Jаmes A. Compart, et al., Appellants, vs. Justin J. Wolfstellar, et al., Respondents, Bank of West, Defendant.
A17-0705
STATE OF MINNESOTA IN COURT OF APPEALS
Filed January 16, 2018
Hooten, Judge
Sherburne County District Court File No. 71-CV-16-513. Reversed and remanded.
Jeffrey A. Scott, Brian W. Varland, Heley, Duncan & Melander, PLLP, Minneapolis, Minnesota (for respondents)
Considered and decided by Larkin, Presiding Judge; Hooten, Judge; and Smith, T., Judge.
S Y L L A B U S
- An adverse claimant’s acceptance of a conveyance of real property from the record title holder, before the statutory period has run, only interrupts his adverse possession if the adverse claimant acknowledges the grantor’s superior title in the conveyed interest.
A purchaser who obtains title at a mortgage foreclosure sale takes title subject to a prior adverse possession unless, within the applicable statutory period, either the adverse claimant аbandons its possession or one with a superior right to possess the real property ejects the adverse claimant.
O P I N I O N
HOOTEN, Judge
Appellants contend that the district court erred by granting summary judgment in favor of respondents on appellants’ adverse possession claim and on respondents’ quiet title counterclaim. Appellants argue that their possession of the disputed real property was hostile for the required 15 years, and that their interest is superior to respondents’ interest. We reverse and remand.
FACTS
This case focuses on real property in Sherburne County, Minnesota, which is divided into four parcels: A, B, C, and D.
Appellants James Compart and Diana Compart own Parcels A and B, and respondents Justin Wolfsteller1 and Janeen Wolfsteller own Parcel C.2 Both the Comparts and the Wolfstellers claim an ownership interest in Parcel D.
For the purpose of this summary judgment appeаl, the following facts are not disputed. In 1992, Philip and Donna Larson acquired an interest in Parcels A, B, C, and D by entering into a contract for deed for the purchase of the parcels with Berlinson Associates, the title owners of the parcels. Five years later, the Comparts entered into a purchase agreement to buy “13.03+/-acres” from the Larsons for $71,775. On September 15, 1997, the Larsons delivered a quitclaim deed, and Berlinson Associates delivered a warranty deed, to James Compart for Parcels A and B, which included the grant of “an
The Larsons fully paid their contract for deed for Parcels C and D, and Berlinson Associates conveyed a warranty deed to the Larsons for those parcels on August 16, 2000. In 2008, the Larsons granted a mortgage encumbering Parcels C and D. Then, on March 5, 2012, the Comparts granted the Larsons an easement over Parcels B and D in a Road Agreement and Easement.3 The agreement, signed by the Comparts and the Larsons, recognized the Comparts as owners of Parcel D, and the Larsons as owners of only Parcel C. Nine days later, on March 14, the Larsons conveyed Parcel D by quitclaim deed to the Comparts. The deed states it was “given to correct an error in the legal description set forth in” the August 16, 2000 warranty deed.
The Wolfstellers claim ownership of Parcels C and D through a chain of title going back to the Larsons’ 2008 mortgage. In 2012, that mortgage was foreclosed, Parcels C and D were sold at a sheriff’s sale, and, after a conveyance between financial institutions, the Wolfstellers purchased Parcels C and D from Wells Fargo.
The Comparts brought this lawsuit in 2016, alleging adverse possession of Parcel D and two boundary-line claims. In their answer, the Wolfstellers filed a quiet title
ISSUES
- Did the district court err in determining that the Comparts’ possession of Parcel D was not hostile for the 15-year statutory period and, on that basis, granting summary judgment to the Wolfstellers on the Comparts’ adverse possession claim?
- Did the district court err in granting summary judgment to the Wolfstellers on their quiet title counterclaim?
ANALYSIS
I. Adverse Possession
The Comparts contend that the district court erred in granting summary judgment to the Wolfstellers because their possession of Parcel D was hostile for the required 15-year period. “On appeal from summary judgment, [appellate courts review] de novo whether there are any genuine issues of material fact and whether the district court erred in its application of the law to the facts.” Harmon v. Comm’r of Revenue, 894 N.W.2d 155, 159 (Minn. 2017) (quotation omitted). In doing so, appellate courts “view the evidence in the light most favorable to the party against whom summary judgment was granted,”
To succeed on an adverse possession claim, a plaintiff must prove, “by clear and convincing evidence, an actual, open, hostile, continuous, and exclusive possession for the requisite period of time which, under our statute, is 15 years.” Ehle v. Prosser, 293 Minn. 183, 189, 197 N.W.2d 458, 462 (1972); see also
The district court determined that the Comparts did not have hostile possession of Parcel D for the required 15 years. It reasoned that because the Comparts had a permissive easement from 1997 until March 2012, and held title via a quitclaim deed granted by the Larsons from March 2012 until the July 26, 2012 mortgage foreclosure, any possession during that timeframe was not hostile and therefore did not count toward the period of
Hostile possession “does not refer to personal animosity or physical overt acts against the record owner of the property.” Ehle, 293 Minn. at 190, 197 N.W.2d at 462. Rather, hostility only requires that one “enter and take possession of the lands as if they were his own, and with the intentiоn of holding for himself to the exclusion of all others.” Thomas v. Mrkonich, 247 Minn. 481, 484, 78 N.W.2d 386, 388 (1956) (quotation omitted).
