Albert E. Holcomb IV and Holcomb Enterprises, LLC v. Delhi Lakeview Estates, Inc.

IN THE COURT OF APPEALS OF IOWA
No. 16-2137
Filed August 2, 2017
ALBERT E. HOLCOMB IV and HOLCOMB ENTERPRISES, LLC,
Plaintiffs-Appellants,
vs.
DELHI LAKEVIEW ESTATES, INC.,
Defendant-Appellee.
________________________________________________________________
Appeal from the Iowa District Court for Delaware County, Thomas A.
Bitter, Judge.
Holcomb and his business, Holcomb Enterprises, LLC, appeal the district
court’s judgment that denied his request for a declaration that an easement by
implication in favor of his property existed across the “Waterfront Access Area” of
Lake Delhi. AFFIRMED.
Peter C. Riley of Tom Riley Law Firm, P.L.C., Cedar Rapids, for
appellants.
Janelle Grace Ewing of The Sayer Law Group, P.C., Waterloo, for
appellee.
Considered by Vogel, P.J., and Doyle and McDonald, JJ.
2
DOYLE, Judge.
In 1977 Camp-O-Delhi, Inc. (C-O-D) purchased land adjacent to Lake
Delhi in Delaware County, Iowa. In 1984 the land was platted as the Camp-O-
Delhi subdivision. The subdivision consists of some 92 lots, lake frontage area,
and also road area. Twenty of the lots front the lake, including lot 89, the
property that is the subject of this litigation. In 1984, C-O-D also recorded
restrictive covenants for the subdivision. In 1985, Delhi Lakeview Estates
Landowners Association, Inc. (DLE) was formed and became successor to C-O-
D. DLE purchased from C-O-D the lake frontage area, which is a strip of land
between the shoreline and the lakefront lots—basically the beach area—called
the “Waterfront Access Area.” DLE also purchased C-O-D’s docks. Also in
1985, C-O-D sold lot 89 to the Stenders. In 2005 DLE recorded restrictive
covenants for the subdivision. They mirror the 1984 C-O-D covenants.
Ownership of lot 89 passed through several hands before Albert Holcomb
IV purchased on contract a portion of lot 89 in 2006.1 Included in the purchase
was a bar-and-grill business located on that lot, known over time as Camp-O or
Camp-O-Delhi. Holcomb and his business, Holcomb Enterprises, LLC, operated
the bar and grill as Camp-O Beach Resort after its purchase.2 The lake side of
the lot Holcomb purchased abuts the “Waterfront Access Area” of Lake Delhi. In
2007 Holcomb requested DLE furnish materials to repair or replace DLE’s
deteriorating docks. When DLE denied Holcomb’s request, he removed the DLE
docks, purchased materials, and built new docks. His application for a dock
1
In 2010, after paying off the contract, Holcomb received a warranty deed for the
property.
2
We hereinafter refer to the plaintiffs collectively as “Holcomb” and in the singular.
3
permit was denied because DLE, the riparian owner, would not sign the permit
application. In 2008, Holcomb was cited by the Iowa Department of Natural
Resources for failing to have a dock permit. Holcomb shuttered the business
sometime in 2008 or 2009 when renewal of his liquor license was denied. After
an appeals process, Holcomb’s liquor license was approved in the summer of
2010. He was preparing to reopen the bar when, in July 2010, a major flooding
event caused the dam that created Lake Delhi to fail. Holcomb’s bar and grill
had six feet of standing water during the flooding. The lake was drained dry.
After the flood, the building was condemned because “it was off its foundation,”
and sometime thereafter, the building was torn down. Holcomb was uncertain if
and when the dam would be replaced and the lake restored, so he “left the
property as is until the dam return[ed].” However, he removed the docks he had
built and put them in storage. Holcomb then moved to suburban Portland,
Oregon, where he resided at the time of trial.
