BEATTIE v. STATE ex. rel. GRAND RIVER DAM AUTHORITY

BEATTIE v. STATE ex. rel. GRAND RIVER DAM AUTHORITY
2001 OK 43
72 OBJ 1504
Case Number: 91359
Decided: 05/15/2001
Modified: 01/15/2002

NOTICE: THIS OPINION HAS BEEN WITHDRAWN FROM PUBLICATION AND REPLACED WITH 2002 OK 3 .

WITHDRAWN *** WITHDRAWN *** WITHDRAWN *** WITHDRAWN

 

EDWARD T. BEATTIE and WALTER R. BAILEY, JR., Plaintiffs/Appellants
v.
STATE OF OKLAHOMA, ex rel GRAND RIVER DAM AUTHORITY, Defendant/Appellee

ON CERTIORARI TO THE COURT OF CIVIL APPEALS, DIVISION 4

¶0 Plaintiffs, who purchased property from the United States, filed suit seeking to enforce relocation and removal rights under a series of utility easements after Defendant, Grand River Dam Authority (GRDA), refused to remove or relocate its facilities which existed upon the purchased property. Both parties filed summary judgment motions. The trial court held Plaintiffs did not acquire the relocation and removal rights and granted summary judgment in favor of GRDA; this summary judgment was upheld by the Court of Civil Appeals. The case presents two primary questions 1) whether the relocation and removal rights held by the seller in connection with five utility easements were assignable so that those rights were transferred to the purchaser through the executed quitclaim deed and 2) did a "subject to" clause in the quitclaim deed reserve the relocation and removal rights in the seller or otherwise prevent those rights from passing to the purchaser of the servient estate. This opinion finds the rights of the U.S. did pass to Plaintiffs and reverses the trial court decision. The case is remanded with instructions to proceed in a manner consistent with the following opinion.

CERTIORARI PREVIOUSLY GRANTED;
COURT OF CIVIL APPEALS OPINION VACATED;
DECISION OF THE TRIAL COURT REVERSED AND
CAUSE REMANDED WITH INSTRUCTIONS TO PROCEED
IN A MANNER CONSISTENT WITH THIS OPINION

K. Clark Phipps, Atkinson, Haskins, Nellis, et al, Tulsa, Oklahoma

for Plaintiffs/Appellants.
Thomas L. Vogt, Jones, Givens, Gotcher & Bogan, P.C., Tulsa, Oklahoma

for Defendant/Appellee.

BOUDREAU, J.

¶1 This matter comes to the Court upon certiorari asking (1) whether certain relocation and removal rights held by the seller in connection with five utility easements were assignable so that those rights were transferred to the purchaser of the servient estate through an executed quitclaim deed, and (2) did a "subject to" clause in the quitclaim deed reserve the relocation and removal rights in the seller or otherwise prevent those rights from passing to the purchaser of the servient estate? We find the relocation and removal rights held by the seller were assignable so that those rights were transferred to the purchaser of the servient estate through the executed quitclaim deed; and the "subject to" clause did not reserve or otherwise prevent the relocation and removal rights from passing to the purchaser of the servient estate. However, as the summary judgment record contains no evidence whether Plaintiffs' proposed use of the land requires either removal or relocation of GRDA's utility facilities, the case must be remanded for further proceedings.

I. Factual Background

¶2 The essential facts are not in controversy. Plaintiffs, Edward Beattie and Walter Bailey, Jr., purchased property from the United States of America in 1996. The U.S. conveyed the property to Plaintiffs by a quitclaim deed. The property conveyed was burdened by five utility easements that the U.S. had granted to the Defendant, Grand River Dam Authority (GRDA), at various points from 1960 through 1979. Four of the easements were for a limited fifty year term and were given at no cost to GRDA. The fifth, a perpetual easement, was given for nominal consideration. Each of the five easements contained a provision which gave the U.S. the right to require relocation or removal of GRDA's facilities should the property occupied by the facilities be "needed by the United States, or in the event the existence of said facilities shall be considered detrimental to governmental activities[.]"

This deed and conveyance is expressly made subject to the following matters to the extent and only to the extent the same are valid and subsisting and affect the property:

a. Existing easements for public roads and highways, rights of way for railroads, pipelines, drainage ditches and public utilities, if any, whether or not shown of record. (Emphasis added).

In addition, the "subject to" clause specifically listed three of the five easements at issue.

¶4 After Plaintiffs acquired the property, they began making plans to develop the tract as a waterfront subdivision. Plaintiffs asked GRDA to relocate its facilities underground or remove them from the newly purchased property. In support of their request, Plaintiffs referenced the provision contained in each of the easements which granted the U.S. the right to demand relocation or removal should the U.S. need the property. Plaintiffs contended the relocation or removal rights were transferred or assigned to them by the U.S. through the quitclaim deed.

¶5 GRDA refused to either remove or relocate the facilities. As a result Plaintiffs filed this lawsuit seeking to enforce their rights under the easements. Both Plaintiffs and GRDA moved for summary judgment. The trial court granted GRDA's motion and denied Plaintiffs', resulting in this appeal. The Court of Civil Appeals affirmed the decision of the trial court, upholding the summary judgment in favor of Defendant, GRDA. This Court then granted certiorari.

II. Standard of Review

¶6 This Court's standard of review upon summary judgment is de novo, meaning without deference, because "the ultimate decision turns on purely legal determinations, i.e. whether one party is entitled to judgment as a matter of law because there are no material disputed factual questions. We, like the trial court, will examine the pleadings and evidentiary materials submitted by the parties to determine if there is a genuine issue of material fact. Further, all inferences and conclusions to be drawn from the evidentiary materials must be viewed in the light most favorable to the non-moving party." Carmichael v. Beller, 1996 OK 48, 914 P.2d 1051, 1053 (citations omitted).