Instead, the Wolfstellers argue that the 2012 quitclaim deed, the 2008 mortgage, and the 2012 foreclosure and sheriff’s sale interrupted the hostility period, and that,
A. 2012 Quitclaim Deed
The Wolfstellers argue that the Comparts’ acceptance of the March 2012 quitclaim deed from the Larsons is an acknowledgment by the Comparts that the Larsons held superior title, interrupting the hostility period and the continuity of their adverse possession. See Olson v. Burk, 94 Minn. 456, 458, 103 N.W. 335, 336 (1905) (“An acknowledgment by the adverse claimant of the owner’s title before the statute has run in his favor breaks the continuity of his adverse possession . . . .“). The Comparts counter by relying on Dozier v. Krmpotich, 227 Minn. 503, 509, 35 N.W.2d 696, 700 (1949), which states that “[t]he continuity of adverse possession is not broken by the adverse claimant’s taking a written conveyance of the interest claimеd by him from parties claiming ownership of the property or some interest therein.”
In evaluating the significance of the quitclaim deed, the key question is whether the adverse claimant obtained title as a way “to get rid of the outstanding title and unite it to the one under which he has been holding,” or if instead he attempted a “purchase of the land from the owner.” Id.; Olson, 94 Minn. at 458, 103 N.W. at 336. An attempt to purchase the real property from the record owner acknowledges that superior title rests with the record owner and interrupts adverse claimant’s continuous, hostile possession because he is no longer holding the real property out as his own. See Olson, 94 Minn. at 458, 103 N.W. at 336–37. But, an adverse claimant who takes “a conveyance from the owner of rеcord does not defeat his claim by right of adverse possession. A disseizor may
Based on these undisputed facts the Comparts did not purchase Parcel D as part of the 2012 transaction, and their acceptance of the quitclaim deed was not an acknowledgement that the Larsons held superior title.
The Larsons sent the Comparts an email relating to the 2012 quitclaim deed, which shows the Larsons acknowledging that superior title rests with the Comparts, and does not support the argument that the Comparts acknowledged the Larsons as superior title holders. In the email, Donna Larson told the Comparts that the Larsons had “done some calculating on the property tаxes on the 2.98 acres that should be in your name since the sale (way back in 1996!).” The Comparts paid the Larsons $754 as reimbursement of the property taxes, and the Wolfstellers argue that this payment makes the conveyance a purchase acknowledging superior title in the Larsons.
Second, the spreadsheet attached to the email shows that the $754 the Comparts paid the Larsons was the parties’ estimate of the property tax on Parcel D that the Larsons had been paying, and was paid to the Larsons as reimbursement for those tax payments. Reimbursing the Larsons for the property tax paid on Parcel D recognizes that the Comparts, as the party having superior title, owed those taxes, not the Larsons. And, based on the Comparts’ original purchase price of $71,775 for 13 acres, approximately $5,500 an acre, the Wolfstellers’ assertion that the $754 was the purchase price for 3 acres of farm land is insufficient to create a faсt issue.
Third, the deed itself states that it is a corrective deed, which is also evidence that it was not a purchase by the Comparts, but a recognition by the Larsons that the Comparts held the rightful claim to Parcel D.6 Fourth, the Road Agreement and Easement—signed by the Larsons and the Comparts only nine days before granting the quitclaim deed—
In response, the Wolfstellers point to James Compart’s affidavit, arguing:
James Compart testified in his Affidavit opposing summary judgment about negotiations with the Larsons in early 2012 to obtain a “Quit Claim Deed” “to settlе the adverse interest claim” over “the disputed Parcel D tract.” James Compart also testified to his agreement to pay the Larsons “for real estate taxes paid on what was Parcel D dating back from when [the Comparts] should have received ownership . . . .” James Compart further testified to the veracity of email communications from Donna Larson from that timeframe in which the Larsons stated: “As soon as that agreement is reached and money is ready to be paid, we’ll sign the papers and this should be able to [be] completed!!”
