Summary
In Lindahl we affirmed the superior court's determination that the owner of the 13-acre parcel has and had vested, perfected prescriptive easement rights in South Mule Shoe Ranch Road for ingress and egress and marketable title.
Summary of this case from Stazenski v. CoughlinOpinion
No. 1 CA-CV 14-0001
03-31-2015
STANLEY F. STAZENSKI and PATRICIA STAZENSKI, husband and wife, Plaintiffs/Appellants, v. GLADYS LINDAHL, a single woman, and the ESTATE OF TOM LINDAHL, a deceased man; JAMES DWAYNE HAVENS and LESLIE LEE HAVENS, husband and wife; JAMIE ASHLYN HAVENS, a single woman, Defendants/Appellees.
COUNSEL Christopher Jacobson LLC, Phoenix By Jay C. Jacobson Counsel for Plaintiffs/Appellants Burch & Cracchiolo, P.A., Phoenix By Daryl Manhart, Andrew Abraham Counsel for Defendants/Appellees
NOTICE: NOT FOR OFFICIAL PUBLICATION. UNDER ARIZONA RULE OF THE SUPREME COURT 111(c), THIS DECISION IS NOT PRECEDENTIAL AND MAY BE CITED ONLY AS AUTHORIZED BY RULE. Appeal from the Superior Court in Yavapai County
No. P1300CV201200199 P1300CV201200200 P1300CV201200201 P1300CV201200202 (Consolidated)
The Honorable Patricia A. Trebesch, Judge
AFFIRMED
COUNSEL Christopher Jacobson LLC, Phoenix
By Jay C. Jacobson
Counsel for Plaintiffs/Appellants
Burch & Cracchiolo, P.A., Phoenix
By Daryl Manhart, Andrew Abraham
Counsel for Defendants/Appellees
MEMORANDUM DECISION
Judge Patricia K. Norris delivered the decision of the Court, in which Presiding Judge Margaret H. Downie and Judge Randall M. Howe joined. NORRIS, Judge:
¶1 Plaintiffs/Appellants Stanley and Patricia Stazenski appeal from the superior court's grant of summary judgment in favor of Defendants/Appellees Gladys Lindahl, the Estate of Tom Lindahl, and James, Leslie, and Jamie Havens. Because we agree with the superior court that the undisputed facts show the Lindahls and the Havens were entitled to summary judgment, we affirm.
FACTS AND PROCEDURAL BACKGROUND
We view the facts and the inferences therefrom in the light most favorable to the Stazenskis. See, e.g., Ponce v. Parker Fire Dist., 234 Ariz. 380, 382-83, ¶ 9, 322 P.3d 197, 199-200 (App. 2014).
¶2 Beginning in 1953, the Lindahl family used South Mule Shoe Ranch Road (the "Road") to access Mule Shoe Ranch, their property in Yavapai County. The Road crossed property owned by their neighbor. In 1992, the Lindahls split off a 13-acre parcel from the ranch and conveyed it to the Havens, who also used the Road for access.
¶3 In 2001, the neighbor acknowledged, through counsel, that based on their historical use of the Road, the Lindahls had acquired a prescriptive easement for ingress and egress. The neighbor disputed, however, the width of the easement. To clarify the width of the easement, the neighbor executed and recorded a Quit Claim Deed in which he quit claimed to the Lindahls "a non-exclusive easement that is 20 feet wide . . . for ingress and egress over Grantor's real property, consistent with and conditional upon such ingress and egress being consistent with all past use." The easement and affected portions of the neighbor's property were described in an attachment to the Quit Claim Deed. According to the Stazenskis, the easement—as described in the attachment to the Quit Claim Deed—fell approximately 212 feet short of reaching Mule Shoe Ranch ("Quit Claim Deed defect"). The Quit Claim Deed did not refer to the Havens or to their 13-acre parcel.
