Opinion
Case No. 20040093-CA.
Filed June 16, 2005. (Not For Official Publication).
Appeal from the Sixth District, Junction Department, 000600006, The Honorable David Mower.
Carolyn B. McHugh and Ronald G. Russell, Salt Lake City, for Appellant.
Matthew C. Barneck, Salt Lake City, and Richard G. Allen, Lehi, for Appellee.
Before Judges Jackson, Orme, and Thorne.
MEMORANDUM DECISION
Appellee Gold Mountain Development, L.L.C., sued Appellant Missouri Flat, Ltd. and others to quiet title to a piece of Utah property. Missouri Flat challenges the trial court's order granting it less than fee simple ownership of the property. We affirm.
The parties filed cross-motions for summary judgment. Missouri Flat challenges three aspects of the trial court's rulings: (1) error in interpreting the 1951 document entitled "Indenture," (2) denial of Missouri Flat's claim of adverse possession, and (3) denial of Missouri Flat's claims of laches and estoppel. We address the challenges in turn and affirm.
I.
First, we consider the interpretation of the indenture. Missouri Flat argues that the express language of the document conveyed a fee simple estate to the surface of the property. Gold Mountain agrees that there is no ambiguity in the document but asserts that it conveyed only the surface of the land for grazing and agricultural purposes. The trial court agreed with the parties that the language of the indenture is not ambiguous. Reading the plain language of the document, the court ruled that the grantor intended to convey less than the full rights to the surface of the land. The court determined that the conveyance for "grazing and agricultural purposes" was a limiting phrase and excluded all other purposes. Further, the grantor reserved the right to enter and to occupy the premises. The court read this also to be inconsistent with a grant of full rights. Finally, the "to have and to hold" language was read to refer to the "above described surface."
The language granting title to the building permanently attached to the premises was read to convey fee simple title to the surface occupied by the structure. Accordingly, the court concluded that Missouri Flat owns the following rights and interests in the described real estate: (a) the frame house and the portion it occupies in fee simple; (b) a permanent easement to use the rest of the surface for grazing and agricultural purposes, subject to Gold Mountain's right to enter for mining and other described purposes; and (c) a permanent right and easement to cut and remove from the surface the quaking aspen and chaparral thereon.
We agree with the parties and the trial court that the language of the indenture is unambiguous. We conclude that the court's interpretation of the indenture's language was in accord with our rules of construction. See Central Florida Invs., Inc. v. Parkwest Assocs., 2002 UT 3, ¶ 12, 40 P.3d 599 (stating that "[i]n interpreting a [document], the intentions of the parties are controlling" and that the trial court should "first look to the four corners of the agreement to determine" the parties' intentions) (quotations and citations omitted); WebBank v. American Gen. Annuity Serv. Corp., 2002 UT 88, ¶ 19, 54 P.3d 1139 (noting that "[i]f the language within the four corners of the [document] is unambiguous, the parties' intentions are determined from the plain meaning of the contractual language, and the [document] may be interpreted as a matter of law") (citation and quotations omitted); Dixon v. Pro Image Inc., 1999 UT 89, ¶ 14, 987 P.2d 48 (stating that in determining whether a document is ambiguous, "a court must attempt to construe [it] so as to harmonize and give effect to all of its provisions") (quotations and citation omitted).
The trial court correctly determined that the "four corners" of the indenture do not establish a transfer of fee simple ownership of the property. WebBank, 2002 UT 88 at ¶ 19. The indenture's limitation of the grantees' interest to "grazing and agricultural purposes" and reservation of the grantor's right to enter and occupy the premises are inconsistent with a grant of full rights. Similarly, the specific grants of ownership of the frame house and the right to cut and remove trees from the property would not be necessary if the indenture was intended to transfer the entire property in fee. Accordingly, we affirm the trial court's determination that Missouri Flat is not entitled to fee simple ownership of the property under the terms of the indenture.
II.
Next, we consider Missouri Flat's claim for adverse possession. This claim also fails. Missouri Flat did nothing to put Gold Mountain on notice of its intentions to adversely hold title in fee simple nor does it claim that it or its predecessors have occupied the land for any purpose other than for grazing livestock. See Dillman v. Foster, 656 P.2d 974, 980 (Utah 1982) (stating that "[w]ithout notice, i.e., conduct clearly inconsistent with the rights of the titleholder," party does not adversely possess property). Thus, Missouri Flat did not adversely possess the property. We affirm on this issue.
III.
Finally, we consider Missouri Flat's claims for estoppel and laches. These claims likewise fail. As stated above, Missouri Flat or its predecessors gave no notice to Gold Mountain that its possession was hostile to Gold Mountain's interest. Without any such notice, there was no reason for Gold Mountain to make further inquiry as to the interests claimed by the two parties.See Rothey v. Walker Bank Trust Co., 754 P.2d 1222, 1224 (Utah 1988) (noting that the first prong of the estoppel test can be met by an omission or failure to act); Papanikolas Bros. Enters. v. Sugarhouse Shopping Ctr. Assocs., 535 P.2d 1256, 1260 (Utah 1975) (stating that to successfully assert laches, a party must establish "[t]he lack of diligence on the part of [the] plaintiff"). Because Gold Mountain had no notice that Missouri Flat's interests were hostile to its interest, it had no duty to act. Thus, we affirm on this issue also.