III. Were the Relocation and Removal Rights Assignable?

¶7 Plaintiffs acquired the real property burdened by GRDA's easements from the U.S. by quitclaim deed. A quitclaim deed executed in a form prescribed by statute conveys all right, title and interest of the grantor of the land. 16 O.S. 1991 § 18 ; Bonebrake v. McNeill, 1971 OK 146, 491 P.2d 269. Accordingly, Plaintiffs acquired every interest of the U.S. in the real property that was not reserved in the quitclaim deed, unless that interest was not freely assignable. GRDA contends the relocation and removal rights held by the U.S. in connection with the utility easements were not assignable and therefore did not pass to Plaintiffs when they received the quitclaim deed.

¶8 The relocation and removal rights held by the U.S. were created in paragraph 11 of the easement grants between the U.S. and GRDA. When interests in or rights to property are created by deed, the deed should be interpreted and meaning of the parties thereto ascertained in the same manner as govern other written contracts. Jennings v. Amerada Petroleum Corp., 1937 OK 228, 179 Okla. 561, 66 P.2d 1069, 1071. In determining whether the rights under a contract are assignable the Court must look at the construction of the contract itself and "every case must turn at last upon the intention of the parties." Minnetonka Oil Co. v. Cleveland Vitrified Brick Co., 1910 OK 279, 27 Okla. 180, 111 P. 326, 329.

¶9 Oklahoma has long held that rights under a contract are presumed to be assignable, unless the parties expressly provide otherwise.

¶10 However, Oklahoma case law has also recognized that certain rights and duties under a contract are too personal in character to permit them to be assigned. Minnetonka, 111 P. at 329; Earth Products Co., 441 P.2d at 404. These cases rest on the proposition that when the personal qualities of either party are material to the contract, an assignment would amount to a material change in the terms of the contract.

¶11 Relying on this exception, GRDA argues that the easement instruments created a relationship of personal confidence or trust between it and the U.S. with respect to the relocation and removal rights, accordingly these rights were not assignable. Specifically, GRDA asserts that it relied upon the personal confidence or trust of the U.S. regarding the manner and frequency at which the U.S. would exercise the relocation and removal rights. GRDA contends that it received assurances from the U.S. that it would exercise the rights only infrequently and that without such assurances, GRDA would never have made substantial improvements on the property. In support of this argument, GRDA attached an affidavit to its motion for summary judgment in which a long time GRDA employee explained the negotiation process for easements of this type and the general expectations of GRDA with respect to a continuing easement relationship.

¶12 In evaluating GRDA's contention that the U.S. held the relocation and removal rights imbued with an obligation of trust and confidence, and thus, those rights were too personal in nature to be assigned without the consent of GRDA, we are presented with a question of contract construction. Id. The instruments must serve as the seminal gauge of the parties' intent, including the evaluation of any relationship of trust between the original parties to the contract. Id. at 331; See also Earth Products, 441 P.2d at 404-05. In every case, this question must turn upon the intention of the parties as manifested in the agreement itself. Minnetonka, 111 P. at 329.

¶13 The instruments themselves contain no express provisions limiting or prohibiting assignment of the relocation and removal rights. Since the instruments do not expressly state that they are nontransferable, the question remains whether they contain equivalent expressions or language which indicates the rights are so personal that they may not be freely assigned. A close examination of paragraph 11, the paragraph in the easement instruments containing the relocation and removal rights, provides no indication that the parties impliedly intended that personal confidence or trust be vested in the U.S. in the exercise of the relocation and removal rights. Paragraph 11 does not specifically limit or restrict in any substantial fashion the manner in which the U.S., as owners of the servient estate, can exercise the rights. On the contrary, the instruments allowed the U.S. to exercise the relocation and removal rights if the land occupied by the facilities was merely "needed" or the facilities were "detrimental to governmental activities[.]" The language of the provision does not reveal the parties intended to repose personal confidence or trust in the U.S. or limit in any significant fashion the manner in which the U.S. exercised the relocation and removal rights.

¶14 Although GRDA argued at the trial court that the provision in the easement instruments creating the relocation and removal rights was not ambiguous, it submitted the affidavit of an employee attempting to establish a relationship of personal confidence between it and the U.S.

¶15 As a second argument, GRDA contends that an assignment of the relocation and removal rights would change the character of its obligation under the instruments by materially increasing the risk imposed upon it under paragraph 11.

¶16 We disagree. Although GRDA contends there is some fundamental difference in the nature of property use when that property is owned by the U.S., as opposed to a private land owner, it offers nothing more than its own statement to support its contention. It failed to provide the trial court with any specific example of land use that would be at a private owner's disposal which would not also be available to the U.S. GRDA merely argued the U.S. would not and did not need this piece of property for waterfront subdivision development and therefore GRDA should not now be forced to relocate its facilities because that is the "need" proposed by the new owners.

¶17 GRDA has failed to demonstrate that the assignment would materially change its interest in the easement. First, the U.S. has historically proven itself capable of using property in a myriad of ways including, commercial and residential development, grazing livestock, farming, parks and recreation, creating reservoirs or dams, landfill and waste disposal. Second, we can find nothing in paragraph 11 which confines the servient owner to a particular list or variety of "needs" to be deemed acceptable to the easement holder, GRDA. The paragraph does not restrict the manner in which the land may be developed. As a result, this Court cannot conclude the assignment of relocation and removal rights to Plaintiffs would mark a material increase in the risk imposed upon GRDA under paragraph 11.