¶4 In 2005, the Stazenskis purchased the 431-acre parcel comprising the remainder of Mule Shoe Ranch and a contiguous 10-acre parcel from the Lindahls. Before the transaction closed, the Lindahls gave the Stazenskis a property disclosure statement. On the statement, the Lindahls answered, "Yes," to the question, "Are you aware of any title issues affecting this Property?" and attached a copy of the Quit Claim Deed. The Lindahls conveyed title to the Stazenskis with a general warranty deed. In 2007, the Stazenskis purchased the 13-acre parcel (collectively, with the 431 and 10-acre parcels, the "Properties") from the Havens who likewise conveyed title to the Stazenskis with a general warranty deed.
For purposes of summary judgment, the Stazenskis admitted the Lindahls historically used the Road to access the 10-acre parcel.
¶5 In March 2007, the Stazenskis obtained a $920,000 loan from a bank which they secured with a deed of trust encumbering the 431-acre parcel and, possibly, the 10-acre parcel. In March 2010, the bank foreclosed on the 431 and 10-acre parcels, and the trustee under the deed of trust conducted a non-judicial foreclosure sale and sold the two parcels to a third party. A few months later the Stazenskis learned of the alleged Quit Claim Deed defect.
On its face, the deed of trust encumbers both the 431 and 10-acre parcels, however, the Stazenskis have disputed whether the 10-acre parcel is subject to the deed of trust in claims they have asserted against their former attorney.
¶6 The Stazenskis subsequently sued the Lindahls and the Havens, and, asserting various contract and tort claims, alleged the Properties were landlocked and the Lindahls and the Havens had failed to disclose that access was based on a prescriptive as opposed to a valid recorded easement. After disclosure and discovery, the Lindahls and the Havens moved for summary judgment. In their moving papers, they argued the Stazenskis had obtained "legal access" to the Properties over the Road by a prescriptive easement which had vested years before the Stazenskis purchased the Properties, and which had passed to the Stazenskis when they purchased the 431 and 10-acre parcels in 2005 and the 13-acre parcel in 2007. They also argued the Stazenskis had actual and constructive notice of any defects in the Quit Claim Deed, see Ariz. Rev. Stat. ("A.R.S.") § 33-416 (2014), before they purchased the Properties, and that the Stazenskis had shown no cognizable damages caused by any of the Lindahls' or the Havens' alleged wrongdoing.
The Stazenskis also sued the Lindahls and the Havens for common law fraud, but in their opening brief they advised this court they had decided to abandon the fraud claim.
The Arizona Legislature has not materially altered any of the statutes mentioned in this decision after the events giving rise to this dispute. Accordingly, we cite to the current version of these statutes.
¶7 The superior court granted summary judgment in favor of the Lindahls and the Havens. The superior court ruled that as a matter of law, the Properties were not landlocked, "[t]he Lindahls and their predecessors had established the prescriptive easement over a substantial period of time, in excess of 40 years," and the Stazenskis' title to the Properties included "vested, perfected prescriptive rights" for ingress and egress along the Road. The superior court also ruled that "by law the plaintiffs are deemed to have known of the alleged deficiencies in the [Quit Claim Deed] before they purchased the properties," and that the Quit Claim Deed pertained "only to the 431-acre and 10-acre parcels" and not to the 13-acre parcel. Finally, the superior court agreed with the Lindahls and the Havens that the Stazenskis had "not articulated any damages in connection with the alleged defects."
DISCUSSION
I. The Prescriptive Easement
¶8 The Stazenskis argue the prescriptive easement is unenforceable and not vested and perfected as the superior court ruled. In making this argument, the Stazenskis do not contest the factual circumstances, discussed above, which gave rise to the prescriptive easement. Instead, they argue that under various Arizona statutes, unrecorded prescriptive easements are unenforceable. Reviewing their arguments de novo because they present issues of law, we disagree and affirm the superior court's ruling that both the Lindahls and the Havens conveyed to the Stazenskis "vested, perfected prescriptive . . . easement right[s] in South Mule Shoe Ranch Road for ingress and egress" to the Properties. See Ponce v. Parker Fire Dist, 234 Ariz. 380, 382, ¶ 9, 322 P.3d 197, 199 (App. 2014) ("In reviewing a motion for summary judgment, we determine de novo . . . whether the trial court properly applied the law.").
