Margulies v. Sherwood Development Co. CA2/6 ( 2021 )

Filed 7/29/21 Margulies v. Sherwood Development Co. CA2/6
NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS
California Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or relying on opinions
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IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA
SECOND APPELLATE DISTRICT
DIVISION SIX
DAVID MARGULIES et al., 2d Civil No. B304005
(Super. Ct. No. 56-2018-
Plaintiffs and Appellants, 00510741-CU-OR-VTA)
(Ventura County)
v.
SHERWOOD DEVELOPMENT
CO., L.P.,
Defendant and Appellant.
David Margulies and 714 West Potrero, LLC
(collectively, Plaintiffs), appeal from the judgment after the trial
court refused to award them trail easements across lots owned by
Sherwood Development Company—despite a jury confirming the
existence of the easements. They contend the court erred when it
negated the jury’s verdict. We affirm.
FACTUAL AND PROCEDURAL HISTORY
The properties and trails at issue
In the early 1980s, Sherwood bought 1,900 acres of
land in the Santa Monica Mountains of southeastern Ventura
County (County). It planned to develop a golf course and build 622
homes on the land. Part of the development has been completed,
but much of the land remains undeveloped save for a “patchwork
of equestrian and hiking trails.” Among the undeveloped parts of
Sherwood’s land is Tract 4409-8, which encompasses just over 150
acres.
A 57-acre ranch lies directly north of Tract 4409-8.
The ranch was developed more than a century ago, and has gone
through a series of owners since then. Margulies bought the ranch
in 2015, and transferred ownership to 714 West Potrero.1
Horseback riding and hiking trails traverse much of
the area. Among the trails are eight segments extending from the
ranch across Tract 4409-8 (denoted segments 1, 2, 3, 4A, 4B, 6, 7,
and 9). For decades, various ranch owners and their employees
and guests have used these trails. Photographs dating back to the
1940s also show the trails.
Sherwood’s development plan for Tract 4409-8
Two decades after Sherwood purchased Tract 4409-8,
County planning officials approved the company’s development
plan for the tract—a process that took 18 years. The approved
plan includes 11 lots that vary in size from two to 23 acres, and
specifies the location and size of the building pad on each.2 It also
requires more than 95 percent of each lot to remain open space.
A fire road traverses Tract 4409-8, wandering across
the area where Broadhaven Street will be built to connect the 11
lots. The street will be constructed at a different elevation and in
slightly different places than the fire road. As part of its approval
of Tract 4409-8, the County approved a detailed grading plan that
1 Margulies is the sole owner of 714 West Potrero.
2 The building pads average a half-acre in size.
2
will require Sherwood to take dirt from mountaintops and fill
valleys to create the 11 building pads and Broadhaven Street.
In 2016—the year after Margulies bought the ranch
and some 10 years after County officials approved the
development plan for Tract 4409-8—Sherwood personnel saw an
equestrian riding on trail segments 1 and 2. They also discovered
that someone had bulldozed a path between the fire road and the
two segments. They constructed fences to block access to the
trails.
Jury trial phase
Plaintiffs sued Sherwood to challenge its construction
of the fences and to confirm prescriptive easement rights over the
trail segments. The parties agreed that the existence of easements
would be tried by the jury, and if there was a verdict in Plaintiffs’
favor the trial court would subsequently determine whether
judgment should be entered on the verdict. They also agreed that
during the bench trial phase the court could consider the evidence
presented to the jury plus additional evidence to be presented after
the verdict.
During the jury trial, Sherwood president Nathan
Stockmeir testified that the company could not develop Tract
4409-8 if Plaintiffs were granted easements over trail segments 1,
2, 6, and 7. He explained that all of the lots in the tract could be
affected if the company could not grade the area where a segment
was located. And until the lots could be built up with dirt from
grading, the approved building pad locations were floating in the
air. Broadhaven Street similarly could not be built without dirt
from the areas to be graded.
