¶ 1 This action arises out of two access easement agreements between adjoining landowners in which each granted an easement to the other for the purpose of building a joint driveway. The agreements also provided that one of the landowners, Harmony Homes, Inc., was financially responsible for building and maintaining the driveway.
¶ 2 On the first issue, we conclude that the two claims relevant to this appeal are timely. The Mnuks' claim for a modification of the easements is governed by the forty-year statute of limitations for enforcing easements, WIS. STAT. § 893.33(6) (2007-08),
¶ 3 On the second issue, we conclude the circuit court employed an incorrect analysis but we affirm because we conclude that RESTATEMENT (THIRD) OF PROPERTY: SERVITUDES § 7.10(1) (2000)
¶ 4 Accordingly, we affirm and remand for further proceedings consistent with this opinion.
¶ 5 For purposes of this appeal, the relevant facts are not in dispute. Harmony Homes was a joint venturer in the development of a subdivision in the Town of Waukesha. The Mnuks purchased lot 121 in 1987. Lot 121 lies to the north of several lots that abut the street, Kame Terrace, to the south. The Mnuks have an easement (western easement) over two of these lots for access to the western part of their property, where they built a residence.
¶ 6 In 1990 the Stelpflugs purchased the lot to the north of the Mnuks, lot 120. The Stelpflugs subsequently filed a lawsuit claiming that their property was landlocked
¶ 7 As part of these negotiations Harmony Homes hired surveyors to lay out an area over eastern portions of lots 121 and 120 that the Mnuks describe as "poles"— narrow pieces of land on each lot that extend to Kame Terrace—for a driveway that provides access to both lots. This area was laid out in a manner that took into account the wetlands that were there.
¶ 8 In addition, in the Lot 121 Access Easement Agreement, the Mnuks granted the Stelpflugs the right to construct and maintain a driveway in a specified location on the easement they granted. In the Lot 120 Access Easement Agreement the Stelpflugs granted the Mnuks the right to use the driveway that the Stelpflugs were to construct on the easement they granted. Both agreements contained identical provisions on construction of the driveway under which the Stelpflugs were responsible, "at [their] sole expense" for the construction and were to pave it by the earlier of one year from the construction of a dwelling on their property or three years from the date of the agreement. If they did not complete it within that time period, the Mnuks could contract for the work and the Stelpflugs were responsible for the costs. The Stelpflugs were also responsible for the maintenance and repair of the driveway.
¶ 9 The Lot 121 Access Easement Agreement also obligated the Stelpflugs to reconstruct the western easement within three months of the agreement.
¶ 10 In 1997 the Stelpflugs sold lot 120 to Harmony Homes. Apparently, Harmony Homes concedes that it thereby assumed the obligations of the Stelpflugs under the 1995 access easement agreements. Harmony Homes did not complete the reconstruction of the western easement until 2002. Harmony Homes then informed the Mnuks that it was going to build the driveway described in the access easement agreements. Because of the passage of time, the wetlands needed to be re-delineated and this process revealed that there were wetlands in the area on which the turnaround of the driveway was to be built. Harmony Homes and the
¶ 11 The Mnuks filed this action in March 2007 seeking a declaratory judgment modifying the easements, a declaration that Harmony Homes is bound by its obligations under the access easement agreements, and other relief.
¶ 12 Harmony Homes moved for summary judgment on two primary grounds: (1) the Mnuks' claims are barred by the six-year statute of limitations for contract actions; and (2) the easement agreements should be terminated because it is not possible to construct a driveway on the easements given the wetlands, and the court did not have the authority to modify the easements. The circuit court concluded that the forty-year statute of limitations for easements applied, not the six-year statute of limitations for contract actions, and therefore the action was timely. The court also concluded that it was legally impossible to build a driveway on the easements described in the agreements, that the legal descriptions were severable under the severability clause in the agreements, and that this created an ambiguity, which gave the court the authority to modify the easements. The court also concluded that, because the designated time period for Harmony Homes' construction of the driveway had passed, the Mnuks could install it and Harmony Homes would then be responsible for reimbursing the Mnuks.
¶ 13 The court's order anticipated further proceedings in which it would decide how to modify the easement. We granted Harmony's petition for leave to appeal this non-final order.
¶ 14 On appeal Harmony Homes renews its arguments that the action should be dismissed because it is barred by the six-year statute of limitations for contract actions and, alternatively, the easements may not be modified and should be terminated.
