Opinion
Nos. 56000-0-I; 56880-9-I; 56900-7-I.
December 18, 2006.
Appeals from judgments of the Superior Court for King County, No. 04-2-03219-9, Charles W. Mertel, J., entered March 17, July 29, August 3 and 16, and September 2, 2005.
Counsel for Appellant(s), Charles Edward Watts, Attorney at Law, Bellevue, WA, 98004-5873.
Counsel for Respondent/Cross-Appellant, Dean Gordon Von Kallenbach, Young deNormandie PC, Seattle, WA, 98101-2985.
Luke Michael Lariviere, Young deNormandie PC, Seattle, WA, 98101-2993.
Stephen Tadashi Araki, Attorney at Law, Bellevue, WA, 98004-3016.
John Michael Clark, Attorney at Law, Vancouver, WA, 98663-3036.
Robert Brian Jackson, Attorney at Law, WA, 98004-3016.
Affirmed in part, reversed in part, and remanded by unpublished opinion per Cox, J., concurred in by Grosse and Agid, JJ.
These consolidated cases raise issues centering on the respective rights of owners of the dominant and servient estates in a driveway easement. Also at issue is whether the grantor under a warranty deed breached any statutory covenants for that deed and, if so, what remedies are proper under No. 56000-0-I (Consolidated with 56880-9-I and 56900-7-I)/2 the circumstances. Finally, we decide whether reformation of the deed was a proper remedy for the mutual mistake of the parties that the deed included a description of a fenced backyard.
We hold that Robert and Joann Burgess ("Burgess") established that a prescriptive easement for ingress and egress in the driveway that crosses the property of their neighbor, Michael Drake, exists for the benefit of the Burgess' lot. Moreover, they also established fee title by adverse possession to the "rockery area," located south of the prescriptive easement in the driveway. They did not establish any rights to the "hedge area" located to the north of the driveway easement.
Drake, the owner of the servient estate that is subject to Burgess' driveway easement, has the right to use that easement, provided such use does not materially interfere with Burgess' use as the dominant estate. This right exists regardless of whether the driveway easement is legally characterized as either exclusive or nonexclusive.
Accordingly, we affirm the summary judgment order, as modified by the trial court, that addresses the disputes between Burgess and Drake.
Jonathan Owen, the predecessor in interest to Drake for the property subject to the prescriptive easement of Burgess, breached statutory warranties regarding encumbrances and the duty to defend under the deed to Drake. Because the trial court's decision incorrectly identified a separate breach and used an incorrect measure of damages, we reverse and remand for further consideration of the damages issue. We also remand for consideration of the award of attorney fees to Drake.
There was a mutual mistake of fact between Owen and Drake that lot 2 included a fenced backyard. The trial court properly ordered reformation of the deed to include that backyard. We affirm that portion of its decision. However, the date and measure of damages to be awarded were incorrectly determined by the court. We reverse and remand for further proceedings.
In 1986, Burgess purchased unimproved property in Bellevue, Washington ("lot 1") from a developer. The developer of the plat containing the lot later designed and constructed a residence for Burgess on lot 1. As part of that construction process, the developer constructed a driveway and parking/turnaround pad over "lot 2." This lot is contiguous to and east of lot 1. In the fall of 1989, Burgess moved into the residence and began to use the driveway for ingress to and egress from lot 1.
That same year, the developer was in financial difficulty that precluded a direct sale of lot 2, which the developer then owned. Because the developer owed Burgess money, Burgess agreed to a three-way transaction that resulted in a sale of lot 2 to a Mr. and Mrs. Olson. This transaction appears to have been designed to satisfy the developer's obligation to Burgess from the proceeds paid by the Olsons to buy lot 2.
Shortly thereafter, the developer constructed a house on lot 2 for the Olsons. This house is also served by a portion of the driveway that provides ingress and egress for lot 1.
In 1994, the Olsons sold lot 2. The purchasers owned the property until 1997, at which time Owen purchased the lot. In December 2000, Owen conveyed lot 2 to Drake by statutory warranty deed. At the time, both parties mistakenly believed the sale included a fenced backyard on the north side of lot 2. Drake later acquired the backyard as part of a purchase of a larger lot.
In 2004, Drake sued Burgess, seeking to quiet title to the driveway serving lots 1 and 2 and other relief. Burgess counterclaimed, seeking a judgment establishing a prescriptive easement in the driveway serving both properties. In response, Drake impleaded Owen, claiming breaches of the statutory warranty deed between these parties and seeking damages and other relief.
Drake moved for summary judgment against Burgess. The trial court entered a summary judgment order in March 2005 that quieted title in lot 2 in Drake, subject to a nonexclusive prescriptive easement for ingress and egress in favor of lot 1. Burgess filed and served a notice of appeal of that order in April 2005.