Stockmeir further explained that, to accommodate
both the trail segments and open space requirements, lot lines
3
would have to be changed. And “[i]f you have to have an easement
across the road, you’re unable to build the road,” which, in turn,
could “affect all of [Tract] 4409-8.” But Sherwood could not move
Broadhaven Street since it was part of the approved development
plan.
In short, Sherwood would be unable to develop Tract
4409-8 if the easements were confirmed. Though the company
could theoretically accommodate the trail segments, that would be
possible only if it “change[d] every pad and every lot line.” It
would also require going through the entire approval process
again, which “would open up each tract map to be looked at again
with current standards and everything, and everything could
change at that point.”
Jurors nevertheless confirmed prescriptive easements
as to trail segments 1, 2, 4A, 6, 7, and 9. They also found that the
easements had not been abandoned. The jurors did not specify
when the easements arose.
Bench trial phase
During the bench trial phase, a civil engineer testified
that modifying Sherwood’s tract map to accommodate the trails
might be possible, but changes to facilitate both the trails and
Sherwood’s proposed development could not be accomplished by
minor modifications. Accommodating the trails would be unlikely
if the same lot lines were used.
Sherwood suggested that the trial court use its
equitable powers to move the location of the trail segments to
accommodate the building pads and Broadhaven Street. Plaintiffs
objected.
The trial court found that lots 51 and 55 were most
impacted by the easements. Trail segment 4A cut off about 20
4
percent of the building pad on lot 51. The pad could not be moved
back because the area behind it was hillside and dedicated open
space. And there was no evidence showing how the lot could
otherwise accommodate the trail: “[I]f it could be done, the result
would be a residential property with a horse trail running through
the heart of it.” (Italics omitted.) But “[c]ommon logic suggests
that few potential homebuyers would be interested in a
multimillion-dollar property with an equestrian/hiking trail just a
few feet outside of the residence [on which they] would not be able
to do any of the things . . . that homeowners typically do in their
yard—e.g., fence the curtilage, grow a lawn, plant flowers and
trees, or build a patio, deck[,] or spa.”
Trail segments 6 and 7 would have similar impacts on
lot 55. The building pad for that lot is bordered on three sides by a
hillside, Brookhaven Street, and lot 54, making it impossible to
move the pad in any of those directions. The pad abuts dedicated
open space on the fourth side, and there was no indication that the
County would approve moving the pad into that space. Relocating
segments 6 and 7 was not an option due to Plaintiffs’ refusal to
consent, and because relocation would require more than “a slight
deviation” from their present locations. An easement over
segments 6 and 7 would thus “substantially diminish the use and
enjoyment of [l]ot 55, impede or prohibit the development of [it],
and effectively negate the marketability of the property.”
Based on these impacts, the trial court determined
that Plaintiffs were not entitled to prescriptive easements over
trail segments 4A, 6, and 7. “[A]s a practical matter,” such
easements would “so substantially impair the use of [Sherwood’s]
property as to be a possessory interest.” And without those
easements Plaintiffs could not reach public lands across
5
Sherwood’s land. The remaining trail segments were thus of no
use to Plaintiffs. The court accordingly refused to recognize any of
the easements confirmed by the jury, and entered judgment for
Sherwood.
DISCUSSION
Plaintiffs contend the trial court erred when it
declined to award them the use of easements confirmed by the jury
because: (1) it relied on inapplicable law, (2) substantial evidence
does not support its findings, and (3) it extinguished easements
that did not directly impact Sherwood’s property. We disagree
with all three contentions.
“[T]he successful claimant of a prescriptive easement
gains . . . the right to make a specific use of someone else’s
property.” (Mesnick v. Caton (1986) 183 Cal.App.3d 1248, 1261.)
It is a right restricted to a “limited” and “defineable use or activity
upon another’s property, which . . . must be less than the right of
ownership.” (Ibid., italics omitted.) But “[i]f the prescriptive
interest . . . is so comprehensive as to supply the equivalent of an
estate, the claimant must establish the elements of adverse
possession, not those of a prescriptive easement.” (Hansen v.