¶9 Relying on A.R.S. §§ 12-1101 to -1104 (2003) - statutes which provide the right and describe the procedure for bringing a quiet title action—the Stazenskis first argue that "[a] quiet title action is the only procedure by which a party can properly and legally establish a prescriptive easement." A quiet title action, however, merely allows a party to clarify or enforce property interests that already exist; it is not necessary to create a transferrable property interest. See A.R.S. § 12-1101(A) ("An action to determine and quiet title to real property may be brought by any one having or claiming an interest therein . . . ."). As the Lindahls and the Havens point out, title to a prescriptive easement vests upon expiration of the statute of limitations. See Curtis v. S. Pac. Co., 39 Ariz. 570, 574, 8 P.2d 1078, 1079 (1932) ("If . . . plaintiffs have used and enjoyed the right of crossing defendant's right of way peaceably and adversely for more than ten years, . . . they have an easement of passage which is a vested property right."); Babo v. Bookbinder Fin. Corp., 27 Ariz. App. 73, 74, 551 P.2d 63, 64 (1976) (assumption that party who acquired property interest by adverse possession did not acquire legal title until judgment entered in quiet title action "erroneous," because "[t]itle vests at the end of the adverse possession period" and "[c]ourt action is not necessary to perfect title"). Furthermore, once vested, a prescriptive easement passes along with title to the dominant estate. See Solana Land Co. v. Murphey, 69 Ariz. 117, 122, 210 P.2d 593, 596 (1949) ("A right of way appurtenant is a right which inheres in the land to which it is appurtenant, is necessary to its enjoyment, and passes with the land . . . ."); Ammer v. Ariz. Water Co., 169 Ariz. 205, 209, 818 P.2d 190, 194 (App. 1991) ("An easement appurtenant is created to benefit the owner of the dominant tenement in the use of his land.").
¶10 The Stazenskis next argue the prescriptive easement is unenforceable under A.R.S. § 33-412(A) (2014), one of Arizona's recording statutes. Contrary to the Stazenskis' argument, however, this statute does not create a "duty . . . to record a document giving notice to the world of the [property] interest"; instead it merely provides that unrecorded conveyances are "void as to creditors and subsequent purchasers for valuable consideration without notice." A.R.S. § 33-412 (A).
¶11 Finally, the Stazenskis argue the prescriptive easement is unenforceable under the statute of frauds. See A.R.S. § 33-401 (2014). The statute of frauds governs the validity of conveyances. It is inapplicable to property interests arising from adverse possession or prescription, which, by definition, allow a party to establish a property interest absent a conveyance. E.g., Spauling v. Pouliot, 218 Ariz. 196, 203, ¶ 25, 181 P.3d 243, 250 (App. 2008) ("A party claiming title to real property by adverse possession must show that his or her possession of the property was actual, visible, and continuous for at least ten years and that it was under a claim of right, hostile to the claims of others, and exclusive."). II. Marketability of Title
¶12 The Stazenskis argue the Lindahls and the Havens failed to convey marketable title to the Properties because either the Properties lacked legal access, or if there was legal access, it was based solely on a prescriptive easement. The superior court did not make an explicit finding on marketability, but in granting summary judgment for the Lindahls and the Havens on the Stazenskis' claims, it implicitly determined the Stazenskis had received marketable title. The Arizona Supreme Court has suggested that whether title is marketable is a question of law, see Baker v. Leight, 91 Ariz. 112, 119, 370 P.2d 268, 273 (1962), and, in any event, we review de novo the superior court's grant of summary judgment. See Ponce, 234 Ariz. at 382, ¶ 9, 322 P.3d at 199.