¶18 In fact, if this Court determined that the relocation and removal rights were unassignable, as GRDA urges, GRDA would now hold easements considerably more substantial in nature than when the U.S. owned the servient property. Prior to the quitclaim deed to the Plaintiffs, GRDA possessed five easements relatively insubstantial in nature, for which it had paid virtually no consideration. GRDA held the utility easements subject to the right of the U.S., upon a simple showing of "need", to insist that GRDA's facilities be relocated or removed. GRDA now seeks a judgment that would result in easements which would effectively contain no relocation and removal rights, completely shifting the balance of authority between the servient estate and easement holder. This would grant GRDA easements far more substantial in nature than it had reason to expect when it contracted with the U.S.

¶19 As a final argument, GRDA tenders the case of Caseyville Township Road Dist. v. Union Electric Co., 274 N.E.2d 133 (Ill.App. 1971), as one similar to the one at bar. In Caseyville, an assignee purchased property from a railroad and after purchase attempted to compel the electric company to relocate its power lines at its own expense, pursuant to an easement agreement which existed between the railroad and electric company. The Illinois court held that the rights were limited to the railroad company and did not pass to plaintiff by virtue of its conveyance from the railroad. We find this case distinguishable. In contrast to the case now before this Court, the original easement grant in Caseyville contained numerous paragraphs in which various rights of the railroad were specifically reserved to the railroad's "successors or assigns," yet the paragraph containing the railroad's right to compel electric company to relocate the lines at its own expense did not contain such language. It was the absence of this language in the relocation paragraph and the presence of the language in so many of the other provisions that the Caseyville court found so compelling. Id. at 718-19. This is not the situation the Court is faced with in the instant case. The easement instruments between the U.S. and GRDA do not contain the systematic inclusion or omission of language that is present in Caseyville and this Court's analysis cannot rest upon the same premise used by the Illinois court.

IV. The "Subject to" Clause in the Quitclaim Deed from the U.S. to Plaintiffs Did Not Reserve the Relocation and Removal Rights in the U.S. or Prevent Those Rights from Passing to the Plaintiffs

¶20 The quitclaim deed executed by the U.S. stated the conveyance to Plaintiffs was "subject to" existing easements for public utilities. The Court of Civil Appeals opinion implies the "subject to" clause reserved all the referenced servient easement rights, including the relocation and removal rights in the U.S. Plaintiffs argue on certiorari that the Court of Civil Appeals incorrectly analyzed the legal impact of the "subject to" clause. Because GRDA could prevail in the event the "subject to" clause either reserved the relocation and removal rights in the U.S. or otherwise prevented those rights from passing to the Plaintiff, this Court must address the effect of the "subject to" clause.

¶21 The "subject to" clause in the quitclaim deed did not reserve the relocation and removal rights in the U.S. The words "subject to" are frequently used in conveyances and have historically been interpreted as meaning "subordinate to," " subservient to," "limited by," or "charged with." Hendrickson v. Freericks, 620 P.2d 205, 209 (Alaska 1980). The Hendrickson court observed that:

When used in a deed these words are generally regarded as terms of qualification, not contract. They serve to put a purchaser on notice that he is receiving less than a fee simple. There is nothing in their use which connotes a reservation or retention of property rights.

Hendrickson

¶22 Similarly, the language of the "subject to" clause did not prevent the relocation and removal rights from passing to the Plaintiffs.

V. The Summary Judgment Record Contains No Evidence on the

Issue of Whether Plaintiffs' Proposed Use of the Land Requires

Either Removal or Relocation of GRDA's Utility Facilities.

¶23 The relocation and removal rights in the five utility easements require GRDA to accommodate the needs and activities of the U.S. The effect of holding these rights freely assignable so that they were transferred to the Plaintiffs as purchasers of the servient estate through the executed quitclaim deeds is to place the Plaintiffs in the shoes of the U.S. Accordingly, Plaintiffs must demonstrate that the needs or the activities of their proposed waterfront subdivision required either removal or relocation of GRDA's utility facilities. Because the summery judgment record is lacking proof on this issue, the case must be remanded to the trial court for resolution.

VI. Conclusion

¶24 In summary, we find that GRDA failed to overcome the presumption that the relocation and removal rights were assignable. Specifically, it failed to establish that the U.S. held the relocation and removal rights imbued with an obligation of trust and confidence, and thus failed to establish those rights were too personal in nature to be assigned without the consent of GRDA. It also failed to establish that the assignment of the relocation and removal rights would change the character of its obligation under the easement instruments by materially increasing the risk imposed upon it. Finally, the "subject to" clause in the quitclaim deed from the U.S. to Plaintiffs did not reserve the relocation and removal rights in the U.S. or prevent those rights from passing to the Plaintiffs. However, as the summary judgment record contains no evidence whether Plaintiffs' proposed use of the land requires either removal or relocation of GRDA's utility facilities, the case must be remanded for further proceedings.

¶25 CERTIORARI PREVIOUSLY GRANTED; COURT OF CIVIL APPEALS OPINION VACATED; DECISION OF THE TRIAL COURT REVERSED AND CAUSE REMANDED WITH DIRECTIONS TO PROCEED IN A MANNER CONSISTENT WITH THIS OPINION.

¶26 WATT, V.C.J., HODGES, OPALA, SUMMERS, BOUDREAU, J.J. Concur. HARGRAVE, C.J., LAVENDER, KAUGER, WINCHESTER, J.J. Dissent.

FOOTNOTES

1 Paragraph 11, containing the relocation and removal right, reads as follows in each of the respective easements:

That, in the event all or any portion of said land occupied by said facilities shall be needed by the United States, or in the event the existence of said facilities shall be considered detrimental to governmental activities; the grantee shall, from time to time, upon notice so to do, and as often as so notified, remove said facilities to such other location or locations on said land as may be designated by said officer, or the grantee shall reconstruct said facilities underground on said land without expense to the United States, as may be directed by said officer, and in the event said property shall not be removed or relocated within ninety (90) days after any aforesaid notice, the United States may cause the same to be done at the expense of the grantee, provided, however, that if directed to reconstruct its facilities underground the grantee may, at its option, in lieu of taking such action, wholly remove its facilities from lands of the United States as described herein, at which time the right granted herein shall cease but the restoration obligation set forth in Condition No. 13 hereof shall remain.

