Opinion
NOT TO BE PUBLISHED
Mendocino County Super. Ct. No. SCUKCVG0799064
Haerle, Acting P.J.
I. INTRODUCTION
This is an appeal and cross-appeal from a judgment after a court trial. The trial court confirmed that DGS Land Company (DGS) has a right to use and maintain an easement for “well and waterline purposes” on land owned by Mountain Valley Company LLC (MVC) and it enjoined MVC from interfering with that right by, among other things, precluding DGS from drilling a new well on the easement. The court also denied MVC’s claim that it has a right to purchase the well from DGS. However, the court did impose an express limit on the amount of water that DGS may withdraw from the well.
On appeal, MVC challenges the trial court’s finding that it does not have a right to purchase the DGS well and also contends that it was the prevailing party at trial, as a matter of law. Pursuant to a cross-appeal, DGS challenges the trial court’s ruling limiting the amount of water that DGS can withdraw from the well. We affirm the judgment.
II. STATEMENT OF FACTS
A. Background
DGS owns a 2, 200-acre ranch in Mendocino County. The ranch was part of a larger piece of real property that DGS purchased in 1977. Some parcels were divided from the original property and sold to third parties. One such parcel, which is located on the eastern border of the DGS ranch, was sold to Joseph and LaVonne Anzalone, pursuant to a grant deed recorded August 24, 1978 (the 1978 grant deed).
The 1978 grant deed contains a reservation in favor of the grantor (DGS) of a right to an easement, pursuant to the following language: “ALSO RESERVING THEREFROM a 10 foot wide easement for well and waterline purposes, 5 feet on each side of the following described line....” The 1978 grant deed contains additional terms, including a provision conferring the following right on the grantee (the Anzalones): “[G]rantee herein shall have the right to buy into at cost any interest in the well, provided for in the reservation of a 10 foot wide easement hereinabove made, and in the water produced therefrom.”
In 1989, DGS commenced plans to install a well on its easement. By that time, the Anzalones had sold the servient tenement to Richard Alderson. Alderson was advised about the well project and invited to participate, but elected not to because he had a well on his property that met his needs. In May 1990, DGS installed a well and two-inch wide pipeline on the easement so that water could be pumped from the well to a tank located approximately 5, 000 feet away on the DGS property.
In November 2003, Alderson conveyed the servient tenement to MVC.
B. The Present Dispute
In the spring of 2006, Roland Hoehne, the majority partner of DGS, arranged for Dave Giese Well Drilling to drill a replacement well on the DGS easement. Over the course of the previous two years, DGS had noticed a dwindling supply of water from its 1990 well and resulting damage to its redwood tank. Dave Giese, who drilled the 1990 well, had recommended that DGS install a new well rather than attempt to repair the present system. DGS gave MVC notice of its intention to drill a replacement well by means of a September 13, 2006, e-mail from Hoehne to Craig Christensen, the president and sole owner of MVC.
On September 12, 2006, the day before DGS notified MVC about its plans, MVC project manager Peter Collins found Dave Giese setting up his drilling equipment in or near the easement on the MVC property. Collins called Christensen who instructed him to tell Giese that MVC would not allow him to drill the well. Collins conveyed the message to Giese who said he would be back to drill the well but then left the MVC property.
Pursuant to a September 14, 2006, letter from Christensen to Hoehne, MVC objected to DGS’s plan to drill a new well. Christensen complained that DGS had set up a drill rig on MVC property without permission and that the “driller” had informed him that he was under instructions from Hoehne to “get as much water as possible.” Christensen advised that DGS did not have permission to enter MVC property to drill a new well and install a new pumping line and that MVC demanded that DGS order its driller to end activities and remove his equipment.
The following day, Christensen sent a letter to Dave Giese demanding that he immediately remove drilling equipment from MVC’s property. The letter was characterized as a notice that Giese was denied access to MVC’s property for any purpose other than removal of his equipment. Notices that Giese was denied access were also posted on the gates to MVC’s property.
In response to MVC’s objection, Giese removed his drilling equipment and Hoehne contacted his attorney, who attempted to resolve the dispute with MVC. Hoehne also offered to meet with Christensen but Christensen declined. In 2007, DGS retained counsel, who also attempted to resolve the dispute with MVC, but whose inquiries garnered no response.
