Stephen Gray And Shelly Gray, Husband And Wife Vs. James R. Osborn, Iii Vs. Stephen Gray And Shelly Gray

Citation: Not availableDocket: 93 / 05-1850

Court: Supreme Court of Iowa; October 5, 2007; Iowa; State Supreme Court

Original Court Document: View Document

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In the Supreme Court of Iowa case No. 93. 05-1850, Stephen and Shelly Gray appeal a decision regarding their claim of an express easement across property owned by James R. Osborn, III, with Tamra Randall as an intervenor-appellee. The Iowa District Court for Benton County, presided over by Judge Kristin L. Hibbs, initially found that an express easement existed, dismissing trespass claims. The Iowa Court of Appeals reversed this ruling, prompting the Grays to seek further review.

The Supreme Court vacated the Court of Appeals' decision and affirmed the District Court's judgment, concluding that the Grays had a valid easement. The facts reveal that Tamra Randall recorded a consent and dedication agreement in September 1996 for Maple Ridge Estates I, which included a plat indicating a 50-foot ingress-egress easement across the northern border of Lot 5, owned by the Grays. The easement connects to a public roadway, 59th Street Trail, but the dominant estate was not specifically described on the plat. The consent and dedication agreement did not explicitly mention the easement, and there was a setback restriction for building in the subdivision.

At the time of the easement's designation, Randall was involved in a boundary dispute with her northern neighbors, which influenced her decision to establish an easement across Lot 5 to ensure access to her property to the east, regardless of the outcome of her ongoing litigation.

In January 1998, Randall won her litigation against the Ricks, allowing her continued access to her eastern property via a gravel road. She did not relocate this road onto the easement at that time. In early 2000, Randall recorded a plat for Maple Ridge Estates II, while still owning Lot 5 in Maple Ridge Estates I. The new plat retained a fifty-foot ingress-egress easement along Lot 5's northern border without altering its location or dimensions. Randall recorded covenants for Maple Ridge Estates II, granting a similar fifty-foot easement to the owners of Lots 3 and 4. Subsequently, Stephen and Shelly Gray acquired Lot 5, with their deed subject to all recorded covenants and easements. Joan K. Peck and Marjorie A. Thirkettle purchased Lot 3, and James R. Osborn III acquired Lot 4 in Maple Ridge Estates II.

Before buying Lot 5, the Grays obtained an abstract of title and title opinion, and their realtor provided them with a copy of the Maple Ridge Estates I plat. Although they noticed the easement wording, they struggled to read it due to poor quality and were misinformed that the easement was solely for utility purposes. After purchasing the property, Stephen Gray consulted Randall about proper fence placement. Randall purportedly advised against building a permanent fence in the easement, a claim disputed by Gray. The Grays constructed a fence along the southern line of the easement.

As Osborn built his home on Lot 4, concerns arose from Peck and Thirkettle regarding the gravel road's use for accessing their property. Osborn modified his access by creating a driveway spur on the Grays’ land, believing it to be within the easement. The Grays were not notified before this construction began, leading them to build a fence blocking the new driveway. Osborn subsequently destroyed the fence, prompting the Grays to file a lawsuit for temporary and permanent injunctions, claiming trespass and damages. Osborn counterclaimed for a declaratory judgment to affirm the fifty-foot ingress-egress easement over Lot 5. Peck and Thirkettle intervened, asserting their interest in the easement, and Randall also intervened since part of the claimed easement lies on her property adjacent to the Grays’.

In June 2004, the district court denied a temporary injunction against Osborn but prohibited him from expanding a spur and using the easement further. The Grays claimed Osborn violated this order by using the easement as a parking lot during his Halloween party, seeking monetary damages. Osborn countered that the Grays constructed a shed on the easement, violating the court's order. The trial commenced on May 9, 2005, and on October 10, 2005, the district court ruled in favor of Osborn, confirming an express fifty-foot easement over the northern boundary of the Grays’ property for the benefit of certain lots in Maple Ridge Estates II. The Grays appealed, and the court of appeals found the two filed plats insufficient to establish an easement, leading to a reversal of the district court’s decision and remand for consideration of the Grays' claims for trespass and injunctive relief.

The parties disagreed on the standard of review, with the Grays arguing for de novo review based on equitable principles, while Osborn contended for a review focused on legal errors. The court determined that because the original action was filed as a 'petition at law' and the trial involved evidentiary objections, the review should be for errors of law. The trial court's findings were deemed binding if supported by substantial evidence.

The court of appeals examined whether two successive plats could collectively create an express easement, a matter of first impression. Ultimately, the court concluded that the plat for Maple Ridge Estates I alone established an express easement across the Grays' property in favor of Osborn and the aligned parties. An easement is a restriction on property rights, which can be created through an express grant or reservation and must be documented in writing due to its nature as an interest in real property, as per Iowa law.

No specific language is required to establish an easement; the parties' intent is critical. The recorded plat for Maple Ridge Estates I shows a clear intention to create an easement along Lot 5's northern border, explicitly labeled as 'EASEMENT' for ingress and egress, complying with Iowa Code 354.6(2). The Grays’ argument for a detailed description of the easement's purpose is unfounded, as ingress and egress suffices. They contend the easement fails due to lack of identification of the dominant estate, but the intent can be inferred from the plat and surrounding circumstances. The easement connects the eastern property to 59th Street Trail, indicating that the property to the east is the dominant estate, not Lot 5, which already has access to the road. Randall's testimony supports that the easement was intended to benefit her eastern property. The subsequent plat for Maple Ridge Estates II identifies Lots 3 and 4 as dominant estates, reflecting Randall's intent to create the easement for her eastern property. The Grays, having received a copy of the plat when purchasing Lot 5, are deemed to have actual notice of the easement.

An easement was evident on the plat, but the terms 'ingress' and 'egress' were hard to read. The Grays mistakenly thought the easement was solely for utility use. Legal precedent establishes that a buyer aware of circumstances that would prompt a reasonable inquiry is deemed to have actual notice of any adverse claims. The plat for Maple Ridge Estates I provided the Grays with inquiry notice regarding the easement. Despite Stephen Gray's denial of being informed about the easement, the placement of their fence along its southern border suggests they had actual knowledge of it. The court concluded that the plat created an express easement, negating the need to consider whether such an easement could arise from two separate documents. The explicit details regarding the easement's location, dimensions, and purpose, along with the parties' intentions, affirmed the existence of a valid easement. The court vacated the Court of Appeals' decision and affirmed the District Court's judgment.