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Bank of America v. Stevens

Court of Appeals of Ohio, Fourth District, Hocking

November 27, 2017

Bank of America, Plaintiff-Appellee,
v.
Gerald D. Stevens, et al., Defendants-Appellants.

          Alisa Turner, Logan, Ohio for appellants.

          Amelia A. Bower, Plunkett Cooney, Columbus, Ohio for appellee.

          DECISION AND JUDGMENT ENTRY

          William H. Harsha, Judge.

         {¶1} Gerald D. Stevens ("Dean") and Gerald A. Stevens ("Gerald") appeal the trial court's entry finding that an implied easement exists from Dean's 2.0467-acre property ("Property") across his father Gerald's land for access to Goose Creek Road. The Stevenses contend that because Bank of America ("bank") is not in possession of the property, it does not have standing to bring a declaratory judgment action to determine whether an easement exists. Thus, they argue the trial court erred in denying their motion to dismiss for lack of standing. However, Dean Stevens conveyed a mortgage to Countrywide Home Loans that included "all easements" that are "now or hereafter a part of the property." Bank of America is the successor by assignment to Countrywide Home Loans. Because the bank has an interest in all easements under the mortgage, it has standing to bring a declaratory judgment to determine the existence and extent of any easements. The trial court did not err in denying the motion to dismiss.

         {¶2} The Stevenses also contend that the trial court erred in denying their motion to dismiss on procedural grounds as untimely. Because the trial court properly denied the motion on substantive grounds, the Stevenses' argument that it was improperly denied on procedural grounds is moot.

         {¶3} Next, the Stevenses contend that the trial court erred in finding an easement by implication based on both prior use and strict necessity because the Property was undeveloped at the time it was severed from Gerald's property and conveyed to his son Dean. Developed or not, the Property has no direct access to Goose Creek Road - it is landlocked by other tracts. At trial the bank established by clear and convincing evidence the existence of an easement by implication based on prior use: (1) Gerald severed the 2.0467-acre rectangular Property from his land and conveyed it to Dean; (2) before Gerald severed the 2.0467-acre Property, Gerald used the contested permanent driveway to access it; (3) the driveway easement is reasonably necessary to Dean's beneficial enjoyment of the Property because it provides the only access to Goose Creek Road; and (4) the use of the driveway was continuous because it was used to access the Property by the Stevenses and their guests for 50 years. The trial court did not err in finding an implied easement by prior use. And because the trial court properly found an implied easement by prior use, the Stevenses argument that the court erred in finding an implied easement by necessity is moot.

         {¶4} Finally, the Stevenses contend that the trial court's finding that an easement exists on the basis that Dean had a license coupled with an interest is erroneous. Because the record contains competent and credible evidence supporting an implied easement by prior use, the Stevenses' argument that the trial court erred on this alternative ground is also moot.

         {¶5} We affirm the trial court's judgment.

         I. FACTS AND PROCEDURAL BACKGROUND

         {¶6} In 2005, Dean Stevens granted a mortgage in his 2.0467-acre property to Countrywide Home Loans, which subsequently assigned it to Bank of America. The terms of the mortgage provided that Dean Stevens "does hereby mortgage, grant and convey" to the mortgagee his 2.0467-acre Property "together with * * * all easements * * * now or hereafter a part of the property." In 2014, Bank of America filed a complaint seeking a judgment declaring that Dean's 2.0467-acre Property includes an easement by implication by prior use and an easement by necessity over the driveway on Gerald Stevens's property. The bank alleged that Dean Stevens's 2.0467-acre Property is landlocked and that access to the Property prior to the severance was over land owned by Gerald Stevens. The bank alleged that declaratory judgment relief was necessary so that the bank can complete a foreclosure action then pending in Case No. 13CV0043.

         {¶7} Gerald and Dean Stevens denied that the Property was landlocked and asserted the affirmative defense of failure to state a claim for which relief may be granted. Nonetheless, the matter proceeded to a trial before the court.

         {¶8} The record indicates Gerald Stevens owned approximately 34 acres along Goose Creek Road, Hocking County, Ohio. Gerald uses a driveway on his property as access to Goose Creek Road. On July 10, 1999, Gerald severed a 2.0467-acre rectangular Property from his 34-acre tract and conveyed it to his son Dean Stevens. The deed conveyed the Property and "all privileges and appurtenances belonging thereto", but did not include a specific easement to use the driveway across Gerald's land.