Meanwhile, in April 2007, Hoehne discovered that the well pump on the DGS easement was not functioning properly. When he arrived at the easement to inspect the pump, Hoehne had to climb the fence because the combination on the lock for the access gate had been changed and he had not been given the new combination.
On April 17, DGS gave MVC written notice that the well pump was broken and that Hoehne intended to exercise his right to enter the easement with his service provider to repair or replace the pump. When Hoehne and Giese arrived at the property, they cut the lock on the access gate and proceeded to fix the pump. While there, they also discovered that there was a leak in the pipeline to the DGS water tank.
On April 23, DGS gave MVC written notice that DGS would commence repair of the leaking pipe that day. In that letter, DGS’s counsel noted that, when Hoehne left the easement the previous week, he placed his own lock on the gate so that both MVC and DGS could have access. However, DGS subsequently learned that MVC had replaced the lock again and that Hoehne had not been given the combination. Counsel stressed that DGS had a right to access and an obligation to maintain the easement so as not to damage MVC property and that the leaking pipe posed a danger of damage.
On April 23, DGS employee Stan Brown went to fix the leaking pipe. The access gate to the easement was still locked so Brown gained access by moving some boards that were covering an abandoned cattle gate.
In a letter dated April 24, 2007, Christensen accused Brown of breaking and entering and “taking water from the property illegally.” Christensen stated that he was giving Brown notice that he was denied access to MVC property and that a formal notice to that effect would be posted at the gates to the property. Christensen also advised Brown that he would be named as a party to a legal action if he forced entry onto MVC property again.
C. The Present Action
On April 30, 2007, DGS filed a complaint against MVC, Christensen and Collins (collectively MVC). The first four causes of action sought declaratory and injunctive relief and damages based on MVC’s alleged direct interference with the DGS easement. Pursuant to its fifth and sixth causes of action, DGS sought declaratory and injunctive relief relating to allegations that MVC had drilled wells on its own property near the DGS easement with the intention of interfering with the DGS easement by overtaxing the underground water source accessed by DGS’s well.
DGS also filed a motion for a preliminary injunction which was heard by the Honorable Richard Henderson on June 15, 2007. An order granting the preliminary injunction was filed July 2, 2007. The court ordered that, pending trial and a determination of the parties’ respective rights, MVC was enjoined from interfering with DGS’s access to and maintenance and use of its well or pipeline located within its easement, “including the drilling of a new well.” The order stated that if a new well was drilled, the old well was to be capped but not destroyed or damaged. The court also established rules for ensuring access and providing notice prior to conducting work in the easement.
On August 3, 2007, MVC’s attorney sent a letter to DGS’s attorney expressing concern about several issues relating to the drilling of the new well. After listing those concerns, the attorney stated: “Lastly, based on your client’s callous attitude towards the use of its easement..., my client has asked that your client identify the cost of the work involved in drilling the well so that MVC may invoke its rights under the initial grant deed to purchase the same in full.” Referencing language in the 1978 grant deed giving the grantee the right “to buy into at cost any interest in the well... and in the water produced therefrom, ” counsel advised that MVC wanted to purchase “100% of the well and the right to take water therefrom.”
After DGS failed to respond to MVC’s request to purchase the well, MVC filed a cross-complaint for specific performance of its alleged right to purchase the DGS well. MVC subsequently amended its cross-complaint to add two more causes of action. Pursuant to a second cause of action for declaratory relief, MVC sought a judicial declaration that DGS could only withdraw water from its new well “commensurate with its historic usage.” MVC’s third cause of action was for declaratory relief as to its alleged right to purchase any interest in the DGS well.
On August 25, 2008, a court trial commenced before the Honorable John A. Behnke. By that time, DGS’s new well system was in operation and the old system was “off line, ” but not formally abandoned. The presentation of evidence consumed approximately four court days, after which the parties filed post-trial briefs.
