Closing a Deed‑Reserved Highway Connection Is a Compensable Taking: Idaho Supreme Court Clarifies Substantial Impairment and Deed‑as‑Contract Enforcement

Introduction

In Bear Crest Limited LLC v. State of Idaho (Idaho Supreme Court, Sept. 3, 2025), the Court delivered a consequential opinion at the intersection of real property and eminent domain law. The dispute arose after the Idaho Transportation Department (ITD) closed the at-grade intersection of County Road 4300 and U.S. Highway 20 near Yellowstone Bear World, a wildlife park in Madison County. Bear Crest Limited (the property owner), Yellowstone Bear World Inc. (the operating company), and Michael Ferguson (an individual owner) sued, asserting breach of contract and inverse condemnation.

The case turns on a 1973 warranty deed from Ross and Lisa Gideon to ITD’s predecessor that conveyed right-of-way land for Highway 20 improvements while reserving to the grantors “Access to the County Road Connection.” Decades later, that physical connection—the spur that joined County Road 4300 to Highway 20—was eliminated. The Supreme Court was asked whether that deed language created an enforceable access right, and whether the closure constituted a compensable taking or merely a permissible change in traffic flow.

The Court reversed summary judgment for ITD, directed entry of partial summary judgment for Bear Crest on liability for breach of contract and inverse condemnation, and remanded for damages and further proceedings. Along the way, the Court clarified key doctrines: (1) a deed’s reservation of a specific “County Road Connection” creates an appurtenant, enforceable access easement that runs with the land; (2) closure of that deed-reserved connection is both a breach and a taking; and (3) multi-mile detours can constitute “substantial impairment” of an abutting owner’s access even absent a physical taking of land.

Summary of the Opinion

Standing: At least Bear Crest has standing to sue on both breach of contract and inverse condemnation because it owns the parcels benefitted by the Gideon deed. With one appellant having standing, the Court reached the merits. The district court must evaluate the standing and claims of Yellowstone Bear World Inc. and Michael Ferguson on remand.
Deed-as-Contract and Merger: The 1973 Gideon deed is the operative contract post-merger. Its reservation of “Access to the County Road Connection” is unambiguous and refers to the specific, ITD-constructed spur that connected County Road 4300 to Highway 20. That reservation created an express, appurtenant easement running with the land.
Breach of Contract: ITD breached the deed by eliminating the deed-reserved connection. The Court directed entry of partial summary judgment for Bear Crest on breach; damages are to be determined on remand.
Inverse Condemnation:
- Reserved easement taken: Destruction of the deed-reserved access is a taking as a matter of law.
- Abutting access substantially impaired: Beyond the deed-based taking, closure caused a substantial impairment of Bear Crest’s access to Highway 20; at the time of closure (2016), the only alternative required a >5-mile circuit via county roads from the Thornton Interchange. That exceeds mere “circuity of travel.”
- No public dedication: The Court rejected the public trust/dedicated use theory; the deed reserved private access, not a public easement.
Remand: The judgment is vacated. Damages, the scope of the “larger parcel,” and whether Yellowstone Bear World Inc. and Ferguson have standing and viable claims are left to the district court.

Background and Procedural History

In the early 1970s, the Gideons owned land abutting Highway 20. In 1973, they conveyed about seven acres to ITD’s predecessor for highway expansion, expressly reserving “Access to the County Road Connection.” The connection referenced was the physical spur constructed across the conveyed land to join County Road 4300 with Highway 20.

Bear Crest later acquired portions of the Gideon property (2004, 2010) and parcels from others (including the Nelsons), and leased the lands to Yellowstone Bear World Inc., which does not own real property. From 1998 to 2016, Bear World’s patrons used the at-grade intersection at County Road 4300 and Highway 20 for immediate access. In 2016, as part of conversion to a controlled-access facility, ITD closed that intersection; for a period, the only access required exiting at the Thornton Interchange roughly 1.5 miles north and backtracking over county roads by more than five miles. A new “Bear World Road” opened in 2019, providing an additional county road approach (but still via the interchange).

