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STATE OF MICHIGAN
COURT OF APPEALS


MARK FOSTER and DEBORAH FOSTER, Plaintiffs/CounterdefendantsAppellants/Cross-Appellees, v LENAWEE COUNTY DRAIN COMMISSION, Defendant/CounterplaintiffAppellee/Cross-Appellee, and LOCH ERIN ASSOCIATION, PROPERTY OWNERS

UNPUBLISHED May 23, 2006

No. 260452 Lenawee Circuit Court LC No. 02-000912-CH

Intervening DefendantAppellee/Cross-Appellant.

Before: Murphy, P.J., and O'Connell and Murray, JJ. PER CURIAM. Plaintiffs, Mark Foster and Deborah Foster, appeal as of right from an order upholding the validity of an easement across their property to defendant, Lenawee County Drain Commission ("Drain Commission"), and reforming the scope of that easement. Plaintiffs claim that the trial court erred in concluding that the easement was valid. Intervening defendant, Loch Erin Property Owners Association ("LEPOA"), cross-appeals, contending that the trial court erred in denying its motions for partial summary disposition and involuntary dismissal. Both plaintiffs and LEPOA challenge the scope of the easement that the trial court found the Drain Commission has in the property. We affirm in part, reverse in part and remand. I. Background

This case involves a dispute regarding the validity and scope of an easement in real property purportedly conveyed by plaintiffs' predecessor in title to the Drain Commission. The north side of the property at issue has approximately 500 feet of frontage along Lake Loch Erin, an artificial lake, and contains a retention dike. The property is bounded on the south side by Reed Road. On January 26, 1985, Donald and Grace Edwards sold approximately three acres of -1-


property they owned along the lake to Gerard and Linda Abram by land contract. The land contract contains a provision that "reserved" easement rights to the Lenawee County Drain Commissioner "for the purpose of access to the Loch Erin shore line to perform maintenance of dikes necessary to contain the lake . . . as set forth in an easement to be recorded." Pursuant to this provision, the Edwards executed a quit claim deed to the Drain Commission on March 1, 1985, creating the easement at issue. The language in the quit claim deed grants "easement rights for the purpose of access to Loch Erin shore line to perform maintenance over the following described premises," and describes the entire parcel of land that plaintiffs now own. On June 21, 1985, the quit claim deed granting the easement was recorded with the Lenawee County Register of Deeds. Thereafter, the Edwards transferred their interest in the land contract to Irish Hills, Ltd., by a quit claim deed, and Irish Hills conveyed the property to the Abrams by warranty deed, "subject to easements and restrictions of record." The Abrams then conveyed approximately two acres of their property to plaintiffs by warranty deed for the sum of $40,000. The warranty deed transferred the property "subject to reservations, easements, and restrictions of record." According to plaintiffs, they purchased the property for the purpose of constructing at least four homes on it. Plaintiffs contend that they discussed the existence of the easement with the Lenawee County Drain Commissioner, Stephen May, before closing on the property and received assurances that they would be able to develop the property and that four sewer stubs would be installed for that purpose. Pursuant to a permit that the Drain Commission issued, plaintiffs installed fill dirt between the dike and Reed Road in preparation for construction. After they purchased the property, plaintiffs filed a complaint and an amended complaint for declaratory relief, requesting that the trial court hold the easement across their property invalid because the Edwards lacked the authority to grant the easement as they were merely vendors of a land contract and did not hold the real property interest, or alternatively, reform the easement to a size that was consistent with the general purpose of the easement and the intent of the original makers and that permitted plaintiffs to develop their property. Plaintiffs also requested monetary relief for the decrease in value or the taking of their property and costs associated with their reliance on May's assurances that they could develop the property. The Drain Commission filed a cross-complaint, requesting that the trial court enter an order granting it a permanent easement for "sewer purposes" on the property. Subsequently, the trial court allowed LEPOA to intervene as a party defendant. Before trial, the trial court denied a motion brought by LEPOA for partial summary disposition, holding that there was a question of fact regarding the authority that the Edwards held to grant an easement in the property. At trial, the trial court denied a motion brought by LEPOA for involuntary dismissal, concluding that the Drain Commission did not have a right to the entire parcel, only to a reasonable easement across the property to perform maintenance on the dike. The trial court also rejected plaintiffs' claim that the easement was invalid, finding that, "the right to [the] easement was reserved from the deed." Based on these rulings, the trial court determined that the only remaining issue was what constitutes a reasonable easement under the circumstances. The trial court admitted the results of three engineering reports of the area in question. The Drain Commissioner, May, testified that, based on the data from these studies, it was his opinion that a reasonable easement was 37 feet, the width of the dike, plus 50 additional feet for -2-


