50 N.E.3d 361
Ind.2016Background
- In 1948 the Cottingham parcel was subdivided into 11 lots; a 35‑foot‑wide strip (the "Strip") along the eastern edge was later treated differently in surveys and tax records.
- A barn/outbuildings built beginning in 1968 partially encroached onto the Strip; the Cotners and their predecessors used and paid taxes on improvements for decades.
- The Strip was sold at tax sales: a tax deed issued in 1993 to a purchaser and again in 2011 (eventually revesting in the county and sold to Bonnell). Those tax deeds are prima facie evidence of valid tax proceedings and vest fee simple title free of prior encumbrances under the Tax Deed Statutes.
- The Cotners sued to quiet title claiming they had acquired the disputed portion by adverse possession (including compliance with the adverse‑possession tax statute). The trial court denied title by adverse possession but sua sponte awarded the Cotners a prescriptive easement over the outbuildings.
- On appeal the Indiana Supreme Court reviewed whether the Cotners met the statutory adverse‑possession/tax requirements, the effect of subsequent tax sales and deeds on adverse possessory interests and easements, and whether a prescriptive easement could properly be awarded.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Cotners satisfied the adverse‑possession tax statute (statutory tax‑payment requirement) | Cotners: they and predecessors paid taxes on the improvements and reasonably believed the land was theirs, satisfying the statute | Bonnell: Cotners did not pay taxes on the Strip itself; therefore they failed the statutory requirement and cannot perfect title | Court: Cotners satisfied the adverse‑possession tax statute under the standard that the adverse claimant need only pay the tax they reasonably and in good faith believe to be due |
| Effect of subsequent tax sales/tax deeds on adverse possessory interests and easements | Cotners: perfected adverse possession (or at least an easement) survives; tax sales cannot divest an adverse possessor who met statutory requirements | Bonnell: tax deeds (1993 and 2011) vested fee simple title and extinguished prior adverse‑possession claims and unrecorded easements under the Tax Deed Statutes | Court: While adverse possession may have been perfected for purposes of the statutory rule, the Tax Deed Statutes and subsequent tax deeds operate to divest prior claims of ownership; recorded easements survive but unrecorded interests are defeated by valid tax deeds |
| Whether a prescriptive easement could be created for the outbuildings | Cotners: even if fee title failed, they are entitled to a prescriptive easement for long‑continued use of the outbuildings | Bonnell: the easement was unrecorded and the tax deeds extinguished prior encumbrances; awarding an easement sua sponte was improper | Court: The trial court’s sua sponte award of a prescriptive easement was erroneous and is reversed |
| Sufficiency of tax‑sale notice and statutory compliance by county | Cotners: county notices/publication did not prevent adverse possessor’s claim given their long, open, notorious use | Bonnell: tax sale procedures and notices were regular; tax deeds are prima facie evidence of regularity and vesting | Court: The statutory notices and statutory effect of the tax deeds were satisfied; tax deeds create a strong presumption of regularity that defeats unrecorded claims |
Key Cases Cited
- Fraley v. Minger, 829 N.E.2d 476 (Ind. 2005) (adverse possessor must pay taxes on the property reasonably believed to be owned to satisfy tax‑statute requirement)
- Tucker v. 35 N.E.3d 251 (Ind. 2015) (discussing interplay between adverse possession and tax‑deed statutory scheme)
- Johnson v. Wysocki, 990 N.E.2d 456 (Ind. 2013) (standard for reviewing factual findings and inferences)
- Echterling v. Kalvaitis, 126 N.E.2d 573 (Ind. 1955) (addressing substantial compliance with tax‑sale notice requirements)
- Calhoun v. Jennings, 512 N.E.2d 178 (Ind. 1987) (explaining issuance of tax certificate and redemption mechanics)