Hatch v. Cuchna

345 Wis.2d 846

826 N.W.2d 122

2013 WI App 13

Robert D. HATCH and Kelly L. Hatch, Plaintiffs–Respondents,

v.Ronald J. CUCHNA and Linda Cuchna, Defendants–Third–Party Plaintiffs–Appellants,

v.Ziegler Construction, Inc., Third–Party Defendant,Gregory A. Knutson, Third–Party Defendant–Respondent.

No. 2011AP1222.

Court of Appeals of Wisconsin.

Dec. 20, 2012.

OPINION TEXT STARTS HEREAppeal from a judgment and an order of the circuit court for Columbia County: James Miller, Judge. Affirmed.

Before LUNDSTEN, P.J., SHERMAN and KLOPPENBURG, JJ.¶ 1LUNDSTEN, P.J.

Ronald and Linda Cuchna appeal an order of the circuit court enjoining the Cuchnas from encroaching on an easement on their property, requiring them to remove all obstructions from the easement, dismissing their claims against third-party defendants, and ordering them to pay reasonable attorneys' fees and costs for one third-party defendant, Gregory Knutson, pursuant to Wis. Stat. § 802.05(3)(b).¹

¶ 2 The Cuchnas argue that the circuit court erroneously interpreted and applied the standards governing their affirmative defenses of waiver, equitable estoppel, laches, and unclean hands. The Cuchnas also contend that the circuit court misused its discretion in ordering sanctions against the Cuchnas in the form of requiring payment of Knutson's reasonable attorneys' fees.

¶ 3 We affirm the circuit court in all respects.

Background

¶ 4 The Cuchnas and Robert and Kelly Hatch own adjoining lots on Lake Wisconsin. Both the Cuchnas and the Hatches own a section of shoreline, but the Hatches can only access their shoreline by way of an access easement over the Cuchnas' property. This access easement was created by a written instrument between the Cuchnas' and the Hatches' predecessors in title in 1994 and was set forth on a certified survey map created by Gregory Knutson, the third-party defendant in this action.

¶ 5 The easement generally runs along the east line of the Cuchna property at a width of fifteen feet and then angles to the west at a width of ten feet to provide access to the Hatches' shoreline. There is a roadway on the ground surface that follows the easement along the east line of the Cuchna property and arcs to the west where the easement turns along the shoreline toward the Hatches' property. Although the Hatches use this roadway to access their shoreline, the roadway does not entirely line up with the easement. The roadway is at least partially outside and to the southwest of the surveyed metes and bounds description of the recorded access easement. The roadway that is actually used is not shown on the 1994 survey map or on another survey map Knutson prepared for the Cuchnas in 1996.

¶ 6 The Cuchnas constructed a boathouse in the northeast corner of their property. The boathouse does not encroach on the roadway, but it is undisputed that the boathouse encroaches the full width of the recorded easement where the easement angles to the west. In August 2005, prior to beginning construction, the Cuchnas hired Knutson to survey their land in preparation for building a boathouse in the future. The 2005 survey did not reference either a future boathouse or the roadway.

¶ 7 In 2006, after construction of the boathouse was complete, the Hatches retained Knutson to survey the Cuchna property and the Hatches' easement. This survey showed that the roadway did not fully fall within the easement and that the boathouse encroached on the easement.

¶ 8 The Hatches filed suit against the Cuchnas, claiming that the boathouse obstructs their use of the easement. The Hatches sought to enjoin the Cuchnas from further obstruction, and requested that the Cuchnas be required to remove the boathouse. The Hatches also sought exemplary or punitive damages. The Hatches filed for summary judgment, and the Cuchnas responded with affirmative defenses of modification of the easement, adverse possession, equity, waiver, equitable estoppel, laches, and unclean hands.

¶ 9 Based on the pleadings, the circuit court dismissed the affirmative defenses of modification of the easement, adverse possession, and equity at the summary judgment stage, but determined that questions of material fact existed as to the affirmative defenses of waiver, equitable estoppel, laches, and unclean hands. After a two-day bench trial, the circuit court found that the remaining affirmative defenses were without merit. The circuit court enjoined the Cuchnas from placing any obstructions on the access easement, and required the Cuchnas to remove the boathouse on or before May 31, 2011. The circuit court also dismissed the Cuchnas' claims for contribution against third-party defendants, and awarded sanctions to Knutson. The Cuchnas appeal.

