwealth intended to
argue Exclusion 3(d) until argument was presented before the
district court.
   Commonwealth asserts that the Woodles failed to raise this
issue in the district court, despite Commonwealth’s reliance on
Exclusion 3(d) at three prior hearings on motions for summary
judgment. Commonwealth raised Exclusion 3(d) at these hear-
ings, and the Woodles did not object to Commonwealth’s reli-
ance on Exclusion 3(d) or assert that Commonwealth should
be barred from raising it as a defense. Commonwealth points
out that even if it should have pled Exclusion 3(d) as an
affirm­ tive defense, had the Woodles objected during the pro-
       a
ceedings below, Commonwealth would have moved to amend
its answer and likely would have been granted leave to do so.
We agree.
   [4] The use of specific language asserting defenses is not
required, nor is it necessary to state a defense in any particular
form, as long as the facts supporting the assertion are stated
and sufficient facts are pled to constitute the raising of the
alleged defense. Gies v. City of Gering, 13 Neb. App. 424, 695
N.W.2d 180 (2005). See, also, Diefenbaugh v. Rachow, 244
Neb. 631, 508 N.W.2d 575 (1993). Commonwealth claimed
the title insurance policy did not provide coverage for the
Woodles’ claim. In its answer, Commonwealth asserted that
the Woodles failed to state a cause of action because “any and
all claims which are the subject of this litigation and were
submitted to Commonwealth for coverage were considered
and properly denied by Commonwealth under the title insur-
ance policy, [attached as] Exhibit C.” Commonwealth raised
    Nebraska Advance Sheets
924	287 NEBRASKA REPORTS

this defense in three summary judgment motion hearings
argued in the district court. The Woodles made no objection
to Commonwealth’s reliance on the provisions of the policy
as a defense.
   [5] In the district court, the Woodles had numerous oppor-
tunities to object to Commonwealth’s reliance on Exclusion
3(d) and did not do so. Because this objection was not pre-
sented to the lower court, we will not address it on appeal. In
the absence of plain error, when an issue is raised for the first
time in an appellate court, it will be disregarded inasmuch as
a lower court cannot commit error in resolving an issue never
presented and submitted to it for disposition. In re Estate of
Rosso, 270 Neb. 323, 701 N.W.2d 355 (2005). We find no plain
error in the court’s consideration of Exclusion 3(d).

                 Implied Easements Attach When
                    Judicially R ecognized by
                         Court Judgment
   In the appeal from the quiet title action, the Woodles
claimed that the district court erred in finding that easements
by implication from former use existed over Lot 2 in favor of
Lots 1 and 3. That issue was decided adversely to the Woodles’
claim of error. See Woodle v. Curlis, No. A-10-954, 2012 WL
399854 (Neb. App. Feb. 7, 2012) (selected for posting to court
Web site).
   Here, the Woodles argue that the district court erred in con-
cluding that the implied easements did not attach to the prop-
erty until they were judicially recognized. The Woodles claim
the easements were created in 1992 and became appurtenant to
the land at that time. They assert that because the easements
were appurtenant, they attached to the land at that time and
would pass with the land on subsequent conveyances, and that
because the policy was issued subsequent to the easements, the
easements were not excluded under Exclusion 3(d).
   Commonwealth argues that the implied easements are inter-
ests that do not exist as a result of a grant or conveyance.
Instead, it is a court’s decree that usually establishes the right.
Because it requires a court’s decree, an implied easement does
not “attach” to the land until it is judicially decreed.
                 Nebraska Advance Sheets
	        WOODLE v. COMMONWEALTH LAND TITLE INS. CO.	925
	                     Cite as 287 Neb. 917

   [6,7] An easement is an interest in land owned by another
person, consisting in the right to use or control the land, or an
area above or below it, for a specific limited purpose. Feloney
v. Baye, 283 Neb. 972, 815 N.W.2d 160 (2012). An easement
by implication from former use arises only where (1) the use
giving rise to the easement was in existence at the time of the
conveyance subdividing the property, (2) the use has been so
long continued and so obvious as to show that it was meant to
be permanent, and (3) the easement is necessary for the proper
and reasonable enjoyment of the dominant tract. O’Connor v.
Kaufman, 260 Neb. 219, 616 N.W.2d 301 (2000).
   In Woodle v. Curlis, supra, the Court of Appeals found that
Lots 1, 2, and 3 were commonly owned by William Thomas
Custom Cabinets, Inc., from 1986 until 1992, when Lot 2 was
conveyed to Tommy and Phyllis Ogg. This marked the first
time that Lots 1, 2, and 3 were not under common owner-
ship. At the time Lot 2 was conveyed, the driveway on Lot 2
was subject to the implied easements and was being used by
the Curlises, who had a residence on Lot 1, for the purpose
of ingress and egress to Lot 1. The Zajacs’ cabinet shop was
built in 1984, and the cabinet company used the driveway on
Lot 2 to access the cabinet shop on Lot 3 with a truck and
trailers. The uses of the easements were in existence at the
time of the conveyance subdividing Lots 1, 2, and 3. The use
of the driveway on Lot 2 had been so continuous and obvi-
ous as to show that it was meant to be permanent. The Court
of Appeals concluded the implied easements were created in
1992 when the lots were subdivided, but it did not specifically
address the question when the implied easements attached to
the land.
   In Nebraska, we have not addressed the question when
an implied easement attaches to land. The Virginia Supreme
Court has addressed a similar issue in Carstensen v. Chrisland
Corp., 247 Va. 433, 442 S.E.2d 660 (1994). The issue was
when an easement by necessity attached to the land. The title
insurance policy was similar to the one in the present case and
excluded encumbrances “‘attaching or created subsequent’”
to the date of the policy. Id. at 441, 442 S.E.2d at 665. The
insured argued that an easement by necessity arose at the time
    Nebraska Advance Sheets
926	287 NEBRASKA REPORTS

