                IN THE SUPREME COURT OF THE STATE OF IDAHO

                                       Docket No. 45390

DALE LEE and KATHI LEE, Husband and )
Wife,                                    )
                                         )                   Boise, August 2018 Term
       Plaintiffs-Appellants,            )
                                         )                   Filed: November 28, 2018
v.                                       )
                                         )                   Karel A. Lehrman, Clerk
WILLOW CREEK RANCH ESTATES NO. 2 )
SUBDIVISION HOMEOWNERS’                  )
ASSOCIATION, INC., an Idaho corporation, )
                                         )
       Defendant-Respondent,             )
                                         )
and                                      )
                                         )
DOES I-X, inclusive,                     )
                                         )
       Defendants.                       )


       Appeal from the District Court of the Third Judicial District of the State of Idaho,
       Canyon County, Hon. Christopher S. Nye, District Judge.

       The judgment of the district court is affirmed.

       Morris Bower & Haws, PLLC, Boise, for Appellants. Daniel W. Bower argued.

       Elam & Burke, PA, Boise, for Respondent. Matthew C. Parks argued.
            _______________________________________________

HORTON, Justice.
       Dale and Kathi Lee appeal the district court’s decision granting summary judgment in
favor of Willow Creek Ranch Estates No. 2 Subdivision Homeowners’ Association, Inc. (the
HOA). The dispute between the Lees and the HOA involves a 1997 agreement (the Agreement)
that purportedly grants the Lees three access points to a private road owned by the HOA. The
Lees conceded in the district court that the Agreement alone does not create an enforceable
easement. The Lees asserted, however, that an easement exists based on the doctrine of part


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performance or that an enforceable encumbrance exists through the doctrine of equitable
servitudes. The district court determined that neither the doctrine of part performance nor the
doctrine of equitable servitudes were applicable to this case and granted the HOA’s motion for
summary judgment. We affirm.
                         I. FACTUAL AND PROCEDURAL BACKGROUND
       The Lees and the Kemp Family Trust (Trust) owned adjoining property in Canyon
County. The Lees and the Trust both contemplated future development of their property. To
further its plans for development, the Trust desired to purchase land from the Lees to develop the
Willow Creek Ranch Estates No. 2 subdivision (Subdivision). On June 1, 1997, the Lees and the
Trust executed the Agreement for the sale of the property. The Agreement states that “[the Lees]
shall also be entitled to 3 driveway accesses from the gravel road to be constructed by [the Trust]
adjoining [the Lees’] property. Such accesses shall be constructed at [the Lees’] cost and subject
to [the Lees] obtaining any necessary government approvals.” The gravel road referenced in the
Agreement ultimately became Kemp Road. The Agreement was signed by the Lees and by an
individual purportedly representing the Trust. The Agreement does not contain a legal
description of the land or the three “driveway accesses” from the gravel road. The Agreement
was never recorded.
       In August 1997, the Lees executed a warranty deed granting ownership of the land to the
Trust. The warranty deed does not reference or incorporate the Agreement, nor does it reference
or reserve an easement for the Lees to access the gravel road mentioned in the Agreement. The
warranty deed contains the following covenant:
       [S]aid premises are free from all encumbrances, EXCEPT those to which this
       conveyance is expressly made subject and those made, suffered or done by the
       Grantee(s); and subject to reservations, restrictions, dedications, easements, rights
       of way and agreements, (if any) of record . . . and that Grantor(s) will warrant and
       defend the same from all lawful claims whatsoever.
       The Trust recorded the plat for the Subdivision in December 1998. The Trust recorded
the Declaration of Covenants, Conditions, and Restrictions and Neighborhood Association
(CC&Rs) for the Subdivision in April 1999. The Subdivision plat and the CC&Rs do not
reference an easement or any other right for the Lees to access Kemp Road.