D. The Trial Court’s Decision
On December 9, 2008, the court filed a detailed tentative decision. It found, among other things, that there was evidence that MVC interfered with DGS’s easement but that most of the incidents did not cause damage. The only incident that resulted in actual damage was when MVC forced Giese to remove his drilling equipment in the fall of 2006. The court did not require MVC to pay damages for that incident, however, because there was evidence that Giese may have been setting up to drill a well outside the easement boundaries.
The trial court rejected MVC’s claim that it had a right to purchase the well from DGS. The court reasoned that “[t]o buy into at cost any interest in this context does contemplate a sharing. Otherwise the benefit to the dominant estate in reserving the easement would be illusory. What benefit would it be to the dominant estate if the servient tenement holder could simply cancel the easement at any time? Moreover, the language buy into, even on the grammatical front, seems to contemplate less than the whole well.”
The court also determined that DGS’s right to extract water from the new well was restricted to its historic use which was determined to be the amount of water that could be pumped from the 1990 well system. Pursuant to the preliminary injunction, DGS had replaced the old two-inch pipeline with a six-inch in diameter line. The court determined that the amount of water transported by the new pipe system could be effectively limited by use of a metering device.
The court specifically found that MVC failed to substantiate its allegation that the new well system would “increase the capacity to transport water from MVC property to DGS property by approximately 900%.” Testimony by MVC’s own expert indicated that the increased capacity was closer to 25 percent and that the amount of water transported by the system could be effectively limited by installing a meter or similar device.
Neither party requested a formal statement of decision. DGS submitted a proposed judgment, which drew objections from MVC and resulted in an additional hearing on March 6, 2009. A formal judgment was entered on May 5, 2009. The judgment contains express rulings on each of the causes of action in the complaint and cross-complaint.
With regard to DGS’s complaint, the court entered judgment in its favor on its first cause of action for declaratory relief. The judgment affirms that DGS has the right to use and maintain the easement “for well and waterline purposes as described in the 1978 deed, including the right to maintain the new well and new pipeline in their current respective locations, which was initially set up with a capacity of 41 gallons per minute.” However, the judgment also requires DGS to install and maintain a “flow restrictor limiting the delivery of water to no more than DGS’s historic use of 29 gallons per minute, and a volume meter, both at its own cost.”
Judgment was entered in favor of MVC on DGS’s second and third causes of action for damages for interference with the easement and with prospective advantage. However, DGS prevailed on its fourth cause of action for a temporary and permanent injunction. The judgment states: “Defendant, Mountain Valley Company, its owners, agents, and employees are hereby enjoined from interfering with plaintiff’s easement rights as set forth in this judgment.”
The court made “no determination” on DGS’s fifth and sixth causes of action for declaratory relief regarding the impact of MVC’s drilling activities and the respective rights of the parties, finding it had insufficient evidence to make any determination on the issues raised.
With regard to MVC’s cross-complaint, the court entered judgment against MVC on its first cause of action for specific performance and its third cause of action for a declaration of its right to purchase the DGS well. However, the court entered judgment in favor of MVC on its second cause of action for declaratory relief. The judgment states that “DGS Land Co. its owners, agents and employees have the exclusive right to take water pursuant to the 1978 deed reservation which shall be limited to no more than DGS’s historic usage of 29 gallons per minute. Accordingly, Plaintiff, DGS Land Co. its owners, agents and employees are entitled to take up to, but no more than 29 gallons of water per minute from the well.”
III. DISCUSSION
A. The Buy-In provision of the 1978 Grant Deed
MVC seeks a reversal of the part of the judgment pertaining to its third cause of action for declaratory relief. MVC contends the trial court committed reversible error by failing to apply “judicial principles of construction” when it rejected MVC’s interpretation of the buy-in provision in the 1978 grant deed.
At times, it appears that MVC is also challenging the judgment against it on its first cause of action for specific performance. However, MVC expressly concedes in its reply brief that its appeal is limited to that portion of the judgment pertaining to its third cause of action.
As noted above, the buy-in provision states that the “grantee herein shall have the right to buy into at cost any interest in the well, provided for in the reservation of a 10 foot wide easement hereinabove made, and in the water produced therefrom.” MVC contends that this provision confers an absolute right on the grantee to purchase the grantor’s well and easement and, therefore, the trial court committed legal error by refusing to acknowledge MVC’s right to buy DGS’s well and easement by paying the cost of drilling the well.