We conclude that Missouri Flat cannot claim fee simple ownership of the property under the terms of the indenture, and that the trial court properly denied Missouri Flat's claims for adverse possession, estoppel, and laches. Accordingly, we affirm the trial court's quiet title order.
William A. Thorne Jr., Judge, concur.
I concur in parts II and III of the court's decision. I disagree with part I.
Deeds are construed according to ordinary rules of contract construction. See Ault v. Holden, 2002 UT 33, ¶ 37, 44 P.3d 781. "`The paramount rule of construction of [a] deed is to give effect to the intent of the parties as expressed in the deed. . . .'" Id. at ¶ 38 (alterations in original) (citations omitted). Generally, the parties' intent is determined from "the plain language of the four corners of the deed." Id.
A thorough reading of the Indenture reveals the grantor's intention to convey title to the surface of the property in fee simple. The exceptions and reservations portion of the Indenture gives the grantor the right to enter the surface of the property "as fully and entirely as if [the grantor] its successors and assigns remained the owner in fee simple of said surface." (Emphasis added.) Such language would make no sense if the grantor in fact retained fee ownership of the surface. Thus, this language is strongly indicative of the grantor's intent to convey outright title to the surface.
Likewise, the phrase "grants, bargains, sells and conveys" and the word "quitclaim" are unnecessary if the grantor intended to transfer only an easement. These words typically indicate a conveyance of title rather than the conveyance of a lesser estate. See Ruthrauff v. Silver King W. Mining Milling Co., 95 Utah 279, 80 P.2d 338, 342 (1938) (giving example of words that give rise to conveyance of title in fee); Severns v. Union Pac. R.R. Co., 125 Cal. Rptr. 2d 100, 104-05 (Ct.App. 2002) (stating that phrase "`grant, bargain, sell, convey, and confirm'" is "traditional language for a conveyance of a fee").
The Indenture also uses the same language to convey the surface as it does to convey the house, i.e., "grants, bargains, sells, and conveys." It is clear from the Indenture that the house was conveyed in fee. Neither party argues otherwise, and the trial court so held, while recognizing the problematic nature of its inconsistency in this regard. Given that the grantor employed the same language to convey the house as it did to convey the surface, it follows that the surface, like the house, was conveyed in fee simple.
In arguing that the Indenture conveys only an easement, Gold Mountain relies heavily upon the phrase "for grazing and agricultural purposes." I am not persuaded that this phrase was intended to describe an easement or to otherwise limit the purposes for which the land could or could not be used. More generally, Gold Mountain points out there are any number of provisions that would be wholly unnecessary if an outright conveyance of the surface was intended. This is inarguably true. But it is true both ways. For instance, the Indenture expressly "except[s] and reserv[es]" to the grantor the right to use the surface to the extent needed for its mining operations. This language, too, is completely unnecessary. The holder of the mineral estate automatically enjoys such rights.
Although Gold Mountain relies upon Haynes v. Hunt, 96 Utah 348, 85 P.2d 861, 864 (1939), for the proposition that the phrase "for grazing and agricultural purposes," is a qualifying phrase that indicates that an easement was conveyed, I view the phrase as used in this case as being descriptive of the purposes for which the land was anticipated to be used — not as a limitation on the land's uses.
Admittedly, the Indenture is somewhat convoluted. However, it is probably best understood as a combination deed and user agreement, designed to be a pragmatic working document rather than as a textbook example of pristine legal drafting. It probably came together something like this: Grantor intends to convey fee title to the surface to grantees, while retaining the mineral estate. Grantor drafts a relatively simple Indenture — or has a lawyer or title company do so — that conveys title to the surface to grantees. Grantees are unsettled by the spare language of the Indenture because grantees do not comprehend the full range of rights included in a fee simple conveyance of the surface while the grantor retains the mineral estate and, therefore, insist that a provision be added authorizing the cutting of timber. Recognizing it loses nothing by making explicit what is already implied, grantor agrees such a provision may be added. At the same time, and in a similar vein, grantor decides it might be best to spell out its right to use the surface to conduct mining operations — just to make sure this is clearly understood. Grantees see no problem in this, but figure they should similarly clarify that title to the dwelling is being conveyed along with the ground it sits on. The process of adding particular provisions continues until grantees and grantor are all satisfied that their respective rights are fully spelled out within the four corners of the document, with such clarity that the transaction can be understood without the need to hire lawyers. (Little did they know!)
I would reverse the judgment and direct the entry of judgment in favor of Missouri Flat.