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       The Trust constructed Kemp Road in 2000. The Trust paid to create three access points
from Kemp Road to the Lees’ property. This construction included culverts and the placement of
gravel extending from Kemp Road to the Lees’ property. Wood fencing and metal gates were
constructed along the three access points from Kemp Road.
       In April 2005, the Trust executed a warranty deed granting ownership of Kemp Road and
other common areas to the HOA. The warranty deed does not expressly reference or reserve an
easement for the Lees to access the gravel road mentioned in the Agreement. The warranty deed
states that the Trust “does hereby grant, convey, release to the [HOA] the following-described
premises with all appurtenances and subject to all existing easements and rights-of-way of record
or implied[.]”
       Alan Mills served on the board of directors of the HOA at the time the Trust transferred
ownership of Kemp Road to the HOA. Mills was also the Trust’s real estate agent at the time of
the Agreement. Mills stated: “As a former HOA board member, I can say with a high degree of
certainty that the HOA at that time was aware of the Agreement and its terms regarding the three
driveway accesses.”
       The Lees informed the HOA in 2014 that the Lees intended to access Kemp Road to
further develop the Lees’ property. In October 2014, the HOA informed the Lees that it would
not permit access to Kemp Road for any development. The Lees sought a declaration from the
district court that the Lees were entitled to use Kemp Road. The Lees conceded that the
Agreement does not satisfy Idaho’s Statute of Frauds. The Lees asserted, however, that the
doctrine of part performance or, alternatively, the doctrine of equitable servitudes provides the
Lees access to Kemp Road.
       The Lees moved for summary judgment on June 20, 2016, and the HOA filed its motion
for summary judgment on May 18, 2017. The district court determined that neither the doctrine
of part performance nor the doctrine of equitable servitudes were applicable to this case. Thus,
the district court denied the Lees’ motion for summary judgment and granted the HOA’s motion.
The Lees timely appealed.
                              II.    STANDARD OF REVIEW
       “When reviewing an order for summary judgment, the standard of review for this Court
is the same standard used by the district court in ruling on the motion.” Davison v. DeBest


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Plumbing, Inc., 163 Idaho 571, 574, 416 P.3d 943, 946 (2018) (quoting Mendenhall v. Aldous,
146 Idaho 434, 436, 196 P.3d 352, 354 (2008)). “The court must grant summary judgment if the
movant shows that there is no genuine dispute as to any material fact and the movant is entitled
to judgment as a matter of law.” I.R.C.P. 56(a). “Summary judgment is appropriate if the
pleadings, affidavits, and discovery documents on file with the court, read in a light most
favorable to the nonmoving party, demonstrate no material issue of fact such that the moving
party is entitled to a judgment as a matter of law.” Partout v. Harper, 145 Idaho 683, 685, 183
P.3d 771, 773 (2008). “If the evidence reveals no genuine issue as to any material fact, then all
that remains is a question of law over which this Court exercises free review.” Id. at 685–86, 183
P.3d at 773–74.
                                       III.   ANALYSIS
       The Lees have proffered two separate theories in support of their claim that they are
entitled to use Kemp Road and the three access points. The first theory is one of express
easement through the combined operation of the doctrine of partial performance and the
Agreement. The second theory is that the doctrine of equitable servitudes allows the Lees to use
the road and driveways.
   A. The Lees cannot prevail on their easement claim because they have not challenged
      both independent bases used by the district court to grant summary judgment to the
      HOA.
       The district court issued a memorandum opinion addressing the parties’ cross-motions for
summary judgment. It held that because the Agreement and the warranty deed conveying the
property to the Trust related to the same subject matter, the warranty deed’s failure to reserve or
create an easement for the Lees’ use of Kemp Road was fatal to their claim. The district court
then explicitly identified an alternative basis for its decision that the Lees did not have an
easement, holding that the doctrine of part performance was unavailable to enforce the purported
easement.
       In response to the Lees’ opening brief on appeal, the HOA notes that the Lees failed to
address the district court’s first ground for determining that they did not have an easement. The
HOA asserts that this failure means that the Lees have waived any argument that they have claim
to an easement to use Kemp Road. The Lees dispute this assertion and argue that “if this Court
determines the doctrine of part performance . . . should be applied, the district court’s finding


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that the warranty deed exists has no legal significance and does not preclude this Court from
ruling in the Lees’ favor.” The Lees are mistaken; the Lees cannot prevail on this issue based on
the theory of part performance alone.