“‘The interpretation of a written instrument is essentially a judicial function to be exercised according to the generally accepted canons of interpretation.’ [Citation.] It is also the rule that where extrinsic evidence was offered or received as an aid of interpretation the appellate court will review the interpretation of the agreement under the substantial evidence rule. [Citations.]” (WDT-Winchester v. Nilsson (1994) 27 Cal.App.4th 516, 528 (WDT-Winchester.).)
“‘The paramount rule governing the interpretation of contracts is to give effect to the mutual intention of the parties. That intent must, in the first instance, be derived from the language of the contract--we must look to the words themselves.... The language, if clear, explicit, and if it does not invoke an absurdity, controls our interpretation. [Citations.]’ [Citations.] It is equally settled that ‘[t]he words of a contract are to be understood in their ordinary and popular sense, rather than according to their strict legal meaning; unless used by the parties in a technical sense, or unless a special meaning is given to them by usage, in which case the latter must be followed.’ [Citation.]” (WDT-Winchester, supra, 27 Cal.App.4th at pp. 528-529.)
Contrary to MVC’s arguments on appeal, the trial court did not violate any of these principles when it rejected MVC’s trial theory that the buy-in provision in the 1978 grant deed gives the grantee the right to purchase the entire well and easement. No such right is expressly conferred by the deed itself; the buy-in provision does not clearly nor explicitly convey a right to the grantee to purchase all of the grantor’s interest in the well or the easement, or to buy out the easement holder. Rather the grantee was given the right to “buy into at cost... any interest” in the well and water. The meaning of this language is not clear at all.
Therefore, the trial court determined the mutual intent of the parties by first considering the language of the deed itself. The court reasonably concluded that the placement of the term “buy into” at the beginning of the description of the grantee’s right was indicative of an intention that the grantee would have the option to share the well and water with the grantor. That intention is also reflected in other language in the buy-in provision which expressly acknowledges the reserved easement without cutting short or otherwise limiting that interest.
Furthermore, the trial court’s interpretation of the buy-in provision is also supported by substantial extrinsic evidence regarding the conduct of the parties before the present dispute arose. “[W]hen a contract is ambiguous, a construction given to it by the acts and conduct of the parties with knowledge of its terms, before any controversy has arisen as to its meaning, is entitled to great weight, and will, when reasonable, be adopted and enforced by the court.” (Universal Sales Corp. v. California Press Manufacturing Co. (1942) 20 Cal.2d 751, 761; see also Hernandez v. Badger Construction Equipment Co. (1994) 28 Cal.App.4th 1791, 1814, and cases cited therein.)
In the present case, when DGS elected to exercise its right to drill a well in the easement, it contacted the then-owner of the servient estate, Richard Alderson, to see if Alderson wanted to participate in the project and share the well and water; Alderson declined that invitation. This evidence regarding the parties’ past conduct based on their understanding of the meaning of the buy-in provision supports the court’s conclusion that the parties intended that the grantee would have the right to share the well and water but not to purchase it all and thereby unilaterally destroy the easement.
MVC contends that the buy-in provision is not ambiguous because the words “any interest” can only mean one thing-that the grantee has the right to purchase “all” interest in the well and the easement that was created by the 1978 grant deed. There are several problems with MVC’s argument.
First, MVC fails to substantiate its premise that “any” necessarily means “all.” Its superficial analysis of the various dictionary definitions of the word “any” only confirms to us that “any” means different things in different contexts. Furthermore, MVC’s heavy reliance on Byrne v. Laura (1997) 52 Cal.App.4th 1054 (Byrne) is disconcerting.
The Byrne court reversed a summary judgment that had been granted to the administrator and heirs of decedent’s estate in an action to enforce oral agreements between the decedent and his girlfriend. (Byrne, supra, 52 cal.App.4th 1054.) A minor issue in that case was whether the decedent’s promise that he would leave “all” of his property to his girlfriend was too uncertain to be enforceable. (Id. at p. 1067.) The Byrne court found that it was not “because there is no doubt as to the amount involved.” (Ibid.) The court reasoned that, according to the girlfriend’s evidence, the decedent “promised her in no uncertain terms that she would succeed to all of his property” and thus the “only uncertainty was how [the decedent had] intended to effectuate his promise.” (Ibid.)
