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Ecosystem Resources, L.C v. Broadbent Land & Resources

April 5, 2012

ECOSYSTEM RESOURCES, L.C., APPELLANT (DEFENDANT),
v.
BROADBENT LAND & RESOURCES, LLC, APPELLEE (PLAINTIFF), AND SOUTH & JONES TIMBER COMPANY, INC., APPELLEE (INVOLUNTARY PLAINTIFF).



Appeal from the District Court of Uinta County The Honorable Dennis L. Sanderson, Judge

The opinion of the court was delivered by: Hill, Justice.

Before KITE, C.J., and GOLDEN, HILL, VOIGT, and BURKE, JJ.

NOTICE: This opinion is subject to formal revision before publication in Pacific Reporter Third. Readers are requested to notify the Clerk of the Supreme Court, Supreme Court Building, Cheyenne, Wyoming 82002, of any typographical or other formal errors so that correction may be made before final publication in the permanent volume.

[¶1] This is the second time the present case has been appealed to this Court. In the first appeal, we reversed a judgment on the pleadings and remanded for proceedings to examine the facts and circumstances surrounding Union Pacific's reservations of timber in deeds from the early 1900s in order to determine the parties' intent with regard to the duration of the timber estates. Ecosystem Resources, LC v. Broadbent Land & Resources, LLC, 2007 WY 87, 158 P.3d 685 (Wyo. 2007) (Ecosystem I). After a bench trial, the district court concluded "in using the term 'timber,' Union Pacific intended to reserve only those trees (1) in existence at the time of the grant and (2) of sufficient size to be suitable for use in construction." The district court also concluded from the facts and circumstances that the parties intended Union Pacific to have a reasonable time to harvest the timber from the encumbered properties. It ruled that Union Pacific's timber reservations had expired because the reserved timber was no longer located on the properties and, in any event, more than a reasonable time had passed. The district court also ruled, in the alternative, that Broadbent had acquired title to the timber by adverse possession. It, therefore, granted judgment in favor of the surface owner, Broadbent Land & Resources, LLC*fn1 and against the timber estate owner, Ecosystem Resources, L.C.

[¶2] Resolving Ecosystem's appeal, we conclude that the district court properly ruled, on the evidence before it, that Union Pacific intended its reservation of "timber" to include only trees of a suitable size which existed on the subject properties at the time of the deeds. The evidence presented at trial clearly established that such timber no longer exists on the properties. Consequently, we affirm the district court's order granting judgment in favor of Broadbent.

ISSUES

[¶3] Ecosystem raises the following issues on appeal:

1. Whether the trial court erred in concluding that the facts and circumstances surrounding the deeds at issue [dated] 1906, 1908 and 1909 indicate an intent of the parties to those deeds to limit the duration of the timber reservation set forth therein.

2. Whether the trial court erred in finding that [Broadbent] had removed timber on disputed lands for a period sufficient to support a finding of adverse possession.

Broadbent offers a more detailed statement of the issues:

1. Whether the district court's finding that the facts and circumstances surrounding the execution of the timber deeds demonstrated an intent to limit the duration of the timber reservation to a reasonable time was clearly erroneous.

2. Whether the district court's finding that the timber reservations applied only to timber existing at the time of the deeds was clearly erroneous.

3. Whether the district court erred in construing the deeds against the drafter.

4. Whether the district court erred in considering the subsequent conduct of the parties.

5. Whether the district court's findings that Broadbent proved the elements of adverse possession [were] clearly erroneous.

FACTS

[¶4] In 1862, Congress passed an act authorizing organization of the Pacific railroad companies. In that legislation, the federal government provided land grants and credit to induce railroad companies to construct a transcontinental railroad. Union Pacific was established to undertake that effort and received a large grant of land in Wyoming. In the 1890s and early 1900s, Union Pacific sold some of its Wyoming property to private persons. Union Pacific included timber reservations in some of its land contracts and deeds.

[¶5] This case involves timber reservations in three Union Pacific deeds from the early 1900s.*fn2 The earliest was a 1906 warranty deed from Union Pacific to James Graham for 634 acres in Uinta County, Wyoming for which he paid $463. The deed stated, in relevant part:

Excepting and Reserving to said Union Pacific Railroad Company, its successors and assigns, the exclusive right to cut and remove timber from said land and the right to ingress, egress and regress upon said land and the right to use as much of the surface thereof as may be necessary for the proper conduct of said business thereon.

[¶6] In 1908, Union Pacific executed a deed granting 15,941 acres in Uinta County to Heber Land and Livestock Company in consideration for $7,970.57. The deed contained the following pertinent language:

Excepting and reserving to Union Pacific Railroad Company, the exclusive right to cut and remove all timber from said lands and the right of ingress, egress and regress upon said land, and the right to use so much of the surface thereof as may be necessary for the proper conduct of said business thereon. *fn3

[¶7] In 1909, Union Pacific executed a deed conveying 5,037 acres to James Chesney in exchange for $3,779.52. The deed excepted and reserved to:

Union Pacific Railroad Company, its successors and assigns, all timber on said lands, and the exclusive right to cut and remove the same from said lands and the right of ingress, egress and regress upon said lands, and the rights to use so much of the surface thereof as may be necessary for the proper conduct of said business thereon.

[¶8] In 2005, a dispute arose between Broadbent, the successor in interest to each of the grantees of the surface estate, and Ecosystem, the successor in interest to Union Pacific's timber interests. Initially, the district court granted Broadbent's motion for a judgment on the pleadings, holding as a matter of law that the timber reservations were limited to a reasonable time because Union Pacific did not expressly state in the deeds that the reservations were perpetual. Ecosystem I, ¶ 1, 158 P.3d at 686. The district court based this ruling on what it concluded was a majority rule across the country. Id., ¶ 21, 158 P.3d at 691. Ecosystem argued that it should have been allowed to present evidence about the facts and circumstances surrounding the execution of the deeds to inform the court as to the parties' intent with regard to the timber interests. Id., ¶ 7, 158 P.3d at 687. This Court agreed, citing ...


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