       The Lees’ failure to address the district court’s application of the merger doctrine is fatal
because operation of the merger doctrine was an independent ground for the district court’s grant
of summary judgment on the easement claim. “[T]he fact that one of the grounds may be in
error is of no consequence and may be disregarded if the judgment can be sustained upon one of
the other grounds.” La Bella Vita, LLC v. Shuler, 158 Idaho 799, 806, 353 P.3d 420, 427 (2015)
(quoting Anderson v. Prof’l Escrow Servs., Inc., 141 Idaho 743, 746, 118 P.3d 75, 78 (2005)).
       To have established before the district court that an easement existed the Lees would
have needed to prevail on two distinct issues. First, the Lees would have needed to have
successfully shown that the Agreement is enforceable even though it does not comply with the
Statute of Frauds. Next, the Lees would have needed to have successfully demonstrated that the
driveway access provisions contained in the Agreement are enforceable notwithstanding the
existence of the warranty deed and the application of the merger doctrine. The district court
concluded that the doctrine of part performance was unavailable as an exception to the Statute of
Frauds because “[t]he easement provision in the . . . Agreement is too indefinite, incomplete, and
uncertain in all of its material terms, and does not contain provisions that are capable in
themselves of being reduced to certainty . . . .” The district court also found that the warranty
deed—and not the Agreement—is determinative of the parties’ rights due to application of the
merger doctrine. The district court held that there is no easement in favor of the Lees because
“[t]he deed did not expressly create or reserve an easement for the Lees to use Kemp Road,” nor
did it “expressly reference or incorporate the . . . Agreement.” The Lees appealed the district
court’s ruling with respect to the application of the doctrine of part performance but did not
appeal the district court’s ruling pertaining to the application of the merger doctrine.
       The merger doctrine is set forth in Jolley v. Idaho Securities, Inc., as follows:
       It is a well established rule of law that prior stipulations are merged in the final
       and formal contract executed by the parties, and this rule applies to a deed or a
       mortgage based upon a contract to convey. When a deed is delivered and accepted
       as performance of the contract to convey, the contract is merged in the deed.


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       Though the terms of the deed may vary from those contained in the contract,
       the deed alone must be looked to to determine the rights of the parties.
               ....
               . . . Where the right claimed under the contract would vary, change, or
       alter the agreement in the deed itself, or inheres in the very subject-matter with
       which the deed deals, a prior contract covering the same subject-matter cannot be
       shown as against the provisions of the deed.
               ....
               In the absence of fraud, mistake, etc., the following stipulations in
       contracts for the sale of real estate are conclusively presumed to be merged in a
       subsequently delivered and accepted deed made in pursuance of such contract, to
       wit: (1) Those that inhere in the very subject-matter of the deed, such as title,
       possession, emblements, etc.; (2) those carried into the deed and of the same
       effect; (3) those of which the subject-matter conflicts with the same subject-
       matter in the deed. In such cases, the deed alone must be looked to in determining
       the rights of the parties.
90 Idaho 373, 382–83, 414 P.2d 879, 884 (1966) (emphasis added) (internal citations and
quotations omitted) (quoting Cont’l Life Ins. Co. v. Smith, 41 N.M. 82, 64 P.2d 377 (1946)).
       Here, the Lees executed a warranty deed conveying the land to the Trust approximately
two months after the Agreement was executed. The district court correctly found that “[t]he . . .
Agreement and the deed both related to the same subject matter.” “The deed did not expressly
create or reserve an easement for the Lees to use Kemp Road,” nor did it “expressly reference or
incorporate the . . . Agreement.” The district court found that the deed is unambiguous. Based on
these findings, the district court correctly concluded that under the merger doctrine the warranty
deed—and not the Agreement—is determinative of the parties’ rights.
       “[I]f an appellant fails to contest all of the grounds upon which a district court based its
grant of summary judgment, the judgment must be affirmed.” Cuevas v. Barraza, 155 Idaho 962,
965, 318 P.3d 952, 955 (2014) (quoting AED, Inc. v. KDC Invs., LLC, 155 Idaho 159, 164, 307,
P.3d 176, 181 (2013)). Because the Lees did not challenge the district court’s ruling pertaining
to the merger doctrine, we are bound to affirm the district court’s ruling that the Lees do not have
an easement to Kemp Road through application of the merger doctrine.
   B. The doctrine of equitable servitudes does not entitle the Lees to use Kemp Road.
       The district court ruled that the Lees’ claim to an equitable servitude conferring a right to
access or use Kemp Road failed because equitable servitudes restrict the use of land, but “do not


