Butler Family LP v. Butler Brothers, LLC 

Summarized by:

  • Court: Oregon Court of Appeals
  • Area(s) of Law: Property Law
  • Date Filed: 01-25-2017
  • Case #: A157038
  • Judge(s)/Court Below: Duncan, P.J. for the Court; DeVore, J.; & Flynn, J.
  • Full Text Opinion

Under Huff v. Duncan, the use of the word “successors” in a lease agreement is not required to evidence an intention that a covenant in the original agreement run with the land; a reference to “assigns” is sufficient to evidence that intention.

In 2010, Knife River Corporation Northwest ("Knife River") entered into a mining lease agreement with Butler Brothers, LLC (“Butler Brothers”). The agreement included a restrictive covenant, which provided that Knife River had the exclusive right to mine (1) on, and (2) on land adjacent to the premises identified in the lease. In 2011, Butler Brothers transferred two parcels of land adjacent to the premises identified in the lease to Butler Family Limited Partnership ("BFLP"). After BFLP sought a declaration that the parcels were not subject to the restrictive covenant, both parties filed cross-motions for summary judgment. The trial court granted summary judgment in favor of BFLP, finding the restrictive covenant did not run with the land because the lease agreement didn’t include the term “successors,” and was therefore not binding on successive property owners. Knife River appealed, arguing the parties to the 2010 lease intended the restrictive covenant to bind successive property owners. BFLP responded the mining restriction was personal on behalf of Butler Brothers, and was therefore not intended to run with the land. The use of the word “successors” in a lease agreement is not required to evidence an intention that a covenant run with the land; and a reference to “assigns” is sufficient to evidence that intention. Huff v. Duncan, 263 Or 408 (1972). Because the lease agreement stated the restrictive covenant “shall be binding upon heirs, personal representatives and assigns of the parties,” the Court found the trial court erred in concluding the absence of the term “successors” meant, as a matter of law, that the covenant was personal. Reversed and remanded.

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