10065 SWC LLC v. HOLMAN TIGARD REAL ESTATE LLC LLC (2026)

This case involves an Easement Agreement that granted plaintiffs the ability to enter onto defendants’ property to place a panel on defendants’ pylon sign. On appeal, plaintiffs raise four assignments of error, arguing that the trial court erred in (1) concluding that the Easement Agreement had terminated for one continuous year of nonuse, (2) concluding that defendants had the right to relocate the sign to a different area, (3) dismissing plaintiffs’ claim for injunctive relief directing defendants to adhere to the terms of the Easement Agreement, and (4) awarding defendants injunctive relief directing plaintiffs to remove their panel from the pylon sign. Defendants, in turn, raise a single assignment of error on cross-appeal, contending that the trial court erred in concluding that the Easement Agreement did not limit plaintiffs to installing a specific sign panel. We conclude that the trial court correctly concluded that the Easement Agreement had terminated due to nonuse. Because that conclusion obviates the need to resolve plaintiffs’ remaining assignments of error, and defendants’ cross-appeal, we decline to address them.

“On review of cross-motions for summary judgment, we view the record for each motion in the light most favorable to the party opposing it to determine whether there is a genuine issue of material fact and, if not, whether either party is entitled to judgment as a matter of law.” O'Kain v. Landress, 299 Or App 417, 419, 450 P3d 508 (2019). We state the facts consistent with our standard of review. Here, the relevant facts are undisputed. Plaintiff 10065 SWC, LLC, (SWC) owns real property in Tigard, Oregon (Plaintiffs’ Property), which it leases to plaintiff Tesla, Inc. (Tesla). Tesla operates a Tesla dealership on Plaintiffs’ Property. Defendant Holman Real Estate, LLC, (Holman) owns the real property located directly adjacent to Plaintiffs’ Property (Defendants’ Property), which Holman leases to defendant Kuni German Motors, LLC (Kuni). Kuni operates a BMW dealership on Defendants’ Property. Before 1981, PCM Associates owned both properties. In 1981, PCM Associates conveyed Plaintiffs’ Property to Toys “R” Us, and a few months later it entered into an Easement Agreement with Toys “R” Us. The Easement Agreement granted Toys “R” Us, as grantee, a limited easement “for the purpose of installing, maintaining, repairing, and replacing” a panel on a pylon sign located on Defendants’ Property. The Easement Agreement required that the panel “conform[ ] to those certain design specifications indicated on the attached Exhibit D,” where Exhibit D included a panel design with the Toys “R” Us logo. Section 2.7 outlined two ways that the Easement Agreement would automatically terminate: (1) “[i]n the event grantee shall fail to use the Easement Area as provided in th[e] Agreement for any continuous one-year period,” and (2) “if the Easement Area is otherwise abandoned by grantee and the grantee fails to respond within 30 days of receipt of a notice claiming said abandonment by grantor.”

In 2017, Toys “R” Us declared bankruptcy. That event in turn triggered a number of other events, the relevant dates of which we set forth with particularity because they bear on the ultimate question of whether the Easement Agreement terminated after a one-year period of nonuse:

• After declaring bankruptcy, Toys “R” Us closed its store on Plaintiffs’ Property no later than June 30, 2018.

• In December 2018, SWC purchased Plaintiffs’ Property from Toys “R” Us's bankruptcy estate.

• SWC created a purchase order, dated February 14, 2019, to solicit bids for removing and discarding the Toys “R” Us panel and fabricating and installing a new “NOW LEASING!” panel.

• In October 2019, plaintiffs installed the “NOW LEASING!” panel on the pylon sign.

• Plaintiffs’ Property remained vacant until SWC leased Plaintiffs’ Property to Tesla in December 2021.

• In June 2022, Tesla entered Defendants’ Property and installed a panel with its logo on the pylon sign.

Defendants objected to Tesla's installation of the “Tesla” panel and requested that it either remove the panel entirely or relocate it to another location on Defendants’ Property. Plaintiffs refused, asserting that they had an unrestricted right under the Easement Agreement to place a “Tesla” panel on the pylon sign.