2 The Restatement (Second) of Contracts also favors the free assignability of contract rights. It provides:

A contractual right can be assigned unless:

(a) the substitution of a right of the assignee for the right of the assignor would materially change the duty of the obligor, or materially increase the burden or risk imposed on him by his contract, or materially impair his chance of obtaining return performance, or materially reduce its value to him, or

(b) the assignment is forbidden by statute or is otherwise inoperative on grounds of public policy, or

(c) assignment is validly precluded by contract.

Restatement (Second) of Contracts Ch. 15, § 317(2)(a)-(c). The law also favors the free assignability of property interests generally; it assumes that "they are alienable except in so far as their alienability is restricted by the manner or the terms of their creation." Restatement of Property Ch. 40 § 489 (comment b); See also Restatement of Property Ch. 40 § 489 (comment a).

 

3 Minnetonka Oil v. Cleveland Vitrified Brick Co., 1910 OK 279, 111 P. 326; Earth Products Co. v. Oklahoma City, 1968 OK 39, 441 P.2d 399; See also Restatement (Second) of Contracts Ch. 15, § 317(a).

4 Various courts have employed this rational to prohibit the assignment of a contract for personal services that requires the exercise of knowledge, judgment or skill: a contract to furnish an abstract of title, See Linn County Abstract Co. v. Beechley, 124 Iowa 146, 99 N.W. 702 (1904); an agreement to render professional services as a physician, lawyer or architect, See Deaton v. Lawson, 40 Wash. 486, 82 P. 879 (1905) (re: physician); Corson v. Lewis, 77 Neb. 446, 109 N.W. 735 (1906) (re: attorney); Smith v. Bd. Of Education of Liberal, 115 Kan. 155, 222 P. 101 (1924) (re: architect). 6 AmJur 2d Assignments, § 30, pp. 169-70.

 

5 After engaging in the contract construction analysis, the Minnetonka Court determined the parties did not intend to make the contract unassignable; there was no express provision in the contract to prohibit assignment and no particular element of trust, skill or confidence between the original parties to the contract which would necessitate performance by the original brick company, rather than an assignee. The Court focused its analysis upon whether a distinctive characteristic or skill was a material inducement to the contract and finding it was not, the Court permitted assignment and directed the gas company to honor the supply agreement. Minnetonka, 111 P. 326 (Okla. 1910).

6 Defendant asserts in its Motion for Summary Judgment that the easement provisions of paragraph 11 are not ambiguous and are in fact "clear, plain and express". (see pp. 8 & 12 of Defendant's Motion). Plaintiffs similarly asserts in their Response and Renewed Counter Motion for Summary Judgment that the relocation and removal right language is "clear and unambiguous". (see pp. 5, 6 & 8 of Plaintiff's Response).

7 GRDA's proposed witness had no direct connection with any of the five easements at issue. He was not involved in the negotiations or easement conveyances in any manner, but apparently had considerable experience of a general nature with regard to GRDA's acquisition and maintenance of similar easements.

8 This approach to assignability has been proposed in the Restatement of Contracts which has recognized that "[a] contractual right can be assigned unless . . . substitution of a right of the assignee for the right of the assignor would . . . materially increase the risk imposed on him by his contract[.]" Restatement (Second) of Contracts Ch. 15, § 317(2)(a). It has also been adopted by the Uniform Commercial Code. Article 2 and 2A of the U.C.C. deal with the sale and lease of goods. Its assignability provision is similar to that of the Restatement. See U.C.C. (1963)12A O.S. § 2-210 (2).

9 The Court of Civil Appeals opinion incorrectly stated, "[T]he rights of the United States under the easements were not conveyed to Plaintiffs. This result is consistent with the reservation by the United States of express mineral rights and a flowage easement." The cases cited by the Court of Civil Appeals, Cox v. Butts, 48 Okla. 147, 149 P. 1090 (1915) and Hyman v. District of Columbia, 247 F.2d 585 (D.C.Cir. 1957), do not support this ultimate conclusion. Cox examined a promise or covenant made in connection with the land and questioned whether a subsequent assignee was obligated under the covenant simply by virtue of acquiring the property. The instant case focuses on rights that pass with a conveyance and does not involve an affirmative obligation or promise as Cox did. Hyman evaluated what portion of a decedent's estate can be taxed when it is "subject to" a claim of the devisee. Hyman analyzed how the "subject to" language effected the value of the inherited property, particularly for the purposes of inheritance tax. While this Court finds no fault with Hyman's analysis of the qualifying effect of the "subject to" language in a testamentary instrument, the case does not have direct application to the facts of the instant case.

Opala, J., concurring.

¶1 Although I concur in the court's opinion, I write separately to add my own analytical basis for holding that plaintiffs can exercise the reconstruction/relocation rights reserved by the United States in the five easement agreements under review. I would rest today's pronouncement on the law governing covenants running with the land. The latter provides support for today's disposition that is equally strong if not stronger than that provided by the contract-law analysis relied upon by the court.1

¶2 The dispositive question tendered on certiorari is whether certain rights expressly reserved by the United States in written instruments granting five utility easements to the Grand River Dam Authority (GRDA) are exercisable by the plaintiffs, to whom the United States subsequently conveyed the land burdened by the easements. The rights reserved allow the United States to require GRDA to relocate or bury the utility lines it has constructed on the easements.2

¶3 Paragraph 11 of each of the five easement agreements states:

That, in the event all or any portion of said land occupied by said facilities shall be needed by the United States, or in the event the existence of said facilities shall be considered detrimental to governmental activities, the grantee shall, from time to time, upon notice so to do, and as often as so notified, remove said facilities to such other location or locations on said land as may be designated by said officer, or the grantee shall reconstruct said facilities underground on said land without expense to the United States, as may be directed by said officer, and in the event said property shall not be removed or relocated within ninety (90) days after any aforesaid notice, the United States may cause the same to be done at the expense of the grantee, provided, however, that if directed to reconstruct its facilities underground the grantee may, at its option, in lieu of taking such action, wholly remove its facilities from lands of the United States as described herein, at which time, the right granted herein shall cease but the restoration obligation set forth in Condition No.13 hereof shall remain. (emphasis added)

¶4 An easement is a nonpossessory right to the use of land in the possession of another for a definite and limited purpose.