¶ 15 The effect of the circuit court's challenged rulings was a denial of Harmony Homes' motion for summary judgment and a partial summary judgment in the Mnuks' favor. Because the relevant facts are undisputed, the question is whether the circuit court's rulings were correct as a matter of law. See WIS. STAT. § 802.08(2). Our review is de novo. Green Spring Farms v. Kersten, 136 Wis.2d 304, 314-16, 401 N.W.2d 816 (1987).
¶ 16 Harmony Homes contends that the Mnuks' claims are governed by WIS. STAT. § 893.43, which provides: "An action upon any contract, obligation or liability, express or implied ... shall be commenced within 6 years after the cause of action accrues or be barred." According to Harmony Homes, the Mnuks' cause of action accrued when Harmony Homes did not build the driveway within three years from the date of the agreements and, thus, the Mnuks had to file their action before July 13, 2004. The Mnuks respond that the proper statute of limitations is that contained in § 893.33(6), which provides that an action to enforce a recorded easement may be filed anytime within forty years of the recording.
¶ 17 Examining the access easement agreements, we see that the "Grant" section of each access easement agreement meets the definition of easement. An easement is "an interest that encumbers the land of another" and "is a liberty, privilege, or advantage in lands, without profit, and existing distinct from the ownership of the land." AKG Real Estate, LLC v. Kosterman, 2006 WI 106, ¶ 2, 296 Wis.2d 1, 717 N.W.2d 835 (citations omitted).
¶ 18 The Mnuks are also seeking a declaration of the obligations of Harmony Homes with respect to the construction of the driveway and the reimbursement to the Mnuks if they build it. Even if we assume the construction provisions are distinct from the easements, arise under contract, and are therefore subject to the six-year statute of limitations—as Harmony Homes contends—the undisputed facts show that a breach did not occur in July 1998.
¶ 19 Parties to written instruments may seek a declaration of the construction or validity of the instrument, and a contract may be construed either before or after a breach. WIS. STAT. § 806.04(1)-(3). Thus, the Mnuks need not allege a breach by Harmony Homes of its obligations under the construction provision in order to seek a declaration of those obligations.
¶ 20 We conclude that the six-year statute of limitations for contract actions, WIS. STAT. § 893.43, does not govern the Mnuks' claim for a modification of the easements described in the easement access agreements. We also conclude that, assuming the construction provisions in those agreements are governed by § 893.43, the six years has not yet begun to run. Accordingly, there is no statutory bar to the Mnuks' claim for a declaration of Harmony Homes' obligations under the construction provisions.
¶ 21 Harmony Homes contends that the circuit court erred in concluding that the severability clause authorized it to modify the easements and that the law does not permit modification of the easements in this case because the description is clear. According to Harmony Homes, termination of an easement is the proper remedy when the primary purpose of an easement is rendered impossible to fulfill. The Mnuks respond that the circuit court's analysis based on the severability clause was correct and that modification of the easements is warranted.
¶ 22 The severability clause in both access easement agreements provides that "[i]f any term, covenant or condition of this Agreement or its application shall be invalid and unenforceable under applicable law, the remainder of this Agreement shall remain in full force and effect and shall not be effected [sic] by such partial invalidity or unenforceability." The circuit court agreed with the Mnuks' theory that this clause permitted the court to sever the easement descriptions in the agreements and then adopt different descriptions. The court reasoned that the easements, as described, were not enforceable because, due to the wetlands, it was legally impossible to build a driveway on them and therefore severance was proper. In the court's view, this severance made the location of the easements ambiguous and gave it the authority to modify the original descriptions.
¶ 23 We first examine the circuit court's analysis relying on the severability clause. We conclude this analysis is incorrect because it confuses the concept of construing ambiguous easement descriptions with the
¶ 24 The easements in this case are express easements—easements created by written grant. See AKG, 296 Wis.2d 1, ¶ 15, 717 N.W.2d 835. We construe the written instrument granting an easement as we do other written instruments, and the purpose is to ascertain the intent of the parties. Rikkers v. Ryan, 76 Wis.2d 185, 188, 251 N.W.2d 25 (1977). We look first to the language of the easement to determine the parties' intent and, if that is unambiguous, we apply that language. Id. If there is an ambiguity, the court may consider extrinsic evidence, but the purpose remains that of determining the parties' intent at the time of the grant. See id.