Plaintiffs alleged breach of contract (based on the deed reservation) and inverse condemnation on three theories: (1) taking of the deed-reserved access; (2) taking of a publicly dedicated access; and (3) substantial impairment of abutting access rights. The district court granted summary judgment for ITD, characterizing the deed as reserving only access “to a county road” (not to the highway connection), rejecting the “public dedication” theory, and finding no taking because the detour was a reasonable alternative.

Issues Presented

Do the appellants have standing?
Does the 1973 Gideon deed create an enforceable, appurtenant access right to the specific County Road/Highway 20 connection, and did ITD breach it?
Did closure of the intersection constitute a compensable taking via (a) destruction of the deed-reserved access, and/or (b) substantial impairment of abutting access?

Detailed Analysis

A. Standing

The Court held Bear Crest has standing because it owns the benefitted property and the deed reservation runs with the land. Since one appellant sufficed to present the appeal, the Court addressed the merits. The district court must evaluate the standing and potential recovery of Yellowstone Bear World Inc. (which owns no land) and Michael Ferguson (whose parcel may lack deed-related access rights) on remand.

B. Breach of Contract: The Deed Means What It Says

The Court reaffirmed that when a deed is delivered and accepted, the contract to convey merges into the deed; the deed’s terms control the parties’ rights (Jolley v. Idaho Securities, Inc.). In Day v. Transportation Department (2020), the Court recognized that covenants expressed in a deed, especially those referencing access reserved in an underlying right-of-way agreement, can be enforced as contract obligations that run with the land.

Applying those principles, the Court held:

The Gideon deed is the operative agreement post-merger; its language is construed like a contract.
“Access to the County Road Connection” is not generic access “to a county road.” The definite article (“the”) and capitalization signal a specific structure—the spur constructed by ITD in 1973 to connect County Road 4300 to Highway 20 across the conveyed right-of-way.
Other deed features confirm this: the project references Highway 20; the legal description ties the conveyed right-of-way to the existing county road line; and the only “connection” controlled by ITD—not the county—was the at-grade highway spur.
The later Thornton Interchange is not “the” County Road Connection contemplated in 1973; it did not exist and is functionally and geographically distinct.

Because ITD eliminated the deed-reserved connection, it breached the deed. The Court directed entry of partial summary judgment in Bear Crest’s favor on liability for breach; damages questions were remanded.

C. Inverse Condemnation

1) Destruction of the deed-reserved easement is a taking

Under Idaho law, a property owner may bring inverse condemnation when the government appropriates a property interest without compensation (Covington; KMST). As in Day, a deed-reserved access right is a cognizable property interest. With the Court’s threshold holding that the deed created an enforceable access easement, the elimination of the County Road Connection constituted a taking as a matter of law.

2) Substantial impairment of abutting access

Separate from the deed, abutting owners hold a protected right of reasonable access to adjacent public ways (HI Boise). That right is subject to police-power regulation; mere changes in traffic patterns and reasonable, less direct routes typically are noncompensable (James; Bastian; Brown; Merritt). The line between a valid regulation and a compensable taking is crossed when prior access is destroyed or substantially impaired and no reasonable alternative remains.

The district court characterized the Thornton Interchange detour as a “reasonable” alternative. The Supreme Court disagreed, focusing on the conditions at the time of interference (2016), when Bear World Road had not yet been built and the only route required more than five miles of county-road travel each way after missing the interchange and passing the attraction. The Court held that this multi-mile, circuitous diversion constituted substantial impairment, distinguishing:

James: mere inconvenience from retracing a route was noncompensable; here, the added distance and detour are qualitatively different.
Nelson Sand & Gravel and Fonburg: cases recognizing compensable severance and access damages in the context of physical takings; though there was no physical taking here, the magnitude of access impairment met the threshold for compensation under the abutting-access doctrine.

