The principal issue in this case is whether someone who is not party to a deed may nevertheless obtain its reformation. Plaintiff contends that, when defendants acquired their property from a third party, the deed was supposed to have included an easement for her benefit. She argued that, because defendants were aware of her interest, the deed should be reformed to reflect it. The trial court agreed and reformed the deed to include an easement for plaintiffs benefit. Defendants appeal, arguing that, because plaintiff was neither a party to the deed nor in privity with any party to the deed, she cannot seek its reformation, and the trial court erred in granting that relief. Plaintiff cross-appeals, arguing that the trial court also erred in failing to award her attorney fees. We conclude that defendants are correct that the trial court erred in reforming the deed and reverse and remand on that basis. Our disposition of the appeal renders moot plaintiffs cross-appeal.
On
de novo
review, ORS 19.415(3)(b) (2007);
1
Kish v. Kustura,
In late 2004, the Cowleys put their parcel up for sale. They discussed with their real estate agent their desire that plaintiff have continued access to the well. The real estate agent suggested that the Cowleys prepare an easement. Meanwhile, defendants expressed interest in purchasing the Cowleys’ property. Defendants made an offer on the property, and the Cowleys accepted. The sales agreement provided that “[b]uyer agrees to allow current owner of property located to the south!, i.e., plaintiff,] access to Indian well.”
Some time after the execution of the sales agreement, the Cowleys’ real estate agent asked an attorney to draft a water easement for plaintiffs benefit. The easement, however, was not prepared in time for closing. At the closing, on March 14, 2005, the parties executed an addendum to their sales agreement, stating that “[s]eller will comple[te] and pay cost of easement for waterline to adjacent property.” Yet no easement documentation existed at the time of closing. Of particular importance is the fact that the statutory warranty deed to the Cowley’s property contained no exception, encumbrance, or other mention of an easement for an irrigation well or water line. Still, the Cowleys signed that deed, and defendants and the Cowleys completed the closing process.
The following day, March 15, 2005, the deed was recorded. That same day, the Cowleys and plaintiff signed a document that purported to grant plaintiff an easement to continue to use the Indian well on what was now defendants’ property. The Cowleys recorded that easement on March 16, 2005.
Following a two-day trial, the trial court granted plaintiff relief by ordering the deed to be reformed to include an easement for the benefit of plaintiff, to enable her to obtain water from the well on defendants’ property. The trial court also awarded plaintiff money damages based on defendants’ interference with the easement and plaintiffs loss of her fish and plants. The trial court held that plaintiffs other claims were moot because reformation of the deed gave her complete relief.
Defendants appeal that judgment, arguing that the trial court erred in reforming the deed. According to defendants, plaintiff could not seek reformation as a matter of law because she is neither a party to the deed between defendants and the Cowleys nor in privity with any of the parties to that deed.
It is black-letter law that reformation will be allowed only as against the original parties to an instrument or someone who is in privity with the original parties to the instrument.
Zink et ux v. Davis et ux,
“Privity” refers to “successive possessions” that are “ ‘connected by an understanding that the rights of the possessor will be transferred, and * * * a transfer of possession in fact occurs.’ ”
Timber Service Co. v. Ellis,
To begin with, neither party argues that the water easement executed by the Cowleys the day after the deed was executed established the necessary privity. That makes sense, given the fact that, by the time the easement had been executed, the Cowleys no longer had any interest in the property to grant to plaintiff. “One cannot * * * grant or transfer an interest in land that one does not own.”
Bigelow v. Wiley Mt. Inc.,
Instead, plaintiff claims that, because she was, in effect, a third-party beneficiary to the sales agreement between the Cowleys and defendants, that places her in privity with both parties to that agreement. Defendants contest plaintiffs assertion that she was a third-party beneficiary to their agreement in the first place. They further contend that, even assuming that she was a third-party beneficiary, that does not stand her in privity with either party to the agreement.
We need not decide, however, whether plaintiff was a third-party beneficiary to the agreement because we agree with defendants that, even if she was, that does not make her in privity with the parties to the deed. That is because what matters in this case is plaintiffs relationship to the parties to the deed, not the agreement.
“Under the doctrine of merger, when a deed is delivered pursuant to the terms of a previous agreement, the deed ‘supersedes the contract as to all its provisions made pursuant to the terms of the latter[.]’ ”
Archambault v. Ogier,
Because plaintiff was neither a party to the deed nor in a relationship of privity with any party to the deed, the trial court erred in granting her relief in the form of reformation of that deed. In reaching that conclusion, we state no opinion about whether plaintiff may be entitled to relief on any of her other claims, issues that the trial court did not have occasion to address.
On appeal, reversed and remanded; cross-appeal dismissed as moot.
Notes
In 2009, the legislature amended ORS 19.415(3)(b), making discretionary this court’s de novo review of cases in an equitable proceeding other than those that involve the termination of parental rights. Or Laws 2009, ch 231, § 2. Because this appeal was filed before the effective date of that statutory change, the current version of the statute does not govern our standard of review in this case. Accordingly, we apply the prior version, which requires de novo review of all cases in an equitable proceeding.