Ranch at the Falls LLC v. O’Neal (2019) 38 Cal.App.5th 155

By Douglas Borchert

The plaintiff sought to quiet title to two claimed easements within residential gated communities in which she held no property interest. The trial court granted her an express easement or in the alternative a prescriptive easement and an equitable easement over all the private streets in a gated community (Indian Springs) in Chatsworth and also an express or in the alternative prescriptive and equitable easements over the Lenope lot in the adjacent Indian Oaks gated community. Taken together these easements provided her access from the west to her ranch where she or her lessee stabled horses owned by the lessee or members of the public.

The plaintiff had access by a different route from the east over a private road, Iverson Road, in the Indian Springs development and other private streets in another gated community Indian Falls. She deemed this route unacceptable because it required her to pass across an old and narrow bridge on Fern Ann Falls Road that she considered dangerous. The bridge was on private property but not on any part of the land in the three gated communities.

The court of appeal concluded that the trial court had erred on several points:

1. The trial court found that the individual lot owners in the subdivision who owned the private streets abutting their lots to the mid-line of the street subject to reciprocal rights of other lot owners were not indispensable parties to plaintiff’s action but nevertheless bound by the judgment. This was clear error.
2.  The trial court found an express easement in her favor over all the private streets of Indian Springs. The declaration of easement showed the exact route of the easement only over Iverson Road in Indian Springs and then over the private streets of Indian Falls. There was no controversy over the use of the private streets in Indian Falls. This was clear error.
3. The judgment provided for an express easement or in the alternative a prescriptive easement, but the court’s statement of decision did not discuss a prescriptive easement and the plaintiff did not establish the requirements for a prescriptive easement over the streets of Indian Springs. This was clear error.
4. The judgment provided for an equitable easement, but the trial court failed to make the necessary findings to establish an equitable easement and the record did not contain the evidence necessary to establish an equitable easement over the private streets of Indian Springs or the Lenope lot. This was clear error.
5. The court awarded her an easement over the Lenope lot for access. There was a recorded easement over the Lenope lot, but the easement by its terms did not benefit the plaintiff’s ranch but a third property she no longer owned. In any case that easement could be used only through the private streets of Indian Springs to which plaintiff had no access. This was clear error.

Chronological Summary

The developer of Indian Springs recorded a 57 lot map in 1982 showing private streets and a common area that included a security gate and reciprocal easements for the use and maintenance of private streets shown affecting each lot. The lot ownership lines ran to the center of the private streets.

Ms. Hart purchased a ranch on Fern Falls Road in 1996 that did not lie within any of the three gated communities, Indian Falls to the east, Indian Oaks to the west, and Indian Springs to the south. The public could reach her ranch by using Iverson Road to the east.

In 1998 the Indian Springs HOA recorded a declaration of privatization stating that the County of Los Angeles was vacating the County’s easement for public streets over the subdivision. The HOA conveyed a non-exclusive easement for ingress and egress over the private streets to the lot owners. The effect of the declaration was to grant abutting landowners, including the Hart Ranch, an easement over Iverson Road and no other streets within Indian Springs. The Indian Springs and Indian Falls HOAs also entered into maintenance agreements to create a direct path through the subdivisions for ingress and egress.

Mrs. Hart moved to a residence in Indian Springs in 2002 which gave her the right to use the private streets in Indian Springs. She lived there until 2008. She bought the Lenope lot in Indian Oaks in 2005 for $ 1.7 million. She built a 15-foot roadway over that property that connected with Fern Ann Falls Road. Together with the right she enjoyed as a homeowner she had the use of the private streets in Indian Springs and Indian Oaks, and she could access her ranch from the west.

In 2005 through an alter ego entity she purchased a property on Fern Ann Falls Road across the road from and south of the ranch and adjoining the Lenope property on the east. The Indian Oaks HOA notified her that using the streets of Indian Oaks for hay delivery vehicles and other purposes was considered running a business from home under the terms of the CC&Rs and that she was allowed to use only Iverson Road for hay trucks and horse trailers and that she was therefore in violation of the Indian Springs CC&Rs.

In 2010 she granted a permanent easement over the Lenope property to the alter ego entity that owned the Fern Ann Falls Road property. She sold the Lenope property to the O’Neal’s in 2012 and asserted she told them about the easement, but there was no evidence of any deed reservation giving her the right to use the easement after the sale. She also sold the Fern Ann Falls property in 2015 again with no reservation in the conveyancing documents allowing Ms. Hart to continue the easement after the sale.