The Stazenskis also argue the superior court was not entitled to determine the Lindahls and the Havens had a prescriptive easement to use the Road for access because the neighbor was not a party to the litigation. As a non-party, the neighbor was not bound by the superior court's ruling, see Daystar Invs., L.L.C. v. Maricopa Cnty. Treasurer, 207 Ariz. 569, 572-73, ¶ 15, 88 P.3d 1181, 1184-85 (App. 2004), but, unlike an action to quiet title, all possible claimants need not be joined to establish marketable title. Notwithstanding the absence of potential adverse parties, a court may find marketable title when potential "outstanding claimants could not succeed were they in fact to assert a claim," and "there is no real likelihood that any claim will ever be asserted." Conklin v. Davi, 388 A.2d 598, 603 (N.J. 1978). As discussed in more detail below, see infra ¶ 16, this is the case here.
¶13 As a preliminary matter, we note that whether lack of legal access to property necessarily renders title unmarketable is an open question in Arizona, and other jurisdictions are divided on the issue. Compare Barasky v. Huttner, 620 N.Y.S.2d 121, 122 (N.Y. App. Div. 1994) ("Lack of legal access renders title unmarketable."), and Haines v. Old Republic Nat. Title Ins. Co., 178 P.3d 1086, 1090 (Wyo. 2008) ("[W]hen property completely lacks [legal] access, it is usually held that its title is unmarketable . . . ."), with Mostrong v. Jackson, 866 P.2d 573, 578 (Utah Ct. App. 1993) (buyers of property failed to establish "that marketable title in this instance necessarily included legal access to the property"). Because, however, the Lindahls and the Havens did not challenge the Stazenskis' argument that lack of legal access renders title unmarketable either in the superior court or in their answering brief, we assume, without deciding, that lack of legal access to property renders its title unmarketable.
¶14 We also note that contrary to the Lindahls' and the Havens' argument on appeal, the record contains evidence the Quit Claim Deed was defective. Thus, because the superior court dismissed the Stazenskis' claims on summary judgment, for purposes of this appeal, if title to the Properties was marketable, it was so only by virtue of the prescriptive easement. See Ponce, 234 Ariz. at 382-83, ¶ 9, 322 P.2d at 199-200 ("We view the facts and the inferences to be drawn from those facts in the light most favorable to the party against whom judgment was entered."). With these considerations in mind, we turn to the question of whether the Lindahls and the Havens conveyed marketable title to the Stazenskis.
In response to the Lindahls' and the Havens' motion for summary judgment, the Stazenskis submitted a report in which their real estate valuation expert explained he had reviewed maps of the area with a land surveyor and had confirmed the Quit Claim Deed defect. The Stazenskis also argued that in addition to the Quit Claim Deed defect, the Quit Claim Deed conveyed no more than a license, personal to the Lindahls, for use of the Road. On appeal, the Stazenskis only mention this point in passing and neither argue nor cite any authorities that the prescriptive easement did not "run with the land." Thus, the Stazenskis have abandoned this argument on appeal.
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¶15 Although not cited by the parties, in Sabin v. Rauch, the Arizona Supreme Court described "a marketable title" as one "free from any reasonable possibility of future litigation which may be necessary to remove apparent or real defects, free from reasonable doubt, and not clouded by any outstanding covenant or conveyance." 75 Ariz. 275, 279, 255 P.2d 206, 208 (1953). In addressing a situation in which conflicting claims appeared in the chain of title, the Sabin court further explained that title "must appear of record to be marketable." Id. at 278-79, 255 P.2d at 207-08, citing Winslow v. Gilstrap, 32 P.2d 767 (Or. 1934) (seller breached purchase contract by failing to convey title that did not appear marketable of record because contract called for "a good and sufficient warranty deed . . . and an abstract [of title] showing the same to be clear of encumbrances").
¶16 In noting that title should appear "of record" to be marketable, the Arizona Supreme Court was not, however, confronted with a situation in which, as here, the alleged defect in marketable title was not "of record," but instead involved only the absence of a recorded document demonstrating the existence of a valid, vested prescriptive easement. Further, in the Oregon case cited by the supreme court, the purchase contract required that "good and sufficient" title be shown through an abstract of title, which in a non-abstract of title state such as Arizona, would be analogous to a requirement that "good and sufficient" title be shown "by record." Thus, we do not read Sabin as establishing a categorical rule that in all situations marketable title can only be demonstrated by a document "of record." See generally Conklin v. Davi, 388 A.2d 598, 601 (N.J. 1978) ("where the contract of sale does not require the vendor to give a title valid of record, but provides for a less stringent requirement, such as marketability," vendor may convince court his or her title resting on adverse possession is marketable, and thus, satisfy his or her obligation to buyer); 17 Williston on Contracts § 50:11 (4th ed.) (2014) ("Some jurisdictions . . . distinguish[] between 'marketable title' and 'marketable title of record.'").