The issues between Drake and Owen were resolved in a bench trial. The court decided that Owen had breached certain statutory warranties because a prescriptive easement over lot 2 in favor of lot 1 existed at the time of the December 2000 conveyance to Drake. The court also decided Owen and Drake were mutually mistaken when they believed that a fenced backyard was part of their transaction. The court ordered reformation and also decided that the reformed deed supported a conclusion that Owen had breached the statutory warranty to convey good title to Drake. The court awarded Drake damages for the breach. The court also decided that Drake was entitled to reasonable attorney fees, but ultimately denied them. The reason for the denial does not appear in the record before us.
Owen appealed in September 2005. Drake cross-appealed these decisions together with a July 29, 2005 order modifying the March 2005 summary judgment order in the action against Burgess.
We first address the issues on appeal from the summary judgment orders in the action between Drake and Burgess. Thereafter, we address the issues on appeal from the decisions in the bench trial between Drake and Owen.
EASEMENT
Burgess argues that the trial court properly granted summary judgment to the extent of deciding that a prescriptive easement for ingress and egress in the driveway crossing lot 2 exists for the benefit of lot 1. But Burgess objects to the court's characterization of the easement as "nonexclusive." Drake agrees that an easement in favor of Burgess exists, but argues that it is not prescriptive. Drake also argues that the easement, however characterized, does not bar him from using it.
We hold that the trial court properly granted summary judgment that confirmed that Burgess has a prescriptive easement for ingress and egress in the driveway crossing lot 2 for the benefit of lot 1. We further hold that regardless of the characterization of the easement as exclusive or nonexclusive, Drake has the right to use it, provided the use does not materially interfere with Burgess' use as the dominant estate.
A motion for summary judgment may be granted when there is "no genuine issue as to any material fact and . . . the moving party is entitled to judgment as a matter of law." A material fact is one on which the outcome of the litigation depends. We review a summary judgment order de novo, viewing the facts and reasonable inferences in the light most favorable to the nonmoving party.
Owen v. Burlington N. Santa Fe R.R., 153 Wn.2d 780, 789, 108 P.3d 1220 (2005).
Khung Thi Lam v. Global Med. Sys., 127 Wn. App. 657, 661, 111 P.3d 1258 (2005).
To establish a prescriptive easement, the claimant must prove that his or her use of the other's land has been: (1) open, notorious, continuous, and uninterrupted; (2) over a uniform route; (3) adverse to the owner of the land sought to be subjected; and (4) with knowledge of such owner at a time when he was able in law to assert and enforce his rights. The period to establish such a prescriptive right is 10 years. For purposes of establishing the adversity element of a prescriptive easement, intent of the parties is irrelevant. Rather, the observable acts of the user and the rightful owner govern. A permissive use acquired by oral grant as a matter of right rather than a mere license may ripen into a prescriptive use although the parol grant is void under the statute of frauds. If the essential facts are not in dispute, whether use is adverse or permissive is purely a question of law.
The Mountaineers v. Wymer, 56 Wn.2d 721, 722, 355 P.2d 341 (1960).
Id.
Dunbar v. Heinrich, 95 Wn.2d 20, 27, 622 P.2d 812 (1980).
Id.
Lee v. Lozier, 88 Wn. App. 176, 182-83, 945 P.2d 214 (1997); Washburn v. Esser, 9 Wn. App. 169, 172, 511 P.2d 1387 (1973); Lechman v. Mills, 46 Wash. 624, 629, 91 P. 11 (1907).
Lingvall v. Bartmess, 97 Wn. App. 245, 250, 982 P.2d 690 (1999).
There are no genuine issues of material fact. We start by observing that Burgess and Drake agree that only the upper portion of the driveway and the parking/turnaround pad at the top of the driveway are the subjects of their dispute. The lower portion of the driveway begins at the southeastern portion of lot 2 and turns off towards the residence on lot 2. The upper portion of the driveway continues straight up the Concrete Drive in a northwestern direction. This lower portion of the driveway has been used by both parties for years for ingress and egress. There is no genuine dispute that a nonexclusive easement over lot 2 exists in favor of lot 1 for this lower portion of the driveway.
A map of the easement and lots is at Clerk's Papers at 280.
The parties further agree that an easement exists in favor of lot 1, but dispute the legal characterization of the easement. Drake contends the easement is not prescriptive in nature and argues that other characterizations should govern. We reject Drake's unpersuasive arguments.
In 1989, the developer constructed the Burgess' residence on lot 1 and the driveway and parking/turnaround pad for ingress and egress for the lot. Over the years, Burgess used the driveway and parking/turnaround pad to obtain access to their property. Burgess also regularly cleaned and maintained the driveway. Burgess' use of the property was open, notorious, continuous, and uninterrupted. Likewise, the use was over a uniform route and was done with the knowledge of the original and successive owners of lot 2 at times when they were able to assert and enforce their rights. It is also undisputed that the use started in 1989 and continued for a period in excess of 10 years as of the time of trial. Burgess also used the driveway and parking/turnaround pad in the same manner as the rest of the driveway for over 10 years from the start of these activities in 1989.
