Adverse Acquisition and Associated Accusations

Roy v. Woodstock Community Trust, Inc., 2013 VT 100A

By Nicole Killoran

Neighbors. Such a blessing, aren’t they? Always friendly, comfortable with change, and certainly never interested in interfering with the new guy’s plans for the property next door.

In fact, as those who are in the “lines” and land-use business can attest, the sanctity of property rights and zoning ordinances translate to a different reality. Neighbors can actually be the source of some of the most noisome and drawn out cases.

Take this case, for example. In 2005 the Woodstock Community Trust bought two abutting parcels of land in Woodstock from a church that owned them. The Trust is a nonprofit in the business of building affordable housing in Woodstock. It applied for permits to build a residential development on the property.

In a posh community like Woodstock unaccustomed to such neighbors, I suppose it’s not surprising that the Trust’s neighbors, plaintiffs in this case, raised a ruckus about the project. Judging by the six-year dispute that followed on both the permits and various property issues, plaintiffs were quite adamantly opposed to having an affordable housing development spring up next door.

Prior to this case reaching the SCOV, both the Environmental Division and the SCOV upheld the permits for the project on appeal. Plaintiffs apparently also picked a fight in the Civil Division on a number of property issues, the subject of today’s rather lengthy opinion. Plaintiffs requested an injunction to stop the development, and the case went to trial. Of all the issues plaintiffs presented evidence on, only one survived to get to the jury: whether the Trust had unreasonably interfered with one of the plaintiffs’ spring rights. After deliberating, the jury sided with plaintiffs.

After the verdict came down, the Trust asked for an evidentiary hearing, but plaintiffs wanted to hurry up and appeal. The trial court decided plaintiffs apparently didn’t want the injunctive relief they’d requested, and gave them an order. Plaintiffs appealed; the Trust cross-appealed.

A few post-trial motions followed. Eventually, with the SCOV’s approval, the trial court held an evidentiary hearing in which the Trust proposed to lay a plastic sleeve and pipe on its property to give plaintiff access to his spring. After the hearing, the trial court amended the judgment in the Trust’s favor.

On appeal, the SCOV has eight different issues to decide. It manages to get a 3 for 1 with the first issue: whether the plaintiff with the supposed spring rights on the Trust’s property actually had spring rights. The trial court sided with plaintiffs on this issue, concluding that the spring rights were “appurtenant” (or belonged) to the land and passed with it automatically. The SCOV has to uphold the trial court if there is any evidence that reasonably supports the conclusion.

The chain of title for plaintiff’s abutting property goes back to a March 1915 deed that doesn’t mention the spring or spring rights. There is a separate deed signed in November 1915 giving one of the new owners a “Spring and the water thereof and therein.” The property went through probate in 1938. The probate estate conveyed to new owners in a deed that doesn’t say anything about the spring. The new owners conveyed again in 1955, and the deed for that transfer was the first one to reference the November 1915 deed and supposedly convey the spring rights. The rest of the chain of title was uneventful between 1955 and plaintiff’s ownership.

As you might imagine, plaintiff relies pretty heavily on the 1955 deed. But ultimately the SCOV doesn’t think the spring is appurtenant to plaintiff’s property. The 1938 probate deed doesn’t say anything about the spring rights, so there’s a gap in the chain of title. Water rights don’t pass unless the deed can be reasonably construed to pass them, and that didn’t happen here. The SCOV denies plaintiff his spring rights, and simultaneously manages to avoid the morass of the post-judgment jury-less evidentiary hearing and motions on that topic (phew!).

Next, the SCOV looks at whether the trial court screwed up when it approved relocation of two of plaintiffs’ water-line easements over their objections. Because none of the facts are in dispute, this is a pure question of law. The SCOV puts itself in the trial court’s well-worn and slightly threadbare shoes to decide this issue.

For the Trust’s project to work as designed and permitted, the Trust had to move plaintiffs’ water lines and thus the easements for them. The trial court approved the relocation because it didn’t think plaintiffs would be inconvenienced by anything other than a brief interruption in water service while the lines were relocated. The Trust promised to pay for the relocation and give plaintiffs free bottled water until their service was reestablished.

Plaintiffs weren’t too thrilled with this. They wanted access to the waterlines to make repairs, and claimed that their maintenance cost would be higher because the pipes were longer. Plaintiffs also claimed that the relocated line would mess with the vegetation on the east side of the Trust’s property, and probably invite a lawsuit in the future. The trial court sided with the Trust on this issue, but noted that the Trust had better hold up its end of the agreement if it didn’t want to get sued.

