Opinion
No. C1-00-1906.
Filed July 3, 2001.
Appeal from the District Court, Chisago County, File No. C6-98-1581.
Barry L. Blomquist, (for respondents)
Wayne B. Holstad, Holstad Knaak, P.L.C., (for appellants)
Considered and decided by Randall, Presiding Judge, Toussaint, Chief Judge, and Anderson, Judge.
This opinion will be unpublished and may not be cited except as provided by Minn. Stat. § 480A.08, subd. 3 (2000).
UNPUBLISHED OPINION
In this real estate dispute, appellants challenge the district court's order that reformed the legal description in appellants' deed to favor respondents. Appellants argue (1) the district court erred by reforming the legal description because appellants were bona fide purchasers who lacked actual, implied, or constructive notice of respondents' interests in the property; (2) laches precluded respondents from seeking to reform appellants' deed; and (3) the district court erred by widening the existing easement over appellants' property. We affirm.
FACTS
In 1959, respondents Olive Deming et al. (the Demings) owned all of the parcels of land now in dispute. In 1981, the Demings sold the south part of their land to Gordon Harms. Harms then sold the land to Peter Brownell, who then sold it to appellants Roger Scherma et al. (the Schermas). The legal description was the same for each transaction and is described as follows:
The South 25 acres of the Northeast Quarter of the Southwest Quarter (NE 1/4 of SW 1/4) and that part of the Northwest Quarter of the Southeast Quarter (NW 1/4 of SE 1/4), described as beginning at the Southwest corner of the N.W. 1/4 of the S.E. 1/4; thence East 286 feet; thence North 16° 30' East, 864 feet; thence North 9° 13' West, 502 feet to a point of the North line of said NW 1/4 of SE 1/4, 450 feet East of the Northwest corner thereof; thence West to the Northwest corner of the NW 1/4 of the SE 1/4; thence South 80 rods, to the point of beginning, all in Section Thirteen (13), Township Thirty-six (36), Range Twenty-one (21).
The Demings, Harms, and Brownell all believed that the legal description conveyed a total of 25 acres. In 1982, the county property tax records showed that Harms owned more than 25 acres, so Harms had the records changed to reflect his ownership of only 25 acres. In 1984, a surveyor sent the Demings a letter, indicating that there was a possible defect in the legal description, but the surveyor indicated that the matter had been cleared up by the Demings' attorney, who had drafted the original description. When Harms sold the land to Brownell, the tax records continued to reflect 25 acres. While Brownell owned the property he logged the land up to his north boundary line (Line A) which separated his property from the Demings'.
In 1990, the Schermas responded to an advertisement by Brownell, offering to sell "25 plus" acres of land, and the Schermas decided to purchase Brownell's parcel. The Schermas mortgage appraisal was based on 25 acres. After the Schermas purchased the land, the tax records continued to reflect 25 acres. The title search paid for by the Schermas did not reveal any irregularities in the title. Later, the Schermas came to believe that the description actually conveyed two parcels of land: one parcel of 25 acres and another parcel of 13.2 acres, totaling 38.2 acres. The Schermas never asked Brownell about the boundary lines before closing on the property. Mrs. Scherma viewed the property just once before purchasing it. In 1994, the Demings considered selling more of their property, and one of their potential buyers spoke with the Schermas about the possible discrepancy in the legal description. Shortly after this conversation, the Schermas had the tax records for 1995 changed to show that they owned 38.2 acres. The additional 13.2 acres are land in which the Demings claim continued ownership, and that forms the basis for this lawsuit.
The Demings commenced an action to quiet title or reform the legal description of the Schermas' deed to show that the Schermas only owned a total of 25 acres. The other respondents participated in the trial due to their future interest in the disputed property because they planned to purchase some of the land from the Demings if the district court ruled in the Demings' favor. Fleet Real Estate Funding Corporation participated as the mortgagee of the property purchased by the Schermas. At trial, in addition to Mrs. Scherma's testimony, the Schermas also had two surveyors testify regarding the interpretation of the disputed legal description. Witnesses for the Demings testified regarding where they believed Line A was located and how and by whom the property around the boundary line was maintained. The parties stipulated to the existence of a roadway easement across the northwest corner of the Schermas' property so that the Demings could access their land, but little evidence was presented regarding its width.