The real question is whether Burgess' use of the driveway was adverse. Drake argues that Burgess' use was not adverse because they acquired an easement by necessity, which is permissive in nature. This argument is unpersuasive, and we reject it.
In Lee v. Lozier, the owner of a lot in a subdivision on Lake Washington agreed to allow a community dock to be built on a portion of his property for his neighbors to use. The owner agreed to give the neighbors a letter that he 11 88 Wn. App. at 179. would never deny the lot owners access to the dock that crosses his property line and promised to file the letter against his title. However, the owner never recorded an easement. The owner subsequently conveyed his interest in the lot to the appellant who denied the neighbors use of the dock. The neighbors sued, requesting an order establishing that they acquired a prescriptive easement to use the portions of the dock that extended onto appellant's property. The trial court concluded that the neighbors had a prescriptive easement.
Lee, 88 Wn. App. at 179.
Id. at 180.
Id. at 181.
This court affirmed, holding that although the parol grant of an easement was void under the statute of frauds, the neighbors' use was adverse because the owner intended to grant them a permanent right to use his dock, not a revocable license. The court noted that the letter indicated that the owner intended to grant a permanent right and the neighbors' use of the dock was consistent with this grant.
Id. at 183-84.
Id. at 183.
Similarly here, the developer constructed the driveway and parking/turnaround pad granting Burgess the right to permanently use this area for the benefit of lot 1. However, the developer never executed and recorded an easement. Without a written easement, the oral grant is void under the statute of frauds. But the unrefuted testimony of the developer was that he intended to give Burgess a permanent right to use lot 2 to obtain access to lot 1.
The Lee court further noted that the presence of consideration is helpful in determining whether the owner's intent was to grant a permanent right, rather than a revocable license. Relying on Washburn v. Esser, where the court found consideration when the four property owners shared the costs of constructing and repairing the road that crossed their lots, the Lee court also found consideration because the owner and the neighbors divided the cost of constructing the dock.
Id. (citing Washburn v. Esser, 9 Wn. App. 169, 172-73, 511 P.2d 1387 (1973)).
Lee, 88 Wn. App. at 183 (citing Washburn 9 Wn. App. at 172-73) (relying on principles articulated in Lechman, 46 Wash. at 629).
Here, Burgess also gave consideration to support the conclusion that a permanent right, not a mere license, was intended in the driveway easement. Burgess paid for the construction of the residence served by the driveway and parking/turnaround pad. The only reasonable conclusion from these facts is that the payment for the house and the driveway that serves it was consideration for the easement. Accordingly, a permanent right exists, not a mere revocable license. Thus, Burgess' use was adverse.
Drake relies on Roediger v. Cullen for the proposition that a use of a way of necessity is permissive, not adverse, and is not the foundation of a prescriptive right. However, that general rule is subject to exceptions and this is one of them, as the state supreme court earlier recognized in Lechman v. Mills. Burgess' use was not permissive in nature. Rather, it was adverse.
26 Wn.2d 690, 696, 175 P.2d 669 (1946).
46 Wash. at 629.
We conclude that the trial court properly ruled that a prescriptive driveway easement in favor of lot 1 exists over lot 2. Because we hold that a prescriptive easement exists over lot 2 in favor of lot 1, there is no need to decide whether an implied easement of necessity also exists.
Drake also argues that Burgess acquired a statutory way of necessity under private condemnation, pursuant to RCW 8.24.010. Drake contends he is entitled to compensation for use of the driveway. We disagree.
An existing easement is a bar to condemnation, and RCW 8.24.010 is a remedy of last resort. Because a prescriptive easement in favor of lot 1 across lot 2 exists, this statute is irrelevant.
Roberts v. Smith, 41 Wn. App. 861, 862, 707 P.2d 143 (1985).
Scope of Use
The primary dispute between Drake and Burgess over the driveway easement centers on whether and to what extent Drake, as the owner of the servient estate, lot 2, may use that easement. Specifically, Burgess argues that the trial court's legal conclusion that the easement for the upper driveway is nonexclusive is incorrect. On the other hand, Drake argues the characterization is correct.
We hold that the characterization of the easement is largely irrelevant. The owner of lot 2, the servient estate, has the right to use the driveway easement, provided the use does not materially interfere with the use by the owner of lot 1, the dominant estate. This right exists whether one characterizes the easement as exclusive or nonexclusive.
The scope of a prescriptive easement is determined by the nature of use during the prescriptive period. Scope of an easement is generally a question of fact. But where the facts are undisputed, it is a question of law. An easement will be construed to accommodate the reasonable use of the dominant estate, not the servient estate. However, the servient owner retains the use of an easement so long as that use does not materially interfere with the dominant estate.
Mahon v. Haas, 2 Wn. App. 560, 563, 468 P.2d 713 (1970).
Broadacres, Inc. v. Nelsen, 21 Wn. App. 11, 15, 583 P.2d 651 (1978).
Lingvall, 97 Wn. App. at 250.
Logan v. Brodrick, 29 Wn. App. 796, 800, 631 P.2d 429 (1981).