Plaintiffs' legal argument on this point is that the trial court’s conclusion was contrary to the SCOV’s precedent in Sweezey v. Neal, where the easement was for a right-of-way. In Sweezey, the SCOV decided not to follow the new(er) Restatement of Property rule, which allows easement relocation if it’s reasonable, the benefitted owner pays for it, and it doesn’t really change or frustrate the purpose of the easement. Instead, the Sweezey SCOV concluded that the benefitted owner can’t unilaterally change the location of an easement without the burdened property owner’s consent.

Plaintiffs of course think this means that all easements follow the same rule. Thus their quibble with the trial court. Sadly for plaintiffs, though, the SCOV decides that there’s good reason to only apply its Sweezey rule to surface easements like roads. For subsurface easements, like water lines, the SCOV decides that the Restatement rule will apply.

The SCOV already noted in Sweezey the importance of having at least some flexibility and reasonableness even for surface easements as long as both the benefitted and the burdened owners’ needs are met. Also, unlike surface easements that put land ownership into question (and eventually litigation), subsurface easements don’t usually cause the same problems. The purpose, i.e., providing water, is typically the important thing with subsurface easements, and the owners who set them up usually don’t care much about the path, just the price. On the other hand, having a strict no-changes rule for subsurface easements could be used to unfairly block development rather than ensuring the easement serves its purpose.

Sorry plaintiffs, says the SCOV. Just like our sister jurisdiction halfway across the country in Colorado, Vermont is going to follow the Restatement reasonableness rule, although only for subsurface easements like the one here. The trial court can order the benefitted owner to pay for future maintenance of the easement and any other costs that might arise, and that ought to balance the equity in cases like this. The SCOV OKs the Trust’s proposal and the trial court’s approval of it.

Next, the SCOV digs into the meatiest issues in its opinion relating to adverse possession. Or, as I like to call it, “you take a 15-year snooze you lose.” Two of plaintiffs’ neighbors claimed they had adversely possessed strips of land on the side of the Trust’s driveway and along the back border. Because the Trust’s predecessor for 24 years was a church, the trial court excluded the time that the church owned it in calculating the 15-year statute of limitations (SOL).

The SCOV breaks up its analysis into three parts asking about various aspects of Vermont’s statutory exception to adverse possession for properties put to “a public, pious or charitable use

First, plaintiffs argue that the Trust missed its SOL gravy train because it didn’t raise it as an affirmative defense in its answer to the complaint. The Trust argued the SOL heavily in its summary judgment motion that the trial court granted, but only “denied” the adverse possession claims in its answer to the complaint rather than also raising it separately as an affirmative defense.

The SCOV notes to begin with that raising the SOL in an adverse possession case is basically a common-law request to recognize superior title, and not a real defense unless you’re another potential adverse possessor. Plaintiffs would prefer that the SCOV look at it like a defense that the Trust gave up when it failed to raise it.

But, says the SCOV, an affirmative defense is something outside the four corners of the complaint that adds something to the case that might not otherwise be in the complaint. As long as it’s “related” to the complaint, it doesn’t have to be pled specifically. Because plaintiffs already had to plead the 15-year limitation in the complaint for adverse possession, the SCOV handily dismisses the argument that the Trust had to plead it or waive it.

Second, plaintiffs argue that, because the property went from pious to private use when the Trust bought it, the statutory SOL exception for pious use doesn’t apply. The trial court decided that the clock for an adverse possession claim can’t start running against property that fits the exception, and that plaintiffs couldn’t prove the 15 year SOL.

To be fair, the SCOV points out that the statute isn’t terribly clear. But nevertheless, in a recent case, Mahoney v. Tara, LLC, it interpreted the statute the way the trial court here did and excluded the time while the property was dedicated to public, pious, or charitable use from its calculation of the 15 years.

Other jurisdictions (e.g., Maine and Missouri) have reached a similar conclusion for state-owned or public lands, and the language of Missouri’s Section 462 equivalent is pretty much identical to Vermont’s. The Missouri Supreme Court, and even the SCOTUS, have noted going back as far as 1871 that it’s a bit of a “ruinous” policy to allow bureaucratic incompetence to lead to the loss of public lands. The public has an interest in favoring land put to public, pious, or charitable use.

Plaintiffs here, notes the SCOV, would have that protection disappear if the land is ever converted to private use. The simple act of a church selling its property to a private entity, not knowing that its neighbors have been creeping in over time, would immediately reduce the land’s value. That doesn’t jive with the protective policy the SCOV sees behind Section 462. The trial court got it right here, and plaintiffs can’t just cut out the time the church owned the property to get its SOL together for adverse possession.