Sandridge Partners, L.P. (2018) 22 Cal.App.5th 1020, 1033
(Hansen).) Whether the trial court correctly concluded that
Sherwood showed that Plaintiffs’ easements are so comprehensive
that they supply the equivalent of an estate is a factual question
we review for substantial evidence. (Id. at p. 1028.)
The trial court applied the correct law
We reject Plaintiffs’ contention that the trial court
relied on inapplicable law when it declined to award them
easements over Sherwood’s property. Before a claimant can be
awarded a prescriptive easement, a court must inquire whether
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the easement “‘completely prohibits the [the property owner] from
using that part of their land.’ [Citation.]” (Harrison v. Welch
(2004) 116 Cal.App.4th 1084, 1094 (Harrison), alterations omitted;
see also Hansen, supra, 22 Cal.App.5th at pp. 1032-1036;
Mehdizadeh v. Mincer (1996) 46 Cal.App.4th 1296, 1304-1308
(Mehdizadeh); Silacci v. Abramson (1996) 45 Cal.App.4th 558, 562-
564 (Silacci); Raab v. Casper (1975) 51 Cal.App.3d 866, 876-878
(Raab).) That Plaintiffs disagree with the trial court’s conclusions
after it undertook the requisite inquiry does not mean the court
relied on inapplicable law.
Substantial evidence supports the trial court’s findings
Substantial evidence supports the court’s conclusions.
Trail segment 4A cuts through lot 51, carving out about 20 percent
of the lot’s half-acre building pad. A steep hillside prevents
Sherwood from moving the building pad back, and there was no
evidence showing that the pad could be moved in another
direction. And if the pad were to remain in its approved location
the trail would run through its front yard. The easement would
thus prevent the eventual purchaser of the lot from using the
property to do things homeowners “typically” do around their
homes: “fence the curtilage, grow a lawn, plant flowers and trees,
or build a patio, deck[,] or spa.”
Lot 55 would be impacted even more. Trail segments
6 and 7 cross the building pad on that lot, dividing it into two
areas of approximately equal size. It is physically impossible to
move the building pad in any of three directions, and it is
infeasible to move it in the fourth direction since that area is
dedicated open space. Keeping the building pad in its approved
location is impossible because Plaintiffs refused Sherwood’s offers
to relocate the trails to another portion of the lot, and moving
7
them over Plaintiffs’ objection would be more than a “slight
deviation.” (See Applegate v. Ota (1983) 146 Cal.App.3d 702, 712
(Applegate) [“slight deviation” from historic location does not
defeat an easement]; Matthiessen v. Grand (1928) 92 Cal.App. 504,
510 [relocation of 20 feet can be more than a slight deviation].)
Thus, if easements over trail segments 6 and 7 were confirmed,
Sherwood would be left without a usable building pad on lot 55.
Confirming easements over the trail segments would
also have other impacts. Nine of the lots in Tract 4409-8, and
Broadhaven Street, could not be developed because the building
plan requires grading the areas where the trail segments lie.
Accommodating the segments in their extant locations would
require changing the grading for every home site and moving all of
the approved lot lines. It took more than 18 years for Sherwood to
gain the County’s approval of its tract map. Since then, the
County’s development requirements have changed “multiple
times.” There is thus no guarantee that the County would approve
these major modifications to the tract map, substantially
impairing Sherwood’s use of the entire tract.
Raab, supra, 51 Cal.App.3d 866 is instructive. In that
case the defendants claimed an easement over land on which they
had built utility lines, a driveway, and part of their yard and
landscaping. (Id. at p. 877.) Those improvements had the effect of
excluding the plaintiffs from that portion of their land, which gave
the defendants the “practical equivalent of an estate.” (Ibid.)