         {¶9} Dean uses the driveway on Gerald's property for access to Goose Creek Road. At the time of the severance and conveyance, the 2.0467-acre rectangular parcel was bordered on the east, south, and west sides by Gerald Stevens's remaining 32 acres. The north side of the Property was bordered by land owned by Harry and Stella Howard, whose property had frontage to Goose Creek Road. At the time Gerald conveyed the 2.0467-acre Property, Dean Stevens did not own any adjoining land. Therefore in July 1999 - the time of the severance - Dean's 2.0467-acre Property had no frontage to Goose Creek Road or access to any other public road. In 2000, Dean Stevens acquired the Howard property, which has frontage to Goose Creek Road, and borders the north boundary of his Property. Dean placed a manufactured home on the Property in 2001.

         {¶10} The Stevenses asserted the affirmative defense that the bank failed to state a claim for which relief may be granted, but they did not file a Civ.R. 12(B)(6) motion arguing that the bank lacked standing. Instead, they included a discussion of the standing issue in their pretrial brief. At the close of the bank's opening statement, the Stevenses' attorney orally sought dismissal on the ground that the bank lacked standing. The bank's counsel responded that the motion to dismiss was untimely, and that it had standing by virtue of the mortgage interest, which included all easements. The trial court took the motion under advisement and ordered the parties to file post-trial briefs on the issue.

         {¶11} During the bank's case in chief Gerald Franklin Hinkle II, a real estate appraiser, testified that he inspected the 2.0467-acre Property and surrounding land prior to preparing a written report. Hinkle testified that the Property and adjacent tracts slope to Goose Creek Road and that the adjacent 15.996-acre northern tract, which Dean acquired from the Howards in 2000, had very steep slopes and cliffs near Goose Creek Road. Hinkle concluded that due to the topography, it would not be feasible to extend a drive from Goose Creek Road across the former Howard tract to gain access to Dean's 2.0467-acre Property. Hinkle testified that the existing access to Dean's 2.0467-acre Property from Goose Creek Road was by a 10-foot wide gravel and chip-n-seal driveway shown in a survey map of the properties. There was no other driveway anywhere on Dean's Property that would connect it to Goose Creek Road, or to Brown Road, a road farther to the west of the Property. Through his research and inquiries to the Hocking County Planning Department, Hinkle learned that due to its lack of public road frontage, the Property is considered a "conditional transfer property" that could only be conveyed to a non-contiguous owner upon obtaining an easement to access Goose Creek Road. Hinkle's report gave an appraised value of the Property with the easement and without it. Without an easement the appraised property value declined by about 45%.

         {¶12} Audie L. Wykle, the Director of Hocking County Regional Planning Office, testified that his office reviews and authorizes land splits. Wykle testified that the 2.0467-acre Property is a "conditional tract" that cannot transfer as an independent parcel. The Property does not meet all the criteria for a stand-alone tract because it has no public road frontage. Wykle testified that he reviewed a topographical map of the surrounding property and he believed that it would not be practical to enter the Property in any other location other than the driveway across Gerald Stevens's property. Wykle also testified that Dean Stevens would not be able to access Brown Road from the Property. Wykle testified that he reviewed the topographical map of the area west of the Property to Brown Road and found that the area is very steep with potential cliffs. According to Wykle, Brown Road is a "Class X" road meaning that the road exists from a public right-of-way standpoint but it is not a road that the county maintains. Wykle testified that in this area Goose Creek Road has very steep hills that abut up to the road on either side.

         {¶13} Gerald Stevens testified that his property has frontage on Goose Creek Road. He built the existing driveway approximately 50 years ago and it has been in continuous use during the 50 years he has owned the property. Gerald testified that his son Dean uses the driveway to access the 2.0467-acre Property and that Dean's guests also use the driveway for access. Gerald testified that he has never blocked Dean's access to the driveway and that he does not want Dean to build a separate driveway to the Property or stop using the existing driveway. Gerald also testified that part of the driveway and a culvert that crosses Goose Creek closest to Goose Creek Road is actually on the 15.996 acres Dean acquired from the Howards in 2000.

