Batto v. Schutz

Filed 5/15/07 Batto v. Schutz CA1/2

NOT TO BE PUBLISHED IN OFFICIAL REPORTS

California Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or relying on opinions not certified for publication or ordered published, except as specified by rule 8.1115(b). This opinion has not been certified for publication or ordered published for purposes of rule 8.1115.

IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA

FIRST APPELLATE DISTRICT

DIVISION TWO

I. INTRODUCTION

John Batto commenced this action to quiet his title to an easement across property owned by Don and Jil Schutz. After a court trial, the superior court found that Battos easement does not extend across the Schutzes property, denied Batto declaratory and injunctive relief, and ordered Batto to execute a quit claim deed in favor of the Schutzes. We reverse.

II. STATEMENT OF FACTS

A. Background

On August 10, 1929, Margaretha Bosch executed a deed (the 1929 deed) granting, for valuable consideration, a right of way to Rosie Dresel who owned property adjacent southerly to Boschs property in Sonoma County. The 1929 deed, which refers to Bosch as the first party and Dresel as the second party, particularly describes the right of way as follows:

Commencing at the southwesterly corner of that certain tract of land conveyed by Obed Chart and Phebe Chart, his Wife, to A. Drahms, under deed dated May 16, 1879, and recorded in Volume 66 of Deeds at page 593, which corner is the intersection of the southerly line of said tract and the easterly line of the County road from Vineburg to Schellville, running thence easterly along and with the said southerly line of said tract to the southeasterly corner of said tract; thence continuing easterly along and with the extension of said southerly line which is the southerly line of that certain tract conveyed by Obed Chart and Phebe Chart, his Wife, to A. Drahms, under date of October 28th, 1882, and recorded in Volume 81 of Deeds, page 309, a distance of 100 feet to a point; thence northerly and at right angles to the last mentioned line a distance of 20 feet; thence westerly and parallel to the southerly line of the tracts above referred to, to a point in the easterly line of the County road above referred to, distant thereon 20 feet northerly from the point of beginning; thence southerly and along the easterly line of said County road to said point of beginning, comprising a strip of land of the uniform width of 20 feet extending along the southerly line of the tracts deeded from Chart to Drahms as above set forth, and now owned by the first party, from the property of said second party to the County road above referred to.

The 1929 deed expressly states that the right of way conveyed is a right of way for all purposes and shall constitute a perpetual easement for that purpose, and that the right of way is conveyed to the second party, his successors and assigns, forever.

As stated in the 1929 deed, the starting point of the easement it created is the southwesterly corner of a property tract then owned by Bosch at which point her southern property line intersects with the easterly line of the County road from Vineburg to Schellville. It is undisputed that, at the time the 1929 deed was executed, the county road from Vineburg to Schellville was Schellville Road. The specific part of Schellville Road that is referenced in the 1929 deed is one arm of a western pointing angle in the road which otherwise runs north to Vineburg and south to Schellville.

In or around 1963, Sonoma County constructed Eighth Street East, a county road which connects with Schellville Road both to the north and the south, and essentially bypasses the angular stretch of Schellville Road referenced in the 1929 deed. Eighth Street East is now the county road which runs north to Vineburg and south to Schellville.

B. The Parties

Batto is the current owner of the property that was owned by Dresel when the 1929 deed was executed. Battos 1967 grant deed expressly incorporates the right of way Bosch conveyed to Dresel in the 1929 deed (the 1929 easement). The parties have stipulated that the 1929 easement was originally appurtenant to the Batto property as John Batto is the successor-in-interest to Rosie M. Dresel.

The parties have also stipulated that the Schutzes are successors-in-interest to Margaretha Bosch. In April 2000, the Schutzes purchased 28107 Eighth Street East for the purpose of commercial development. The northern tip of their triangular shaped parcel lies at the north intersection of Schellville Road and Eighth Street East; Schellville Road runs along the west border and Eighth Street East runs along the east border of the Schutz property. The southern line of the Schutz property is the part of the 1929 easement which runs between Eighth Street East and Schellville Road.

Before the Schutzes purchased their property, they saw no physical signs of a road or passageway along the southern border of the property. A feasibility study prepared for another potential buyer, that was given to the Schutzes by their real estate agent in late 1999, indicated that the property was not subject to any easements. Nor was there any reference to an easement in the Schutzes grant deed, preliminary title report or title insurance policy. The Schutzes would not have purchased their property had they known about the 1929 easement because preserving that easement would have destroyed the commercial viability of their development project.