Third, plaintiffs argue that the church didn’t actuall use the property for pious or public purposes. This argument turns on some of the SCOV’s prior opinions that set up a three-part test, the American Museum test, for answering the question whether property is devoted to public and charitable uses and thus qualifies for the SOL exception.

The gist of plaintiffs’ argument is that, because one of the three parts of the American Museum test requires the property to be used “for the benefit of an indefinite class of people,” and because the church supposedly had a “defined specific membership,” the property doesn’t qualify. The SCOV’s previous opinions haven’t really applied the test to a pious use before, so this is the SCOV’s first chance to decide the question.

The point of the public use exception is to ensure that only properties that benefit the public in general qualify. But, notes the SCOV, religious worship is “fundamentally a matter of private conscience and practice.” Applying the “indefinite class” requirement for public use to the pious use context stretches the test a bit much and risks excluding certain religious organizations that have different membership criteria. That is why the SCOV chafes at the notion.

Instead, the SCOV picks as a substitute the language in this statute, which only includes in “pious use” churches and associated buildings, and playgrounds, parking lots, gardens, and other adjacent land features. This happens to fit the Trust’s property nicely: while the church owned it, the property was used for worship services, youth bible camp, church picnics, July 4th fireworks, Boy Scout meetings, and sports practice for the local schools. Pious use applies, concludes the SCOV. Plaintiffs can’t escape the SOL exclusion, and they can’t cobble together their 15-year period without it.

Next, the SCOV looks at plaintiffs’ argument that the boundary they would prefer with the Trust’s property was established by acquiescence. Because the SCOV already decided that the SOL wasn’t met, here it’s just interpreting the legal question of whether this statute applies to boundary-by-acquiescence claims. Plaintiffs, as you might imagine, think that the exception doesn’t apply because a boundary-by-acquiescence claim is different than an adverse possession claim. The trial court said there’s really no difference. The SCOV agrees.

The same 15-year SOL applies to both types of claims, and that one statute limits when that 15 years runs. Plus, the same policy disfavoring loss of public lands due to bureaucratic neglect applies to both types of claims. Sorry, says the SCOV---it smells no different than adverse possession. The pious-use exception applies.

Plaintiffs’ next argument was probably moot by the time it got to the SCOV, but it looks at it anyway. When it bought the properties, the Trust inherited a predecessor’s easement for “ingress and egress.” Plaintiffs asked the trial court to prevent the Trust from using the easement for construction vehicles, but the question never made it to the jury. The rules on this issue say that the property benefitting from an easement can’t increase the burden on the burdened property by expanding the scope of the easement. The original purpose of the people who set it up is what controls, although the degree of use can change over time with evolving technologies and land use.

Plaintiffs’ argument is that the easement was intended to be used to serve a single-family home, and that allowing it to be used for construction of the Trust’s affordable housing project is beyond the scope of the easement. The SCOV doesn’t think that using the “ingress and egress” easement to temporarily allow construction vehicles would be anything other than normal development that’s allowed as time goes on. The Trust isn’t violating the easement, and the trial court was right to not have the jury decide this.

Plaintiffs’ last argument is on the issue of nuisance and whether the trial court screwed up by dismissing their nuisance claim as unripe, not yet ready to be decided. At the time it did that, the Trust’s permits were up in the air and on appeal. The trial court dismissed the nuisance claim and told plaintiffs to come back when they had a controversy it could decide.

Plaintiffs argue that this was a “drastic measure.” The SCOV, tongue in cheek, notes that dismissal without prejudice and a note that plaintiffs could come back later is hardly “drastic.” At any rate, the SCOV notes that the impact of the Trust’s project on its plaintiff-neighbors couldn’t possibly be determined at the time.

As a final note, the SCOV, with the benefit of having already looked at these particular permits, goes ahead and answers the question of whether a court can give neighbors an injunction in anticipation of a project being a “nuisance per se.” The answer is yes, and the SCOV notes that even a “lawfully permitted project” can be a nuisance. But, considering the extensive review of the Trust’s permits at the Town, Environmental Division, and SCOV level, that didn’t happen here. The trial court got it right to dismiss the nuisance claim without prejudice early on to give the permitting process time to work out.

And with that, the SCOV brings to a close a seven-year epic struggle to object to the Trust’s hard-won affordable housing project. One might wonder whether the folks who will be moving in to the complex will feel the burn of their neighbors’ resentment at being legally trounced at just about every turn. We can only hope that the memory fades over time into just another topic of over-the-fence neighborly conversation.

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