¶ 25 In this case, there is no ambiguity in the description of the easements in the agreements and there is therefore nothing for the court to construe. The issue is not what the parties intended at the time they entered into the agreements but what should happen now, when they agree that the easements cannot accomplish the purpose for which they were granted. The circuit court, if it proceeds as contemplated, will not be attempting to determine the parties' intent at the time they entered into the agreements, subject to the case law that governs that inquiry. Instead, it will be attempting to modify the location of the easements the parties agreed to in order to accomplish the purpose of those easements. We conclude the correct way to determine if the circuit court has this authority is to examine the easement law on impossibility of purpose. We turn to this issue now.
¶ 26 Our starting point is AKG, in which the supreme court considered, and rejected on the facts, a landowner's claim for modification or termination of an express easement due to the impossibility of purpose. AKG, 296 Wis.2d 1, 717 N.W.2d 835. The landowner argued that the purpose of the 1961 easement was to provide ingress and egress until public road access was provided, but subsequent state regulations made it impossible to construct a public road along the easement. Id., ¶ 22. In making this argument, the landowner asked the court to adopt RESTATEMENT (THIRD) OF PROPERTY: SERVITUDES § 7.10(1), which addresses impossibility of purpose. This provides:
¶ 27 In AKG the court made the following statement about this provision:
AKG, 296 Wis.2d 1, ¶ 19, 717 N.W.2d 835.
¶ 28 The AKG court then proceeded to examine the primary purpose of the easement. It concluded the primary purpose was not to become a public road but to provide ingress and egress to the easement holder's land over a specifically described course. Id., ¶ 23. This purpose, the court held, was not frustrated or impossible to fulfill. Id.
¶ 29 In AKG the landowner made a second argument under subsection (2) of RESTATEMENT (THIRD) OF PROPERTY: SERVITUDES § 7.10, which addresses the situation in which "the purpose of a servitude can be accomplished, but because of changed conditions the servient estate [landowner's property] is no longer suitable for uses permitted by the servitude." In this situation "a court may modify the servitude to permit other uses under conditions designed to preserve the benefits of the original servitude." § 7.10(2). The landowner in AKG, who was developing a subdivision, argued that the easement unreasonably burdened its property and that it had offered an alternative access route to the easement holder, but the easement holder had refused. AKG, 296 Wis.2d 1, ¶ 25, 717 N.W.2d 835.
¶ 30 The AKG court rejected RESTATEMENT (THIRD) OF PROPERTY: SERVITUDES § 7.10(2) because it would alter the "longstanding default rule in Wisconsin that a servient estate [the landowner] cannot unilaterally relocate or terminate an express easement" and the court was not convinced it "should sacrifice property rights ... in favor of economic efficiency."
¶ 31 Harmony Homes reads AKG as supporting its position that a court may not modify an express easement and reasons from there that a court may terminate but not modify an express easement that no longer accomplishes its primary purpose. This is a misreading of AKG. As we have already explained, the court rejected the proposition that a landowner could obtain an easement modification for economic reasons when the primary purpose could still be accomplished. Id., ¶¶ 29, 31. However, the court did not reach the question of a court's authority to provide relief when it is impossible to accomplish the primary purpose. This was unnecessary in AKG because the court determined it was still possible in that case to accomplish the primary purpose. In short, AKG leaves open the question whether a court should apply RESTATEMENT (THIRD) OF PROPERTY: SERVITUDES § 7.10(1) in a case where it is impossible to accomplish an easement's primary purpose.
¶ 33 In Atkinson we also cited Werkowski for the following ruling:
Atkinson, 211 Wis.2d at 643, 566 N.W.2d 158 (citing Werkowski, 30 Wis.2d at 417, 141 N.W.2d 306).
¶ 34 Thus, in Atkinson we expanded the principle in Werkowski to allow a court to modify a definite description on the ground of impossibility. However, we did not discuss the issue presented by the parties' arguments here: whether the court must terminate the easement, as Harmony Homes contends, or has the authority to modify it, as the Mnuks contend. Because RESTATEMENT (THIRD) OF PROPERTY: SERVITUDES § 7.10(1) directly addresses this issue, we consider whether we should apply it here. For the following reasons, we conclude it is the appropriate rule to apply in this case.
¶ 35 As the AKG court noted, RESTATEMENT (THIRD) OF PROPERTY: SERVITUDES § 7.10(1) "reflects the common law rule that an easement for a particular purpose
RESTATEMENT (THIRD) OF PROP.: SERVITUDES § 7.10, cmt. a. at 395.