C. Use of the Easement

To travel between his property and Eighth Street East, Batto must use the 1929 easement, but he does not need to utilize the portion of that easement that runs between Eighth Street East and Schellville Road. However, Batto testified at trial that, when he acquired his property, the former owner advised him to make use of all of the 1929 easement to make sure that he kept his right to use it. Accordingly, when it was convenient, Batto would drive across the section of the easement between Eighth Street East and Schellville Road once or twice every couple of years, [or] once a year. Battos friend, Glenn Ware, testified that he has driven across this section of the easement with Batto in the last ten years. Ware described the area as a typical access road to any farmers field off of another road.

Batto testified that he has also used the section of the 1929 easement that crosses the Schutz property to visit a friend who lives on the other side of Schellville Road. In addition, he has explored the possibility of accessing water from wells located west of Schellville Road and using the easement to transport the water to his vineyard. According to Batto, the part of the 1929 easement on the Schutz property provides a straightforward path from Eighth Street East to Schellville Road.

Richard McCambridge owns a business on Eighth Street East. McCambridge was acquainted with a former owner of the Schutz property, John Tate. McCambridge testified that, in 1979, he and Tate drove along the south border of the property without a problem. At that time, Tate was planning to sell the property and erected a fence which blocked access to the easement. Battos father cut the fence and told Tate he had no right to block the easement. McCambridge also testified that the driveway to a small machine shop located to the south of the Schutz property could be accessed by driving across the part of the easement connecting Eighth Street East and Schellville Road.

Howard Brunner is a land surveyor who testified as an expert on behalf of the Schutzes. Brunner reviewed aerial photographs of the Schutz property that were taken in 1942, 1961, 1971, 1980 and 2000, and testified that he found no physical evidence of a road of any kind in the part of the 1929 easement that runs across the Schutz property. Brunner conceded, however, that if the easement was used only intermittently, then evidence it had been crossed might not appear on an aerial photograph. Although Brunner passes by this property on a regular basis, he has never personally viewed or walked across the south border of the Schutz property.

Eric Strand is an excavation contractor who was employed to work on the Schutzes' development project. Strand inspected the property in April 2003 and his company performed work there from approximately June through December 2003.[1] Strand testified that he saw no physical signs of a road along the southern property line. Strand further opined that, given the soil and other conditions of the property in that area, he did not believe this part of the 1929 easement had ever been used as a road. However, Strand acknowledged that it would have been possible to drive a truck across the easement before he commenced his construction project.

D. The Dispute

Batto testified that he first noticed construction work being done in the easement on the Schutz property in late July 2003. At that time, he told an employee of Strand named Larry that he had an easement and to stop work in that area. Larry referred Batto to Eric Strand, who told Batto that the Schutzes owned the property. After he learned of Battos easement claim, Strand or his secretary notified the Schutzes.

During the first week of August 2003, Batto and Don Schutz had a telephone conversation during which Batto repeated his claim that he had an easement along the south border of the Schutz property. Batto testified that he asked Schutz to stop work in the easement area; however, Don Schutz denied that Batto ever made such a request of him. In any event, it is undisputed that Schutz told Batto that any problem was between Batto and the title company who had guaranteed Schutz clear title to the property.

As soon as [he] heard from Mr. Batto, Don Schutz consulted with Ron Dering, an attorney and planning consultant, to see if Dering could clear up the problem with Batto.[2] At that time, the only work that had been done in the easement area was site excavation and the installation of underground pipes.

Batto had trouble obtaining a response from the Schutzes title insurer, First American Insurance Company (First American), and made several calls to the Schutzes seeking their assistance. At some point, Jil Schutz called First American about the matter and was told that someone would get back to her.

On August 14, 2003, Batto sent a letter to Debby James at First American. That letter stated, in part: Today . . . I saw that pipes have been placed in my right of way . . . and that Larbre Well Drilling is about to drill a well on my right of way. []  As I said on the phone on 08-01-2003 and on 08-14-2003 when you made a copy of my Grant Of Right Of Way document this work needs to stop until this matter is resolved, I have a right of way for all purposes that cannot be blocked. The letter reflects that copies of it were sent to Don, Larbre, and the County. Batto testified at trial that Don was Don Schutz, and that he attached a copy of his easement deed to this letter. Both Don and Jil Schutz testified, however, that they did not receive this letter and that Batto never provided them with documentary evidence of his claimed easement. Nevertheless, the Schutzes filed a claim with First American on August 17, 2003.[3]

First American sent the Schutzes a letter dated November 25, 2003, which stated in part: As you know, John Batto is the current owner of an easement over your property recorded August 12, 1929. In this letter, First American acknowledged that the Schutzes title policy covered losses arising from easements in favor of others and that Battos easement was not identified as an exception to coverage. First American advised that it had contacted Battos attorney and was exploring whether Batto would release his easement right in exchange for compensation. The Schutzes were also notified that, if Batto was unwilling to release his easement, the company would compensate the Schutzes for their loss in value but not for damages relating to improvements the Schutzes had made in the disputed area. According to this letter, the measure [of loss] would be the difference in value due to the easements recordation, given the use and condition of your property when you discovered the easement in early August, 2003.

