Easements can be modified for impossibility

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An easement may be modified if it is impossible for it to fulfill its primary purpose.

The Wisconsin Court of Appeals on July 29 adopted the Restatement (Third) Of Property: Servitudes sec. 7.10(1), even though subsec. (2) has been rejected by the Wisconsin Supreme Court.

The court found that, in contrast to subsec. (2), the rule permitting modification as an alternative to termination in the event of impossibility protects the rights of property owners, and is a less drastic remedy.

Section 7.10(1) of the Restatement provides: “When a change has taken place since the creation of a servitude that makes it impossible as a practical matter to accomplish the purpose for which the servitude was created, a court may modify the servitude to permit the purpose to be accomplished. If modification is not practicable, or would not be effective, a court may terminate the servitude. Compen-sation for resulting harm to the beneficiaries may be awarded as a condition of modifying or terminating the servitude.”

Harmony Homes, Inc., was a joint venturer in the development of a subdivision in Waukesha. Philip and Holly Mnuk bought a lot in the development in 1987 and built a residence.

In 1995, easements were negotiated between the Mnuks and the owners of a neighboring lot to provide egress to their properties via a joint driveway.

However, the driveway was never built, and because the property is now considered wetlands, it cannot be built.

The Mnuks therefore sought declaratory judgment modifying the easements to account for the change in circumstances.

Harmony Homes (which would be obligated to pay for any driveway) moved for summary judgment, arguing that, because it is impossible to construct the driveway contemplated in the easements, the easements must be terminated instead.

The circuit court denied the motion, concluding that the easements were ambiguous, and thus it had authority to modify them.

The Court of Appeals granted Harmony Homes’ petition for leave to appeal, but affirmed, although on different grounds.

In an opinion by Judge Margaret J. Vergeront, the court found no ambiguity, but held that modification may be a valid alternative to termination, in the event of impossibility.

The court began its analysis with the Supreme Court opinion in AKG Real Estate, LLC, v. Kosterman, 2006 WI 106, 296 Wis.2d 1, 717 N.W.2d 835.

In AKG, a landowner asked the court to adopt sec. 7.01(2) of the Restatement, which permits modification of an easement, where, because of changed conditions, the property is no longer suitable for the uses permitted by the servitude.

The Supreme Court declined to adopt the provision, because it would alter the “longstanding default rule in Wisconsin that a servient estate cannot unilaterally relocate or terminate an express easement.” AKG, at pars. 31, 34, 35.

Harmony Homes argued that the holding in AKG supported its position that a court may terminate but not modify an easement.

However, the court distinguished AKG, because, in that case, it was not impossible for the easement to accomplish its primary purpose, but was merely no longer economical.

Distinguishing AKG, the court explained, “it is a change that protects, where practicable, the property rights of the easement holder. In this regard, it is consistent with the AKG court’s reasoning for rejecting sec. 7.10(2). That subsection, with a lower threshold than sec. 7.10(1) for modifying an easement, does not sufficiently protect the property rights of the easement holder.”

Before concluding, the court cautioned that courts should be cautious about either modifying or terminating an easement because of impossibility, and urged that “impossibility” be narrowly interpreted.

David Ziemer can be reached at [email protected].