Harris v. Ski Park Farms, 120 Wn.2d 727, 739, 844 P.2d 1006 (1993); Veach v. Culp, 92 Wn.2d 570, 575, 599 P.2d 526 (1979).
Here, the record shows that from 1989 to 2001 only Burgess used the upper driveway. The original owners of lot 2 and their successors in interest did not. Although Burgess exclusively used the upper driveway during the prescriptive period, this use does not extinguish Drake's right to use the land as the owner of the servient estate. Burgess has not cited to any relevant authority to support the argument that even an exclusive easement divests the owner of the servient estate from use of the easement. Our review of the authorities indicates that where an exclusive easement grants the dominant estate exclusive use for all purposes, the easement more closely resembles a fee interest and is generally disfavored by the courts. However, even if the conveyance limits exclusive use of all or part of the servient estate to a particular purpose, the conveyance is an easement and the servient owner retains the right to use the land in ways not inconsistent with the uses granted in the easement.
7 Thompson on Real Property § 60.04(b)(2) (David A. Thomas ed., 2d ed., 2006) (citing Latham v. Garner, 105 Idaho 854, 856, 673 P.2d 1048 (1983) (emphasis added)).
Walton v. Capital Land, 252 Va. 324, 326-27, 477 S.E.2d 499 (1996) (owner of the servient estate may use the easement in a manner that will not interfere with ingress and egress to the highway).
Here, Burgess only claims to have an easement in the driveway, not fee title. Burgess fails to cite any authority, and we have found none, that the owner of the servient estate is stripped of the right to use the easement for purposes not inconsistent with the dominant estate's use.
In sum, we need not decide whether the easement in the driveway is either exclusive or nonexclusive. Even if the easement would be properly characterized as exclusive, as to exclude third parties, we decline to construe it so as to extinguish the right of Drake to use it, provided the use does not materially interfere with the use by Burgess.
RECONSIDERATION Adverse Possession
Drake argues that the trial court abused its discretion in concluding that Burgess acquired fee title by adverse possession to a portion of lot 2. We disagree.
One may gain title by adverse possession if one's use is exclusive, open and notorious, actual and uninterrupted, and hostile and adverse to the owner for at least 10 years. We review a motion for reconsideration for an abuse of discretion. A trial court abuses its discretion only if its decision is manifestly unreasonable, exercised on untenable grounds, or is arbitrary.
Chaplin v. Sanders, 100 Wn.2d 853, 857, 676 P.2d 431 (1984).
Rivers v. Wash. State Conf. of Mason Contrs., 145 Wn.2d 674, 685, 41 P.3d 1175 (2002).
Harris v. Drake, 152 Wn.2d 480, 493, 99 P.3d 872 (2004).
Burgess moved for reconsideration of the summary judgment order, asserting that the driveway was the sole issue raised before the court, and they were not waiving their claims to the southern and northern portions of the driveway. Burgess requested clarification of the order and argued that they acquired title by adverse possession in the area south of the driveway "rockery area," and the northwestern part of the driveway "hedge area." The trial court clarified its order and found that Burgess acquired fee title by adverse possession over the "rockery area," but not the "hedge area."
Drake does not challenge that Burgess established the elements of adverse possession. Rather, Drake argues the trial court abused its discretion because Burgess initially asserted they were not raising an adverse possession claim and are judicially estopped from later doing so. Judicial estoppel precludes a party from gaining an advantage by asserting one position before a court and then later taking a clearly inconsistent position before the court.
Garrett v. Morgan, 127 Wn. App. 375, 379, 112 P.3d 531 (2005).
Here, Burgess claimed an exclusive easement for ingress and egress in the driveway, not a claim to fee title. This was not inconsistent with the requested clarification that the areas to the south and north of the driveway were subject to claims of adverse possession.
The trial court properly exercised its discretion.
Use of Easement by Servient Estate
Next, Drake argues that the trial court abused its discretion in prohibiting him from using the easement to access his property behind lot 2. Because it is premature to decide whether Drake's right to use the easement in this manner materially interferes with Burgess' use, we need not decide this issue.
The servient owner of an estate is entitled to use the easement for any purpose that does not interfere with the proper enjoyment of the easement. As the owner of lot 2, the servient estate, Drake has a right to use the driveway, provided his use does not materially interfere with Burgess' use. We have already explained why this is so.
Thompson v. Smith, 59 Wn.2d 397, 407-08, 367 P.2d 798 (1962).
In the trial court's modified summary judgment order, it limited Drake's use of the driveway "only for use on Lot 2, as presently configured." This provision could arguably be read as a prohibition of Drake using the driveway to obtain access to the rear of lot 2.
Burgess relies on Brown v. Voss to argue that Drake cannot expand the easement to serve property outside of lot 2. But that case is distinguishable.
105 Wn.2d 366, 715 P.2d 514 (1986).
There, the supreme court held that the dominant estate cannot use an easement to access other parcels, other than the dominant estate, because any extension to other parcels is a misuse of the easement. This rule does not apply to the servient owner, Drake, because the servient estate owns the property and has a right to use the easement for any purpose, as long as it does not materially interfere with the dominant estate's use.