¶ 36 Because modification is a less drastic remedy than termination, we see no reason why that should not be the remedy the court first considers, as it is under RESTATEMENT (THIRD) OF PROPERTY: SERVITUDES § 7.10(1). To be sure, it is a change in the common law; but it is a change that protects, where practicable, the property rights of the easement holder. In this regard, it is consistent with the AKG court's reasoning for rejecting § 7.10(2). That subsection, with a lower threshold than § 7.10(1) for modifying an easement, does not sufficiently protect the property rights of the easement holder. See, e.g., AKG, 296 Wis.2d 1, ¶ 39, 717 N.W.2d 835 ("We are not persuaded that the policy arguments are sufficiently compelling to justify overturning more than a century of precedent and upsetting the settled expectations of thousands of easement holders."). At the same time, we see no unfairness to the landowner in § 7.10(1). Indeed, a court may be more likely to grant relief to the landowner, given the option of a remedy less drastic than termination.
¶ 37 We recognize, as the comment to § 7.10 suggests, that courts should be cautious about either modifying or terminating an easement on the ground of impossibility. See RESTATEMENT (THIRD) OF PROP.: SERVITUDES § 7.10, cmt. a. at 395. It would be undesirable to give a broad interpretation to the phrase "impossible as a practical matter to accomplish the purpose for which the [easement] was created." § 7.10(1). In this case the parties agree that the primary purpose of both easements was for the building and use of a driveway giving access to lot 120 and to the eastern parcel of lot 121. They also agree that, because of the new wetland delineation, that purpose cannot be fulfilled with the existing easements. We are satisfied that these facts come within the proper scope of § 7.10.
¶ 38 We find the flexibility given a circuit court in RESTATEMENT (THIRD) OF PROPERTY: SERVITUDES § 7.10(1) to be particularly appropriate in this case because of the nature of the access easement agreements. Harmony Homes is the landowner under the Lot 120 Agreement and the easement holder under the Lot 121 Agreement, and the Mnuks' position under each agreement is reversed. The Mnuks seek a modification, rather than termination, of the easement granted them under the Lot 120 Agreement and a modification, rather than termination, of the easement it has granted under the Lot 121 Agreement. Harmony Homes' position is that it wants both easements terminated. However, Harmony Homes would thereby be released from its obligation to pay for the
¶ 39 In applying RESTATEMENT (THIRD) OF PROPERTY: SERVITUDES § 7.10(1) to this case, we emphasize that the rule provides that a court may modify or may terminate an easement under the conditions specified. Whether to do either, and how to modify if the court decides upon that remedy, is within the discretion of the circuit court. In this case, it appears that neither party wishes the easements to remain valid and unmodified. If this is correct, then on remand the court will be exercising its discretion in deciding whether to modify or terminate the easements.
¶ 40 We do not provide a definitive list of factors for the circuit court to consider in making this determination, but based on the parties' arguments, we comment on a few. One important factor is whether it is practicable to relocate the easements to avoid the wetlands. Another is how much additional land of each of the parties will be required to do that, if it is possible. Harmony Homes asserts that the Mnuks can have access to their eastern parcel over the "pole" of their land and do not need an easement on Harmony Homes' lot for that purpose. The court will need to determine if that is true and, if it is true, how that affects the analysis. Harmony Homes' existing financial obligation for building and maintaining the driveway also needs to be considered. As already noted, this is a benefit to the Mnuks for which they have presumably bargained and which will be lost to them if the easements are terminated. On the other hand, if the easements are relocated, it may cost more to build the driveways and any such additional expenses for Harmony Homes must also be considered. In this regard we note that the RESTATEMENT (THIRD) OF PROPERTY: SERVITUDES § 7.10(1) specifically provides that "[c]ompensation for resulting harm to the beneficiaries may be awarded as a condition of modifying or terminating the [easement]." Finally, it may be relevant to consider why the more recent wetlands delineation does not permit a driveway on the easements when the location of the easements purportedly took into account the wetlands.
¶ 41 We affirm the circuit court's ruling that the six-year statute of limitations does not bar the Mnuks' claims for a modification of the easements and for a declaratory ruling on Harmony Homes' obligations under the easement agreements. We also affirm, although on different grounds, the court's conclusion that it has the authority to modify the easements. We remand to the circuit court so that it can exercise its discretion in applying RESTATEMENT (THIRD) OF PROPERTY: SERVITUDES § 7.10(1) to determine whether to modify the easements or terminate them and whether to award compensation to either party.
Order affirmed and cause remanded with instructions.
Werkowski v. Waterford Homes, Inc., 30 Wis.2d 410, 417, 141 N.W.2d 306 (1966) (quoting 17A AM.JUR. Easements § 101 (1957)).