the dominant tract was severed from the subservient tract and
that because the easement had attached before the policy was
issued, the exclusion did not apply.
    The Virginia Supreme Court disagreed. It concluded that
although “an easement by necessity legally arises at the time
the servient estate is severed from the dominant estate, the
easement may remain inchoate until established through judi-
cial order or otherwise. An easement often is not judicially
established or sought to be established for many years fol-
lowing the initial severance.” Id. at 442, 442 S.E.2d at 665.
The court reasoned that requiring title insurance companies to
research title records for all contiguous properties to determine
if a latent easement existed would be an unreasonable burden
to place on the title insurance company. Id. It concluded that
the exclusions of the title insurance policy applied and did
not cover any losses sustained as a result of the easements by
necessity which were established through judicial order entered
after the policy date.
    Although Carstensen v. Chrisland Corp., supra, addressed
an easement by necessity, an easement by implication can be
analyzed in the same manner. Both easements are interests
that come into existence by a court order recognizing their
existence rather than by an express grant or easement. We fol-
low the same analysis. In the case at bar, the easements were
implied from prior and continuous use but were not of record
until a court order legally recognized their existence.
    The implied easements were not legally recognized until
the court order was entered in the quiet title action. The
implied easements over Lot 2 arose from prior use before
the policy of insurance was issued, but they remained incho-
ate until the court order judicially recognized their existence.
They were of no force or effect until the court determined
that they existed. It was at the time of judicial recognition
that the implied easements attached to Lot 2 and became of
public record.
    We therefore conclude that for purposes of the policy of
title insurance in question, the implied easements “attached”
to Lot 2 at the time of the district court’s decree which rec-
ognized their existence. Easements that are created or attach
                         Nebraska Advance Sheets
	                           KIM v. GEN-X CLOTHING	927
	                              Cite as 287 Neb. 927

subsequent to the date of the policy are excluded. Because the
implied easements remained inchoate, they did not attach to
Lot 2 until they were legally recognized by the decree of the
district court which was entered September 7, 2010. The date
of the title insurance policy was December 31, 2008. Because
the implied easements attached subsequent to issuance of the
policy, the easements were excluded by the terms of the policy.
As a matter of law, Commonwealth did not have a duty to
defend or indemnify the Woodles.
                        CONCLUSION
   The provisions of the title insurance policy on Lot 2 did
not provide coverage for the easements of ingress and egress
for the benefit of Lots 1 and 3. Commonwealth did not vio-
late its contract with the Woodles by denying coverage or
indemnification. The district court did not err in sustaining
Commonwealth’s motion for summary judgment. Finding no
merit in the Woodles’ assignments of error, we affirm the judg-
ment of the district court.
                                                    Affirmed.

        Matthew Kim, appellee, v. Gen-X Clothing, Inc.,
           and Farmer’s Truck I nsurance Exchange
                   (Farmers), appellants.
                                   ___ N.W.2d ___

                        Filed April 11, 2014.   No. S-13-802.

 1.	 Workers’ Compensation: Appeal and Error. A judgment, order, or award of
     the Workers’ Compensation Court may be modified, reversed, or set aside only
     upon the grounds that (1) the compensation court acted without or in excess of its
     powers; (2) the judgment, order, or award was procured by fraud; (3) there is not
     sufficient competent evidence in the record to warrant the making of the order,
     judgment, or award; or (4) the findings of fact by the compensation court do not
     support the order or award.
 2.	 ____: ____. In determining whether to affirm, modify, reverse, or set aside a
     judgment of the Workers’ Compensation Court, the findings of fact of the trial
     judge will not be disturbed on appeal unless clearly wrong.
 3.	 Workers’ Compensation: Evidence: Appeal and Error. In testing the suffi-
     ciency of the evidence to support the findings of fact in a workers’ compensation