Id. at 372.
Here, the parties did not litigate the question of whether Drake's use of the easement to obtain access to the rear of lot 2 would materially interfere with Burgess' use of the easement. All that appears in the record before us are conflicting assertions about this issue. Because this question was not litigated in the court below, and we conclude it is premature to do so on this record, we need not address further the question of the court's language in its order.
REFORMATION
In an appeal from a decision of the trial court following a bench trial in the lawsuit between Drake and Owen, the latter argues that the trial court erred in reforming the deed based on mutual mistake. We hold that the remedy of reformation was appropriate for this case.
Reformation is an equitable remedy designed to bring into writing that which is materially at variance with the parties' agreement in order to conform that agreement to reflect the intent of the parties. The purpose of reformation is to adequately express the agreement the parties made. We review a trial court's application of equity for an abuse of discretion.
Denaxas v. Sandstone Court of Bellevue, 148 Wn.2d 654, 669, 63 P.3d 125 (2003).
Childers v. Alexander, 18 Wn. App. 706, 710, 571 P.2d 591 (1977).
Wilhelm v. Beyersdorf, 100 Wn. App. 836, 848, 999 P.2d 54 (2000).
A party may seek reformation where the parties made a mutual mistake. Mutual mistake occurs when both parties are mistaken as to the underlying basis of the agreement and when the mistake is discovered, the essence of the agreement is destroyed. The test for mutual mistake is whether the agreement would have been entered into had there been no mistake. Reformation is justified only if the parties' intentions were identical at the time of the transaction.
Denaxas, 148 Wn.2d at 669.
Seattle Prof'l Eng'g Employees Ass'n v. Boeing Co., 139 Wn.2d 824, 832, 991 P.2d 1126 (2000).
Nationwide Mut. Fire Ins. Co. v. Watson, 120 Wn.2d 178, 190, 840 P.2d 851 (1992).
Denaxas, 148 Wn.2d at 669.
The party seeking reformation of a deed based on mutual mistake must prove the facts supporting it by clear, cogent and convincing evidence. When mutual mistake is proven, a writing may be reformed to express the original intention of the parties.
Keierleber v. Botting, 77 Wn.2d 711, 715, 466 P.2d 141 (1970).
Id. at 716.
Owen does not assign error to the trial court's findings of fact on mistake of fact. Thus, they are verities on appeal.
Moreman v. Butcher, 126 Wn.2d 36, 39, 891 P.2d 725 (1995).
After Drake purchased lot 2 from Owen in 2000, he discovered that his fenced backyard encroached 600 square feet onto the northern parcel. After this discovery, Drake purchased the back lot for $62,500. The trial court reformed the deed based on mutual mistake to include the backyard and patio.
When Drake purchased the property, he believed it included the backyard and patio. Owen advertised the house to include a private yard with a deck and also believed he was selling the house to include the backyard. Drake testified that he would not have purchased the property had he known it did not have a backyard. Owen also testified that he would have disclosed these issues had he known he did not own the backyard. The parties both intended that the agreement include the backyard, and were mutually mistaken regarding this material fact.
Owen relies on Childers v. Alexander to argue that the proper remedy is rescission, not reformation. In that case, Alexander purchased land for $44,000 from Childers and intended to use the land to grow hops. After the sale, Alexander discovered a chemical residue that caused damage to seven acres of his hops. Alexander sought reformation of the contract to reduce the purchase price by $9,000 for the damage. The trial court concluded that Alexander was not entitled to reformation. The court of appeals affirmed, reasoning that the parties did not bargain for the purchase and sale of anything other than general farmland and there was no agreement to buy and sell land only if it was suitable for hops. The court noted that Alexander was at most unilaterally mistaken about one of the many uses of the land and was not entitled to have a contract reformed to something the parties never agreed on.
Childers, 18 Wn. App. at 707.
Id. at 708.
Id. at 709.
Id. at 710.
Unlike Childers, Drake and Owen bargained for the sale of lot 2 to include the backyard and patio. Owen intended to sell the house to include the backyard, and Drake intended to purchase the house with the backyard. Thus, the parties were identically mistaken about a material fact.
Owen further argues that mutual mistake entitles the parties to rescind their agreement and return to their original position. However, equitable remedies lie within the sound discretion of the trial court, to be exercised in accordance with what is reasonable and just under the particular circumstances. Because rescission would have been too difficult four years after the conveyance, it was reasonable and just for the trial court to determine that reformation was the appropriate remedy under the circumstances. We need not address whether Owen was culpably negligent, a requirement of rescission, because reformation was proper.
Owen's Brief at 13 (citing Simonson v. Fendell, 101 Wn.2d 88, 93, 675 P.2d 1218 (1984)).
Hesselgrave v. Mott, 23 Wn.2d 270, 283, 160 P.2d 521 (1945).