Jil Schutz testified that this November 25, 2003, letter was the first notice she and her husband had received indicating that Batto in fact had an easement. Schutz estimated that she had as many as ten conversations with representatives from First American during the period between August and November 2003, and that she was never told to cease work or that her project was in jeopardy. Rather, she was told that the company believed Batto had no claim, that it is null and void and it is no longer existing. Schutz also testified that, after they received the November 25 letter, nobody told the Schutzes to stop work on their project nor could they have afforded to stop because they had invested everything in the project and, without it, they would have no income and basically nothing to live on.

On February 25, 2004, Jamin Hawks of First American sent a letter to the Schutzes memorializing a telephone conversation he had with Jil Schutz that day. According to the letter, Batto was unwilling to release his easement claim and the company was prepared to pay the Schutzes for their loss. By the time of trial, First American had paid the Schutzes $36,000, the Schutzes had not signed a release, and they planned to continue to pursue their title insurance claim.

Jil Schutz used a timeline of costs and expenses that she prepared prior to trial to testify about the cost of the Schutzes development project. [4] By August 14, 2003, the Schutzes had invested $755,000 in their project and they had spent more

than $900,000 by the time they received First Americans November 25 letter. Schutz estimated that by the time of trial, the Schutzes had invested approximately $1.5 million in their project. Schutz also testified that they cannot remove the improvements from the disputed easement area because they cannot afford to do so, there is no place else on the property to put the improvements, and several of the improvements are required by the County to be included in the project.

E. Proceedings in the Trial Court

On May 12, 2004, Batto filed a complaint to quiet title and for declaratory and injunctive relief. Batto sought a permanent injunction ordering defendants to remove all improvements which impede and prevent plaintiffs use of the easement and further prohibiting defendants and all those acting in concert with them from obstructing plaintiffs use of the easement in the future.

On June 14, 2004, the Schutzes filed a cross-complaint to quiet their title to the disputed easement based on theories of adverse possession and abandonment. The Schutzes also sought declaratory relief as to the scope of the 1929 easement.

A court trial was held before the Honorable Knoel Owen and the court filed a statement of decision on February 2, 2006. The statement of decision is divided into three parts. First, the court set forth four conclusions of law: (1) defendants did not prove adverse possession; (2) defendants dismissed their abandonment claim during trial; (3) defendants failed to prove laches; and (4) plaintiff was not entitled to an injunction because the balance of hardships favored the defendants and the Schutz property is not subject to the easement previously appurtenant to the Batto property . . . .

The next part of the statement of decision, which is labeled Findings in Support of Conclusions of Law, contains the courts analysis of the two issues it found dispositive in this case, the scope of the 1929 easement, and a balancing of the hardships. As to the first issue, the scope of the easement, the court found that a reasonable interpretation of the 1929 easement grant is that since the mid 1960s the remnant 250 foot easement section which burdens Defendants land has not been required by the Plaintiff to reach . . . the County road from Vineburg to Schellville and that said 250 foot portion of the easement is no longer appurtenant to the use and enjoyment of plaintiffs property due to the intervening construction of Eighth Street East. The court also appears to have found that, in any event, Batto was not entitled to an injunction because, in the courts view, the Schutzes were innocent and acted reasonably under the circumstances, the alleged encroachment did not cause Batto irreparable injury, and the equities clearly and greatly favored the Schutzes.

In the conclusion section of the statement of decision, the court summarized its holdings which include these two somewhat inconsistent findings with respect to the scope of the 1929 easement: 1) The 1929 Dressel [sic] to Bosch Grant of Right of Way created an easement appurtenant to the Batto property that terminates at Eighth Street East [. . . the County road from Vineburg to Schellville]; . . []  2. The defendants property is no longer burdened by any easement interest created by the 1929 Grant of Right of Way from Bosch to Dressel [sic] . . . .

A judgment in favor of the Schutzes was filed on February 2, 2006. The judgment states in part: The 1929 right of way granted to Rosie Dressel [sic] no longer extends to Schellville Road, but terminates at Eighth Street East. The judgment also require Batto to execute a quit claim deed in favor of defendants releasing all right, title and interest in the remnant portion of the Bosch/Dressel [sic] Easement over defendants property.

III. DISCUSSION

A. Declaratory Relief:Scope of the 1929 Easement

The first issue on appeal is whether the trial court erred by holding that the 1929 easement does not extend across the Schutz property. As noted above, the court held that (1) the easement created by the 1929 deed terminates at Eighth Street East, and (2) the Schutz property is no longer burdened by any easement interest created by the 1929 deed. To make these statements consistent, we will assume the trial court meant that (1) the 1929 deed does not convey an easement over the property now owned by the Schutzes, and (2) even if it does, the easement has changed and no longer extends that far. We will separately address each of these conclusions.