Byrne has nothing to do with the rules governing the interpretation of a written instrument because that case involved an oral promise. Beyond that, Byrne only supports the general proposition that “all” means “all.” It certainly does not support MVC’s faulty assumption that the words “any” and “all” mean the same thing when used in a written instrument.
A second flaw in MVC’s interpretation of the buy-in provision is that it isolates the two words “any interest” from the provision which provides their context. The buy-in provision does not convey a right to purchase any interest in the easement, but rather to “buy into at cost... any interest” in the well and water. As explained above, when these words are considered together, they are evidence of an intention to give the grantee the option to share the well and water with the easement owner. This interpretation of the grantee’s right is also consistent with the rest of the language in the 1978 grant deed. That deed contains an express and unambiguous reservation of an easement for well and water purposes. There is absolutely no dispute that the parties mutually intended that the grantor would have that easement. Indeed, the easement is expressly referenced in the buy-in provision itself. Nevertheless, MVC would have us select two words from the buy-in provision and construe them to infer an intention to give the grantee unilateral power to destroy the grantor’s easement simply by paying the cost of drilling the well.
Third, accepting MVC’s interpretation of the buy-in provision would “‘invoke an absurdity.’” (WDT-Winchester, supra, 27 Cal.App.4th at p. 528.) Such a construction would render the deed internally inconsistent because it would mean that the parties simultaneously held conflicting intentions, i.e., (1) that the grantor would retain an easement for well and water purposes and (2) that the grantee could unilaterally destroy the easement the moment the grantor attempted to use it for its intended purpose. As the trial court observed, “[w]hat benefit would it be to the dominant estate if the servient tenement holder could simply cancel the easement at any time?”
MVC contends that there is “nothing absurd about MVC being entitled to purchase ‘any’ up to and including all of the interest in the well on the easement” because “[f]rom the inception of the deed, there was always the possibility that DGS would be deprived of some or all of the interest in the well since that is expressly what the Grant Deed provides.” We are not persuaded by MVC’s reasoning and we reject its faulty premise that the 1978 grant deed “expressly” confers a right to purchase the entire well. We reiterate, however, that the buy-in provision does expressly acknowledge and confirm an easement in favor of the grantor. Construing the 1978 grant deed to confer a right on the grantee to purchase the grantor’s express easement simply by paying the cost of the well would work an absurdity because it would deprive the easement owner of the benefit of owning an easement.
Finally, MVC contends that, if language in the buy-in provision is ambiguous, then the trial court erred as a matter of law by failing to resolve the ambiguity in favor of MVC. MVC cites two cases in support of this proposition, Vance v. Fore (1864) 24 Cal. 435, 446 (Vance) and Union Oil Co. v. Stewart (1910) 158 Cal. 149, 154 (Stewart). Vance states that when a deed contains conflicting descriptions of property and both “descriptions are of equal authority, ” then “the settled rule of law would require us to adopt the description most favorable to the grantee.” (Vance, supra, 24 Cal. at p. 446.) Here, we do not deal with conflicting language in a grant deed unless we accept MVC’s self-serving interpretation of the buy-in provision. The trial court’s interpretation of the buy-in provision, as conferring a right to share the well and water, is consistent with the provision in the 1978 deed expressly reserving an easement in favor of the grantor.
Stewart, supra, 158 Cal. at page 159, the other case upon which MVC relies, recites the rule codified in section 1069 of the Civil Code (section 1069), which states: “A grant is to be interpreted in favor of the grantee, except that a reservation in any grant... is to be interpreted in favor of the grantor.” MVC contends that this rule inures to its benefit because “[t]he right to purchase the well provided for in the deed was a grant of a right to MVC, not a reservation.” First, MVC has not established that it has the “right to purchase the well.” Second, MVC ignores the fact that the buy-in provision is integrally related to and must be construed along with the reservation of the express easement, and section 1069 requires that the reservation be interpreted in favor of DGS.