STATUTORY WARRANTIES
Owen argues that the trial court erred in finding that he breached the warranties of quiet enjoyment and seisin. We hold that Owen breached the warranties against encumbrances and to defend against adverse claims.
A grantor who conveys land by a statutory warranty deed makes five covenants: (1) that the grantor was seised of an estate in fee simple; (2) that he had a good right to convey that estate; (3) that title was free of encumbrances; (4) that the grantee, his heirs and assigns, will have quiet possession; and (5) that the grantor will defend the grantee's title. These covenants include both present covenants, such as warranty of seisin, which may be breached at the time of conveyance, and future covenants that a grantor may breach at some time in the future.
Mastro v. Kumakichi Corp., 90 Wn. App. 157, 162, 951 P.2d 817 (1998).
Id. (citing 18 William B. Stoebuck, Washington Practice, Real Estate Transactions § 13.2 at 86 (1995)).
Warranty of Quiet Enjoyment
The warranty of quiet enjoyment is breached if the grantee is actually or constructively evicted under a paramount title existing at the time of conveyance. A constructive eviction occurs when the person asserting paramount title proves it and prevails in an action for possession. The covenant of quiet enjoyment is concerned with defending possession of property. We review a trial court's findings of fact to determine whether they are supported by substantial evidence. Substantial evidence is evidence in sufficient quantum to persuade a reasonable person of the truth of the premise.
Foley v. Smith, 14 Wn. App. 285, 291, 539 P.2d 874 (1975).
See McDonald v. Ward, 99 Wash. 354, 358, 169 P. 851 (1918); Foley, 14 Wn. App. at 291-92 (evidence of a judgment that a third party owned an interest in property proved breach of the warranty of quiet enjoyment).
West Coast Mfg. Inv. Co. v. West Coast Imp. Co., 25 Wash. 627, 643, 66 P. 97 (1901).
Curtis v. Security Bank of Washington, 69 Wn. App. 12, 15, 847 P.2d 507 (1993).
Holland v. Boeing Co., 90 Wn.2d 384, 390-91, 583 P.2d 621 (1978).
Owen assigns error to finding of fact 5, which states:
. . .
5. As a result of the undisclosed driveway encumbrances, . . . Owen breached the warranty of quiet enjoyment warranted in his warranty deed and Lot 2 has suffered a diminution in value as the result of this breach.
Clerk's Papers at 808 (emphasis added).
Here, Burgess claimed an exclusive easement over the driveway on lot 2, but never claimed an ownership or possessory interest. Despite the easement, Drake has paramount title to the driveway. Thus, the language in the finding is legally incorrect to the extent that it states that the "encumbrance" breaches the "warranty of quiet enjoyment."
Warranty Against Encumbrances
The warranty against encumbrances is a present covenant that is breached at the time of execution of the deed. A grantor will breach this warranty if an easement on the property exists at the time of conveyance.
Stone v. Sexsmith, 28 Wn.2d 947, 951, 184 P.2d 567 (1947).
Williams v. Hewitt, 57 Wash. 62, 64, 106 P. 496 (1910).
When Owen conveyed lot 2 to Drake in December 2000, all of the elements of a prescriptive easement in favor of lot 1 over the upper driveway on lot 2 existed. Thus, title was not free of encumbrances, and Owen breached this covenant of the deed.
Although the trial court did not classify the breach as "against encumbrances," we can affirm its decision on any alternative basis supported by the record. Accordingly, we affirm the trial court's conclusion that Owen breached the statutory warranty deed on the alternative ground that the driveway easement was an encumbrance at the time of the conveyance.
Champagne v. Thurston County, 134 Wn. App. 515, 520, 141 P.3d 72 (2006).
Warranty of Seisin
The warranty of seisin guarantees that at the time of the conveyance, the grantor is lawfully seized of an indefeasible estate in fee simple in the described premises. The grantor breaches the warranty if he does not have "'the possession, the right of possession, and the complete legal title' of the conveyed property." There is authority that a breach of this covenant occurs if at the time of conveyance an adverse possessor is physically in possession. But a noted commentator takes issue with this interpretation of the language of the warranty of seisin — that the grantor is "seized of an estate in fee simple."
Double L Properties, Inc. v. Crandall, 51 Wn. App. 149, 152, 751 P.2d 1208 (1988).
Id. at 153 (quoting 7 G. Thompson, Real Property § 3178 at 240 (1962 repl.)).
Id.; see also Mastro, 90 Wn. App. at 163.
18 William B. Stoebuck, Washington Practice, Real Estate Transactions § 14.3 at 119 (2004).
Owen assigns error to conclusion of law 4:
. . .
4. As a result of the reformation of the statutory warranty deed to include in the legal description the fenced yard and patio area adjacent to Lot 2, Owen breached the deed by failing to convey good title.
Clerk's Papers at 805.
Owen contends the trial court improperly held that he breached the warranty to convey good title. We agree.