Discussion

I. Standard Of Review

¶ 10 This appeal presents questions of fact, discretion, and law. The particular standard of review for each affirmative defense and the award of sanctions will be discussed below. As a general matter, an analysis of each affirmative defense requires a review of the circuit court's findings of fact, which we uphold unless those findings are clearly erroneous. Ag Serv. s. of Am., Inc. v. Krejchik, 2002 WI App 6, ¶ 11, 250 Wis.2d 340, 640 N.W.2d 125 (Ct.App.2001). In particular, where the circuit court has made a determination as to the credibility of a witness, we will accept the inference drawn by the circuit court. Schultz v. Sykes, 2001 WI App 255, ¶ 32, 248 Wis.2d 746, 638 N.W.2d 604. Finally, when an express finding is not made, appellate courts normally assume that the circuit court made findings in a manner that supports its final decision. See Sohns v. Jensen, 11 Wis.2d 449, 453, 105 N.W.2d 818 (1960).

II. Affirmative Defenses

¶ 11 The Cuchnas argue that the circuit court misused its discretion by finding that the Cuchnas failed to meet their burden of proof with respect to their affirmative defenses. According to the Cuchnas, the circuit court's decisions with respect to all of the affirmative defenses were founded entirely on the court's determination that the Cuchnas had a duty not to interfere with the easement. The flaw in the Cuchnas' argument is that they erroneously assume that they remain free on appeal to argue a view of the facts that is contrary to the circuit court's express and implicit findings of fact, even if such findings are not clearly erroneous. For example, the Cuchnas do not accept as true the fact that the Hatches did not know that the boathouse foundation intruded on the easement and that Robert Hatch, when speaking with a cement contractor, relied on Ronald Cuchna's assurance that the boathouse would not intrude on the easement. However, those and other factual findings by the circuit court are binding on appeal so long as they have support in the record.

A. Waiver

¶ 12 Whether the Hatches waived their right to the access easement is a mixed question of fact and law. See All Star Rent A Car, Inc. v. DOT, 2006 WI 85, ¶ 15, 292 Wis.2d 615, 716 N.W.2d 506. As previously discussed, we uphold the circuit court's findings of fact unless those findings are clearly erroneous. Ag Servs. of Am., 250 Wis.2d 340, ¶ 11, 640 N.W.2d 125. The application of the legal standard of waiver to these findings is a question of law that we review de novo. Meyer v. Classified Ins. Corp. of Wis., 179 Wis.2d 386, 396, 507 N.W.2d 149 (Ct.App.1993).

¶ 13 Waiver is the “voluntary and intentional relinquishment of a known right.” Attoe v. State Farm Mut. Auto. Ins. Co., 36 Wis.2d 539, 545, 153 N.W.2d 575 (1967). The elements of waiver are: (1) “a right, claim, or privilege in existence at the time of the claimed waiver”; (2) “the person who is alleged to have waived such a right had knowledge, actual or constructive, of the existence of his or her rights or of the important or material facts which were the basis of his or her right”; and (3) “the person waiving such right did so intentionally and voluntarily.” Wis JI–Civil 3057.

¶ 14 Intent to waive can be inferred from the conduct of the party against whom the waiver is claimed. Wis JI—Civil 3057. “[I]t is not necessary to prove an actual intent to waive.” Attoe, 36 Wis.2d at 545, 153 N.W.2d 575;see also Rasmusen v. New York Life Ins. Co., 91 Wis. 81, 89, 64 N.W. 301 (1895) (“Doubtless, the act out of which the waiver is deduced must be an intentional act, done with knowledge of the material facts, but it cannot be necessary that there should be an intent to waive.”). However, “[a]lthough the waiving party need not intend a waiver, he or she must act intentionally and with knowledge of the material facts.” Nugent v. Slaght, 2001 WI App 282, ¶ 13, 249 Wis.2d 220, 638 N.W.2d 594. This knowledge may be actual or constructive. Attoe, 36 Wis.2d at 546, 153 N.W.2d 575. “ ‘Constructive knowledge is knowledge which one has the opportunity to acquire by the exercise of ordinary care and diligence.’ ” Nugent, 249 Wis.2d 220, ¶ 13, 638 N.W.2d 594 (quoting Wis JI—Civil 3057). In the absence of knowledge of material facts, waiver is not possible. Wis JI—Civil 3057.

¶ 15 It is undisputed that the Hatches have a right to the access easement. Thus, the first element of waiver is fulfilled.

¶ 16 The record supports the circuit court's implicit finding that the Hatches did not have actual knowledge of the correct location of the recorded easement. The circuit court found that Robert Hatch's testimony that he did not know where the actual easement was but knew only where the roadway went through the property was credible. This testimony is supported by the fact that the 1994 survey map that showed the metes and bounds location of the recorded easement did not provide a location of the roadway in comparison to the easement. The actual location of the recorded easement as compared to the roadway was only discovered and brought to the Hatches' attention in 2006, after Knutson surveyed the property for the Hatches. In fact, Ronald Cuchna stated in his testimony that everybody who used the roadway assumed that the roadway fell...