Daily Development for Friday, July 23, 2004
by: Patrick A. Randolph, Jr.
Elmer F. Pierson Professor of Law
UMKC School of Law
Of Counsel: Blackwell Sanders Peper Martin Kansas City, Missouri dirt@umkc.edu

RECORDING ACTS; EASEMENTS; ADEQUACY OF RECORDING: Recording affidavit referencing an easement, which in turn refers to an instrument purporting to reserve an easement over “existing driveway on grantor’s land” does not serve as constructive notice of easement claim over grantor’s adjacent parcel, since location of existing driveway is not indicated of record.

Chadwell v. Wojtacszek, No. 247808 (Mich. App. 5/4/04) e-journal no. 22999 (unpublished opinion)

Rabes owned adjacent Parcels A and B. They sold Parcel A to McLeans pursuant to a recorded installment land contract (common devices in Michigan). This contract stated that there was granted “the right of ingress and egress over the present driveway located on the property of the Sellers.”

Thereafter, Rabes sold Parcel B to Suliks, also by recorded installment land contract, but this contract did not mention the driveway easement in favor of the adjacent property. Thereafter, Rabes recorded an affidavit asserting that there was an easement over Parcel B in favor of Parcel A. Almost 25 years later, Suliks sold Parcel B to defendant. McLeans asserted the existence of the easement, and defendants argued that the easement was destroyed when they bought Parcel B as bona fide purchasers without actual or constructive knowledge of the easement.

Apparently, in the intervening years, any physical evidence of the driveway easement on Parcel B had disappeared, or else the physical character of the easement gave no notice of the expectation that Parcel A had a right of access over that driveway. The issue was joined solely on the basis of whether there was record notice to the defendants of the existence of the easement.

The trial court had ruled that the affidavit provided notice to defendants of the easement.

On appeal: Held: Reversed.

The Michigan Court of Appeals concluded that the affidavit did not provide constructive notice of the easement because it was not a recording of a conveyance in and of itself. It so held despite a Michigan statute providing that an affidavit can be recorded to provide notice to subsequent purchasers of claims:
“An affidavit stating facts relating to any of the following matters which may affect the title to real property in this state made by any person having knowledge of the facts or by any person competent to testify concerning such facts in open court, may be recorded in the office of the register of deeds of the court where the real property is situated: . . . (e) Knowledge of facts incident to possession. . . . “

The Court of Appeal stressed the specific language of the recording act that said that any conveyance not recorded as provided by statute “shall be void as against any subsequent purchaser for good faith and for valuable consideration.”

The court then analyzed whether the recorded installment land contract was an adequate recording of the easement. Even though it might have actually expressed the conveyance of the easement, the court ruled, the installment contract did not describe the area over which the easement crossed with any specificity. The “Seller’s existing driveway,” the court concluded, could have been located on Parcel B, but could have also been located on other property, and consequently it was impossible to know with any certainty where the easement was to be found. Thus, the recording of the contract was not sufficient to provide constructive notice.

Comment 1: If the editor properly understands the court’s ruling, the court was wrong, at least by generally prevailing concepts of what constitutes inquiry notice. The primary error was in concluding that there was no duty of inquiry on the part of the defendants arising from the recorded affidavit. The original grantees from the authors of the affidavit, remember, still owned Parcel A. They were the plaintiffs in this lawsuit. Inquiry from them prior to the sale likely would have produced information sufficient for the defendants to ascertain the nature and location of the claimed easement.

If the statute permitting the affidavit to act as notice of claims is to mean anything, it would appear to put parties with a duty of studying the record on inquiry notice concerning information contained in the affidavit.

Comment 2: Some jurisdictions, possibly Michigan, follow the rule that a duty of inquiry arising from information in the record stops with the record itself. Thus, when the court concluded that the installment land contract between Rabes and McLeans did not provide record notice of the location of the alleged easement, the inquiry duty of the defendants stopped. If this is the case, one would think that the court would have been more forthcoming about the fact that this was the basis for its ruling. The editor suspects that the court never got that far in its thinking.

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