Here, the trial court reformed the deed to include the fenced backyard and patio that were omitted from the legal description of the December 2000 deed. However, before reformation, the legal description of lot 2 did not include the fenced yard and patio. Rather, the deed properly described all of the property that Owen then owned. Drake fails to cite any authority to support a breach by reformation of a deed. We find none. Thus, we reverse the determination that there was a breach of the warranty of seisin at the time of the December 2000 conveyance by virtue of the court's later reformation of that deed.
DAMAGES
Drake argues that the calculation for the diminished value of damages should have been the date of trial, not the date of discovery. We disagree and hold that the damages we discuss in this section should have been calculated as of the date of the December 2000 conveyance. When covenants under a warranty deed are breached, an injured grantee is entitled to recover damages for lost property or diminution in property value. In general, the measure of damages for a breach of a covenant of warranty is the consideration paid, or the value of the land as measured by the purchase price, with interest.
Mastro, 90 Wn. App. at 163.
Foley, 14 Wn. App. at 295-96; West Coast Mfg. Inv. Co. v. West Coast Imp. Co., 31 Wash. 610, 614-15, 72 P. 455 (1903).
When a seller misrepresents property, the measure of damages is the difference between the market value of the property had it been represented and the market value of the property as it actually was at the time of the sale.
Weinstein v. Sprecher, 2 Wn. App. 325, 330, 467 P.2d 890 (1970).
Here, the trial court awarded Drake damages for the breach of warranties based on diminution in value for lot 2 without the fenced yard and patio and an encumbered driveway. The trial court calculated damages from 2001, the date Drake discovered the encumbrances. The proper date for these breaches is the date of conveyance, December 2000. The measure of damages is as specified in West Coast Manufacturing Investment Co. v. West Coast Improvement Co. and the cases following it.
31 Wash. at 614-15.
The proper date for the damages assessed in connection with reformation of the deed for the mutual mistake is also the date of conveyance, December 2000. Moreover, the proper analog for the measure of damages is where a seller misrepresents property. Thus, the measure of damages is the difference between the market value of the property as it had been represented and the market value of the property as it actually was at the time of the sale. That is the measure that should be applied by the court on remand.
Weinstein, 2 Wn. App. at 330.
Drake relies on Shields v. Garrison to argue that the trial court should have calculated his damages from the date of trial. However, that case dealt with compensation for a statutory way of necessity under private condemnation.
91 Wn. App. 381, 957 P.2d 805 (1998).
Id. at 385.
We reverse the damages portions of the rulings below and remand for further consideration.
OTHER MATTERS
Owen argues the trial court committed several procedural errors. We agree to the extent that the trial court awarded Drake 18 percent post-judgment interest.
First, Owen argues it was error for the trial court to strike his pleadings as untimely and not allow his expert to testify.
KCLR 7(b)(3) requires a party to file all motions and other documents with the court no later than six court days before the date the party wishes the motion to be considered. KCLR 26(b) requires a party to disclose a summary of all witnesses whom the party wishes to call at trial including expert witnesses. We review a trial court's ruling on a motion to strike for an abuse of discretion. A trial court's decision to exclude expert testimony is also reviewed for an abuse of discretion.
King County Fire Protection Dist. No. 16, 36, 40 v. Housing Authority, 123 Wn.2d 819, 826, 872 P.2d 516 (1994).
State v. Willis, 151 Wn.2d 255, 262, 87 P.3d 1164 (2004).
Here, Owen filed his amended answer and additional pleadings including a motion in limine on the date of trial. The trial court permitted Owen's amended answer, but struck his additional pleadings and motion in limine as untimely. This was proper. It was also proper for the trial court to prevent Owen's expert from testifying because Owen failed to identify his expert for trial as required by the local rules. The trial court properly struck Owen's pleadings and granted Drake's motion for failure to identify expert witnesses.
Owen also argues that it was error for the trial court to allow Drake's expert to appraise the diminished value of lot 2 at the date of discovery. It was not error for the trial court to request Drake's expert to appraise the value of lot 2. As discussed above, the appraisal date should have been in December 2000, the date of the conveyance.
Next, Owen argues it was error for the trial court not to consider the defense of laches. Owen contends that Drake's delay caused the prescriptive easement to ripen. However, Burgess began using the driveway in 1989 and the easement ripened in 1999, 10 years later. Drake did not discover the encumbrance until May 2001. At that time, the prescriptive easement had already ripened. Laches is not applicable.
Finally, Owen argues that the trial court erred in awarding 18 percent post-judgment interest. We agree.
Post-judgment interest, unlike pre-judgment interest, is mandatory under RCW 4.56.110. RCW 4.56.110(4) provides:
Womack v. Rardon, 133 Wn. App. 254, 264, 135 P.3d 542 (2006).
Except as provided under subsections (1), (2), and (3) of this section, judgments shall bear interest from the date of entry at the maximum rate permitted under RCW 19.52.020 on the date of entry thereof. . . .
