243 P.3d 491
Or. Ct. App.2010Background
- Plaintiff owns the smaller parcel and used an Indian well on the neighboring larger parcel.
- The larger parcel was owned by the Cowleys, who later sold to defendants; the well was connected to plaintiff's irrigation and koi pond.
- No written easement memorialized plaintiff's use of the well prior to or at closing; plaintiff used the well with no objection.
- Before closing, the sales agreement contemplated an easement for plaintiff; the easement was drafted but not prepared in time for closing.
- At closing, the deed to the Cowleys' property contained no easement; the deed was recorded the next day; a separate purported easement for plaintiff was signed and recorded the following day.
- Plaintiff continued to use the well for about 17 months until a dispute arose in August 2006; plaintiff filed suit seeking deed reformation, estoppel, and an implied easement.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Can a non-party to a deed obtain reformation? | Plaintiff argues third-party beneficiary status to the sale agreement creates privity. | Plaintiff is not a party to the deed and lacks privity with the deed's signatories. | Reformation not allowed; plaintiff not in privity. |
| Does merger extinguish contract rights to seek reformation? | Rights under the sale agreement survive for the benefit of the easement. | Upon merger, the deed supersedes the contract; rights not memorialized are extinguished. | Merger extinguishes contract rights; reformation based on those rights not available. |
| Does third-party beneficiary status establish privity for deed reformation? | Being a third-party beneficiary to the sale agreement should place plaintiff in privity. | Even if beneficiary, not in privity with the deed's parties. | No privity; beneficiary status does not create privity for deed reformation. |
| Is the cross-appeal moot after the appellate ruling? | N/A | If the deed reform is reversed, issues may remain. | Cross-appeal moot; primary relief reversed and remanded. |
Key Cases Cited
- Zink et ux v. Davis et ux, 203 Or. 49 (1954) (reformation limited to original parties or those in privity)
- Security S. & T. Co. v. Portland F.M. Co., 124 Or. 276 (1928) (mistaken instrument may be corrected by original parties or those in privity)
- Timber Service Co. v. Ellis, 163 Or. App. 349 (1999) (definition of privity as successive possession)
- Archambault v. Ogier, 194 Or. App. 361 (2004) (merger of contract into deed affects equitable rights)
- City of Bend v. Title & Trust Co., 134 Or. 119 (1930) (deed-based extinguishment when covenants relate to title/possession)
- Johnston v. Lindsay, 206 Or. 243 (1956) (covenants tied to title may be extinguished by deed execution)