City of Rio Rancho v. AMREP SOUTHWEST INC.
150 N.M. 428
N.M.2011Background
- In 1985, the Vista Hills West Unit 1 plat designated Parcel F as a drainage easement over ten acres for the City of Rio Rancho.
- Parcel F was sold in fee simple by Amrep to Mares, then to Cloudview Estates, both subject to the recorded drainage easement.
- Cloudview sought to vacate the easement and subdivide Parcel F into thirty lots; the City declined, citing an intended perpetual open-space use.
- The City claimed Cloudview was not a good faith purchaser because the drainage easement could vest fee title via dedication or adverse possession and due to unrecorded open-space interests.
- District court granted summary judgment that Cloudview held fee title subject to the drainage easement; City and Amrep sought various equitable and inverse-condemnation relief.
- New Mexico Court of Appeals reversed in part, and the Supreme Court granted certiorari to decide good faith purchaser status and associated issues.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Cloudview is a good faith purchaser and what title Cloudview holds | City: easement designation implies City title by dedication/adverse possession; Cloudview should be aware. | Cloudview obtained fee simple title free of unrecorded City interests; only the recorded drainage easement binds it. | Cloudview is a good faith purchaser; Cloudview's fee title is subject only to the recorded drainage easement. |
| Whether the City acquired fee title to Parcel F under Section 3-20-11 | Plat designated Parcel F for public use, triggering fee title by dedication. | Plat does not expressly dedicate Parcel F for public use; it only grants a drainage easement. | Section 3-20-11 does not vest fee title in the City; the plat does not designate Parcel F for public use. |
| Whether the City has color of title or adverse possession to Parcel F | City possessed Parcel F and had color of title via plat; adverse possession could vest fee title. | Easement does not convey fee title; no color of title or ten-year possession proved. | No color of title or adverse possession; City cannot claim fee title as a matter of law. |
| Whether Cloudview had a duty to investigate due to an unrecorded open-space claim | Cloudview should have inquired because of potential open-space interests implied by the plat. | The recorded plat unambiguously grants drainage easement; no duty to inquire. | Cloudview had no duty to investigate; the recorded drainage easement extinguishes unrecorded interests for a good faith purchaser. |
Key Cases Cited
- Romero v. Philip Morris Inc., 2010-NMSC-035 (N.M. 2010) (summary-judgment de novo review standard)
- Hunt v. Ellis, 27 N.M. 397, 201 P. 1064 (N.M. 1921) (notice and inquiry doctrine for purchasers)
- Kennedy v. Bond, 80 N.M. 734, 460 P.2d 809 (N.M. 1969) (easement rights distinguished from fee title)
- Arias v. Springer, 42 N.M. 350, 78 P.2d 153 (N.M. 1938) (unrecorded interests; protection of innocent purchasers)
- Mark V, Inc. v. Mellekas, 114 N.M. 778, 845 P.2d 1232 (N.M. 1993) (contract interpretation and extrinsic evidence limits in easement context)