the materials and equipment necessary for maintenance. For access to this easement, May further recommended an easement of 25 to 30 feet from Reed Road. In contrast, plaintiffs presented Christopher Crisenbery, a licensed engineer, who stated that a 45-foot easement was sufficient for monitoring and maintenance, along with an access easement from Reed Road of approximately 15 feet. Although he opined that maintenance could be accomplished in less than the area recommended by May, he acknowledged that May knew the Drain Commission's equipment and the additional area needed for its use and concluded that he would "tend to agree with the Drain Commissioner if that's what he required." The trial court noted that, if the dike should fail, there was "potential for tremendous damage." Therefore, a reasonable easement must be adjacent to the dike and large enough to allow for adequate maintenance and repair. The trial court found that May was credible and knowledgeable and that Crisenbery did not dispute May's testimony. Thus, the trial court held that a reasonable easement was 37 feet, plus 50 feet from the water's edge. On January 10, 2005, the trial court entered a written order in accordance with this holding, plus the trial court added a 50-foot wide access easement from Reed Road to the easement along the shoreline and denied plaintiffs' demand for money damages. This appeal and cross-appeal followed. II. A. Analysis

Validity of the Easement

On appeal, plaintiffs contend that the trial court erroneously held that the easement was valid. We disagree. Plaintiffs' specific requests for declaratory relief and to quiet title or remove a cloud on a title are actions in equity. Universal Am-Can Ltd v Attorney General, 197 Mich App 34, 37; 494 NW2d 787 (1992); Michigan Nat'l Bank & Trust Co v Morren, 194 Mich App 407, 410; 487 NW2d 784 (1992). We review equitable actions de novo, but review the factual findings of the trial court for clear error. MCR 2.613(C); McFerren v B & B Inv Group, 253 Mich App 517, 522; 655 NW2d 779 (2002). "A finding is clearly erroneous when, although there is evidence to support it, the reviewing court on the entire record is left with the definite and firm conviction that a mistake has been committed." Walters v Snyder, 239 Mich App 453, 456; 608 NW2d 97 (2000). Moreover, both the preliminary question of whether a contract is ambiguous and the subsequent interpretation of the contract are issues of law that we review de novo. Klapp v United Ins Group Agency, Inc, 468 Mich 459, 463; 663 NW2d 447 (2003). Specifically, plaintiffs contend that the easement is invalid because the Edwards, as vendors of the land contract, lacked the authority to convey the easement to the Drain Commission without the joint approval of the Abrams, the vendees of the land contract. It is true that both the Edwards and the Abrams held some form of title to the property at issue at the time that the deed conveying the easement was executed. In equity, a buyer who performs under a land contract obtains an equitable title, while the vendor holds the legal title in trust for him. Steward v Panek, 251 Mich App 546, 555-556; 652 NW2d 232 (2002), citing Charter Twp of Pittsfield v Saline, 103 Mich App 99, 103; 302 NW2d 608 (1981). Moreover, when the land contract is signed, "the vendee acquires `seisin' and a present interest in the property that may be sold, devised, or encumbered." Graves v American Acceptance Mtg Corp (On Rehearing), 469 -3-


Mich 608, 616; 677 NW2d 829 (2004).1 Thus, after payment of part of the purchase price, the Abrams were vested with equitable title in the property, and the Edwards held legal title in trust for them. Although the Abrams acquired ownership, they never held title to the portion of the property containing the easement at issue. The land contract to which the Abrams agreed includes the following provision: Seller and Purchaser [m]utually [a]gree . . . [e]asement rights reserved to the Lenawee County Drain Commissioner for the purpose of access to the Loch Erin shore line to perform maintenance of dikes necessary to contain the lake in accordance with court order setting the lake level dated August 8, 1977, as set forth in an easement to be recorded. The trial court held that the easement was valid because the plain language of the contract "reserved" the right to the easement. According to an old rule of conveyancing law, an easement may not be reserved for the benefit of a stranger to the deed or grant. Mott v Stanlake, 63 Mich App 440, 441-442; 234 NW2d 667 (1975), citing Choals v Plummer, 353 Mich 64, 71; 90 NW2d 851 (1958). However, a grantor may set forth an exception in favor of a third party. Mott, supra at 442. When a grantor does not attempt to create a reservation, but instead creates an exception for the benefit of a third party, the language of the conveying instrument is to be given its intended effect. Id., citing Martin v Cook, 102 Mich 267; 60 NW 679 (1894).2 Because the words "reservation" and "exception" are frequently confused and used indiscriminately, the grantor's choice of language is not determinative of whether the provision is a reservation or exception. Mott, supra at 442. "The crucial factor is the intention of the grantor and grantee." Id., citing Martin, supra, and Choals, supra. Despite the use of the term "reserved" in the clause at issue, there was no attempt to reserve an interest to the grantors. Instead, an exception was created in favor of a third party, the Drain Commissioner. Accordingly, the easement was excluded from the grant to the Abrams, and the Edwards subsequently conveyed the easement pursuant to the agreement. Although the trial court improperly termed the clause as a "reservation," we hold that the court did not clearly err in finding that the easement was properly conveyed, and therefore, it was valid.