Because the 1929 easement was created by a grant deed, the nature and extent of the respective rights are governed by [the] terms [of the deed]. (Keeler v. Haky (1958) 160 Cal.App.2d 471, 474 (Keeler).) In construing an instrument conveying an easement, the rules applicable to the construction of deeds generally apply. [Citation.] If the language is clear and explicit in the conveyance, there is no occasion for the use of parol evidence to show the nature and extent of the rights acquired. A written agreement, unless it is ambiguous, must be construed by a consideration of its own terms. The meaning and intent thereof is a question of law and the reviewing court is not bound by the trial courts findings and conclusions regarding such intent and meaning. [Citations.] (Ibid.; see also Wilson v. Abrams (1969) 1 Cal.App.3d 1030, 1035.)

The language of the 1929 grant deed is not ambiguous. For consideration, Bosch conveyed to Dresel a perpetual easement for all purposes across Boschs property. The scope of the easement is also clearly stated: it commenc[es] at the southwesterly corner of the first tract of property referenced in the deed and runs along the southerly line of said tract to the southeasterly corner of said tract. It continues to run easterly along with the southerly line of the second tract referenced in the deed for a distance of 100 feet. The width of the easement is also clearly described as a strip of land of the uniform width of 20 feet extending along the southerly line of the tracts deeded from Chart to Drahms as above set forth . . . .

As a point of reference, the 1929 deed refers to the County road from Vineburg to Schellville which intersects with the south property line and creates the southwesterly corner of the first tract of property. That location is also identified as the southwesterly corner of the easement. As noted in our factual summary, the only county road from Vineburg to Schellville that existed when the 1929 deed was executed was Schellville Road. Therefore, the 1929 deed conveyed an easement extending across the south border of Boschs property to Schellville Road.

The trial court concluded that a reasonable interpretation of the 1929 easement grant is that since the mid 1960s the remnant 250 foot easement section which burdens Defendants land has not been required by the Plaintiff to reach . . . the County road from Vineburg to Schellville and that said 250 foot portion of the easement is no longer appurtenant to the use and enjoyment of plaintiffs property due to the intervening construction of Eighth Street East. This conclusion is erroneous as a matter of law. The trial court erred by ignoring the clear and explicit language in the conveyance. (Keeler, supra, 160 Cal.App.2d at p. 474.) That language compels the conclusion that the easement runs across the entire length of the two property tracts that were expressly described in the deed and that the easement extends to Schellville Road and does not end at Eighth Street East, a road which neither corresponds to the western border of the first tract of property referenced in the 1929 deed nor, indeed, even existed at the time the deed was executed.

It appears that the court based its decision on the legally irrelevant determination that Batto no longer needs the portion of the easement which burdens the Schutz property in order to reach a county road. The 1929 easement, however, is not a way of necessity nor even an implied easement[5] but, instead, was expressly granted in a deed. Battos need for and use of the easement are simply not relevant when interpreting express unambiguous language in a grant deed. (See, e.g., Keith v. Superior Court (1972) 26 Cal.App.3d 521, 525 (Keith).)

We turn next to the trial courts second conclusion, that the easement no longer runs across the Schutz property to Schellville Road. It appears the court drew this conclusion after making factual findings that (1) Batto did not need to cross the Schutz property to reach a county road once Eighth Street East was built, and (2) since Eighth Street East was constructed, Batto has not used the disputed part of the easement to reach Schellville Road. However, the statement of decision does not reference any legal rule or authority to support the trial courts conclusion that these circumstances justify changing the scope of the perpetual 1929 easement.

Keith, supra, 26 Cal.App.3d at page 525, states that an expressly granted, specifically located easement, . . . is not subject to change without the consent of both parties. [Citation.] Here, we find no evidence, nor did the trial court find, that Batto and the Schutzes consented to a change in the scope of the 1929 easement.

There is authority that an easement can be extinguished by the performance of some act on either tenement, by the owner of the easement, or with his assent, which is incompatible with its nature or exercise. (Civ. Code,  811, subd. (3).; 12 Witkin, Summary of Cal. Law, supra, Real Property,  426, p. 498.) Here, there is no evidence before us that Batto acted or assented to any act that was inconsistent with the exercise of his right to use the easement across the Schutz property. In this regard, we find it significant that the trial court expressly found that the evidence did not support the Schutzes laches defense or their adverse possession claim.

