Hansen v. Sandridge Partners, L.P.

22 Cal.App.5th 1020

232 Cal.Rptr.3d 247

Erik J. HANSEN et al., Plaintiffs, Cross-defendants and Respondents,

v.SANDRIDGE PARTNERS, L.P. et al., Defendants, Cross-complainants and Appellants.

F073106

Court of Appeal, Fifth District, California.

Filed April 6, 2018

McCormick, Barstow, Sheppard, Wayte & Carruth and Scott M. Reddie, Fresno, for Defendant, Cross-complainant and Appellant Sandridge Partners L.P.

Cunningham & Treadwell, Cunningham, Treadwell & Bartelstone and David Bartelstone, Pasadena, for Defendant, Cross-complainant and Appellant Citibank, N.A.

Gilmore Magness Leifer and David M. Gilmore, Fresno, for Plaintiffs, Cross-defendants and Respondents.

OPINION

HILL, P.J.

Respondent and cross-appellant Erik Hansen and several relatives (the "Hansens") own about 382 acres of farmland in Tulare County (APN 291-010-009; the "09 parcel"). Appellant and cross-respondent Sandridge Partners, L.P., (Sandridge) owns an adjacent parcel of about 250 acres (APN 291-010-005; the "05 parcel").¹ This case centers around approximately 10 acres on the southwest part of Sandridge's 05 parcel. The parties refer to this roughly triangular-shaped area as the "Disputed Land."

Hansen Ranches, a partnership between Erik and several relatives, has farmed the 09 parcel for as long as Erik can remember. For 30 years, Erik participated in the farming of the 09 parcel, and now he manages the day-to-day farming operations. When Erik began managing farming operations, there was already an irrigation ditch on the 09 parcel. The irrigation ditch generally runs along the border between the 09 and 05 parcels.²

Initially, the Hansens farmed mostly cotton, alfalfa, and wheat. The crops were planted on the entire 09 parcel and the Disputed Land. While a cotton crop was planted, there would be intermittent "activity" on the property for the entire year. However, "there could be weeks, maybe even months where no activity is seen." This absence of activity could occur after "ground prep" was finished, or while the Hansens were preparing to pre-irrigate, or while they were "waiting for rain or any of those kinds of things." However, the land would "have the appearance of being prepped for the planting." Specifically, it would "look like either cotton beds were in place with irrigation borders between checks and irrigation drainage ditch on the drainage side of the field."³ Farming cotton involved the use of tractors, cotton planters, cultivators, "scouting," and "lots of different operations."

Sometimes the Hansens would rotate alfalfa or wheat with the cotton. While alfalfa was planted on the property, it would be visible to onlookers. Farming alfalfa often involved the presence of equipment including swathers, bailers, tractors, road graders, and border makers.

The Hansens' farming practices were "[m]ore or less consistent" over the years.

In 2002, the Hansens planted pistachio trees on part of the 09 parcel, to the north of the Disputed Land. In 2010, there was an internal discussion about planting pistachio trees on the remainder of the 09 parcel. In 2011, the Hansen family ordered pistachios trees for that purpose.

In early to mid-2011, Erik told his father he had learned that the owner of the neighboring 05 parcel, Valov⁴ , was in talks to sell it to Sandridge. At that point, Erik's father "remembered that there was a lot line adjustment issue." Erik's father "explained that there was a discrepancy in the line in what we have been farming" and that "we need to talk to [the] Valovs and make sure we straighten out the line before they close."⁵ Erik's father did not explain why Hansen Ranches was farming on property they did not own. Erik's "assumption is that's just the way it was done ... for the whole time."

Erik contacted Valov. Valov had a "vague recollection" of the lot line issue⁶ but did not discuss specifics. Erik "asked him what stage of the game his deal is, and that we need to straighten out any discrepancies in the lot line before they close." Valov said he thought they would be able to resolve the issue before closing. Valov and Erik made arrangements to speak again later. However, Valov eventually stopped returning Erik's calls.

At some point "prior to planting [the pistachio trees] and prior to putting a drip system in" Erik spoke with Larry Richie, an employee of Sandridge. The "outcome" of the conversation "was that we would take care of this [lot line issue] some way, if it didn't get handled prior to closing through Valovs."

In the spring of 2012, the Hansens took several steps to prepare 160 acres of land—including the Disputed Land—for pistachio trees, including deep ripping the land and installing a drip irrigation system.⁷ When the irrigation system was installed, Erik knew from his father "that a lot line adjustment needed to happen" but still claims he still did not know "the specifics" of the issue. Nonetheless, the Hansens planted the pistachio trees in June 2012.⁸ Erik did not receive any complaints from any neighbors concerning the installation of the irrigation system or the planting of the pistachio trees.

