C.A. 2nd

The Second Appellate affirmed a judgment. The court held that a party who accepted one neighbor’s offer to use access roads across both that neighbor’s and another neighbor’s land, and who subsequently used the roads on both properties, was later estopped to deny the neighbor’s authority to grant such access.

Windsor Pacific LLC sought to establish a prescriptive easement over two access roads on undeveloped land in northern Los Angeles County owned by Samwood Co., Inc., and Shadow Pines, LLC. Windsor had used the roads for several years with Shadow’s permission and pursuant to a written easement agreement with Shadow.

The trial court, after a nonjury trial, granted judgment in favor of both Shadow and Samwood, finding that Windsor’s use of the roads did not create a prescriptive easement over either property because Windsor’s use of those roads was expressly authorized by the prior permissive easement granted to Windsor.

In a post-judgment order, the trial court denied Shadow’s motion for an award of attorney fees pursuant to a contractual attorney fee provision included in the written agreement documenting the prior permissive easement.

Windsor appealed with respect to the Samwood property pnly, arguing that the permissive easement granted by its written agreement with Shadow applied only to use of the access roads on Shadow’s property. Such easement agreement, Windsor argued, could not apply to use of the access roads on Samwood’s property because Shadow did not have the authority to grant such an easement to Windsor.

Shadow appealed the denial of attorney fees.

The court of appeal affirmed in part and reversed in part, holding that Windsor was equitably estopped to deny or question Shadow’s authority to grant an easement over the Samwood property.

The record showed that Windsor’s prior agreement with Shadow expressly stated that Shadow owned an interest in both the Shadow property and the Samwood property. It further granted Windsor a nonexclusive easement to use the access roads on both properties. The court found that Windsor’s continued use of the two access roads in these circumstances precluded its claim that its use of the roads was adverse to Samwood as owner of the Samwood property. This was true, the court found, irrespective of whether or not Shadow actually had the authority to grant Windsor an easement over the Samwood property.

In order to establish equitable estoppel, a party must show (1) the party to be estopped was apprised of the facts; (2) he intended that his conduct be acted upon, or acted in a manner that led the party asserting the estoppel to believe it was so intended; (3) the asserting estoppel was ignorant of the true state of facts; and (4) he relied upon the conduct to his injury.

Here, the first element was satisfied because the evidence clearly showed that Windsor had formed the intent to claim a prescriptive easement over the two roads on both the Shadow and Samwood properties, yet failed to disclose such intention to either Shadow or Samwood. Further, Windsor was well aware such a prescriptive easement was totally inconsistent with its permissive use of the property. Nonetheless, at no time before it first stated the claim at issue here did Windsor ever (1) question or dispute Shadow’s authority to grant permission to Windsor to use the two access roads on the Samwood property or (2) assert any claim for a prescriptive easement.

The second element was satisfied, the court found, when Windsor entered into the agreement with Shadow for permissive use of the roads.

The third element was satisfied because Samwood and Shadow were unaware that Windsor intended to claim a prescriptive easement based on its use of the access roads on the Samwood property.

Finally, the court found, the fourth element was also satisfied because both Samwood and Shadow would be injured if, after Windsor had negotiated for and agreed to receive a permissive easement, its continued use of the two access roads were held to give rise to a prescriptive easement. Both Samwood and Shadow were entitled to rely on their understanding that Windsor’s use of the two access roads on the Samwood property was permissive, until the time that Windsor claimed otherwise.

The essential elements of equitable estoppel were thus satisfied as a matter of law and Windsor was thus estopped to deny Shadow’s authority to grant Windsor an easement over the two access roads on the Samwood property.

Turning to the denial of attorney fees, the court agreed with Shadow that the attorney fee provision in the easement agreement with Windsor authorized a fee award in this case. The court found that an attorney fee clause providing for a fee award to the prevailing party in “any action or proceeding to enforce or interpret” a contract applies not only where the plaintiff’s allegations in the complaint seek to enforce or interpret the contract, but also where the defendant seeks to do so by asserting an affirmative defense raised in its answer. The court accordingly reversed the post‑judgment order denying Shadow’s motion for an award of attorney fees and remanded with directions to grant the motion and determine the amount of the award.