Plaintiffs filed this action asserting claims for quiet title, declaratory judgment, and injunctive relief. Defendants, in turn, asserted counterclaims for quiet title, declaratory judgment, and injunctive relief. The parties filed cross-motions for summary judgment, and the trial court entered a general judgment declaring that (1) the Easement Agreement had automatically terminated on or before June 30, 2019, due to a continuous one-year period of nonuse; (2) even if the Easement Agreement had not terminated, defendants had the right to request relocation of the pylon sign to a different location on Defendants’ Property; (3) if the Easement Agreement had not terminated, its terms did not restrict plaintiffs to installing a panel with the Toys “R” Us logo on the pylon sign; and (4) plaintiffs had to remove the “Tesla” panel from the pylon sign.

As to the automatic termination issue, the trial court concluded that “the language of [the termination provision] is unambiguous,” and that the definition of “use” in the Easement Agreement “has a context beyond just install[ ], maintain, repair, or replace a certain sign * * *. It is to attract and direct customers to the dominant estate.” Regarding the period from June 30, 2018 to December 2018, when Toys “R” Us was still the grantee, the court concluded that the company had failed to use the Easement Area because it was out of business and could “no longer fill the purpose * * * of the Easement Agreement because you can't direct customers to the dominant estate when there are no customers because there is no business.” Regarding the period from December 2018 to June 30, 2019, when SWC was the grantee, the court concluded that SWC's action of beginning the process of soliciting bids for the removal and replacement of the panel did not stop the clock on the period of nonuse. Specifically, the court explained that the terms “install, maintain, repair, or replace the sign, do[ ] not mean begin to or take steps toward. It means done. * * * And that is consistent with the recital which says ‘use it’ means for the purpose of the dominant estate to direct and attract customers.” Finally, the court concluded that plaintiffs’ argument that the one-year period “starts when SWC purchase[d] [Plaintiffs’ Property] in December of 2018 is not supported by the agreement because the grantee is the grantee, and when you go to [Section] 2.9, the parties, their successors, assignees, and lessees—they are all one entity on each side.” Plaintiffs appeal.

In plaintiffs’ first assignment of error, they contend the trial court erred in concluding that the easement had terminated after a continuous year of nonuse and thus erred in granting defendants’ motion for summary judgment and denying plaintiffs’ motion for summary judgment on that issue.

“We review the trial court's construction of an instrument creating an easement for legal error.” Stone v. CCXL, LLC, 318 Or App 107, 122, 506 P3d 1167, rev. den., 370 Or 198 (2022). “In construing an easement, [the court's] task is to discern the nature and scope of the easement's purpose and to give effect to that purpose in a practical manner.” Bloomfield v. Weakland, 224 Or App 433, 446-47, 199 P3d 318 (2008), rev. den., 346 Or 115 (2009). “In giving effect to an easement's purpose, general principles of reasonableness control. Ordinarily, an easement passes no rights to the grantee except those rights that are necessary for the easement's reasonable and proper enjoyment.” Watson v. Banducci, 158 Or App 223, 231, 973 P2d 395 (1999) (internal citation omitted). In doing so, “we will only look beyond the wording of the [easement] instrument where there is an uncertainty or ambiguity.” Stone, 318 Or App at 122. “A provision is ambiguous if, in context, it can reasonably be understood to have more than one meaning.” Id. “Where there is an ambiguity, we will determine the intent of the original parties by examining the surrounding circumstances, such as ‘the purpose and nature of the easement, the circumstances existing at the time of the grant or reservation, and the manner in which the easement was used by the original parties.’ ” Id. (quoting Tipperman v. Tsiatsos, 327 Or 539, 545, 964 P2d 1015 (1998)). “[W]hen an ambiguity exists in a deed that reserves an easement, a supplemental rule of construction is that the reservation is to be construed most strongly against the grantor [who reserves the easement] and in favor of the grantee.” Tipperman, 327 Or at 545 (internal quotation marks omitted; alterations in original). However, that rule of construction is to be used only “when other tools for construing a deed, such as an examination of the relevant surrounding circumstances, have not resolved the ambiguities.” Id.

At the outset, plaintiffs argue that, assuming Toys “R” Us and SWC both failed to “use” the panel as provided in the Easement Agreement, there was no continuous one-year period of nonuse because neither Toys “R” Us, nor SWC, as individual grantees failed to use the panel for one continuous year each. In plaintiffs’ view, the period of nonuse that began once Toys “R” Us closed its store in June 2018 restarted once SWC purchased Plaintiffs’ Property in December 2018, and because SWC replaced the panel with the “NOW LEASING!” panel within a year of its purchase, the Easement Agreement did not terminate for one year of nonuse.