At the time of purchase, Holcomb obtained the property’s abstract
containing its chain of title. Included therein is a May 1985 warranty deed
conveying to DLE the “waterfront and roads as shown” on the 1984 Camp-O-
Delhi subdivision plat and “all Boat Docks along the waterfront” of that
subdivision. The deed noted it was “subject to all restrictive covenants of
record.” The recorded covenants specified that the lake’s frontage would “be
owned and maintained by the lot owners’ association”—DLE—and could not be
sold. The covenants also included that the docks would “be owned by [DLE]”
and could “be rented by the year to lot owners,” with the income from those
rentals being used to pay the association’s expenses. Holcomb understood the
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beach between the waterfront and lot 89 was owned by DLE, as were the
existing docks. Upon the purchase, Holcomb was provided with a copy of the
association’s by-laws. The by-laws state the association owns, among other
things, “Water Frontage includ[ing] the beach, the boat ramp, and the entire
shoreline except for lots A, B, C, D, and O” and “All Association docks.” The by-
laws also provide:
Dock and Dock Repairs: Each occupied lot is entitled to one dock
space. Docks are assigned on a seniority basis with a move up list
that will be updated each time a move is made. The dock list, the
move up list and a list of landowners who have paid their dock fee
will be posted in the Association owned shed. You will be
responsible for the maintenance of your assigned dock. Materials
for repairs will be provided by landowners Association.
In June 2010, a month before the dam broke, Holcomb filed suit against
DLE, seeking the district court to declare Holcomb had “a right of easement
across shoreline property and Waterfront Access Area, and for other relief as is
just and equitable in the premises,” under theories of easement by prescription
and easement by implication. The petition alleged that “because previously
existing docks,” which patrons of his resort had used to access his resort, “were
in a state of disrepair and posed a hazard to users” and DLE “refused to provide
the material to rebuild or repair the docks,” he “constructed docks on the
waterfront . . . adjacent to his property on property owned by [DLE].” The petition
stated Holcomb had attempted to obtain a dock permit but was “denied as a
result of the refusal of [DLE] to sign the dock-permit application.”
The litigation between Holcomb and DLE was “put on hold in order to
attempt to arrive at a mutually agreed upon resolution of the issues.” The matter
was continued by agreement of the parties over the years, and trial was later set
5
for 2016, after work had begun on the dam’s reconstruction and on new rules
and regulations regarding the use of the subdivision’s properties, including
Holcomb’s property. While the dam was under construction and no lake existed,
DLE “worked with the Iowa Department of Natural Resources to rebuild the
[d]ocks in compliance with state law and regulations and to build a concrete wall.”
Even though there was no lake, DLE continued to rent the newly constructed
docks to members in good standing, and those members continued “to pay all
dues, assessments and the dock rental fees.” DLE claimed Holcomb had not
paid the “annual assessment or dock fee for the second half of 2010” and for the
years that followed.
Trial to the court on Holcomb’s petition was held in March 2016.
Thereafter, the district court entered its judgment denying Holcomb’s “claim for
easement by prescription and/or by implication.” The court found Holcomb,
having paid DLE’s dock rental fees and yearly assessments in 2006, 2007, 2008,
and 2009, did not take any affirmative action to demonstrate open and hostile
use of the docks which would have been necessary to establish a prescriptive
easement. Additionally, the court found no easement by implication, explaining:
There is no evidence that DLE ever intended to create an
easement for Holcomb. His claim is no better than any other
property owner on the lake who has maintained a dock for many
years. His claim is that the docks have existed for a very long time
for the benefit of [his and prior lot 89 owners’] property, but there is
no proof that any prior owner considered such use to constitute an
easement. Lastly, it is debatable as to whether the docks are
reasonably necessary for the use and enjoyment of [Holcomb’s]
property, or whether they are a mere convenience. The only claim
made by [Holcomb] is that approximately half of his customers
arrive by boat. Holcomb would be whole if he continued to rent the
docks in front of his property, rather than owning them.
6
Holcomb subsequently filed a motion seeking an enlargement of the
court’s findings. Holcomb stated he believed the court’s judgment was “incorrect
because the Court focused on the more limited issue of the right to use docks,
and not on the broader issue Holcomb asserted, which was the right to access
across the shoreline based upon an easement by implication or prescription.”