An easement obtained by grant can be lost by nonuse. (Civ. Code,   887.050; 12 Witkin, Summary of California Law, supra, Real Property,  424, p. 496.) Civil Code section 887.050, subdivision (a) states: . . . [A]n easement is abandoned if all of the following conditions are satisfied for a period of 20 years immediately preceding commencement of the action to establish abandonment of the easement: [] (1) The easement is not used at any time. [] (2) No separate property tax assessment is made of the easement nor, if made, no taxes are paid on the assessment. [] (3) No instrument creating, reserving, transferring, or otherwise evidencing the easement is recorded.

In the present case, although the trial court found that Batto did not need the part of the easement extending across the Schutz property, and that there has not been a dirt road in that part of the easement since Eighth Street East was constructed, the court did not find that the easement had not be used at any time for a period of 20 years. In any event, the evidence is undisputed that Battos easement was recorded. Perhaps it was this evidence which resulted in the dismissal of the Schutzes abandonment cause of action at trial.

In summary, we find no legal basis upon which to sustain the trial courts holding and declaration that the easement created by the 1929 deed does not burden the Schutz property. The evidence before us compels the conclusion that Batto is the successor in interest to an easement appurtenant to his property which runs along the southern border of the Schutz property and terminates at Schellville Road.

B. Injunctive Relief

Having found that Batto does have an easement across the south border of the Schutz property, we now address the issue of whether the trial court erred by denying Batto injunctive relief. As noted in our factual summary, Batto sought an order requiring the Schutzes to remove all improvements which impede and prevent him from using the easement and ordering them not to obstruct his use of the easement in the future. At the time of trial, the area has been encumbered with a water well, pump and appurtenances, part of a paved parking lot and access driveway, storm drain facilities, electrical lines, pipes, a PG&E service transformer, fencing, gates, landscaping and a concrete trash enclosure. The Schutzes approved site plans provided for future construction of a covered storage structure in the easement area.

1. Propriety of Injunctive Relief

[A] court of equity may, in a proper case, issue a mandatory injunction for protection and preservation of an easement including, where appropriate, an order for removal of an obstruction already erected. [Citations.] The determination as to whether such remedy is appropriate is within the sound discretion of the trial court. [Citation.] A mandatory injunction may issue even if the cost of removal is great under certain circumstances [, especially if the encroaching structure was willfully erected with knowledge of the claimed easement. [Citations.] (Warsaw v. Chicago Metallic Ceilings, Inc. (1984) 35 Cal.3d 564, 572.)

On the other hand, where the encroachment does not irreparably injure the plaintiff, was innocently made, and where the cost of removal would be great compared to the inconvenience caused plaintiff by the continuance of the encroachment, the equity court may, in its discretion, deny the injunction and compel the plaintiff to accept damages. (Christensen v. Tucker (1952) 114 Cal.App.2d 554, 559 (Christensen).) This rule, which we refer to as the relative hardship doctrine, is frequently applied by California courts asked to determine whether to grant an injunction to enjoin a trespass or nuisance caused by an encroachment. (See Hirshfield v. Schwartz (2001) 91 Cal.App.4th 749, 758-759 (Hirshfield), and cases cited therein.)[6]

To properly deny an injunction pursuant to the relative hardship doctrine, three factors must be present: 1. Defendant must be innocent -- the encroachment must not be the result of defendants willful act, and perhaps not the result of defendants negligence. In this same connection the court should weigh plaintiffs conduct to ascertain if he is in any way responsible for the situation. 2. If plaintiff will suffer irreparable injury by the encroachment, the injunction should be granted regardless of the injury to defendant except, perhaps, where the rights of the public will be adversely affected. 3. The hardship to defendant by the granting of the injunction must be greatly disproportionate to the hardship caused plaintiff by the continuance of the encroachment and this fact must clearly appear in the evidence and must be proved by the defendant. (Christensen, supra, 114 Cal.App.2d at pp. 562-563; see also, Hirshfield, supra, 91 Cal.App.4th at p. 759.)

When the relative hardship doctrine is used to deny an injunction that is otherwise warranted, the courts action approaches an exercise of the right of eminent domain in favor of a private person. [Citations.][7] (Fairrington v. Dyke Water Company (1958) 50 Cal.2d 198, 200 (Fairrington).) Therefore, in exercising its discretion to determine whether to grant or deny a mandatory injunction pursuant to the relative hardship doctrine, the court must start with the premise that defendant is a wrongdoer, and that plaintiffs property has been occupied and it must resolve doubtful cases . . . in favor of the plaintiff. (Christensen, supra, 114 Cal.App.2d at p. 562.) Furthermore, the courts findings must establish that all three of the factors set forth above are present. (Ibid.; see also Fairrington, supra, 50 Cal.2d at p. 200.)