She leased the ranch to Cano Training Stables in 2013 for a term of two years for a $ 4000 per month lease payment. Cano boarded about 30 horses which required the use of vehicles for hay deliveries, black smiths, and manure removal.  In addition the horse owners came to the ranch on almost a daily basis to ride. With the permission of the Fern Falls Road owner who owned the dominant tenement in the 2010 Lenope Roadway easement, the owner of the servient tenement Lenope property blocked access to the Lenope roadway to the ranch.

Ms. Hart filed an action against the owner of the Lenope lot in 2014 seeking quiet title, declaratory relief, and nuisance. She obtained a preliminary injunction restraining the Lenope lot owner from maintaining a gate or otherwise interfering with her use of the Lenope roadway pending trial. She amended the complaint to add the Indian Springs HOA and Indian Oaks HOA and the Lantz Security Systems as defendants. She alleged that public use of the streets in Indian Springs and Indian Oaks had been a condition of their development and that the public and the plaintiff had easement rights over those streets. She alleged that after the grant of the injunction the HOAs had refused to allow the public to use the private streets to get to the Lenope Roadway and instead had to wait to be escorted by a guard over Iverson Road on a route to the ranch which required using a dangerous narrow bridge on Fern Ann Falls Road. Mr. Cano advised Ms. Hart that he would have to give up his tenancy because of the problems.

The Litigation

Nineteen witnesses testified in a trial that took seven days. At the end of the plaintiff’s evidence defendants made an oral motion for judgment based on the failure to join indispensable parties which the court denied. The trial court issued a written decision on April 10, 2017 finding for plaintiff on all issues. The Court of Appeal began by noting errors in the trial courts fact finding and other procedural matters and then went to the issues:

1. Indispensable Parties-The Court of Appeal stated that the Indian Springs homeowners were indispensable parties and that the express easement granted by the Indian Springs HOA was to Iverson Road. Their joinder was required by the quiet title statute which defines necessary parties as those having adverse claims to the title against which a determination is sought. The individual lot owners’ title ran to the center of the streets on which their lots abutted. No judgment could be entered in quiet title in the absence of all parties with an interest in the property at issue which would include these owners.

The trial court mistakenly concluded that the HOA was the owner of the private streets. The tract map showed definitively that each lot owner’s title ran to the center of the street. Nothing in the CC&Rs suggested the HOA owned the streets.

The plaintiff had sought to point to the easement declaration as proof of the HOA’s ownership of the streets. The Court of Appeal stated pointedly that the plaintiff could not explain away the map. The written language of the easement specifically uses the map to show the easement route.

2. Other Claims-The plaintiff had alleged a prescriptive easement as an alternative to an express easement. But the Court of Appeal found nothing in the trial court decision supporting the finding of a prescriptive easement or anything in the decision even mentioning a prescriptive easement. The Court of Appeal went on to note that there was insufficient evidence to support even an implied finding of a prescriptive easement.

The Court of Appeal went on to note that there was nothing in the trial court’s statement of decision that would support the finding of an equitable easement. It noted the Shoen decision which set forth the three requisites for granting an equitable easement:

a. The party seeking the equitable easement must show the trespass was innocent rather than negligent or willful.

b. The property owner or the public would not be irreparably injured by the easement.

c. The hardship to the trespasser from having to cease the trespass would be greatly disproportionate to the hardship to the owner caused by continuance of the encroachment.

In particular, the Court of Appeal said the trial court failed to consider whether the plaintiff’s conduct was innocent. The Court of Appeal said that from the day she purchased the ranch in 1996 she knew about the nature of the Iverson Road access and the shortcomings of the bridge.

3. Remaining Issues-When the plaintiff granted an easement to the Fern Ann Falls Road property over the Lenope lot she or an alter ego owned both and by the merger doctrine one cannot grant oneself an easement over his own property. The easement is extinguished when one acquires fee title to both the servient and dominant tenements.

But the doctrine did not come into play. The plaintiff stated she wanted to grant an easement over the Lenope lot to her ranch not the Fern Ann Falls property. But since the easement grant was not ambiguous her intent did not come into play.

Conclusion

Since there were no enforceable easements over the private streets of Indian Springs or the Lenope property the Court of Appeal stated that there was no basis for award of damages, injunction or attorney’s fees against defendants. Plaintiff’s claims for nuisance, declaratory relief, and intentional interference with contractual relations failed along with her easement claims.

The Court of Appeal reversed and remanded the case to the trial court to vacate the injunctions and attorney’s fees and to enter a new judgment in favor of defendants.