We question whether MVC’s option to buy-into the well can properly be characterized as a “grant” of a property interest entitling MVC to the benefit of section 1069. Even if it can, the rule of section 1069 “‘must be considered in connection with other provisions of the code in reference to interpretations, the most prominent of which is that all interpretations should be directed toward the ascertainment of the true intent of the parties.’ [Citation.]” (Main v. Legnitto (1964) 230 Cal.App.2d 667, 678.)
The record before us confirms that the trial court properly applied the law to arrive at the true intent of the parties to the 1978 grant deed. Therefore, we affirm the part of the judgment denying MVC the declaratory relief that it sought pursuant to the third cause of action in its cross-complaint.
B. The Scope of the Easement
In its cross-appeal, DGS contends that the trial court committed reversible error by granting MVC declaratory relief regarding the scope of the easement. As noted above, the judgment establishes that DGS’s right to take water pursuant to the reservation in the 1978 grant deed is limited to no more than DGS’s historic usage of 29 gallons per minute. DGS argues that this part of the judgment is “legally incorrect.” We disagree.
When an easement is created by a grant deed, courts look to the terms of the grant to determine its scope. (Civ. Code, § 806 [“The extent of a servitude is determined by the terms of the grant or the nature of the enjoyment by which it was acquired.”]) The trial court expressly acknowledged this rule in its tentative statement of decision. However, as the court also correctly recognized, the extent of DGS’s right to extract water from the well is not determinable from the terms of the general grant of this easement “for well and waterline purposes.”
Therefore, the trial court applied the following rule, announced by our Supreme Court more than 100 years ago in Winslow v. City of Vallejo (1906) 148 Cal. 723, 725 (Winslow): “[W]here a grant of an easement is general as to the extent of the burden to be imposed on the servient tenement, an exercise of the right, with the acquiescence and consent of both parties, in a particular course or manner, fixes the right and limits it to the particular course or manner in which it has been enjoyed.” (See also Youngstown Steel Products Co. v. City of Los Angeles (1952) 38 Cal.2d 407, 410-411; Snodgrass v. Crane (1943) 57 Cal.App.2d 565, 567 (Snodgrass).)
Applying the Winslow rule, the trial court found that DGS’s right to extract water from the well on its easement was fixed and limited to the amount of water that could have been extracted from the 1990 well. This conclusion is supported by substantial evidence which shows that the 1990 well, pump and pipe line were installed with the express knowledge and tacit consent of the grantee and that system was used by the grantor to extract water from the easement for a period of more than 15 years without objection. Under these circumstances, the court properly concluded that the scope of the easement had been fixed by its use.
On appeal, DGS characterizes the trial court’s ruling as legally incorrect but it fails to even address the Winslow rule until its reply brief where it summarily dismisses the case as irrelevant. In Winslow, supra, 148 Cal. 723, a city ran a ten-inch iron main pipeline across the plaintiff’s property pursuant to an easement it obtained by a grant which gave it a right of way for “any water-pipes or mains which may be laid by the city....” (Id. at p. 724.) Several years later, the city attempted to run a second significantly wider pipe across the easement in order to meet its growing water needs. The Winslow court affirmed a judgment granting plaintiff an injunction which prevented the city from running the second pipeline.
As the Winslow court explained, when the extent and limits of an easement created by a grant are in question, courts should first consider the language of the instrument itself, considered in view of the circumstances surrounding its execution and the situation of the parties. (Winslow, supra, 148 Cal. at p. 725.) However, when the language of the grant is general, such that its scope is indefinite, and the surrounding circumstances are not conclusive, then the scope of the easement can be fixed by the conduct of the parties. (Id. at pp. 726-727.) Therefore, the city’s “laying of the ten-inch pipe, with the acquiescence of both parties, measured and limited the location and the extent of the easement.” (Id. at p. 727.)
Winslow is not only factually similar, but also legally on point. Like the present case, Winslow involved language in a grant which did not expressly define the scope of the easement but instead used indefinite language from which the mutual intent of the parties could not be determined. Under those circumstances, the court may consider extrinsic evidence regarding the conduct of the parties to fix the scope of the easement. (Winslow, supra, 148 Cal. at p. 727.)