We disagree. Section 2.7 of the Easement Agreement allows for automatic termination of the easement “[i]n the event grantee shall fail to use the Easement Area as provided in this Agreement for any continuous one-year period.” Additionally, Section 2.9 of the Easement Agreement states, in its entirety, “This Easement shall be binding upon and inure to the benefit of the successors and assigns of the parties hereto and lessees of the premises.” Nothing in either provision includes language that the automatic termination for nonuse occurs only if a single grantee fails to use the panel, as directed in the Easement Agreement, for the continuous year, and Section 2.9 unambiguously binds successors of the parties to the terms of the Easement Agreement, including the termination provisions of Section 2.7. See ORS 42.230 (“In the construction of an instrument, the [court] is simply to ascertain and declare what is, in terms or in substance, contained therein, not to insert what has been omitted, or to omit what has been inserted[.]”). Thus, the trial court correctly concluded that the Easement Agreement did not require a single grantee to fail to use the panel for a continuous one-year period to trigger the automatic termination provision for nonuse.

We now turn to the termination provision itself to determine whether there is a genuine issue of material fact that Toys “R” Us and its successor, SWC, failed to “use” the panel as defined in the Easement Agreement for a continuous one-year period from June 30, 2018, to June 30, 2019. We begin by considering the wording of the relevant provision in the context of the Easement Agreement as a whole. The termination provision, Section 2.7, of the Easement Agreement is as follows:

“This Easement is an easement appurtenant that shall run with the Dominant Estate until terminated or abandoned. In the event grantee shall fail to use the Easement Area as provided in this Agreement for any continuous one-year period, * * * or if the Easement Area is otherwise abandoned by grantee and the grantee fails to respond within 30 days of receipt of a notice claiming said abandonment by grantor, this Easement shall automatically expire without further action by grantor, and grantee shall, upon request of grantor, execute suitable recordable documents evidencing such expiration and abandonment.”

That provision outlines two ways that the Easement Agreement will automatically terminate: (1) when the grantee fails to “use” the Easement Area as provided for any continuous one-year period, or (2) if the grantee otherwise abandons the Easement Area, the grantor sends the grantee a notice claiming said abandonment, and grantee fails to respond within 30 days of receiving that notice. Because the trial court concluded that the Easement Agreement had automatically terminated upon a year of continuous nonuse, we interpret only the language of that termination method.

Section 2.1 defines the grantee's “use” of the Easement Area as limited to the “installation, maintenance, repair and replacement” of the panel. Because no provision in the Easement Agreement specifically defines those four terms, we must determine whether the terms have ordinary meanings that make the overarching provision susceptible to only one reasonable interpretation. See Yogman v. Parrott, 325 Or 358, 361-62, 937 P2d 1019 (1997). In doing so, we typically look to the dictionary definitions of the terms. See id. at 362.

“Installation” is defined, as relevant in the context of the Easement Agreement, as “an act of installing or the state of being installed,” where “install” is defined as “to set up for use or service.” Merriam-Webster Unabridged Dictionary, https://unabridged-merriam-webster-com.soll.idm.oclc.org/unabridged/installation (accessed August 19, 2026); https://unabridged-merriam-webster-com.soll.idm.oclc.org/unabridged/install (accessed August 19, 2026). “Maintenance” is defined as “the labor of keeping something (such as buildings or equipment) in a state of repair or efficiency.” Merriam-Webster Unabridged Dictionary, https://unabridged-merriam-webster-com.soll.idm.oclc.org/unabridged/maintenance (accessed August 19, 2026). “Repair”is defined as“ to restore by replacing a part or putting together what is torn or broken.”Merriam-Webster Unabridged Dictionary, https://unabridged-merriam-webster-com.soll.idm.oclc.org/unabridged/repair (accessed August 19, 2026). Finally, “replacement” is defined as “the act of replacing or the state of being replaced,” where “replace” is defined as “to take the place of” and to “serve as a substitute for or successor of.” Merriam-Webster Unabridged Dictionary, https://unabridged-merriam-webster-com.soll.idm.oclc.org/unabridged/replacement (accessed August 19, 2026); https://unabridged-merriam-webster-com.soll.idm.oclc.org/unabridged/replace (accessed August 19, 2026). Plaintiffs do not suggest alternative, reasonable meanings for the four terms in the context of the Easement Agreement, and we can think of none. Thus, we conclude that the terms are unambiguous and define what it means to “use” the panel on the pylon sign.