The Court clarified two commonly conflated concepts:

Substantial impairment threshold: In regulatory-access cases (no physical taking), the test is whether remaining access is reasonable or too circuitous; diminution in market value is not the metric for whether a taking occurred.
Damages measure after a taking: Where there is a physical taking and severance, market-value diminution and injury-to-remainder evidence (the “larger parcel” analysis) inform compensation (Nelson; Grathol). In regulatory-access cases, valuation follows the finding of substantial impairment; specific measures of compensation are addressed at the damages phase.

3) No public dedication

The Court rejected the public-trust/dedication claim (Killinger; Rowley). The deed reserved a private access right to the grantors and successors; there was no clear, unequivocal intent to dedicate the connection for public use.

Precedents and Authorities: How They Shaped the Decision

Day v. Transportation Dep’t (2020): Pivotal. Established that deed-referenced access reservations merge into the deed and are enforceable covenants running with the land; permitted breach-of-contract claims based on deed covenants.
Jolley v. Idaho Securities (1966): Merger doctrine: the deed supersedes the sales contract; rights are determined by the deed’s four corners.
Camp Easton (2014) & Frost (2021): Contract/deed interpretation: unambiguous instruments are enforced according to their plain meaning without extrinsic evidence.
HI Boise (2012), Bastian (1976), Brown (1993), Merritt (1986): Abutting access can be regulated by police power; no right to a particular traffic pattern; but destruction/substantial impairment of access can be compensable.
James (1964): Mere circuity of travel is not a taking; used here as a contrast to the multi-mile detour at issue.
Nelson Sand & Gravel (1970); Fonburg (1958): Recognized compensable severance/access damages tied to physical takings and substantial increases in travel burden; used to clarify the damages–liability distinction.
Grathol (2015): Larger-parcel analysis (unity of title, contiguity, unity of use) for partial takings; cited regarding damages on remand.
Coward (2010); Abbott (1991); Restatement (Third) of Property (Servitudes) § 5.2: Express easements by reservation are presumed appurtenant and run with the land.
Rowley (2014); Killinger (2000): Burden and standard for public dedication; no dedication here.
Idaho Code § 40‑104(9): Controlled-access facility definition; contextualizes ITD’s safety aims but does not override property rights where access is deed-reserved or substantially impaired.

Legal Reasoning: Why the Court Ruled This Way

The Court’s reasoning rests on rigorous textual analysis and careful doctrinal calibration:

Text controls: The deed language (“Access to the County Road Connection”)—read in context of the Highway 20 project, the legal description, and the contemporaneous spur built over the conveyed right-of-way—plainly reserved access to a specific, ITD-controlled connection. The alternative reading (generic access to a county road) would render the reservation meaningless; the grantors already had access to County Road 4300.
Merger corollary: Once the deed was delivered, it became the final integrated agreement. Under Day, deed covenants that reflect the underlying bargain are enforceable in contract and run with the land.
Takings framework: The State’s police power to regulate access does not immunize it from takings liability where it destroys a deeded access easement or substantially impairs abutting access. The substantial-impairment threshold focuses on the reasonableness of remaining access at the time of interference; a multi-mile diversion on local roads exceeded mere inconvenience.
Temporal focus: The inverse-condemnation claim accrues at the time of interference (2016), not when Bear World began operations (1998). This avoids hindsight bias from later roadway developments (e.g., Bear World Road in 2019).
Dedication requires intent: Without clear evidence of intent to dedicate to the public, a private deed reservation cannot morph into a public easement.