2. The Trial Courts Balancing Test

In the present case, the trial court relied on the relative hardship doctrine as a basis for denying Batto injunctive relief. However, we question whether the court sufficiently understood the doctrine it purported to apply. Our concern begins with the following statement, which the trial court characterized as a conclusion of law: [A] balancing of the hardships analysis favors the defendants and in conjunction with all of the evidence and the terms of the stipulation (Paragraphs 1e and 2d)[[8]] the Schutz property is not subject to the easement previously appurtenant to the Batto property and plaintiffs request for a mandatory injunction is denied.

This statement strongly suggests that the trial court misapplied the relative hardship doctrine in order to reinforce its independently erroneous interpretation of the 1929 deed. The purpose of this doctrine is not to determine whether a property interest exists in the first instance but rather to assist the trial court in exercising its limited discretion to deny a mandatory injunction once the encroachment has been established. (Christensen, supra, 114 Cal.App.2d at p. 562; see also, Los Angeles v. Howard (1966) 244 Cal.App.2d 538, 548 [doctrine does not apply unless there has been, in fact, a trespass on, or an invasion of, the property rights of another].)

Indeed, as noted above, to properly apply the doctrine, a court must start [from] the premise that defendant is a wrongdoer and that plaintiffs property has been occupied, and it should decide doubtful cases in the plaintiffs favor. (Christensen,

supra, 114 Cal.App.4th at p. 562; see also Hirschfield, supra, 91 Cal.App.4th at p. 759 [Overarching the analysis is the principle that since the defendant is the trespasser, he or she is the wrongdoer; therefore, doubtful cases should be decided in favor of the plaintiff.].)

Because the trial court failed to recognize that Batto has an express easement across the south border of the Schutz property, its relative hardship analysis was flawed from the outset; the court did not start from the premise that the Schutzes are the wrongdoers and have unlawfully occupied the property in question. Nor, indeed, did it ever acknowledge this important fact. Furthermore, as discussed more fully below, the trial courts erroneous belief that Battos easement claim was invalid prevented it from properly determining whether the three factors comprising the relative hardship doctrine are present in this case.

3. Innocence

As noted above, the first factor that must be present before an injunction is properly denied pursuant to the relative hardship doctrine is that the defendants must be innocent; their encroachment must be neither willful nor negligent. This factor implements the rule that relief by way of a mandatory injunction will not be denied on the ground that the loss caused by it will be disproportionate to the good accomplished, where it appears that the defendant acted with full knowledge of the complainants rights and with an understanding of the consequences which might ensue . . . . (Warsaw v. Chicago Metallic Ceilings, Inc., supra, 35 Cal.3d at p. 573.)

In the present case, the trial court made the following findings regarding the Schutzes innocence: [D]efendants did not have knowledge of the existence or scope of the easement (significant or deminimus) before the site improvements were installed. In this situation the court finds that the defendants acted reasonably and responsibly in directing plaintiff to tender his claim to their title insurer for title research and response. Additionally, the evidence preponderates that defendants were not asked to stop work until the claim could be supported or investigated. The construction within the easement was the result of innocent mistake and neither willful nor negligent conduct.

The courts finding that the Schutzes did not have knowledge of the easement until after the improvements were installed in the easement area is not supported by the evidence.[9] The uncontested fact that Battos easement was recorded constitutes constructive notice to the Schutzes as a matter of law. (Keeler, supra, 160 Cal.App.2d at p. 478; Pacific Gas & Elec. Co. v. Hacienda Mobile Home Park (1975) 45 Cal.App.3d 519, 532.) Further, undisputed evidence shows that the Schutzes had actual notice of Battos easement claim before any improvements were installed above ground in the easement area.

The trial court disregarded the evidence of actual notice. It reasoned that, because it cost Batto nothing to attempt to stop construction by asserting an easement interest, whether valid or not, the Schutzes should not be charged with notice of the claim until

they received evidence of its validity.[10] The trial courts impression that it cost Batto nothing to assert his easement claim was not a proper basis for disregarding the evidence of actual notice. This observation by the court is one of many indications that it was proceeding from the erroneous premise that Battos claim was, in fact, invalid.

As noted above, the trial court also found that the Schutzes acted reasonably and responsibly by referring Batto to First American. This finding does not support the courts determination that the Schutzes were innocent encroachers. The relevant question is not whether referring Batto to the title company was reasonable but, rather, whether the Schutzes acted reasonably and in good faith when they built in the easement area notwithstanding their notice of Battos claim.

Arguably, the trial court also found that the Schutzes proceeded with their project pursuant to a reasonable and good faith belief that they had a clear title with respect to the property at issue.[11] However, a clean title, by itself, simply is not dispositive. Any purchaser of property knows that titles may be defective. (Frabotta v. Alencastre (1960) 182 Cal.App.2d 679, 684 (Frabotta).) In Frabotta, a former panel of this court found that a party who relies on title insurance when making a decision to obstruct an easement may have a claim against its title insurer but is not shielded in an action by the easement holder. (Ibid.)