¶5 A covenant is a promise that imposes a burden on the covenantor to act or refrain from acting, and confers a benefit on the covenantee consisting of the right to require the covenantor to act or not act. Covenants in deeds and other conveyances may be either real or personal. A real covenant is one which is so connected with the underlying realty that either the right to enforce the covenant's performance (the benefit) or the duty to perform the covenant's obligation (the burden), or both, passes to the heirs or grantees of one or both of the original covenanting parties by operation of law without express assignment or delegation.

A.

Privity of Estate

¶6 Although its precise origin is obscure,

¶7 Two types of privity of estate are recognized at common law, horizontal and vertical.

¶8 While this court has never expressly dispensed with horizontal privity as a condition for the running of a real covenant, the vertical aspect of privity is generally the only one identified in the few Oklahoma decisions involving the running of real covenants.

B.

Touch and Concern

¶9 Before a successor to the covenantee's estate may compel a covenant's performance, the covenant's benefit must touch and concern the land. This means that there must be a logical connection between the benefit to be derived from enforcement of the covenant and the property.

C.

Intent that the Covenant Run With the Land

¶10 Finally, a covenant runs with the land only if the original covenanting parties intended for it to run. Their intention is to be determined from their entire agreement construed as a whole and not from any single clause or provision.29 No particular language is required to demonstrate an intent that a covenant run.30

¶11 Considering the easement agreements here under review as a whole, there is ample reason to conclude that paragraph 11 was intended for the benefit of the servient estate and not simply for the benefit of the United States. The performance of the covenant contained in paragraph 11is valuable only to the person who owns or occupies the land to which the benefit of the covenant relates. It is of absolutely no value to the original covenantee -- the United States -- apart from the latter's ownership of the land. The covenant's object is to retain flexibility in the use of the servient estate in the face of unknown future developments. Hence, the value of the land is increased if the right to enforce the covenant runs with the land.

¶12 The conditions triggering the relocation/reconstruction rights are set out in alternative clauses. Under the first alternative, GRDA must move or bury its facilities if all or any portion of the land is needed by the United States. The words United States are in no way qualified and their use in this context is nothing other than a reference to the needs of the grantor, a status now held by plaintiffs. With respect to the "detrimental to governmental activities" clause of paragraph 11, Congress long ago declared that housing is a federal concern with implications for the general welfare and security of the United States.31 While the United States might never have directly undertaken the construction of housing on this property or have been authorized to provide funding in connection with the particular project proposed by plaintiffs, it is clear that the construction of housing in general serves a governmental purpose. It cannot be said that interference with the construction of plaintiffs' housing development is not detrimental in a broad sense to a governmental activity.

¶13 Defendant's burden under the easement agreements would not be substantially increased by the running of the benefit of paragraph 11 to plaintiffs, nor would it result in an expansion of the rights of the servient tenant. On the contrary, to accept defendant's argument that the covenant is personal would materially alter the balance established in the easement agreements by eliminating entirely the servient tenant's power to modify defendant's use of the property if it conflicts with the development of the land. It would lead to the absurd, one-sided result that GRDA would continue to occupy and utilize the easements, burdening the servient estate, but the servient tenant would have none of the rights reserved by the grantor for the benefit of the servient estate.32 Such a result would constitute an unreasonable burden upon that estate. Nothing in the agreements in their entirety suggests that the original intent of the parties was to leave the covenantee's successors in such a disadvantageous position relative to that of their predecessor.33 To hold that this covenant runs with the land simply ensures that the servient tenant possesses the same rights in the property as its predecessor had without materially altering the obligations of the easement holder.34

¶14 I would hence hold that the relocation/reconstruction rights contained in paragraph 11 run with the land. Because the summary-process record before us is devoid of evidentiary material showing that either of the conditions precedent to the exercise of the relocation and reconstruction rights has been met,35 I agree with today's reversal of summary judgment and with the court's disposition by remand.36

FOOTNOTES

1At the center of this case is the meaning of a provision contained in five easement agreements between the United States and GRDA. If the meaning of that provision were to be determined by contract law, the rule that "obligations to and rights of the United States under its contracts are governed exclusively by federal law" would come into play. See, Boyle v. United Technologies Corp., 487 U.S. 500, 504, 108 S. Ct. 2510, 2514, 101 L. Ed. 2d 442 (1988). Basing the analysis on property-law concepts brings the case within the rule that state law, rather than federal law, governs property rights, even when the property rights of the federal government stand under consideration. Sunderland v. United States, 266 U.S. 226, 232-233, 46 S. Ct. 64, 65, 69 L. Ed. 259 (1924) ("The general rule is not to be doubted, that the tenure, transfer, control and disposition of real property are matters which rest exclusively with the state where the property lies (United States v. Fox, 94 U.S. 315, 320, 321, 24 L.Ed. 192). . . ."). Inasmuch as both parties the plaintiffs as well as GRDA pressed on us here the rules of state contract law, the correctness of resting today's pronouncement on that law rather than on federal contract law need not be examined.

