Haik v. Sandy City
2011 UT 26
| Utah | 2011Background
- Haik Parties and Sandy City claim title to the same water right; Sandy City recorded an Agreement of Sale (1977) but did not record the deed until 2004; Haik Parties recorded their deed in 2003 after a chain of title back to 1978; Haik’s title search omitted the 1977 Agreement but would have found it if looked earlier; Sandy City’s deed was never recorded for nearly 27 years after the Agreement of Sale; UDWR records corroborate an inviolate chain of title in favor of Haik Parties; the district court granted summary judgment in favor of Haik Parties and quieted title, holding they acted in good faith and were first to record
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| whether the Agreement of Sale put Haik on constructive record notice | Haik: agreement was executory, no notice | Sandy City: agreement described a conveyance and imparted notice | agreement imparted notice but good-faith purchase by Haik |
| whether notice of an equitable interest defeats a subsequent purchaser in good faith | Haik: no good-faith protection due to notice; belief in clean title | Sandy City: equitable interest can defeat later purchaser | Haik Parties purchased in good faith under circumstances |
| whether the Agreement of Sale was fully performed or executory governs notice | Haik: ambiguous, treated as executory for notice purposes | Sandy City: should treat as completed sale | ambiguous, treated as executory for purposes of record notice |
Key Cases Cited
- Salt Lake Cnty. v. Metro W. Ready Mix, Inc., 2004 UT 23 (Utah Supreme Court, 2004) (two types of notice; race-notice framework)
- J.B. Ranch, Inc. v. First Am. Title Ins. Co., 966 P.2d 834 (Utah Supreme Court, 1998) (notice from recorded documents; inquiry vs. record notice)
- Cannefax v. Clement, 818 P.2d 546 (Utah Supreme Court, 1991) (equitable notices; title interests)