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(unpublished opinion)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.
Items reported here and in the ABA publications are for general information
purposes only and should not be relied upon in the course of representation or
in the forming of decisions in legal matters. The same is true of all commentary
provided by contributors to the DIRT list. Accuracy of data and opinions
expressed are the sole responsibility of the DIRT editor and are in no sense the
publication of the ABA.
Parties posting messages to DIRT are posting to a source that is readily
accessible by members of the general public, and should take that fact into
account in evaluating confidentiality issues.
ABOUT DIRT:
DIRT is an internet discussion group for serious real estate professionals.
Message volume varies, but commonly runs 5 15 messages per work day.
Daily Developments are posted every work day. To subscribe, send the message
subscribe Dirt [your name]
to
listserv@listserv.umkc.edu
To cancel your subscription, send the message signoff DIRT to the address:
listserv@listserv.umkc.edu
for information on other commands, send the message Help to the listserv
address.
DIRT has an alternate, more extensive coverage that includes not only commercial
and general real estate matters but also focuses specifically upon residential
real estate matters. Because real estate brokers generally find this service
more valuable, it is named “BrokerDIRT.” But residential specialist attorneys,
title insurers, lenders and others interested in the residential market will
want to subscribe to this alternative list. If you subscribe to BrokerDIRT, it
is not necessary also to subscribe to DIRT, as BrokerDIRT carries all DIRT
traffic in addition to the residential discussions.
To subscribe to BrokerDIRT, send the message
subscribe BrokerDIRT [your name]
to
listserv@listserv.umkc.edu
To cancel your subscription to BrokerDIRT, send the message signoff BrokerDIRT
to the address:
listserv@listserv.umkc.edu
DIRT is a service of the American Bar Association Section on Real Property,
Probate & Trust Law and the University of Missouri, Kansas City, School of Law.
Daily Developments are copyrighted by Patrick A. Randolph, Jr., Professor of
Law, UMKC School of Law, but Professor Randolph grants permission for copying or
distribution of Daily Developments for educational purposes, including
professional continuing education, provided that no charge is imposed for such
distribution and that appropriate credit is given to Professor Randolph, DIRT,
and its sponsors.
DIRT has a WebPage at:
http://cctr.umkc.edu/dept/dirt/
-----
To be removed from this mailing list, send an email message to
listserv@listserv.umkc.edu with the text SIGNOFF DIRT.
Please email manager@listserv.umkc.edu if you run into any problems.
See <http://www.umkc.edu/is/cs/listserv/unsubscribing.htm> for more information.