Impact and Practice Implications

This decision will reverberate across transportation planning, right-of-way acquisitions, and property litigation in Idaho:

For agencies (ITD, local highway districts):
- Deed-reserved access to a specific connection is a hard constraint. Converting corridors to controlled access or reconfiguring intersections that extinguish such reserved connections will trigger liability for breach and takings unless the agency acquires the access right or provides equivalent access.
- Engineering choices that create lengthy detours can cross the “substantial impairment” line even without a physical taking, especially where at-grade access is eliminated entirely and interchanges are not proximal.
- Mitigation planning must address both deeded easements and abutting access. Consider negotiated amendments, substitute connections, or compensation at the time of design.
For landowners:
- Express deed reservations tied to roadway projects are potent, enforceable property rights. Drafting precision matters: references to specific connections or future access infrastructure can anchor enforceable rights.
- When access is eliminated or significantly lengthened, evaluate both deed-based takings and abutting-access impairment. Preserve evidence of travel distances at the time of interference and access conditions before/after the closure.
For litigators and appraisers:
- Liability and damages are distinct stages. Establish liability via deed interpretation and substantial-impairment analysis first; then address valuation (fair market value at the time of the taking, injury to remainder, potential larger parcel).
- On remand, the “larger parcel” factors (unity of title, contiguity, unity of use) will be case-dispositive for damage scope. Parcels outside the Gideon chain of title may or may not be included depending on those factors.
Doctrinal clarity: The Court harmonizes Day (deed covenants enforceable post-merger) with the access-takings line (James; HI Boise), mapping when detours are permissible regulation versus compensable substantial impairment. It also underscores the accrual-at-interference rule, focusing valuation and liability analyses at the moment of closure.

Complex Concepts Simplified

Controlled-access highway: A roadway designed for through-traffic where abutters may have no direct access except at controlled points (e.g., interchanges). Safety goals do not automatically override property rights fixed by deed or longstanding abutting-access principles.
Merger doctrine (deeds): The purchase contract’s terms “merge” into the deed at closing; the deed becomes the final word on the parties’ rights. If the deed itself reserves access, that covenant is enforceable and runs with the land.
Appurtenant easement: A right attached to land (not a person) that transfers with the land to successors. The Gideon reservation is an appurtenant easement benefitting the remaining Gideon (now Bear Crest) property.
Inverse condemnation: A property owner’s lawsuit to obtain just compensation after the government takes or substantially interferes with a property right without formal condemnation proceedings.
Abutting owner’s access: Owners abutting a public road have a right to reasonable access. The State may regulate traffic, but if access is substantially impaired (not just mildly less convenient), compensation may be due.
Substantial impairment vs. damages: Substantial impairment is the threshold question for liability in regulatory-access cases (is the remaining access reasonable?). Damages (how much money is owed) are determined afterward and may involve market-value impacts, larger-parcel analysis, and injury-to-remainder concepts.
Public dedication: To convert private land or a private easement to public use, there must be a clear and unequivocal intent to dedicate. A private deed reservation for the grantor’s benefit is not a public dedication.

What Remains on Remand

Damages valuation: The district court will determine compensation for the breach and the taking as of the 2016 interference date. Issues may include:
- Whether the “larger parcel” encompasses only Gideon-chain parcels or also other contiguous parcels under unified ownership and use (Grathol’s unity factors).
- Appropriate valuation approaches (e.g., market value before/after closure, injury to remainder); the Court did not decide whether business-lost-profits are recoverable.
Other appellants’ status: Yellowstone Bear World Inc. and Michael Ferguson’s standing and potential recovery will be addressed by the district court, consistent with this opinion.

Conclusion

Bear Crest Limited LLC v. State of Idaho is a significant access-rights and deed-interpretation decision. The Idaho Supreme Court held that a deed’s reservation of “Access to the County Road Connection” unambiguously safeguarded continued use of the specific Highway 20 connection constructed in 1973. Closing that connection breached the deed and effected a taking of the reserved easement. Independently, the closure substantially impaired the abutting landowner’s access to Highway 20, given the multi-mile detour required at the time of closure.

By reinforcing Day’s deed-as-contract framework and refining the substantial-impairment threshold in regulatory-access settings, the Court provides a clear blueprint: agencies must honor deeded access rights or compensate when eliminating them; and when access shifts from direct to multi-mile detours, the police power yields to just-compensation requirements. The opinion will shape right-of-way negotiations, highway reconfigurations, and property litigation in Idaho for years to come.