RCW 19.52.020 provides:
(1) Any rate of interest shall be legal so long as the rate of interest does not exceed the higher of: (a) Twelve percent per annum; or (b) four percentage points above the equivalent coupon issue yield . . . of the average bill rate for twenty-six week treasury bills. . . .
(Emphasis added.)
Here, the trial court awarded Drake post-judgment interest at the rate of 18 percent, which is greater than the maximum allowed.
We remand for correction of the interest to conform to the statutory rate.
ATTORNEY FEES
Drake argues that the trial court abused its discretion in denying him attorney fees and costs. We hold that the record before us does not explain why the court ultimately declined to award fees after expressly holding they were awardable. Thus, we remand for reconsideration of this issue.
In Washington, attorney fees are recoverable only when they are authorized by a private agreement of the parties, a statute, or a recognized ground of equity.
Mellor v. Chamberlin, 100 Wn.2d 643, 649, 673 P.2d 610 (1983).
Drake argues he is entitled to attorney fees and costs based on Owen's failure to accept tender of defense based on the prescriptive easement of Burgess and the litigation of that claim. He also claims a right to fees under the attorney fee provision of the purchase and sale agreement.
Warranty to Defend
Reasonable attorney fees are recoverable when a grantee, in good faith, gives notice to the grantor of a claim against title, and the grantor refuses to defend his or her title. However, a grantee who prevails against a grantor for breach of any of the covenants contained in a statutory warranty deed may not recover an award of attorney fees.
Mellor, 100 Wn.2d at 650 (Rosellini, J., concurring) (reversing the attorney fee award because the grantor was neither notified regarding the settlement of the encroachment matter nor given an opportunity to defend title); Foley, 14 Wn. App. at 296.
Barber v. Peringer, 75 Wn. App. 248, 254, 877 P.2d 223 (1994) (citing Mellor, 100 Wn.2d at 648-49).
Here, the trial court found that Drake tendered defense of Burgess' claim to a prescriptive easement to Owen, who refused the tender. Because Owen does not challenge these findings, they are verities on appeal. The trial court first awarded fees, subject to a determination of the amount, and subsequently denied Drake any attorney fees. Nothing in the record that we can find explains the change in position.
Clerk's Papers at 809 (Findings of Fact 8 and 9).
Cowiche Canyon Conservancy v. Bosley, 118 Wn.2d 801, 808, 828 P.2d 549 (1992); Clerk's Papers at 397-98 (It is unclear whether Owen challenges finding of fact 8 that Drake requested Owen to tender defense of title. If that finding is challenged, the record supports that finding because Drake sent Owen a letter regarding the driveway encumbrance and requested Owen to tender defense.).
Owen relies on several cases for the assertion that if fees are awardable, they should be limited solely to the breach of a covenant of warranty to defend against lawful claims. Because Burgess has a valid easement over Drake's driveway and obtained title by adverse possession to the "rockery area," and Owen failed to defend title, Drake is entitled to an award of reasonable attorney fees incurred in that action.
Reply Brief at 7-13 (citing Foltz v. Manson, 164 Wash. 692, 4 P.2d 509 (1931); Hoffman v. Dickson, 65 Wash. 556, 118 P. 737 (1911); Scott v. Woolard, 12 Wn. App. 109, 529 P.2d 30 (1974)).
Purchase and Sale Agreement
RCW 4.84.330 authorizes an award of attorney fees in any action on a contract, where such contract specifically provides for attorney fees. When parties execute, deliver, and accept a deed, it becomes the parties' final contract and subsumes all prior agreements. In general, the provisions of a real estate purchase and sale agreement merge into the deed, subject to certain exceptions. The exceptions include collateral contract requirements that are not contained in or performed by the execution and delivery of the deed, are not inconsistent with the deed, and are independent of the obligation to convey. The doctrine of merger does not apply to actions based on fraud or mistake.
Barber, 75 Wn. App. at 251.
Id.
Id. at 251-52 (citing Black v. Evergreen Land Developers, Inc., 75 Wn.2d 241, 248, 450 P.2d 470 (1969)).
Brown v. Johnson, 109 Wn. App. 56, 60, 34 P.3d 1233 (2001).
Here, Drake and Owen were mutually mistaken regarding whether the property contained the fenced backyard and patio. Because the purchase and sale agreement provides for attorney fees to the prevailing party for any suit concerning the agreement, Drake as the prevailing party is entitled to an award of attorney fees for the action regarding mistake. Merger does not apply.
Accordingly, we must remand this issue to the trial court for a determination of whether fees for the limited purpose we have described are awardable for the action below.
RAP 18.1
Finally, Drake requests fees on appeal under RAP 18.1. Drake bases his request upon Owen's failure to defend title and RCW 4.84.330. Because Drake is entitled to attorney fees for his action against Burgess and for the action regarding mistake of fact, he is also entitled to recovery of fees on appeal.
We remand to the trial court for a determination of the amount of fees to be awarded to Drake for this appeal. The trial court shall also determine to what extent Drake is entitled to fees for the action below. We affirm in part, reverse in part, and remand for further proceedings that are consistent with this opinion.