Holcomb maintained “the issue is not one of the right to use docks, but rather the
right of access,” and he requested the court enlarge its findings to find that he—
the owner of lot 89 and the business thereon—“has an easement by implication
for patron access from the lake,” even if he must rent the docks—which he was
willing to do “for a reasonable rental.” The court thereafter denied Holcomb’s
motion.
Holcomb now appeals the district court’s judgment, arguing the district
court should have recognized that an easement by implication in favor of his
property “across the Waterfront Access Area” was established at the time “the
owner of both the Waterfront Access Area and the [lot 89] property conveyed
each parcel.” The claim was tried in equity, and our review is de novo. See Iowa
R. App. P. 6.907; Larman v. State, 552 N.W.2d 158, 161 (Iowa 1996). “Equity is
not bound by forms, fiction, or technical rules but will seek and determine the true
situation.” Tri-State Ref. & Inv. Co. v. Opdahl, 481 N.W.2d 710, 712 (Iowa Ct.
App. 1991).
“An easement by implication is one which the law imposes by inferring the
parties to a transaction intended that result, although they did not express it.”
Brede v. Koop, 706 N.W.2d 824, 830 (Iowa 2005) (citation omitted).
An easement by implication arises under the following conditions:
7
(1) a separation of the title; (2) a showing that, before
the separation took place, the use giving rise to the
easement was so long continued and obvious that it
was manifest it was intended to be permanent; and
(3) it must appear that the easement is continuous
rather than temporary, and [(4)] that it is essential to
the beneficial enjoyment of the land granted or
retained.
An easement is “essential” when it is reasonably necessary, as
distinguished from being merely convenient. “The intent to grant or
reserve an easement by implication must be determined as of the
time of the severance of the unity of ownership.”
Id. (alteration in original) (citations omitted).
The Camp-O-Delhi subdivision was platted in 1984. The original
covenants were executed and recorded in October 1984. The separation of title
here occurred in 1985 when C-O-D sold lot 89 to the Stenders, the predecessors
in interest to Holcomb, and sold the waterfront to DLE. The issue, then, is
whether the circumstances of the transaction evidence an intent by these parties
to grant or reserve an easement in the land C-O-D sold to the Stenders. See id.
at 831. We think not. The covenants predated the sale and evince C-O-D’s
intent. The covenants provide, “Lake frontage will be owned and maintained by
the lot owners’ association. Lake frontage cannot be sold.” They also provide,
“Docks will be owned by the Lot owners’ association and may be rented by the
year to lot owners.” Furthermore, they provide, “All roads and easements within
Camp-O-Delhi . . . will be owned and maintained by the lot owners’ association.”
It is thus crystal clear that at the time of severance of the unity of title, the parties
did not intend to grant or reserve an easement of access to the lake, at least by
dock, to the owner of lot 89.
8
When Holcomb filed this lawsuit, it was all about the docks. Holcomb was
miffed when DLE refused to provide material to rebuild or repair the docks that
Holcomb’s boating patrons utilized to access his business. Taking matters into
his own hands, Holcomb constructed his own docks on DLE’s waterfront
property. The lawsuit was brought after the Iowa Department of Natural
Resources cited Holcomb for having no dock permit. After losing in district court,
Holcomb appeared to switch gears, claiming in his motion to enlarge that the
district court erred in focusing on “the limited issue of the use of docks” and that
“[t]he issue is not an easement by implication to use docks. Rather, the issue is
our easement by implication for the right of access across the Waterfront Access
Area.” Telling is the fact that Holcomb has not articulated—either to the trial
court or to us—what kind of access easement it is he seeks. Nonetheless, it is
clear he wants his boating patrons to have dock access to his business. Unless
they beach their boats, the only practical boat access is by dock. Holcomb’s
quest for an easement by implication is merely a thinly veiled attempt to
circumvent the covenants to which he is bound. Why would he seek an
easement by implication if it were not for the purpose of installing his own docks
on DLE waterfront? He answered this question at trial. Holcomb testified he
wanted to start the business back up and that he had dock materials to put up his
own docks if he could get a dock permit and establish a right of access.
As we noted above, an easement by implication was not intended to be
reserved or granted at the time of the separation of title, and therefore Holcomb
is not entitled to one. Consequently, we affirm the trial court’s judgment.
AFFIRMED.