Earl v. Pavex, Corp.
372 Mont. 476
Mont.2013Background
- The Keims owned a 390.841-acre tract (Tract 1), later split into Tract 1A (sold to Pavex) and Tract 2A (sold to the Earls). A 30-foot easement for ingress/egress/utilities over the property was undisputed.
- In the Keims→Pavex deed (recorded Sept. 2006) the Keims granted Pavex a separate 100-foot-wide easement over Tract 2A for the benefit of Tract 1A.
- The Keims later sold Tract 2A to the Earls (contract for deed Apr. 2007) without mentioning the 100-foot easement; the Earls claim they lacked actual notice of the 100-foot easement.
- The Earls sued to invalidate the 100-foot easement (arguing it was not in their chain of title) and alternatively asserted they need not remove existing structures/cropland encroaching into the easements.
- The District Court held the 100-foot easement did not burden the Earls (granted summary judgment to Earls) but ruled encroachments may need removal (summary judgment to Pavex on that legal question).
- The Montana Supreme Court reversed as to enforceability of the 100-foot easement, affirmed that encroachments may have to be removed if they unreasonably interfere, and remanded fact issues (including precise location of the 100-foot easement and whether encroachments are unreasonable).
Issues
| Issue | Plaintiff's Argument (Earls) | Defendant's Argument (Pavex) | Held |
|---|---|---|---|
| Whether the recorded 100-foot easement was extinguished by not appearing in the Earls’ deed / chain of title | The easement is unenforceable because it does not appear in the chain of title to Tract 2A; the buyer need only search the direct conveyance chain (narrow chain-of-title rule) | A purchaser is constructively on notice of recorded servitudes created by prior or existing owners of the parcel (broad chain-of-title rule); the easement was recorded and discoverable | Court adopts broad chain-of-title rule: Earls had constructive notice; the 100-foot easement is enforceable (reversing district court) |
| Whether existing structures and cropland encroaching in the easements must be removed | The Earls argue Pavex took easement subject to open-and-obvious preexisting encroachments and that Earls have an implied easement to maintain structures/cropland within the corridor | Pavex argues obstructions that interfere with easement rights must be removed to permit full exercise of easement purposes | Court affirms legal principle that servient owner may use easement area so long as use does not unreasonably interfere; permanent/unreasonable encroachments may be removed. Whether encroachments are unreasonable is a fact question for remand |
Key Cases Cited
- Witter v. Taggart, 577 N.E.2d 338 (N.Y. 1991) (adopts narrow chain-of-title; limits constructive notice to conveyances in the direct line to purchaser)
- Dukes v. Link, 315 S.W.3d 712 (Ky. Ct. App. 2010) (supports broad chain-of-title; recorded easement by common grantor binds subsequent purchaser of servient tract)
- Keybank N.A. v. NBD Bank, 699 N.E.2d 322 (Ind. Ct. App. 1998) (recorded instruments must be indexed in proper chain to impart constructive notice)
- Newton v. N.Y., N.H. & H.R.R. Co., 44 A. 813 (Conn. 1899) (recognizes limited rights of abutting owner within a public way — conceptually an "easement upon an easement")
- Piper v. Mowris, 351 A.2d 635 (Pa. 1976) (a grantee is chargeable with notice of matters discoverable in the records of his grantor)
- Mason v. Garrison, (cited in opinion without reporter pin) (Mont. 2000) (Montana precedent recognizing servient owner may use easement area so long as it does not unreasonably interfere)
(Note: the Court overruled Nelson v. Barlow to the extent it supported the narrow chain-of-title rule and held Montana law favors the broad chain-of-title/constructive notice rule.)