By Joe Forward, Legal Writer, State Bar of Wisconsin

July 23, 2010 – Under Wis. Stat. section 706.10(3), a deed transferring sand removal rights to a “grantee” and not expressly to the “grantee, his heirs, and assigns” does not limit transferability of the sand removal rights, the Wisconsin Supreme Court recently held.

Section 706.10(3) states: “In conveyances of lands words of inheritance shall not be necessary to create or convey a fee, and every conveyance shall pass all the estate or interest of the grantor unless a different intent shall appear expressly or by necessary implication in the terms of such conveyance.”

In Borek Cranberry Marsh, Inc. v. Jackson County, 2010 WI 95 (July 21, 2010) the supreme court rejected Jackson County’s argument that a 1977 deed conveying sand removal rights to a “grantee” were granted to the original grantee alone, and thus were non-transferable.

The supreme court held that the deed did not expressly limit transferability or necessarily imply that sand removal rights were non-transferable under section 706.10(3).

Facts

Carl Nemitz owned marsh land adjacent to land owned by Jackson County. In 1977, Nemitz purchased from Jackson County an easement that granted to Nemitz both water flowage and sand removal rights to Jackson’s County’s land for the purpose of cultivating cranberries.

The deed granted water flowage rights to “Carl Nemitz, his heirs, and assigns.” However, the deed granted sand removal rights to the “grantee.” There was no mention of “heirs or assigns” with regard to the sand removal rights.

In 1978, Nemitz sold the cranberry marsh to the Boreks. The deed transferred the land and the water flowage and sand removal rights. In turn, the Boreks transferred the land with water flowage and sand removal rights to Borek Cranberry Marsh, Inc. (BCM).

BCM operated for years without removing sand from Jackson County’s land, but sometime before April 2007, notified Jackson County of its intent to do so pursuant to the 1977 deed. Jackson County disputed BCM’s right to remove sand under the 1977 deed.  BCM filed suit.

The circuit court granted summary judgment to Jackson County, and the appeals court reversed. The supreme court affirmed the appeals court.

Majority

Under section 706.10(3), words of inheritance, such as “heirs and assigns,” are not necessary to convey “all the estate or interest of the grantor unless a different intent shall appear expressly or by necessary implication in the terms of such conveyance,” the court explained.

The court – in an opinion written by Justice Michael J. Gableman – clarified that under section 706.10(3), “grantee” has the same exact meaning as “grantee, his heirs, and assigns” unless another meaning is expressly stated or implied in a deed.

Jackson County argued that the 1977 deed makes clear that sand removal rights were non-transferable. Inclusion of the terms “heirs and assigns” in the water flowage grant and exclusion of the terms “heirs and assigns” in the sand removal grant, the county argued, constitutes express language or a necessary implication that only water flowage rights were transferable.

Necessary implication

The deed did not expressly limit transferability of the sand removal rights, the court held. Thus, the primary question was “whether the non-transferability of the sand removal rights is a ‘necessary implication’ of the terms of the easement.”

Jackson County argued that the difference in language granting water flowage and sand removal rights created a necessary implication that sand removal rights were non-transferable.

Use of different language in related sections is generally interpreted as intending a different meaning, the court explained, but Jackson County’s interpretation is not a necessary one.

That is, a necessary implication only arises where interpreting otherwise “would constitute a perverse misconstruction of the language.” Jackson County’s interpretation is not necessary because the statute does not require “words of inheritance” to transfer interests, the court explained.

Thus, under section 706.10(3), “the easement conveyed a fully transferable interest in both the water flowage and sand removal rights,” the court held.

Regardless of whether a grant of land by a public body should be construed most strongly against the grantee, as Jackson County argued, such a rule “would be applied only as a rule of last resort,” the court noted.

Dissent

Chief Justice Shirley S. Abrahamson wrote a dissenting opinion that was joined by Justice Ann Walsh Bradley. The chief justice argued that the majority “effectively disregards the otherwise apparent intent of the parties as evinced by the written text.”

Looking at the “four corners” of the deed, Abrahamson argued that “the text of the sand removal provision contains numerous indicia that the parties intended the two rights to be different and discrete from one another.”

The chief justice asserted that the first clause of section 706.10(3) – “[i]n conveyances of lands words of inheritance shall not be necessary to create or convey a fee” – does not apply because in Wisconsin “an easement is not a conveyance of land,” it’s an interest in land.

Regardless, even if words of inheritance are unnecessary to convey land or an interest in land, that “does not mean that words of inheritance are meaningless,” Abrahamson wrote.

The second clause – “every conveyance shall pass all the estate or interest of the grantor unless a different intent shall appear expressly or by necessary implication in the terms of such conveyance” – does not modify or affect the first clause, the chief justice argued. That is, each clause stands alone and must be interpreted separately.

The second clause, read alone, simply states that whatever interest was held by the grantor passes upon conveyance, Abrahamson explained, and nothing less. Here, the plain language of the deed restricts the grantor’s ability to transfer sand removal rights.

“I cannot agree with the majority’s interpretation and application of [section 706.10(3)],” Chief Justice Abrahamson wrote.

Attorneys

Dan Arndt of Arndt, Buswell & Thorn S.C., Sparta, represented Borek Cranberry Marsh, Inc.

Mark Hazelbaker of Hazelbaker & Associates S.C., Madison, represented Jackson County.