Following a two-day trial, the district court reformed the Schermas' deed to reflect legal ownership of 25 acres. Both parties moved to amend the court's findings and conclusions, and the Schermas moved for a new trial. The court granted only the Demings' motion, making clerical amendments to its findings and conclusions and finding that the roadway easement, the existence of which the parties had previously stipulated, should be widened to 33 feet. The Schermas appeal from this amended order.
DECISION I. Reformation of the Legal Description
The district court's decision regarding reformation will not be disturbed unless the determination is manifestly contrary to the evidence. Metro Office Parks Co. v. Control Data Corp., 295 Minn. 348, 353, 205 N.W.2d 121, 124 (1973). A written instrument may be reformed if it is shown that
(1) there was a valid agreement between the parties expressing their real intentions; (2) the written instrument failed to express the real intentions of the parties; and (3) this failure was due to a mutual mistake of the parties, or a unilateral mistake accompanied by fraud or inequitable conduct by the other party.
Nichols v. Shelard Nat'l Bank, 294 N.W.2d 730, 734 (Minn. 1980) (citations omitted). Ambiguity is not a prerequisite to the reformation of a written instrument. Metro Office Parks, 295 Minn. at 353, 205 N.W.2d at 124.
Focusing on the land sale between the Demings and Harms and then later between Harms and Brownell, the district court's decision to reform was not manifestly contrary to the evidence. The parties (all buyers and sellers involved) believed that 25 acres was the size of the parcel. The legal description did not reflect their intention, which constitutes mutual mistake. See id. (stating that mutual mistake exists when parties agree to document's content but, because of scrivener's error, document does not reflect true agreement). Harms testified that, after he discovered that his county tax records indicated that he owned 38.2 acres, he had the records changed (against his own interest) to reflect his belief that he had only ever owned 25 acres. The Schermas hold title directly through a chain going back to Harms. When Harms sold the property to Brownell, the tax records continued to reflect this change showing a 25-acre parcel.
Line A, a boundary line, was in dispute. The location of Line A is important because it affects on what the Schermas knew, or should have known, about the claim of ownership of the 13.2 acres by all persons holding title up the chain to the Demings. Several people, including Harms and Mark Deming, son of the owner of the Demings' land, testified where they believed Line A was located. These witnesses also stated that the Demings maintained the property down to Line A and that the Demings had placed no hunting/no trespassing signs along Line A. After Brownell purchased the property, he only logged to up Line A. When Brownell decided to sell the property, he advertised a parcel that was "25 plus" acres. Based on the entire record and viewing the land sales from Demings to Harms to Brownell to the Schermas, we affirm the trial court's legal conclusion that reformation was an appropriate remedy.
But, reformation may not be granted when such a change might prejudice bona fide purchasers or other innocent third parties. Proulx v. Hirsch Bros, Inc., 279 Minn. 157, 164, 155 N.W.2d 907, 912 (1968). A bona fide purchaser is one who does not have "actual, implied, or constructive notice of inconsistent outstanding rights of others." Anderson v. Graham Inv. Co., 263 N.W.2d 382, 384 (Minn. 1978) (citation omitted).
The Schermas argue that the district court erred by reforming the deed because the Schermas contend they were bona fide purchasers of the property who did not have notice that the Demings still claim ownership of the disputed 13.2 acres. We understand the Schermas argument that the legal description, which they and all prior owners in the chain of title hold by, purports to convey not the 25 acres, but 38.2 acres. But that argument is simply a restatement of the issue, meaning was reformation justified to do equity, maintain the intent of the parties, and prevent a mutual mistake and unjust enrichment.
At trial, Mrs. Scherma agreed that she responded to an advertisement for "25 plus" acres for sale. The record is clear that the Schermas' lender had a land appraisal done on just 25 acres. Mrs. Scherma did testify that she did not see the appraisal before she and her husband closed on the property. Similarly, when asked about the no trespassing/no hunting signs posted by the Demings along Line A between the parties' property, Mrs. Scherma testified that she did not see them.