Valov's sale to Sandridge closed in December 2012.

Erik finally spoke with Valov again after the sale closed. Erik said he wished they could have fixed the lot line issue before the close of the sale. Valov apologized, said his father was dying and "that he thought it might have created a problem for dealing with his dad's estate."

Sandridge, the Hansens, and their representatives negotiated to potentially resolve the Disputed Land issue. Those negotiations were unsuccessful, and the present litigation commenced.

The Hansens sued to quiet title to a "prescriptive easement for their continued use and occupation of the Subject Property." Under the prescriptive easement sought, Sandridge would have "no right to use or occupy any portion of the Subject Property." Sandridge cross-complained against the Hansens to quiet title and seek damages for conversion and trespass.

After a court trial, the superior court denied the Hansens' request for a prescriptive easement but instead granted the Hansens an "equitable interest ... of limited scope and duration ... with the following conditions:"

"1) Hanson [sic ] pay the full fair market value of the unimproved land to Defendant based on a valuation as of the date of trial. The Hirshfield⁹ court ordered payment of full fair market value even though the interest granted was of limited scope and duration.

"2) Hanson [sic ] may not add to the encroachment, though they may repair the irrigation and filtration system and replace trees that die in the first five years after the initial planting in June 2012[.]

"3) The interest will end should the Hansons [sic ] stop farming the Disputed Property for a period of one year or more, or sell the Disputed Property.

"4) The interest will terminate after the Pistachio trees currently planted are no longer a commercially viable crop. No testimony was offered by the parties on this issue so the court cannot set an exact duration of the easement."

DISCUSSION

I. The Hansens Are Not Entitled to an Equitable Easement

Appellants challenge the court's recognition of an equitable easement in favor of the Hansens. We conclude that the Hansens' encroachment on Sandridge's land was negligent as a matter of law, and reverse the recognition of an equitable easement.

A. Law of Equitable Easements

"For a trial court to exercise its discretion to ... grant an equitable easement, ‘three factors must be present. First, the [encroacher] must be innocent. That is, his or her encroachment must not be willful or negligent.

The court should consider the parties' conduct to determine who is responsible for the dispute. Second, unless the rights of the public would be harmed, the court should [stop the encroachment] if the [burdened landowner] "will suffer irreparable injury ... regardless of the injury to [the encroacher]." Third, the hardship to the [encroacher] from [ordering removal of the encroachment] ["]must be greatly disproportionate to the hardship caused plaintiff by the continuance of the encroachment and this fact must clearly appear in the evidence and must be proved by the defendant." ’ [Citation.] ‘Unless all three prerequisites are established, a court lacks the discretion to grant an equitable easement.’ " ( Nellie Gail Ranch Owners Assn. v. McMullin (2016) 4 Cal.App.5th 982, 1003–1004, 209 Cal.Rptr.3d 658 ( Nellie Gail ).)

" ‘Overarching the analysis is the principle that since the [encroacher] is the trespasser, he or she is the wrongdoer; therefore, "doubtful cases should be decided in favor of the plaintiff." ’ [Citations.] Moreover, ‘courts approach the issuance of equitable easements with "[a]n abundance of caution." ’ " ( Nellie Gail, , supra , 4 Cal.App.5th at p. 1004, 209 Cal.Rptr.3d 658.)

B. Standard of Review

" ‘We defer to the trial court's factual findings so long as they are supported by substantial evidence, and determine whether, under those facts, the court abused its discretion. If there is no evidence to support the court's findings, then an abuse of discretion has occurred.’ " ( Nellie Gail, supra, 4 Cal.App.5th at p. 1006, 209 Cal.Rptr.3d 658.) While the resolution of factual disputes is left to the trial court, appellate courts may determine whether the elements of an equitable easement have been established by the facts as a matter of law. (E.g., Shoen v. Zacarias (2015) 237 Cal.App.4th 16, 21, 187 Cal.Rptr.3d 560 ( Shoen ).)

C. Application

1. The Hansens Negligently Encroached on the 05 Parcel When They Planted the Pistachio Trees and Installed the Irrigation System

The first requisite for an equitable easement is that the trespasser's encroachment " ‘must not be willful or negligent.’ " ( Nellie Gail, supra, 4 Cal.App.5th at p. 1003, 209 Cal.Rptr.3d 658 ; Shoen, supra, 237 Cal.App.4th at p. 19, 187 Cal.Rptr.3d 560 ; Tashakori v. Lakis (2011) 196 Cal.App.4th 1003, 1009, 126 Cal.Rptr.3d 838 ( Tashakori ).¹⁰ ) While all three elements of an equitable...