Other cases are in accord. In Silacci, supra, 45
Cal.App.4th at pages 560-561 and 564, the Court of Appeal
reversed the grant of an “exclusive prescriptive easement” to the
defendants to use the plaintiffs’ property as their own back yard
because a fence excluded all others—including the plaintiffs—from
8
the property. In Mehdizadeh, supra, 46 Cal.App.4th at pages
1305-1306, the court similarly reversed the finding of a
prescriptive easement because it would “divest the [defendant-
landowners] of nearly all rights that owners customarily have in
residential property,” including access to the land and the ability
to build on or cultivate it. Perhaps most similar to the instant case
is Harrison, supra, 116 Cal.App.4th 1084. In that case, the
defendant erected no fence to exclude the plaintiffs from their
property, but her landscaping of the area over which she claimed
an easement nevertheless “effectively prevent[ed] [them] from
determining how the area . . . [was] to be used.” (Id. at p. 1094.)
The same is true here. The trial court reasonably
concluded that confirming Plaintiffs’ easement rights over trail
segments 4A, 6, and 7 will effectively prevent Sherwood from
developing lots 51 and 55. It would also severely hinder—if not
prohibit—the development of other lots in Tract 4409-8 due to the
intertwined nature of the grading the development requires. Such
limitations would grant Plaintiffs the “practical equivalent” of an
estate over at least two 20-acre lots—and possibly even more of
Sherwood’s lands—something that cannot be gained by a
prescriptive easement.
Plaintiffs counter that the principles set forth in Raab,
supra, 51 Cal.App.3d 866 and its progeny do not apply here
because easement rights are judged based on the use of the
servient estate at the time they arose, not the planned use of that
estate. (See Brown Derby Hollywood Corp. v. Hatton (1964) 61
Cal.2d 855, 860.) But when it confirmed prescriptive easements as
to trail segments 1, 2, 4A, 6, 7, and 9, the jury did not specify when
the easements arose. And from its statement of decision it is clear
that the trial court inferred that they arose after the County
9
approved Sherwood’s development plan in 2006. That prior ranch
owners and their employees and guests intermittently used the
trails before 2006 does not negate the reasonableness of that
inference. We must accordingly uphold it. (Fladeboe v. American
Isuzu Motors Inc. (2007) 150 Cal.App.4th 42, 48.)
The trial court did not err when it refused to
confirm easements over the remaining trail segments
Finally, we reject Plaintiffs’ contention that the trial
court erred when it refused to confirm easements over trail
segments 1, 2, and 9 (which do not directly impact Sherwood’s
development plans) since they cannot be used for their
contemplated purpose—i.e., to reach the public lands of the Santa
Monica Mountains—without segments 4A, 6, and 7. The scope of
an easement is defined by its historic use. (Applegate, supra, 146
Cal.App.3d at p. 711.) Plaintiffs sought an injunction granting
them easements “to utilize the trails . . . to complete the ‘loop’ trail
and in order to cross over the Sherwood [p]roperties into the Santa
Monica Mountains for equestrian and hiking uses.” (Italics
added.) They cannot now claim that easements over trail
segments 1, 2, and 9 should be confirmed based on some different
use or purpose. (Ibid.; see also Otay Water Dist. v. Beckwith (1991)
1 Cal.App.4th 1041, 1048 [easement must be consistent with
historic use].) Substantial evidence supports the trial court’s
refusal to award Plaintiffs easements over all of the trail segments
confirmed by the jury.3
3 Given our conclusion, we do not consider the merits of the
issues raised in Sherwood’s cross-appeal.
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DISPOSITION
The judgment is affirmed. Sherwood shall recover its
costs on appeal.
NOT TO BE PUBLISHED.
TANGEMAN, J.
We concur:
GILBERT, P. J.
YEGAN, J.
11
Mark S. Borrell, Judge
Superior Court County of Ventura
______________________________
Morgan, Lewis & Bockius, Thomas M. Peterson,
Charles J. Malaret; Law Office of K.M. Neiswender and Kate M.
Neiswender for Plaintiffs and Appellants.
Ferguson Case Orr Paterson, Wendy C. Lascher and
John A. Hribar for Defendant and Appellant.