"Seisin" is defined as "[p]ossession of a freehold estate in land; ownership." Black's Law Dictionary (8th ed). An exception withdraws a portion of the real property from the description conveyed. In other words, it excludes from the grant something that is not intended to be granted. In contrast, a reservation does not change the description of the property conveyed, but rather, reserves for the grantor a right or interest in the real property, such as an easement. A reservation establishes a new right or interest. See Black's Law Dictionary (8th ed); see also Mott, supra at 443, and Peck v McClelland, 247 Mich 369, 370-371; 225 NW 514 (1929).
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Plaintiffs also contend that the land contract contains ambiguous and conflicting provisions regarding the title guaranteed to them. Plaintiffs cite paragraph 1(a) of the contract, which provides: Seller [a]grees [t]o sell and convey to Purchaser land [description], hereinafter referred to as "the land" together with all tenements, hereditaments, improvements, and appurtenances . . . now on the land; subject to any applicable building and use restrictions and to any easements affecting the land. Plaintiffs also cite paragraph 1(c), which provides: Seller [a]grees . . . [t]o execute and deliver to Purchaser . . . upon payment in full of all sums owing hereon, . . . a good and sufficient warranty deed conveying title to the land, subject to abovementioned restrictions and easements and to any then unpaid mortgage or mortgages, but free from all other encumbrances, except such as may be herein set forth or shall have accrued or attached since the date hereof through the acts or omissions of persons other than Seller or his assigns. Plaintiffs argue that these paragraphs assured the Abrams that the Edwards would deliver "a deed free from any claims or easements except those that existed as of the day that the contract was executed." Therefore, plaintiffs assert that these paragraphs conflict with paragraph 3(m), in which easement rights were excepted for the Drain Commissioner "as set forth in an easement to be recorded." The primary purpose of interpreting contracts is to determine and enforce the intent of the parties. Old Kent Bank v Sobczak, 243 Mich App 57, 63; 620 NW2d 663 (2000). To accomplish this, the reviewing court must read the parties' contract as a whole and attempt to apply the plain language of the agreement. Id. The land contract contained an exception giving the Edwards the right to transfer an easement in the property to the Drain Commission. Therefore, the exception existed at the time that the contract was executed, and the Abrams purchased the property with knowledge of the easement. Contrary to plaintiffs' assertion, paragraph 1(a) specifies that the property is "subject to . . . any easements affecting the land." Furthermore, paragraph 1(c) states that the seller will convey a warranty deed on full payment "free from all other encumbrances, except such as may be herein set forth . . . ." These two paragraphs do not conflict with the subsequent paragraph excepting an easement for the benefit of the Drain Commissioner. Accordingly, we reject plaintiffs' claim. Plaintiffs further contend that the easement is invalid because it exceeds the scope of the exception in the land contract. Plaintiffs argue that the omitted language "of dikes necessary to contain the lake in accordance with court order setting the lake level dated August 8, 1977" is of "key importance" because it limits any easement to be granted to that of an easement of access to the dike to maintain the level of the lake and indicates the intent of the grantors. "An easement is the right to use the land of another for a specified purpose." Schadewald v Brule, 225 Mich App 26, 35; 570 NW2d 788 (1997). The scope of an easement is strictly confined to the purpose for which it was granted or reserved. Blackhawk Dev Corp v Village of Dexter, 473 Mich 33, 41; 700 NW2d 364 (2005), citing Delaney v Pond, 350 Mich 685, 687; 86 -5-


NW2d 816 (1957). While the language of the deed granting the easement differs somewhat from the language of the exception, the purpose for the easement is clearly stated in both documents. The exception and the easement state that the easement is for the purpose of "access" to the shoreline of the lake "to perform maintenance." It is undisputed that maintenance may be necessary because the property is bounded by a dike that keeps the lake water enclosed. The alleged limiting language of the easement has no bearing on the extent of the easement, as the purposes stated in both documents are comparable. Therefore, we conclude that the trial court did not err in ruling that the easement was valid. B. Extrinsic Evidence

Plaintiffs claim that the trial court should have considered parol evidence in determining the scope and purpose of the easement. We agree. A trial court's decision to admit and consider extrinsic evidence is reviewed for an abuse of discretion. Chmielewski v Xermac, Inc, 457 Mich 593, 614; 580 NW2d 817 (1998). If the language of the easement is ambiguous, the trial court may consider extrinsic evidence to determine the scope of the easement. Little v Kin, 468 Mich 699, 700; 664 NW2d 749 (2003). Furthermore, a trial court's interpretation of an easement is a question of law that we review de novo. Schroeder v Detroit, 221 Mich App 364, 366; 561 NW2d 497 (1997). "`An easement may be created by express grant, by reservation or exception, or by covenant or agreement.'" Rossow v Brentwood Farms Dev, Inc, 251 Mich App 652, 661; 651 NW2d 458 (2002), quoting Michigan State Hwy Comm v Canvaser Bros Bldg Co, 61 Mich App 176, 181; 232 NW2d 351 (1975). To create an express grant of an easement, there must be language in the conveying instrument showing a clear intent to create the easement. Forge v Smith, 458 Mich 198, 205; 580 NW2d 876 (1998); see also 25 Am Jur 2d, Easements and Licenses,

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