>Daily Development for Monday, July 14, 2008
>by: Patrick A. Randolph, Jr.
>Elmer F. Pierson Professor of Law
>UMKC School of Law
>Of Counsel: Husch Blackwell Sanders
>Kansas City, Missouri
>
>EMINENT DOMAIN; TITLE:  Where a town fails to take reasonable steps to find the record owner of a parcel subject to an eminent domain taking and lists the property’s titleholder as “owners unknown,” the taking order is invalid as not recorded in due course, the record owner did not have constructive notice of the taking, and a subsequent purchaser for value had standing to challenge the taking as a bona fide purchaser without notice.

>
>Devine v. Town of Nantucket, 870 N.E.2d 591 (Mass. 2007).
>
>In 1968, the Town of Nantucket (the “Town”) initiated an eminent domain action, acquiring certain property next to the Nantucket Airport (the “Parcel”). Due to administrative inefficiencies, the parcel was listed in the Town’s tax records as “owners unknown.” Based on this information only, the Town recorded the taking order, and a 1970 amendment to that order (collectively, the “Taking Order”) in the registry of deeds, listing the Parcel as “owners unknown.” Obviously, there was no listing in the grantor/grantee index, as there was no known owner.

>
>The background for the “owner unknown” designation was that one George Loomis was the record owner of the property in 1923, when he died leaving the property by will to his sisters, Mary and Caroline Loomis.  The will was probated in New Jersey, but no ancillary probate was opened in Massachusetts.   The sisters promptly conveyed the property to one Carmer, who apparently recorded the deed.  But there was no precise link to the title of his grantees, the sisters, as the record owner of the property was George. But the court found that a reasonably prudent title examiner, at the time of the 1968 takings, would have identified that the property had been subdivided and could have checked the subdivider’s transfers, getting to George.  Then, looking for “Loomis” in the grantor index, the title search would have found the sisters and the deed to Carmer.  Thus, the court was unforgiving as to the Town’s failure to carry out a condemnation against the owner of the property, Carmer.

>
>In 1985, a group of persons making a business of identifying lost inheritances and other long ignored property claims came across this parcel and made a deal with Carmer.  Carmer conveyed the Parcel for $7,500 to Paul Vozella, who promptly recorded the deed and in 1988 conveyed the Parcel to William J. Devine as trustee of Loomis Realty Trust, who also promptly recorded the deed. None of the Parcel owners had actual notice of the Taking Order.

>
>The 1980's transfers led the Town , apparently unaware of its own eminent domain proceeding, to view Carmer and then the Trust (through Devine)  as owners, and at various times between 1985 and the commencement of this action, the Town collected taxes on the Parcel and issued building permits to its owners. In June 2001, Devine received a letter from the Town’s counsel notifying him of the Taking Order, and the Town subsequently barred Devine from entering onto the Parcel by erecting a fence, issuing a stop work order, revoking all building permits, and filling in excavations made on the land.

>
>Less than three months later, Devine brought an action for damages and to quiet title. The Superior Court found for Devine, the Town appealed, and the Supreme Judicial Court heard the case on its own motion.

>
>The Town first argued that Devine’s claims were time-barred under the three year statutes of limitations for bringing an action to assess damages for a taking and challenging a taking’s validity. The Supreme Judicial Court disagreed, holding that taking orders must be recorded “in due course” in the registry of deeds to be valid; the Taking Order was not recorded “in due course” because it was not indexed under the owner of record (Carmer), it could not be found in the ordinary grantor-grantee index, and the act of recording failed to give constructive notice; and thus the Taking Order was invalid and its recording did not trigger the running of the limitations period.

>Next, the Town argued that Devine did not have standing as a bona fide purchaser to challenge the taking because he had constructive notice of the taking. The Supreme Judicial Court also rejected this argument, holding that the Town’s failure to record the Taking Order “in due course,” in addition to the Town’s actions between 1985 and 2001, necessitated a holding that Devine had no notice of the 1968 taking order.

>
>Comment 1: Note that in fact all the owners should have had knowledge that there was a gap in the chain of title in 1923.  But even if they knew that, what would they have done that would have given them knowledge of the Town’s condemnation?  So the problem was not with the validity of the owner’s title, but with the invalidity of the Town’s eminent domain title.  And the court was unforgiving of the Town’s failure to properly index, apparently because, as noted, it was of the view that the Town should have identified Carmer’s deed by a proper title search.  The Town could come up with very little factual detail of what happened and why in 1968.

>
>Comment 2: Obviously the Town was reluctant to reward Devine and his friends for their research, and fought through this appeal.  Devine, apparently, has been round the barn before with public agencies on such issues, and the court noted that his name appears in a number of these sorts of “missing owner” disputes.  Perhaps the Town thought that Devine, clever as he was, would certainly have discovered the 1968 condemnation order, but the trial court made a finding that no owner of the Parcel had actual knowledge of that order, so that’s how it stands.

>
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