The statement that the deed was to settle the adverse possession claim supports the Comparts’ argument that they were not purchasing Parcel D, but obtaining record titlе to property that they were possessing as their own and to which they had a rightful claim. Additionally, James Compart’s claim that he “should have received ownership” in 1997 is not an acknowledgement that the Larsons had superior title. Rather, the affidavit states, “That your affiant in 2012 when agreeing to settle the matter with [the] Larsons, agreed to reimburse them for real estate taxes paid on what was Parcel D dating back from when [the Comparts] should have received ownership and took possession as an owner in 1996 to 1997.” (Emphasis added.) None of this evidence supports the conclusion that the Comparts’ acceptance of the quitclaim deed acknowledges superior title in the Larsons.
Moreover, if the Comparts had not accepted the quitclaim deed, their adverse possession claim would have continued to run and, assuming they prove the other elements of adverse possession at trial, they would be entitled to fee title. We will not deem acts undertaken to strengthen the Comparts’ adverse possession claim to have the effect of abandoning it—at least not where the evidence shows that they did not acknowledge superior title in the Larsons.
We hold, based upon these undisputed facts and the caselaw, that the Comparts’ acceptance of the 2012 quitclaim deed was not an acknowledgement of superior title in the Larsons and therefore did not interrupt the hostility or continuity of their adverse possession claim.
B. 2008 Mortgage, Foreclosure, and Sheriff’s Sale
The Comparts’ continuous, hostile possession of Parcel D, which predates the mortgage granted by the Larsons in 2008, was not interrupted by the grant of the mortgage or the mortgage foreclosure sale. The purchaser at the foreclosure sale and all subsequent purchasers took title to Parcel D subject to the Comparts’ possession. “It is well settled by the decisions in this state that actual possession and occupancy of land by a party, other than the [seller] thereof, is notice sufficient to put a purchaser on inquiry as to the particulars of the occupant’s claim of title.” Nellas v. Carline, 161 Minn. 157, 159, 201 N.W. 299, 300 (1924). One who purchases or takes an encumbrance on land, while that land “is in the actual possession” of one other than the seller, “is bound to make inquiries of the occupants, and to ascertain the nature and extent of their interests.” Morrison v. March, 4 Minn. 422, 429–30, 4 Gil. 325, 331 (1860) (quotation omitted). If there is a dispute on this point, it is whether the Comparts’ had “actual possession and occupancy” of Parcel D, and that is a question for the trier of fact. See Sage v. Morosick, 69 Minn. 167, 169–70, 71 N.W. 930, 931 (1897) (“The question whether there has been actual possession for the purpose of establishing title by adverse possession under the statute of limitations is usually one of fact for the jury.“); see also Skala, 171 Minn. at 413, 214 N.W. at 272 (“The law prescribes no particular manner in which possession shall be maintained or made manifest. It must be of such a character as to be unequivocal notice to the true owner that sоmeone is in possession in hostility to his title. Much depends on the nature and situation of the land and the uses to which it is adapted.“); Murphy v. Doyle, 37 Minn. 113, 115, 33 N.W. 220, 221 (1887) (“[T]o constitute adverse possession there need not be a fence or a
The Wolfstellers argue that because the Comparts accepted a quitclaim deed from the Larsons, they had an obligation to redeem their interest in Parcel D at the mortgage foreclosure sale, and that the Comparts’ failure to redeem the interest they obtained through the quitclaim deed would extinguish not only that interest, but would also end the hostility of their adverse possession claim. See
First, the Wolfstellers’ argument about the effect of a mortgage sale without redemption is irrelevаnt. The rule as stated in Dozier is that
[w]here land in the possession of an adverse claimant is purchased by another at a foreclosure sale of the mortgagor’s estate, the sale does not interrupt the continuity of the adverse possession of one not a party to the proceedings, and the purchaser succeeding only to the estate of the mortgagor must bring his action to recover the land within the period of the adverse possession.
A mortgagor, before the expiration of the statutory period of adverse possession, holds the right to eject parties in possession. See Levine v. Twin City Red Barn No. 2, Inc., 296 Minn. 260, 263, 207 N.W.2d 739, 741 (1973) (“Ejectment can be maintained only against a person in possession by one having a present exclusive right to possession.“). If the Comparts adversely possessed the property for 15 years, they acquired title to the property and neither the mortgagor nor their successors in interest could eject them. See Ross v. Cale, 94 Minn. 513, 515, 103 N.W. 561, 561 (1905) (“[T]itle acquired by adverse possession is a title in fee simple, and is as perfect as a title by deed.“). As the Michigan Supreme Court succinctly explained, a mortgagee cannot “assert a right against one in possession of land holding adversely that could not be asserted by the mortgagor if the mortgage had not been made.” Schafer v. Hauser, 111 Mich. 622, 625, 70 N.W. 136, 137 (1897); see also Dozier, 227 Minn. at 509–10, 35 N.W.2d at 700 (adopting that principle).