Finally, the trial courts finding that the Schutzes were not expressly asked to stop work in the easement area is not at all controlling. All of Battos actions, his repeated assertions of his easement interest, first to Schutz and his workers, then to the title company, and then his refusal to release that interest, were undeniably part of an ongoing effort to preserve the easement. Thus, the courts questionable factual determination that the Schutzes were not expressly told to stop work in the easement area does not support a conclusion that Batto misled the Schutzes about the nature of his claim or in any other way was responsible for the Schutzes decision to proceed with their project.

In light of the undisputed evidence that the Schutzes had actual notice of Battos easement claim prior to above-ground construction within the easement area, the crucial issue presented by this case is: Did defendant[s] act in good faith or did [they] act in willful disregard of plaintiffs rights hoping that a court would allow the structure[s] to remain and grant only a remedy of damages? (Brown Derby Hollywood Corporation v. Hatton (1964) 61 Cal.2d 855, 860 (Brown Derby); DAndrea v. Pringle (1966) 243 Cal.App.2d 689, 698 (DAndrea).)

When addressing this question on remand, the trial court should consider that continuation of construction after objection by plaintiff suggests a lack of good faith. (Brown Derby, supra, 61 Cal.2d at p. 859, and cases cited therein; see also, DAndrea, supra, 243 Cal.App.2d at p. 698.) Furthermore, there is authority that a defendant does not act in good faith by gambling on the outcome of a legal action and losing, whether or not that gamble may have appeared reasonable at the time. (See Warsaw v. Chicago Metallic Ceilings, Inc., supra, 35 Cal.3d at p. 573.) If the Schutzes elected to simply ignore Batto and hope for the best, they did not proceed in good faith.

4. Injury and Hardship

The second and third factors under the relative hardship doctrine require an assessment of the plaintiffs injury. As to the second factor,[i]f plaintiff will suffer irreparable injury by the encroachment, the injunction should be granted regardless of the injury to defendant, except, perhaps, where the rights of the public will be adversely affected. (Pahl v. Ribero (1961) 193 Cal.App.2d 154, 163.) Under the third factor, even if the injury to plaintiff is not irreparable, he is entitled to an injunction unless the defendants show that the hardship to them if an injunction is granted would be greatly disproportionate to the hardship to plaintiff resulting from the encroachment. (Christensen, supra, 114 Cal.App.2d at p. 563.)

The trial court determined that Batto did not suffer irreparable injury and that in balancing what hardship or interest, if any, plaintiff may have had in defendants parcel at the time of the filing of his lawsuit against the hardships that would be imposed upon defendants if injunctive relief were granted it is found that the equities clearly and greatly favor defendants.

To support these conclusions, the court found that the encroachments do not affect any existing use of the Batto property, and that, [w]hile plaintiff contends that the defendants encroachments may affect the future development of [Battos] property he offered only speculation as to what that development is, or may be or how the encroachments would interfere with such unknown plans, if at all. The court also found that potential hardships to the Schutzes include significant financial expense, disruption to their business and a possible physical loss of business space if compelled to remove off-street parking spaces currently located within the easement area because those spaces were conditions of obtaining necessary permits from the county.

These findings by the trial court do not support its determination that the final two factors of the relative hardship doctrine are satisfied in this case. The primary deficiency stems, once again, from the failure of the court to recognize Battos easement across the Schutz property.

The word injury generally means in law invasion or violation of a legally protected interest or property right of another. (Roth v. Cottrell (1952) 112 Cal.App.2d 621, 624.) An easement appurtenant to real property is a legally protected property interest. (Id. at p. 625.) When the owner of the dominant estate overburdens an easement by acts not contemplated by the grant deed, the result is, in effect, a trespass, and if the owner of the dominant estate is permitted to continue obstructing the easement, the effect will be to take from the owner of the servient estate the fee of the easement by prescriptive use. (Keeler, supra, 160 Cal.App.2d at p. 479; see also, Fairrington, supra, 50 Cal.2d at p. 201 [plaintiff entitled to mandatory injunction to prevent defendants continuing trespass from ripening into a perpetual easement].)

Because the courts analysis was driven by its mistaken belief that Batto had no valid easement, it erroneously found that Batto did not have any interest that would be affected by denial of an injunction. As a result, its analysis and conclusion with respect to the relative potential hardships to the parties cannot be sustained.

The courts findings regarding the potential hardships to the Schutzes are also inadequate. For example, it made no factual finding as to the costs of removing the encroachments. Nor did the court take into account the undisputed fact that the Schutzes have title insurance which could significantly reduce the financial burden of removing the encroachments. (See, e.g., Frabotta, supra, 182 Cal.App.2d 679.)