2Four of the easements provide a right of way for electric transmission lines. The fifth provides a right of way for a communications line.

3While the record does not include a copy of the instrument creating the communications line easement, both parties treat it as containing the same provision regarding relocation as that which appears in the four easement instruments that are included in the appellate record.

4The rights reserved in paragraph 11 require GRDA to "remove [its] . . . facilities to such other location or locations on said land as may be designated" or to "reconstruct said facilities underground on said land." In other words, GRDA is required under this provision to relocate or bury its power lines, not to remove them in the sense of permanently eliminating them from the property. That is the province of paragraph 12 of the easement agreements, which authorizes the United States to terminate the easements under certain circumstances.

5K & K Food Services, Inc. v. S & H, Inc., 2000 OK 31, ¶13, 3 P.3d 705, 710; Bonner v. Oklahoma Rock Corp., 1993 OK 131,¶7, 863 P.2d 1176, 1181. See Restatement (Third) of Property (Servitudes) §1.2(1) at 12 (2000) ("An easement creates a nonpossessory right to enter and use land in the possession of another and obligates the possessor not to interfere with the uses authorized by the easement.").Two categories of easements are generally recognized: easements appurtenant and easements in gross. An easement appurtenant involves two tracts of land: the dominant tenement to which the benefit or advantage of the easement pertains and the servient tenement, which bears the burden or obligation of the easement. Il Giardino, LLC v. Belle Haven Land Co., 757 A.2d 1103, 1111 (Conn. 2000); State ex rel. Comm'r of Transp. v. Dikert, 725 A.2d 119, 122 (N.J. Super Ct.1999); Lazy Dog Ranch v. Telluray Ranch Corp., 965 P.2d 1229, 1234 (Colo. 1998). An easement in gross involves only a single tract of land the servient tenement which is burdened by the right of the owner or holder of the easement to use the servient tenement for a purpose unrelated to his (or her) ownership or occupancy of a separate tract of land. R.C.R., Inc. v. Rainbow Canyon, Inc., 978 P.2d 581, 586 (Wyo. 1999). GRDA's easements are in gross. An easement, whether appurtenant or in gross, does not affect title to, or possession of, the land, both of which remain in the owner of the servient tenement. See Lazy Dog Ranch supra at 1234. The rights of the servient tenant and the dominant tenant or easement holder are mutually limiting. The servient tenant retains the right to make reasonable use of the land, limited by the right of the easement holder to use the easement in a manner consistent with its intended purpose. Mason v. Garrison, 998 P.2d 531, 540 (Mont. 2000). See also John E. Cribbet, Principles of the Law of Property 344 (2nd ed. 1975). The most common type of easement is the right of way the right to traverse the land of another by foot or by vehicle but easements may also be created for drainage, water, sewage, and utilities. Elliot L. Epstein and Ronald L. Bissonnette, Easements Ain't So Easy, 15 Maine Bar Journal 52, 53 (January 2000).

6Story v. Hefner, 1975 OK 115, ¶13, 540 P.2d 562, 566.

7Jon W. Bruce and James W. Ely, Jr., The Law of Easements and Licenses In Land, ¶1.07, at 1-56 (Revised ed. 1995); Columbia Club, Inc. v. American Fletcher Realty Corp., 720 N.E.2d 411, 417 (Ind. App. 1999).

8Roger A. Cunningham et al, The Law of Property §8.13, at 466-469 (2nd ed. 1993); Waikiki Malia Hotel, Inc. v. Kinkai Properties Ltd. Partnership, 862 P.2d 1048, 1057 (Haw. 1993); C. Clark, Real covenants and other Interests which "Run with the Land" 93 (2nd ed. 1947). The law governing covenants running with the land can be traced to two distinct lines of cases, both originating in England. See 9 R. Powell, Powell on Real Property, §60.04[1] at 60-42 (Michael Allan Wolf, ed., Matthew Bender 2000). The first line of cases began in the sixteenth century with Spencer's Case, 5 Co. 16a, 77 Eng. Rep. 72 (Q.B. 1583), in which a plaintiff unsuccessfully brought suit at law for damages for the breach of a covenant. Id. From this inauspicious beginning was born the concept of covenants running at law. Almost three hundred years later, an English court of equity in Tulk v. Moxhay, 2 Phil 774, 41 Eng. Rep. 1143 (Ch. 1848) issued an injunction to enforce in equity a covenant that would have been unenforceable at law due to the absence of privity between the original covenanting parties. See 9 R. Powell §60.04 [1] at 60-42-43. See also Susan F. French, Toward a Modern Law of Servitudes: Reweaving the Ancient Strands, 55 So. Cal. L. Rev. 1261, 1276 (Sept. 1982). From this case evolved the rules governing the running of covenants in equity, known as equitable restrictions. Although neither Spencer's Case nor Tulk themselves formulated rules for the running of covenants, they are considered the source for the rules that gradually developed in England and the United States governing separately the running of covenants at law and in equity. See 9 R. Powell, §60.04[1] at 60-44. The traditional requirements for a covenant to run at law were that (1) the covenant touch and concern the land, (2) the original covenanting parties must have intended for the covenant to run, and (3) some form of privity of estate must be present. Id. at 60-43. The traditional requirements for a covenant to run in equity were that (1) the covenant must touch and concern the land, (2) the original covenanting parties must have intended for it to run, and (3) the successor to the burden must have had notice of the covenant. Id. at 60-44. When law and equity courts were separate, the available remedy for breach of a running covenant damages or injunctive relief depended upon whether the covenant met the requirements of a real covenant or of an equitable restriction. Id. §60.07 at 60-116. The present-day merger of law and equity in a single body, together with judicial confusion over the myriad technical rules governing which covenants run at law and which in equity, has resulted in the consolidation of the two separate lines of cases generated by Spencer's Case and Tulk. Id. Courts today, in general, will grant the relief appropriate to the facts regardless of the real or equitable label that might be attached to the covenant in suit. Id. The recently adopted Restatement (Third) of Property (Servitudes) has gone a step further, abandoning as anachronistic the separate treatment of real covenants and equitable restrictions, as well as of easements, and adopting a unified set of rules for the transfer, construction, and termination of all such interests in land, denominated collectively "servitudes." Id. §60.11[2] at 60-162-163. The Restatement (Third) replaces the traditional rules governing these interests "with rules designed to identify more accurately the situations in which the threatened risks of harm to the general welfare justify judicial intervention to invalidate properly created transactions intended to create interests that run with the land." Restatement (Third) of Property (Servitudes) §3.1, comment a at 348.