¶17 When title has been challenged as unmarketable because of the absence of a recorded document, jurisdictions across the United States have recognized that "title resting in adverse possession, if clearly established, will be held marketable." Conklin, 388 A.2d at 602; accord Schlueter v. Ackerman, 137 A.2d 179, 182 (Md. 1957); Medusa Portland Cement Co. v. Lamantina, 44 A.2d 244, 246 (Pa. 1945); Barter v. Palmerton Area Sch. Dist., 581 A.2d 652, 654 (Pa. Super. Ct. 1990); see also W.E. Shipley, Annotation, Title by or through Adverse Possession as Marketable, 45 A.L.R.2d 544, § 3 (1956) ("It is the well-established rule in the great majority of the jurisdictions where the question has been considered that a clearly established title by adverse possession or limitations, that is, one which is good beyond a reasonable doubt, is marketable."); 17 Williston on Contracts § 50:11 (4th ed.) (2014) ("A title founded on adverse possession may, according to the vast majority of courts, be capable of that degree of clear proof as to be marketable . . . ."). Here, in light of the uncontroverted evidence demonstrating the Lindahls' and the Havens' historical use of the Road, the neighbor's acknowledgment the Lindahls had acquired a prescriptive easement to use the Road, and the Stazenskis' failure to offer any evidence they had been unable to access the Properties, the prescriptive easement was "free from any reasonable possibility of future litigation which may be necessary to remove apparent or real defects." Sabin, 75 Ariz. at 279, 255 P.2d at 208. Thus, the Lindahls and the Havens conveyed marketable title to the Stazenskis. III. Misrepresentation/Failure to Disclose
¶18 Finally, the Stazenskis appeal the superior court's grant of summary judgment against them on their negligent misrepresentation claim. This claim was grounded on the allegation the Lindahls and the Havens failed to disclose the Quit Claim Deed defect and that, instead, a prescriptive easement provided access to the Properties. Reviewing this argument de novo, we affirm the superior court's dismissal of this claim on summary judgment. See Ponce, 234 Ariz. at 382, ¶ 9, 322 P.3d at 199.
¶19 As to the Lindahls, the record squarely defeats the Stazenskis' claim. As discussed, the Lindahls disclosed the Quit Claim Deed to the Stazenskis and gave them a copy of it before the Stazenskis purchased the 431 and 10-acre parcels. Furthermore, because the Quit Claim Deed was recorded in the chain of title for the 431 and 10-acre parcels, by operation of law the Stazenskis had notice of its "existence and contents." See Bailey v. Kuida, 69 Ariz. 357, 362, 213 P.2d 895, 898 (1950) (purchasers had constructive notice of encumbrances on record with county recorder); see also A.R.S. § 33-416 (2014). Thus, the Stazenskis purchased the 431 and 10-acre parcels with full knowledge of the alleged Quit Claim Deed defect.
¶20 And, as to the Havens, the Quit Claim Deed did not purport to provide access to the property the Stazenskis purchased from them. The Havens could not have injured the Stazenskis by not disclosing the Quit Claim Deed defect when the Quit Claim Deed did not, on its face, have anything to do with the 13-acre parcel.
CONCLUSION
¶21 For the foregoing reasons, we affirm summary judgment in favor of the Lindahls and the Havens. We also award the Lindahls and the Havens their reasonable attorneys' fees on appeal, see A.R.S. § 12-341.01 (Supp. 2014), and their taxable costs on appeal, see A.R.S. § 12-341 (2003), contingent upon their compliance with Arizona Rule of Civil Appellate Procedure 21.