The Idaho Supreme Court Is Making It Easier to Inadvertently Lose Property Rights

Legal Alert

While the Idaho legislature has been making it harder to lose real property rights through carelessness or inaction, the Idaho Supreme Court has been making it easier. In Idaho, and most other states, it has long been the law that someone possessing (or using) real property adversely to the rights of the record owner can eventually acquire an ownership (or easement) right if the adverse possession (or use) continues long enough. How long exactly is governed by statute, and in 2006 the Idaho legislature changed the required time from five years to twenty years, making it much less likely that a record owner of land will lose valuable property rights through carelessness or inaction.

In light of that, readers may be surprised to learn that the Idaho Supreme Court has recently determined, in a series of cases, that landowners may lose valuable property rights due to their carelessness or inaction in as little as four years, and that short period may start before anyone sets foot on another’s property.

Brown v. Greenheart

The series of cases began in 2014 with Brown v. Greenheart, 157 Idaho 156, 335 P.3d 1 (2014). There, sellers, named Brown, who sold land in 2007, brought an action in 2012 against the buyer Greenheart to clear up title to some water rights after realizing that those rights might have been inadvertently conveyed to the buyer under the language of the deed, despite the sellers’ intention to retain those water rights. The buyer said the sellers were too late, arguing that the sellers’ claim was barred by the statute of limitations. The district court ruled against the buyer, finding that the statute of limitations did not start to run in 2007 when the deed was recorded, but in early 2012 when the buyer filed a Notice of Change of Ownership with the Idaho Department of Water Resources.

On appeal, the Idaho Supreme Court noted that Idaho Code section 6-401 says, “[a]n action may be brought by any person against another who claims an estate or interest in real or personal property adverse to him, for the purpose of determining such adverse claim ....” The Supreme Court citing Idaho Code section 5-224 then went on to say that under Idaho’s “catchall” statute of limitations, “[a]n action for relief not hereinbefore provided for must be commenced within four (4) years after the cause of action shall have accrued.” The Supreme Court said that the four years does not start to run until one person claims an interest in property “adverse to” another and, in this case, that did not happen until 2012 when the buyer filed its notice with the Idaho Department of Water Resources claiming ownership of the water rights. Therefore, the four-year statute of limitations had not run and the sellers were allowed to pursue their case.

Sommer v. Misty Valley

The next case in the series is Sommer v. Misty Valley, Docket No. 48007 (Dec. 21, 2021). In that case, the Sommers, owners of land burdened by an access easement, brought suit in 2018 against the prospective developer of a neighboring subdivision, Magic Valley LLC, after learning how the developer intended to use the easement for access to the subdivision. The Sommers alleged that the proposed use would unlawfully expand the easement because the easement only benefitted some, but not all, of the land in the subdivision. The developer claimed the Sommers were too late, arguing that the claim was barred by the statute of limitations.

The Supreme Court rejected the developer’s argument citing its earlier decision in Greenheart. The Supreme Court began by saying that the case was, in substance, an action to quiet title under Idaho Code section 6-401 (quoted above), because the case “seeks to settle the title, rights and interests surrounding” the Sommers’ real property. The Court then noted that in Greenheart it held that the four-year statute of limitations set forth in Idaho Code section 5-224 governs quiet title actions.

The Court then turned its focus to when the four-year period started to run against the Sommers. The Court said, even if the Sommers were put on notice in 2007 or 2008 of Misty Valley’s general intent to build a subdivision, that was not enough to start the four-year statute of limitations under the standard announced in Greenheart. In Greenheart, accrual occurred when Greenheart claimed an interest in the disputed water rights by filing a notice with the Idaho Department of Water Resources. That was the first point in time that Greenheart took an objective action with enough specificity to claim an interest “adverse to” the Browns’ water rights. In the Sommers case, according to the Supreme Court, between 2007 and 2008, Misty Valley communicated a general intent to build but did not take any objective action (e.g., filing with the appropriate government agency) to notify the Sommers of any particular or specifically planned subdivision that utilized the easement. Without this, the Sommers could have no way of knowing in 2007 and 2008 whether Misty Valley’s intended subdivision would come to fruition and if it did, whether it would be “adverse to” their interests. The Supreme Court said the earliest possible date a quiet title claim might have accrued was 2017, when Misty Valley filed its preliminary plat application. That application not only had a map showing the proposed use of the easement, but also included actual plans to subdivide the property including plans for streets and other public improvements. And since 2017 was just a year before the suit was filed, it was obvious that the Sommers’ case was not barred by the four-year statute of limitations. Note that the case strongly suggests that the four-year statute of limitations began to run on the Sommers’ ability to defend their property rights before anyone set foot on the Sommers’ property.

Easterling v. HAL Pacific

The third and final case in the series is Easterling v. HAL Pacific, Docket No. 47919 (Dec. 21, 2021), which was issued the same day as the Sommers opinion. The Easterling case involved a claim by the Easterlings that their property was entitled to an “easement by necessity” over land owned by HAL Pacific Properties, L.P. An easement by necessity is a right to an unwritten easement that the law recognizes when two parcels are split from a single ownership and one parcel obviously needs access over the other. In essence, the law recognizes that the parties likely forgot to create the easements that are obviously necessary to make each parcel useful.

What’s important for the present discussion is that HAL Pacific asserted that the Easterlings were too late, arguing that their claim for an easement by necessity was barred by the statute of limitations. So, the Idaho Supreme Court again considered when the statute of limitations might cause someone to lose a valuable property right due to inaction. Following its now familiar line of reasoning, the Supreme Court said:

[W]e hold that the statute of limitations in Idaho Code section 5-224 applies to easement by necessity claims such that the right to an easement by necessity, which arises at the time of severance, will be extinguished if the four-year period under the statute has accrued and run. We further hold that easement by necessity claims are within the purview of Idaho’s broad quiet title statute, Idaho Code section 6-401, and do not accrue, for purposes of section 5-224, at severance. Instead, accrual will occur when the landlocked owner—or any of the predecessors-in-interest—knew, or reasonably should have known, that another made a claim “adverse to” the parcel’s right to an easement by necessity.

The Supreme Court then gave an example of how the owner of the landlocked parcel might lose its right to an easement by necessity: The Court said that if owner of the other parcel “erected a fence that blocked” the landlocked parcel’s access to the public road in 1960, then the owner of the landlocked parcel “has reason to know of a claim by another adverse to” the right to an easement by necessity. If the owner of the landlocked parcel does not file a complaint by 1964, “the statute of limitations will run under section 5-224 and that right … is forever extinguished.” So, while the law initially protects a landowner who forgets to create a necessary easement, the law demands that the same owner act rather quickly if someone later does something inconsistent with the overlooked easement.

What is perhaps most interesting about the Easterling case is that, unlike the other two cases in this series, Easterling was a split decision. Two of the five justices thought it was a mistake to apply the four-year statute of limitations to an easement by necessity claim. One of the reasons given by the dissenting justices is that applying the four-year statute of limitations does not fit with Idaho’s overall statutory scheme, the dissent noting that, for other claims concerning real property, the legislature recently extended the relevant periods from five to twenty years. “The majority has failed to recognize that due to the distinctive characteristics of an easement by necessity claim and similar adverse possession-type claims concerning real property, they are not governed by the same type of limitation period as a breach of contract claim.”

The dissent concluded with the following ominous warning: “The foreseeable and unforeseeable consequences of the majority’s decision are legion.” We agree but would extend that warning to this entire line of cases, under which one could conceivably lose valuable property rights in just four years, with the clock starting before anyone sets foot on another’s property.

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