The Demings rely on the following facts to show that the Schermas had implied notice of the Demings' interest in the property: (a) the Schermas responded to an advertisement for the sale of "25 plus" acres; (b) the Schermas' loan appraisal was for 25 acres; (c) the Demings placed no trespassing/no hunting signs along Line A; (d) Brownell only logged up to Line A; (e) the Schermas' property tax assessments were based on 25 acres; (f) the Schermas observed mowing and other maintenance work being performed down to Line A and did not complain; and (g) the Schermas did not open up any land for pasture above Line A.
A purchaser has implied notice if one has "actual knowledge of facts which would put one on further inquiry." Id. For example, a subsequent purchaser is put on inquiry if another person exhibits actual, open possession and use of the property. Miller v. Hennen, 438 N.W.2d 366, 370 (Minn. 1989).
There are facts in the record to suggest that the Schermas had notice. Several witnesses testified that the boundary line depicted by Line A was accurate, that the Demings' no hunting/no trespassing signs were present along that line for many years, and that the signs were present at the time the Schermas purchased the property. The Demings maintained the property down to Line A and continued to do so after the Schermas purchased the property from Brownell. Brownell's logging line was visible at the time of the transaction, and Mrs. Scherma testified that she viewed some of the brush piles and downed logs from Brownell's logging before purchasing the property. Also, at the time the Schermas purchased the property, the tax records indicated that the parcel was 25 acres. These facts, coupled with the fact that the Schermas responded to an advertisement for "25 plus" acres, easily should have put them on further inquiry. We reject the Schermas' argument that "25 plus" could just as easily mean approximately 38 acres. Custom and usage tells us that, to attorneys and realtors, "25 plus" means that the seller assumes he owns approximately 25 acres and understands that the final survey and/or the final title opinion may determine a figure slightly more or less than the 25 acres. In fact, appellant's attorney conceded this point at oral argument. Common sense dictates that if a seller believes he has 38 acres to sell, the seller would not choose to advertise the property using the arbitrary figure of 25 acres, plus or minus. Although the advertisement and the tax statements are not determinative, they are part of an overall picture that supports the district court's conclusion that the Schermas had knowledge of facts that should have put them on further inquiry and which constitute implied notice.
Relying on Howard, McRoberts Murray v. Starry, 382 N.W.2d 293 (Minn.App. 1986), the Demings also argue that there was a defect in the legal description, which provided constructive notice to the Schermas. A defect must be apparent from the record in order to have constructive notice. Id. at 296. In Howard, the court determined that the legal description was defective because it was illogical for respondent to file a lis pendens on all of the property lying in two sections but only a small portion lying in a third section. Id. at 296-97. The court concluded that the illogical description would have provided an interested third party with constructive notice. Id. at 297.
Here, two surveyors testified that, when they read the legal description, they interpreted it to convey two separate parcels of land: one parcel for 25 acres and another metes and bounds description of a parcel for 13.2 acres. Additionally, one of the surveyors testified that he showed the description to several other surveyors and that each reached the same conclusion. But, there is also evidence that a surveyor wrote to the Demings in 1984, raising the question of possible defect in the description. The previous buyers and sellers believed that the description conveyed 25 acres, as did Brownell when he sold the property to the Schermas. We understand the Schermas' position that the description could be read to convey 25 acres plus another parcel. But, since part of the legal description mentioned 25 acres, it would be customary if there were specific wording in the legal description stating that there was an additional 13.2 acres, which together showed a conveyance of 38.2 acres. The fact that two separate parcels, one of 25 acres and a second of 13.2 acres, are not specifically set out is not determinative by itself. Legal descriptions speak for themselves, and metes and bounds can be measured out by anyone. But, the absence of that language, along with all the other evidence in the record, supports the district court's decision to reform the legal description.
We conclude that the district court's decision to reform the legal description to reflect the Schermas' ownership of 25 acres is supported by the record and sounds in equity.