Turning to the period following the closure of the Toys “R” Us store on Plaintiffs’ Property, there is nothing in the record showing that Toys “R” Us, as grantee, installed or replaced the panel during the period from June 30, 2018, through December 2018; instead, the facts are undisputed that the Toys “R” Us panel, installed prior to June 2018, remained in place through December 2018. There is also nothing in the record showing that Toys “R” Us repaired or otherwise took actions to maintain the panel during that time. Thus, there is no genuine issue of material fact that Toys “R” Us did not “use” the panel as defined in the Easement Agreement for the duration of that six-month period.

Plaintiffs argue that that six-month period does not count towards the year of nonuse because, in plaintiffs’ view, Toys “R” Us was still “using” the panel after it went out of business because there was nothing “in the record to indicate that the * * * panel was in need of repair or replacement” during that time, and the panel “continued to identify the owner of Plaintiffs’ Property until December 2018.” However, nothing in Section 2.7 specifies that the beginning of the one-year period of nonuse is triggered only when the panel is “in need of” installation, maintenance, repair, or replacement. It simply states that the failure to use (i.e., install, maintain, repair, or replace) the Easement Area during a continuous one-year period would result in automatic termination of the Easement Agreement.

Additionally, the overarching purpose of the Easement Agreement further supports the conclusion that Toys “R” Us was no longer “using” the panel once it had closed its store on Plaintiffs’ Property. See Yogman, 325 Or at 361 (interpreting the text of a disputed contract provision requires examining the text of the provision in the context of the contract as a whole). The Easement Agreement includes in the recitals that “[t]he easement shall be located on an adjoining parcel * * * for the benefit of the owner or occupant of the Dominant Estate [(Plaintiffs’ Property)] to attract and direct customers to the Dominant Estate.” As the trial court found, the purpose of the easement allowing the grantee to place a panel on the pylon sign is to attract and direct customers to the dominant estate (Plaintiffs’ Property). After Toys “R” Us closed its store located on Plaintiffs’ Property, it was no longer using the panel to “attract and direct” customers to that store. Because of this, there is no genuine issue of material fact that Toys “R” Us was not “using” the panel from the date of the store's closure in June 2018 through the date it sold the property to SWC in December 2018, and that period of time therefore counted towards the year of nonuse.

Turning to the period from December 2018 to June 30, 2019, during which SWC was the grantee, plaintiffs argue that SWC did not “fail to use” the Easement Areas during that period because “as soon as December 2018 and by no later than February 2019, [it] undertook efforts to replace the Toys “R” Us panel * * * by soliciting bids to replace the panel.” Plaintiffs specifically point to a purchase order, dated February 14, 2019, that SWC created to solicit bids for “removing, discarding, and replacing” the Toys “R” Us panel.

However, as discussed above, the ordinary meaning of “replacement” is “the act of replacing or the state of being replaced,” where “replace” is “to take the place of.” Applying that ordinary definition in the context of the Easement Agreement, a panel is “replaced” when a different panel physically “takes the place of” the original panel. Although plaintiffs are correct that the record shows that plaintiffs began to solicit bids for the purpose of physically replacing the Toys “R” Us panel prior to June 30, 2019, that action is not the same as the action of physically replacing the panel itself, which the undisputed facts show occurred in October 2019. Therefore, there is no genuine issue of material fact that SWC failed to “use” the Easement Areas, as defined in the Easement Agreement, from the period between December 2018 and June 30, 2019. That nonuse, combined with Toys “R” Us's period of nonuse from June 30, 2018, to December 2018, resulted in the automatic termination of the Easement Agreement.

Because we conclude that the trial court did not err in concluding that the Easement Agreement had automatically terminated after a one-year period of nonuse and correctly granted summary judgment in defendants’ favor on that issue, we decline to address plaintiffs’ remaining assignments of error or defendants’ cross-appeal.

On appeal, affirmed; cross-appeal dismissed as moot.

JOYCE, J.