To summarize, the order denying Batto injunctive relief cannot be sustained. The trial courts erroneous determination that Batto does not have an express easement across the Schutzes property prevented it from properly exercising its discretion to determine whether to grant injunctive relief or deny it pursuant to the relative hardship doctrine and to award damages instead.

C. The Quit Claim Deed

The trial court ordered Batto to execute a quit claim deed in favor of the Schutzes releasing all right, title and interest in the easement segment over the Schutzes property. This order must be reversed in light of our determination that Batto has an express easement over the south border of the Schutz property.

If, after a proper application of the relative hardship doctrine, the trial court denies Batto injunctive relief, it must give him the opportunity to seek and prove damages. Further, [w]hile undoubtedly the trial court, where it grants damages in lieu of an injunction may protect the defendant by granting to him affirmative relief [citation], the affirmative relief granted should not be greater than is reasonably necessary to protect defendant. (Christensen, supra, 114 Cal.App.2d at p. 563.) Nothing in the record before us suggests that a quit claim deed from Batto would be necessary to protect the Schutzes in this case.

IV. DISPOSITION

The judgment is reversed and this case is remanded to the trial court with instructions to (1) enter an order declaring that Batto does have an express easement across the Schutz property and (2) reconsider Battos request for an injunction in a manner consistent with our decision. The trial court may, if it is so disposed, receive additional evidence on issues pertaining to the relative hardship doctrine. (DAndrea, supra, 243 Cal.App.2d at p. 699.) If the court determines to deny an injunction and to compel Batto to accept damages, the court shall receive evidence on the issue of the extent and nature of damages to Batto. (Ibid.)

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Haerle, J.

We concur:

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Kline, P.J.

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Lambden, J.

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[1] Strands work included constructing a pad for the new building, installing a storm drain and utility lines, and preparing the soil for a parking lot and asphalt.

[2] Ron Dering represented the Schutzes in the trial court and is one of the attorneys representing them on appeal. At trial, Schutz denied that he hired Dering in August 2003, but was impeached with the following deposition testimony: I believe we hired Mr. Dering as soon as we heard from Mr. Batto that he might have an easement or said he had an easement . . . .

[3] At oral argument before this court, the Schutzes counsel denied that his clients filed a claim against First American. The record confirms, however, that JilSchutz testified that she did indeed file such a claim.

[4] Although Jil Schutz testified that she did not see Battos August 14, 2003, letter to First American until a few days before trial, that letter was referenced in her timeline of costs and expenses.

[5] A way of necessity arises by necessity and ceases when the necessity ends. (See generally, 12 Witkin, Summary of Cal. Law (10th ed 2005) Real Property,  398, pp. 465-466.) Similarly, reasonable necessity may give rise to an easement by implication. (Id. at  394, p. 463.) However, the 1929 easement is an express easement conveyed by the 1929 grant deed.

[6] As stated in Hirshfield, [t]he doctrine we refer to as relative hardship is the equitable balancing required by Christensen and related decisions. The case law and commentaries use various other labels, such as balancing of equities [Citation.] balancing conveniences [citation.], and comparative injury [citation]. For consistency, we will call it the relative hardship doctrine. (91 Cal.App.4th at p. 754, fn. 1.)

[7] The doctrine is justified on purely practical grounds: If injunctions were granted as of right, then plaintiffs would be encouraged to engage in legal extortion in cases in which an expensive structure encroaches only to a minor degree. (Christensen, supra, 114 Cal.App.2d at p. 560.)

[8] Prior to trial, the parties executed a Stipulation re Undisputed Facts. The paragraphs that the court referenced here state that, 1e.) unless the court accepts one of the Schutzes defenses, the Schutz property is subject to the 1929 easement and 2d.) one of the Schutzes defenses is that a balancing of the hardships test favors defendants in opposition to plaintiffs request for a mandatory injunction to defendants encroaching improvements.

[9] The statement of decision does not specify the date by which all of the improvements were installed in the easement area. The Schutzes testimony relevant to this issue is confusing and inconclusive.

[10] The court found that the Schutzes were not presented with any evidence of Battos easement until they received the November 25, 2003, letter from their title company. The only evidence which supports this questionable finding is the Schutzes self-serving and contradicted testimony at trial.

The trial court acknowledged there were problems with the Schutzes credibility with regard to the issue of notice. We are concerned by the courts decision to ignore these problems for the stated reason that it doubted Battos credibility with respect to his (completely unrelated) testimony that there was a dirt road across the south border of the Schutz property. In short, the courts conclusion simply does not follow.

[11] Jil Schutz testified that, in addition to their clear title, the Schutzes relied on assurances from the title insurance company that Battos claim was no longer valid. We cannot square this testimony with undisputed evidence that, within two weeks of the first phone call between Don Schutz and Batto, the Schutzes consulted with their present attorney and filed a claim against First American.