9Roger A. Cunningham et al, supra note 8, §8.13, at 468. Noyes v. McDonnell, 1965 OK 16, ¶7, 398 P.2d 838, 840. See also French, supra note 8 at 1270.

10Noyes v. McDonnell, supra note 9 at ¶7, at 840. The other two factors commonly recognized are a writing that satisfies the Statute of Frauds and the existence of privity between the original covenanting parties. See Roger A. Cunningham et al, supra note 8, §8.13, at 469.

11Vulcan Materials Co. v. Miller, 691 So. 2d 908, 914 (Miss. 1997).

12See 9 R. Powell, supra note 8 §60.04 [2][c] at 60-62-63 ("The origins of the privity requirement are unclear. It appears first in dicta in the 1789 English decision of Webb v. Russell [3 T.R. 393, 100 Eng. Rep. 639 (K.B. 1789)], although it is frequently attributed to Spencer's Case [5 Co. 16a, 77 Eng. Rep. 72 (Q.B. 1583)], decided two hundred years earlier.").

13Orange and Rockland Utilities, Inc. v. Philwold Estates, Inc., 418 N.E.2d 1310, 1314 (N.Y. 1981). See 9 R. Powell, supra note 8 §60.11[4] at 60-170 ("[A]t the time real covenant doctrines were being developed, assignments of contractual duties were impossible."). See also, French, supra note 8 at 1269-1270.

14Runyon v. Paley, 416 S.E.2d 177, 184 (N.C. 1992).

15Id.

L Winokur, The Mixed Blessings of Promissory Servitudes: Toward Optimizing Economic Utility, Individual Liberty, and Personal Identity, 1989 Wis. L. Rev. 1, 92; French, supra note 8 at 1272.

17Flying Diamond Oil Corp. v. Newton Sheep Co., 776 P.2d 618, 628 (Utah 1989). Under the traditional horizontal privity rule, adjoining landowners could not enter into a covenant for their mutual benefit apart from a conveyance and have the covenant be enforceable by and against their successors. John W. Fisher, II, The Evolution of Restrictive Covenants in West Virginia, 100 W. Va. L. Rev. 55, 59. At English common law, only a landlord-tenant relationship between the original covenanting parties is recognized as creating horizontal privity. Id.; Winokur, supra note 16 at 97 n. 43; French, supra note 8 at 1272-1273. American courts have accepted other relationships as well, including that between grantor and grantee and between owners of easements. French, supra note 8 at 1273.

18See 9 R. Powell, supra note 8 §60.04[2][c] at 60-67. At one time, strict vertical privity required succession to an estate of equal duration to that of the original covenanting party. That requirement has gradually loosened to permit succession to something less than the identical estate. French, supra note 8 at 1273.

19William B. Stoebuck, "Running Covenants: An Analytical Primer," 52 Wash. L. Rev. 861, 867 (1977). See, e.g., Runyon, supra note 14 at 184.

20The Restatement (Second) of the Law of Property, published in 1944 and superceded only last year by the Restatement (Third) of Property (Servitudes), took the position that both types of privity were necessary for the running of the burden of a real covenant, but that vertical privity alone would suffice for the running of the benefit. This distinction has been resoundingly criticized as resting on inadequate support in the case law. See, e.g., C. Clark, supra note 8 at 137-143 and Append. 1; Henry Upson Sims, The Law of Real Covenants: Exceptions to the Restatement of the Subject by the American Law Institute, 30 Cornell L. Q. 1 (1944). The newly adopted Restatement (Third) of Property (Servitudes) makes no such distinction. Rather, it rejects any type of privity of estate as necessary for the creation of a servitude.

21Most of Oklahoma's privity of estate decisions arise out of a lessor-lessee relationship between the original covenanting parties. See, e.g., Castle v. Double Time, Inc., 1986 OK 80, 737 P.2d 900. Because the landlord-tenant relationship supports horizontal privity even under the strict English common law requirement, these cases have provided no opportunity for the court to undertake a systematic discussion of the current status of the horizontal privity requirement. Oklahoma jurisprudence on the enforcement of covenants respecting realty where the original parties were not in a tenurial relationship have similarly omitted any discussion of the horizontal aspect of privity. For example, in litigation for enforcement of covenants contained in plat restrictions and in agreements creating restrictive covenants among landowners, the absence of horizontal privity has not been raised as a barrier to the covenant's performance. See, Noyes v. McDonnell, supra note 9; O'Neil v. Vose, 1944 OK 26, ¶¶14-15, 145 P.2d 411, 415. The case sub judice would not necessitate a decision on whether horizontal privity has been or should be dispensed with as a prerequisite for a real covenant to run. Should horizontal privity remain a prerequisite for the running of the benefit of a covenant in Oklahoma, the requirement would be satisfied in this case because the covenant was created in connection with the larger land transaction between the United States and GRDA.

22Macias v. Guymon Industrial Foundation, 1979 OK 70, ¶5, 595 P.2d 430, 433 (privity of estate established through the relationship between successive adverse possessors).