         {¶14} Gerald testified that to his knowledge, there is no recorded easement for the driveway; likewise, Dean has not given him an easement for that portion of the driveway that crosses a section of the 15.996 acres formerly owned by the Howards; nor did he record or create an easement to the driveway when he transferred the 2.0467-acre Property to Dean. Gerald testified that when he conveyed the Property to Dean, he intended the Property to stay in Dean's ownership and to be accessed by the driveway on his property. Gerald testified that Dean has never blocked Gerald's access to the portion of the driveway that crosses a portion of the land Dean acquired from the Howards. Gerald indicated that there are no other driveways from Goose Creek Road to the 2.0467-acre Property.

         {¶15} Dean Stevens testified that he has lived at the Goose Creek Road property for 52 years - his entire life. He testified that a second driveway exists from the Property and connects to Brown Road through a western parcel Gerald owns, but he could not explain why the driveway to Brown Road was not depicted on the survey map. Dean did not provide any documentation to support the existence of this driveway. Dean also testified that he has not constructed any other driveways either to Brown Road or to Goose Creek Road from his Property. However, contrary to Hinkle and Wykle's testimony, Dean stated that he believed it was possible to create a driveway in a northeasterly direction across the steep and cliff-like terrain to Goose Creek Road and he had planned to do so eventually. Dean testified that when he mortgaged the Property he gave Countrywide Home Loans a right-of-way to his Property but he was unsure what happened to it or whether it was recorded. The record contains no recorded right-of-way or easement from Dean Stevens to Countrywide Home Loans. Dean testified that when his father transferred the Property to him, he intended to use the existing driveway on his father's property to access his Property.

         {¶16} The court's subsequent ruling on the motion to dismiss for lack of standing found that it was untimely because it was not made until after trial commenced. But the trial court also denied the motion on substantive grounds, finding that the bank had a personal stake in the matter as the bank held a mortgage on the Property, and its mortgage interest would be substantially impaired if there was no easement due to the large reduction in the value of the Property without it.

         {¶17} In reaching the merits the trial court found that the Property was landlocked when it was severed in July 1999, and that the driveway to the Property across Gerald's property was the only access. The court found that although Dean Stevens testified that an alternative driveway existed to Brown Road, the maps, aerial photographs, surveys, or other witnesses' testimony supported a finding that no driveway to Brown Road exists. The trial also found that constructing a driveway on the property Dean acquired in 2000 from the Howards would be very difficult and expensive because the very steep terrain is not conducive to the construction of such an access.

         {¶18} The trial court ruled that the bank had established an implied easement by prior use by clear and convincing evidence. The court found that: (1) the parties had stipulated that there was a severance of the unity of ownership in a parcel of real estate - Gerald had severed the Property from a parcel of land he owned; (2) before the severance, the driveway existed on the property for approximately 50 years; and Gerald and Dean used it to access Gerald's property, including the 2.0467-acre Property he later conveyed to Dean; and the driveway was permanent; (3) the easement is reasonably necessary to the beneficial enjoyment of the Property because in July 1999, the Property was landlocked - Dean Stevens did not own the Howard property located to the north, so he could not have built a driveway from the Property to Goose Creek Road on it; and (4) the servitude is continuous as distinguished from temporary or occasional because the evidence showed that Dean has been using the driveway as his only access since at least 1999. The trial court found that the implied easement ran from Dean's property, across Gerald's property and to Goose Creek Road. In describing the implied easement, the trial court did not address the segment of driveway that crosses over the property formerly owned by the Howards. Likewise, our decision does not address that segment of property.

         {¶19} The trial court alternatively found that the bank had established an implied easement by necessity and an easement by license coupled with an interest.

         {¶20} The Stevenses appealed.

         II. ASSIGNMENTS OF ERROR

         {¶21} The Stevenses designate four assignments of error for review:

I. THE TRIAL COURT ERRED WHEN IT FAILED TO DECIDE DEFENDANTS' MOTION TO DISMISS PRIOR TO TRIAL AND IN RULING THAT DEFENDANTS' MOTION WAS UNTIMELY.
II. THE TRIAL COURT ERRED IN DETERMINING THAT THE PROPERTY WOULD BE WORTH CONSIDERABLY LESS WITHOUT ACCESS AND THAT THE DIFFERENCE IN VALUE WAS "SUFFICIENT TO PROVIDE STANDING TO THE BANK." TRIAL COURT ENTRY, ...

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