The Winslow rule was applied in another factually analogous situation in Snodgrass, supra, 57 Cal.App.2d 565. In that case, the grantee’s deed contained a general easement that conveyed “the ‘right to take and use water for household purposes... from water springs upon the lands of the grantor, and the right to enter upon said lands and lay water pipes for conducting water to the land herein described.’” (Id. at p. 566.) Over the years, the grantee had continually taken water from one spring on the grantor’s property. Applying the Winslow rule, the Snodgrass court found that the easement became fixed by the grantee’s use: “The appellant exercised the right granted him by deed by electing to take from a particular spring, which spring was at that time located on premises of his grantor. Therefore his right, although not limited by the grant, became fixed by the manner of its use, and he cannot enlarge it now without the consent of all of the parties who may be affected.” (Id. at p. 567.)
DGS contends the Winslow rule “is very much held into question by” Camp Meeker Water System, Inc. v. Public Utilities Com. (1990) 51 Cal.3d 845, 867 (Camp Meeker). In Camp Meeker, the Public Utilities Commission (PUC) denied a utility company’s application to increase its rates for providing water to its customers. The utility had argued the rate increase was necessary because it would have to lease additional wells on an adjacent parcel of land in order to meet its customers’ water needs. The PUC rejected this claim because it found that the utility had acquired an easement by a deed which permitted it to obtain water from the adjacent land without paying for that water.
The Camp Meeker court affirmed the PUC’s decision, including its finding that the easement granted to the utility by a 1951 deed permitted the utility to “exploit any and all sources of water” on the servient estate. (51 Cal.3d at p. 867.) The court reasoned that the PUC’s finding was consistent with the language in the grant deed, which did not restrict the utility’s use to wells or springs that existed at the time of the conveyance but rather included “‘all water rights appurtenant to said System and used or useful in its operation’” and “‘whether expressly described... or not.’” (Ibid.) Furthermore, the PUC’s determination was supported by substantial evidence. Because the deed did not expressly describe the extent of the easement, the law governing easements by implication was instructive for purposes of determining the intent of the parties and, under that law, “‘consideration must be given not only to the actual uses being made at the time of the severance, but also to such uses as the facts and circumstances show were within the reasonable contemplation of the parties at the time of the conveyance.’” (Id. at p. 867.)
DGS fails to convince us that Camp Meeker mandates a reversal of the trial court’s finding regarding the scope of the DGS easement. The fact that the PUC adopted a broad construction of the grant deed at issue in Camp Meeker does not automatically entitle DGS to that same treatment. Rather, the relevant point is that the Camp Meeker court affirmed a construction of a deed that was supported by the record. Indeed, Camp Meeker reinforces our decision to affirm the trial court’s determination in this case. Like the PUC interpretation of the utility’s express easement, the trial court’s conclusion regarding the scope of the easement in this case is consistent with the language of the deed itself and is supported by substantial evidence regarding the parties’ likely intent.
To the extent DGS is arguing that the trial court violated Camp Meeker by limiting DGS to its “historical” use, we disagree. Camp Meeker supports the proposition that an easement by an express grant is not limited to the uses at the time of conveyance. (51 Cal.3d at p. 867.) But, the trial court did not impose such a limit in this case, despite its use of the word “historical.” In fact, a well was not even drilled in the easement until 1990. Therefore, the trial court did not limit DGS’s easement to the use at the time of the conveyance.
Instead, the trial court fixed the scope of the easement in a way that was consistent with the parties’ own conduct prior to the dispute which gave rise to this action. Evidence of that conduct, of what the parties actually did and allowed to be done, was certainly relevant to a determination of the mutual intentions of the parties to the 1978 grant deed. Nothing in the Camp Meeker decision suggests otherwise.
DGS contends that Camp Meeker imposes a requirement that the scope of an easement by general grant must be construed to allow for uses within the reasonable contemplation of the parties at the time of the conveyance. A more accurate statement is that Camp Meekerallows courts to consider extrinsic evidence regarding uses of the easement that were within the reasonable contemplation of the parties, as an aid toward determining the likely intentions of the parties regarding the scope of the easement. Here, DGS fails to identify any such evidence in the record before us, other than the evidence regarding the parties’ conduct in connection with the drilling of the 1990 well system.