II. Laches
The Schermas argue that the Demings should not be entitled to reformation under the doctrine of laches. The Schermas assert that the Demings, as the original owners of the parcel, were aware of a possible defect in the legal description but failed to address the defect in a timely manner.
The basic question in applying the doctrine of laches is "whether there has been such an unreasonable delay in asserting a known right, resulting in prejudice to others, as would make it inequitable to grant" the requested relief. Harr v. City of Edina, 541 N.W.2d 603, 606 (Minn.App. 1996) (quotation omitted). "The doctrine of laches depends on a factual determination in each case." Eide v. State Farm Mut. Auto. Ins. Co., 492 N.W.2d 549, 556 (Minn.App. 1992). "Mere delay does not constitute laches, unless the circumstances were such as to make the delay blamable." Elsen v. State Farmers Mut. Ins. Co., 219 Minn. 315, 321, 17 N.W.2d 652, 656 (1945) (quotation omitted).
Here, a surveyor contacted the Demings in 1984 and asked about a possible defect in the legal description. To clarify the description, the surveyor contacted the Demings' attorney, who drafted the description. The attorney told the surveyor that the description was intended to convey a total of 25 acres. Based on these events, the Demings believed that the matter was resolved. When the Demings realized that the Schermas were asserting ownership in more than 25 acres, the Demings acted in a timely manner by filing a quiet title action in district court. The Schermas attempt to argue that the attorney's statement is hearsay, but we summarily reject this characterization of trial evidence. The parties stipulated to this statement as evidence. Stipulated evidence is part of the trial record and part of our record on review. Thus, the evidence that the attorney drafting the original description, on which all parties to this lawsuit and the chain of title rely, stated that the description was intended to convey a total of 25 acres, as respondents contend, buttresses the trial court's decision to reform the description, which we affirm today, and buttresses the argument that respondent's remedy should not be barred by laches.
III. Easement Width
The Schermas first attempt to argue that the only easement that could be established is an easement by necessity. But, the chain of title shows an express easement by grant, and the parties stipulated to its existence. The language, which has remained the same through the Demings to Harms transaction, the Harms to Brownell transaction, and the Brownell to the Schermas transaction, states that the land is subject to a permanent easement reserved to the parties of the first part, their heirs and assigns for a roadway over and across the above premises running from the Southwest corner thereof and Northerly to the premises retained by the parties of the first part, which premises are North of the above-described premises and adjacent thereto, and which roadway is presently in place.
The district court correctly noted that "there is no need to consider the easement in other forms suggested such as one by necessity or prescription. The easement is an affirmative grant."
The Schermas next argue that the district court erred by establishing the roadway easement's width at 33 feet. The Schermas assert that there is no evidence to establish any custom or usage that roadway easements must be this wide.
"[T]he extent of an easement should not be enlarged by legal construction beyond the objects originally contemplated or expressly agreed upon by the parties." Minneapolis Athletic Club v. Cohler, 287 Minn. 254, 258, 177 N.W.2d 786, 789-90 (1970) (citation omitted). But, an easement holder
is not limited to the particular method of use in vogue when the easement was acquired, and * * * other methods of use in the aid of the general purpose for which the easement was acquired are permissible.
Washington Wildlife Preservation, Inc. v. State, 329 N.W.2d 543, 546 (Minn. 1983).
The record does not indicate whether the easement grant ever established the easement's width, but parties stipulated that the roadway easement must provide access for "ingress and egress for vehicular traffic, including, but not limited to, private passenger travel, service trucks, utility trucks and emergency vehicles." The court established a 33-foot roadway easement based on Minn. Stat. § 164.07, subd. 2(a) (2000), which provides that a "town board shall establish a cartway at least two rods wide" when the owner of a parcel of land containing at least five acres has no access to the land except "over the lands of others, or whose access thereto is less than two rods in width." The court believed that 33-feet was "the smallest passage recognized under Minnesota law." Based on this reasoning, we conclude that the court did not abuse its discretion in establishing a 33-foot easement rather than a smaller width requested by the Schermas.
One rod is equal to 16.5 feet. Black's Law Dictionary, 1194 (5th ed. 1979).