Daily Development for Friday, February 14, 2003

By: Patrick A. Randolph, Jr.
Elmer F. Pierson Professor of Law
UMKC School of Law
Of Counsel: Blackwell Sanders Peper Martin
Kansas City, Missouri
prandolph@cctr.umkc.edu

EASEMENTS; CREATION; NECESSITY; "PRIVATE EMINENT DOMAIN:" The existence of a lease between the parties providing access easements does not preclude the exercise of eminent domain involving the taking of private property for a private way of necessity.

Wyoming Resources Corporation v. T-Chair Land Company, 49 P.3d 999 (Wyo. 2002).

Wyoming Resources Corporation ("WRC") entered into a contract with T-Chair Land Company providing WRC access to oil and coalbed methane production wells by roads on T-Chair's ranch property. The contract obligated WRC to control water runoff produced by its wells. WRC's oil well and coalbed activities produced uncontrolled water that damaged the surface of T-Chair's ranch and raised the level of a reservoir on T-Chair's property. Because WRC failed to control this water and stated that it planned to drill fourteen additional wells, T-Chair blocked WRC's access.

WRC filed a complaint in condemnation and sought to condemn a road it accessed pursuant to the access agreement between the parties. The Supreme Court of Wyoming found that contractual rights do not preclude condemnation proceedings, and that taking of private property for a private way of necessity is valid and consistent with public policy in Wyoming. The taking of private property for a private way of necessity is valid because there is a public interest in giving individuals access to the road and highway network of the state for the development of land as a resource for the common good.

Remanded for determination as to whether the acquisition of the easement was "necessary" within the meaning of the statute.

Comment 1: Not all states have this concept of giving a landlocked owner the right to condemn privately an easement in order to obtain access to the property. The concept is quite different from the common law easement by necessity. In addition to the feature that the claimant may pay for the easement, there is the significant difference that the easement is available over any adjacent property - whichever route makes sense, and is not limited to property that earlier was in common ownership with the parcel for which access is sought.

Wyoming's statute is more limited than many. It provides only for private condemnation of ways of necessity for certain identified activities of special public importance - among them the exploi tation of oil and gas resources, as was the case here.

But was there necessity here? If the applicant had complied with the terms of the leased access, it would have had no necessity.

The court cites cases in which condemnation of fee interests were permitted despite the fact that the condemnor already had a leasehold estate in the same property. In these cases, the courts recognized that the public interest supporting the condemnation was served by the condemnor having a fee interest so as to justify the level of investment necessary to carry out the desired public activity. But here, the condemenor's own interest was a leasehold estate, so these cases provided no justification for it seeking an access beyond the leased access it had earlier obtained.

Comment 2: The servient owner had barred the use of the already existing easement because the dominant owner had surcharged it by generating too much water By remanding for a determination of necessity, the court clearly is stating that the mere fact that there was a leased access that could no longer be used due to surcharge did not preclude the dominant party from seeking to acquire the access by private condemnation, thus authorizing the surcharge. (Note that the condemnation damages also permitted payment for the impact of the easement on the servient owner's other property - so the servient will be paid for the surcharge impact.)

In short, the right to obtain an easement by condemnation here seems to have been turned into a right to obtain an easement to cause a nuisance. Was that the statutory intent? What if we didn't have flooding, but runoff of pollutants? Same analysis? By what standard does the court decide that the water runoff or pollution renders the need to obtain an easement "necessary?" Note that the statute is very general and applies to all kinds of oil and gas operations. Are all of them being given the right to condemn a license to pollute - at least when access is necessary?