23 Columbia Club, Inc., supra note 7 at 420.

24Castle, supra note 21 at ¶11, at 903.

25Local Fed. S & L of Okla. City v. Eckroat, 1940 OK 123, ¶22, 100 P.2d 261, 262.

26Richardson v. Mustang Fuel Corp., 1989 OK 53, ¶19, 772 P.2d 1324, 1328.

27Id.. More explicit conceptualizations of the touch-and-concern requirement are found in many treatises and scholarly articles. See, e.g., C. Clark, supra note 8, at 97 ("If the promisor's legal relations in respect to the land in question are lessened his legal interest as owner rendered less valuable by the promise the burden of the covenant touches or concerns that land; if the promisee's legal relations in respect to that land are increased his legal interest as owner rendered more valuable by the promise the benefit of the covenant touches or concerns that land."). See also Paula A. Franzese, "Out of Touch:" The Diminished Viability of the Touch and Concern Requirement in the Law of Servitudes, 21 Seton Hall L. Rev. 235, 238 (1991) ("[T]he ‘benefit' and the ‘burden' of the given promise [must] be analyzed separately. Accordingly, the benefit of a covenant will not run unless it touches and concerns the land, a condition typically construed to require that the covenant's performance render the promisee's interest in land more valuable. The rule is sometimes expressed as satisfied if the covenant confers ‘a direct benefit on the owner of land by reason of his ownership,' or if, in layperson's sensibilities, the given promise would be viewed as aiding ‘the promisee as landowner.' Attendantly, the burden of a covenant will not bind successors unless it too touches and concerns the land. This is generally interpreted to mean that the covenant's performance renders the promisor's interest in land less valuable." (citations omitted)).

28Columbia Club, Inc., supra note 7 at 420 ("The clearest example of a covenant that ‘touches and concerns' the land is one which calls for a party to do, or refrain from doing, a physical act on the land."). See also, Roger A. Cunningham et al, supra note 8, §8.15 at 471("The clearest example of a covenant that meets the requirement is one calling for the doing of a physical thing to land.").

29Scriver-Stevens Co. v. Boliaris, 1963 OK 194, ¶13, 385 P.2d 911, 914-915; Founders Bank & Trust Co. v Upsher, 1992 OK 35, ¶11, 830 P.2d 1355,1361 ("Intent is to be gathered from the entire instrument.").

30No particular words are necessary to convey an estate of inheritance. See the provisions of 16 O.S. 1991 §29 , which provide:

"Every estate in land which shall be granted, conveyed or demised by deed or will shall be deemed an estate in fee simple and of inheritance, unless limited by express words."

31See e.g.,the Housing Act of 1949, 42 U.S.C.A. §1441 (setting the goal of ". . . a decent home and a suitable living environment for every American family, . . .").

32Other important rights of the servient tenant which are either reserved by the United States to itself by name, written in terms of the United States' interest in the property, make reference to the governmental aspect of the property's ownership, or are expressly made exercisable by a government official include (a) the right set forth in paragraph 6 to require GRDA to repair or replace "any property of the United States damaged or destroyed by the grantee incident to the use and occupation of the said premises" or, at the discretion of the officer having immediate jurisdiction over the property, to require the payment of money as compensation for any such damages,(b) the right set forth in paragraph 10 to require GRDA to provide such service from its power lines "as may be required from time to time for governmental purposes on said land" at favorable rates, and (c) the right set forth in paragraph 12 giving the Secretary of the Army the power to terminate the easements "upon reasonable notice to the grantee if the Secretary of the Army shall determine that the right-of-way hereby granted interferes with the use or disposal of the said land or any part thereof by the United States, . . . " Acceptance of defendant's interpretation of paragraph 11 would, by analogy, deprive plaintiffs of the benefit of any of these provisions.

33GRDA points to the provisions of paragraph 12 of the easement agreements, which permit the United States to terminate the easements if their existence interferes with the use or disposal of the land. GRDA argues that paragraph 12 would be superfluous if a successor to the United States could exercise the reconstruction/relocation rights contained in paragraph 11. Contrary to GRDA's contention, the running of the paragraph 11 covenant does not render the termination provisions of paragraph 12 pointless. A potential buyer of the land, who would be entitled to compel relocation or burial of GRDA's facilities if the paragraph 11covenant runs, might nevertheless prefer not to be bothered doing so, and might therefore condition purchase of the land on the seller terminating the easements before consummation of the conveyance.

34Cf. Town of Skiatook v. Brummett, 1963 OK 256, 387 P.2d 115 (the court held it was the intent of the original covenanting parties that the town's promise to supply water to a single home, given in exchange for a right of way to construct a water pipeline, would run with the land to subsequent owners of that home, but it was not the intent of the original covenanting parties that upon development of the land, the covenant would run to sixteen separate homes).

35Plaintiffs' motion for summary judgment did not include evidentiary material to support plaintiffs' need for the land. Exhibits consisting of plaintiffs' letters requesting that GRDA move or bury its power lines do not constitute proof that would be admissible at trial. Such proof on this issue would have to be adduced if judgment on remand is to be the plaintiffs' due. See the provisions of 12 O.S. 1991 §2801 (hearsay definitions) and §2802 (hearsay rule) and Rule 13(b), 12 O.S. 1991, Ch. 2 app, Rules of the District Courts. These letters were sufficient to defeat defendant's motion for summary judgment on the need issue. Copeland v. Lodge Enterprises, Inc., 2000 OK 36, ¶9, 4 P.3d 695, 699.

36Russell v. Bd. of County Comm'rs, 1997 OK 80, ¶35, 952 P.2d 492, 504 ("Where on the judgment's reversal a cause is remanded, it returns to the trial court as if it had never been decided, save only for the ‘settled law' of the case.").