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confer an affirmative right to enter and use another’s land.” The Lees contend that this case
provides the Court with an opportunity to extend the doctrine of equitable servitudes to create an
enforceable easement. The HOA responds that the doctrine of equitable servitudes is not
applicable to this case because the district court correctly held that an equitable servitude does
not confer access rights.
       The “[e]quitable enforcement of covenants restricting the use of land was recognized in
the common law of England after the middle of the Nineteenth Century.” West Wood Inv., Inc. v.
Acord, 141 Idaho 75, 83, 106 P.3d 401, 409 (2005). “Equitable interests may arise because of the
actions of the parties, such as oral representations.” Id. “Under certain circumstances a writing is
not required to establish a legally enforceable interest and any number of factors, if found by the
trial court to be sufficient, may justify a finding that the plaintiffs have an interest in the land.”
Middlekauff v. Lake Cascade, Inc., 103 Idaho 832, 835 n.2, 654 P.2d 1385, 1388 n.2 (1982).
       The Lees point to West Wood for the proposition that the doctrine of equitable servitudes
can establish an affirmative right to use another landowner’s property. West Wood Inv., Inc., 141
Idaho at 83–86, 106 P.3d at 409–12. In West Wood, the original developer—West Wood
Investments, Inc. (West Wood)—received governmental approval to develop a planned unit
development (PUD) that included a common area for the enjoyment of future owners. Id. at 80,
106 P.3d at 406. The common area was known as Lot 5. Id. The PUD was sold to a new
developer—Arrow Point Development Co., Inc. (APDC)— and a promissory note was executed
in favor of West Wood. Id. APDC converted the PUD to a condominium project and constructed
a pool and building on Lot 5 for common use by the condominium owners. Id. APDC
subsequently defaulted on the promissory note and West Wood—acting in its role as a lender—
brought a foreclosure action that included Lot 5. Id. The Court noted that APDC had recorded a
“record of survey” prior to the foreclosure action that identified a substantial portion of Lot 5 as
common area. Id. at 86, 106 P.3d at 412. The Court also noted that West Wood had actual
knowledge that Lot 5 was a common area based on evidence adduced at trial. Id. Consequently,
the Court reasoned that West Wood had constructive knowledge and actual knowledge that the
facilities on Lot 5 were intended for the common use of the condominium owners. Therefore, the
Court held that, because West Wood had notice of the servitudes, equity allowed enforcement of
the promises made to the condominium owners to use Lot 5 as a common area. Id.


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       Despite the Lees’ arguments, the doctrine of equitable servitudes is not applicable to this
situation. There are a number of factual differences between this case and West Wood that
demonstrate the inapplicability of our holding in that case to this situation. Unlike the lot in West
Wood that was identified as a common area as a part of a larger PUD, this case involves two
adjacent parcels that are not part of the same development. Unlike West Wood, where the
condominium owners were attempting to restrict the use of Lot 5 to a common area, the Lees are
seeking to establish an affirmative right to use Kemp Road for ingress and egress for
development purposes. There is no Idaho case that stands for the proposition that the doctrine of
equitable servitudes can be utilized to confer an affirmative right to use another landowner’s
property for ingress and egress. We see no reason to extend the doctrine as the Lees ask and
hold that the doctrine of equitable servitudes cannot be utilized to establish an affirmative
easement for ingress and egress to Kemp Road.
   C. The HOA is entitled to an award of attorney fees on appeal.
       The Lees have not requested attorney fees on appeal. However, the Lees do request that
the district court’s order awarding fees and costs be reversed if the Lees prevail on appeal. The
HOA requests attorney fees pursuant to Idaho Code section 12-120(3). The HOA is the
prevailing party in this appeal.
       The prevailing party in a suit based upon a commercial transaction is entitled to an award
of reasonable attorney fees, including on appeal. See Bryan Trucking, Inc. v. Gier, 160 Idaho
422, 427, 374 P.3d 585, 590 (2016); I.C. § 12-120(3). “In determining whether attorney fees
should be awarded under I.C. § 12-120(3), the Court has conducted a two-step analysis: ‘(1)
there must be a commercial transaction that is integral to the claim; and (2) the commercial
transaction must be the basis upon which recovery is sought.’ ” Garner v. Povey, 151 Idaho 462,
469, 259 P.3d 608, 615 (2011). Here, the dispute between the Lees and the HOA stems from the
acquisition of property to facilitate the development of a subdivision. This is a commercial
transaction. See Lexington Heights Dev., LLC v. Crandlemire, 140 Idaho 276, 287, 92 P.3d 526,
537 (2004). Because this case arises from a commercial transaction, the HOA is entitled to an
award of attorney fees.




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                               IV.       CONCLUSION
      We affirm the judgment of the district court and award attorney fees and costs on appeal
to the HOA.


      Chief Justice BURDICK, and Justices BRODY, BEVAN and STEGNER CONCUR.




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