DGS fails to explain why it believes this extrinsic evidence regarding the conduct of the parties in 1990 is relevant to establish the parties’ likely intentions regarding the meaning of the buy-in provision but not similarly relevant to establish those same parties’ intentions regarding the scope of the easement itself.
Instead, DGS posits that the only reasonable inference to be drawn from the language of the 1978 deed itself is that the parties intended that the easement would provide enough water to the grantor to serve all of the grantor’s reasonable future needs and uses, whatever they might prove to be. The flaw in this reasoning is best illustrated by the Winslow case that DGS has elected to ignore. (Winslow, supra, 148 Cal. 723.) In that case, the city who owned the easement for “any” water-pipes argued that the parties to the original grant knew that the purpose of the easement was to supply water and may well have contemplated that the water needs of the city would grow. The Winslow court acknowledged this fact but held that “[i]t by no means follows... that the grantors, in conveying a right of way for water-pipes over their land, intended to burden that land with an easement the extent of which could never be definitely ascertainable, and which might be enlarged again and again, as often as the growth of the city of Vallejo might make it necessary to extend the operations of the water plant.” (Id. at p. 727.)
Winslow illustrates the problem with DGS’s logic: The fact that an easement created by a general grant does not define the extent of the easement does not mean that it has no limit. The easement holder may not exploit the fact that the scope of the easement cannot be established by the terms of deed itself to obtain a perpetually undefined right to use the property of another. When, as here, an easement is created by a general grant, courts may look to other language in the deed and to extrinsic evidence to determine the likely intention of the parties and thereby establish the scope of the easement.
DGS has failed to establish that the trial court’s determination regarding the scope of the easement is “legally incorrect.” Therefore, the part of the judgment granting MVC’s second cause of action for declaratory relief is affirmed.
C. MVC Was Not The Prevailing Party
MVC contends the part of the judgment denying it litigation costs must be reversed because MVC was the prevailing party at trial, as a matter of law. MVC is mistaken.
Section 1032 subdivision (a)(4), of the Code of Civil Procedure (section 1032(a)(4)) defines the “prevailing party” as “the party with a net monetary recovery, a defendant in whose favor a dismissal is entered, a defendant where neither plaintiff nor defendant obtains any relief, and a defendant as against those plaintiffs who do not recover any relief against the defendant.” MVC does not meet any of these definitions. No party was awarded any monetary relief in this case. Rather, as MVC expressly concedes, the court “awarded purely equitable Declaratory and Injunctive relief.” Furthermore, as the judgment clearly reflects, the court awarded some relief to both sides of this dispute but also denied other relief to both sides.
MVC takes the position that, although the court did award DGS declaratory and injunctive relief, DGS did not actually prevail on those causes of action because the judgment “did not broaden DGS’ rights in any way.” This argument is irrelevant. DGS did not file this action to broaden its right, but rather to clarify and enforce rights that MVC refused to acknowledge including, in particular, the right to build a new well on the DGS easement.
MVC also contends that it is the prevailing party because, “although the Court did not specifically enforce the Grant Deed as requested by MVC, it did limit DGS to one well and historical usage.” The only relevance of this observation is that it acknowledges that MVC prevailed on one of its equitable theories but failed to obtain judgment on two other causes of action in its cross-complaint.
Section 1032(a)(4) provides that “[w]hen any party recovers other than monetary relief... the ‘prevailing party’ shall be as determined by the court, and under those circumstances, the court, in its discretion, may allow costs or not....” Here, both DGS and MVC recovered “other than monetary relief” and, therefore, the trial court had discretion to allow costs or not. MVC acknowledges that “[i]t is well settled in California that where relief other than monetary relief is granted, the award of costs is discretionary.” Despite this clear rule, MVC has made no effort to establish that the trial court abused its discretion here.
IV. DISPOSITION
The judgment is affirmed. The parties are to bear their own costs on appeal.
We concur: Lambden, J., Richman, J.