Second, even assuming the Wolfstellers are correct that the mortgage foreclosure sale had the power to extinguish the Comparts’ interest in Parcel D, there is no evidence in the record that the Comparts received actual notice of the mortgage foreclosure sale. The mortgage foreclosure sale statute requires that, “at least four weeks before the appointed time of sale a copy of such notice shall bе served in like manner as a summons in a civil action in the district court upon the person in possession of the mortgaged premises, if the same are actually occupied.”
The purpose of requiring this notice [is] . . . . to prevent a wrong which might result if no notice was required to be given to persons not only in possession, but also in actual occupation. “Actual occupancy” is defined as an open, visible occupancy, as distinguished from the constructive possession which follows the legal title. “Actual possession” has practically the same meaning. It mеans possession in fact, effected by actual entry upon the premises and actual occupancy. The word “actual” is usually used in a statute in opposition to “virtual” or “constructive,” and calls for an open, visible occupancy.
Cutting v. Patterson, 82 Minn. 375, 380, 85 N.W. 172, 173 (1901). “Whether land is ‘actually occupied’ is primarily a question of fact.” Pipkorn v. Dunn, 408 N.W.2d 705, 707 (Minn. App. 1987), review denied (Minn. Sept. 30, 1987). Under these facts the
Viewing the record in the light most favorable to the non-moving party, including the lack of evidence that the Comparts received notice of the foreclosure or otherwise participated in the foreclosure action, we conclude that the Wolfstellers have failed to show that the mortgage foreclosure sale interrupted the Comparts’ continuous, hostile possession of Parcel D.
C. Tax Payment
The Wolfstellers argue in the alternative that the Comparts failed to pay the required real estate taxes on Parcel D for “at least five consecutive years” during the time that the Comparts claim they adversely possessed Parcel D. See
No action fоr the recovery of real estate or the possession thereof shall be maintained unless it appears that the plaintiff, the plaintiff’s ancestor, predecessor, or grantor was seized or possessed of the premises in question within 15 years before the beginning of the action.
Such limitations shall not be a bar to an action for the recovery of real estate assessed as tracts or parcels separate from other real estate, unless it appears that the party claiming title by adverse possession or the party’s ancestor, predecessor, or grantor, or all of them together, shall have paid taxes on the
real estate in question at least five consecutive yеars of the time during which the party claims these lands to have been occupied adversely.
The supreme court’s interpretation of
While the Wolfstellers are correct that Grubb goes further than Ehle, Grubb does not support their position. In Grubb, the adverse claimant was attempting to obtain title to “approximately 13 acres of his neighbor’s 16–acre parcel.” 433 N.W.2d at 919. We concluded that “the legislature intended the tax-payment requirement to apply to actions where the disseizor claims all or substantially all of an assessed tract or parcel” because
The Wolfstellers also rely on Bryant v. Gustafson, 230 Minn. 1, 40 N.W.2d 427 (1950), or—more specifically—on Grubb’s explanation of what Bryant held, to support their position. Bryant, 230 Minn. at 4–5, 40 N.W.2d at 430–31. The Wolfstellers argue that Bryant held that the tax-payment requirement applied even when only a portion of a separately assessed parcel was being claimed under a theory of adverse possession. Grubb states:
Nowhere did the court indicate that the portion of the roadway the respondent disseizors claimed must also be separately assessed. Rather, the entire roadway was separately assessed for taxes, and the adverse claim to a portion of that roadway was defeated because the disseizor had not paid such taxes, as required under
Minn. Stat. § 541.02 .
Grubb, 433 N.W.2d at 921 (emphasis added). This language goes further than the actual holding of Grubb, and goes further than Bryant.
Second, the applicable syllabus point from Bryant states, “Where the land in question is separately assessed, the payment of taxes by a disseizor—or his predecessors in adverse possession—for a period of five consecutive years during the рeriod of adverse occupancy is a prerequisite to the acquisition of title by adverse possession.” 230 Minn. at 2, 40 N.W.2d at 429. And while Bryant implies that the adverse claimant in that case was required to pay the real estate taxes on the road, that implication is not controlling because the court first held that the adverse claimants had not satisfied the 15-year requirement,
II. Quiet Title
Because we hold that the district court erred in granting summary judgment against the Comparts on their adverse possession claim, we also hold that the district court erred in granting summary judgment in favor of the Wolfstellers on their quiet title counterclaim because there are material disputes of fact over whether the Comparts obtained title to Parcel D through adverse possession.
D E C I S I O N
Because we hold that the Comparts’ acceptance of the 2012 quitclaim deed was not an acknowledgement of superior title in the Larsons, that neither the execution of the mortgagе nor the foreclosure sale interrupted the continuity or hostility of the Comparts’ adverse possession claim, and that the tax-payment requirement of
Reversed and remanded.
