Daily Development for Wednesday, September 16, 2009
by: Patrick A. Randolph, Jr.
Elmer F. Pierson Professor of Law
UMKC School of Law
Of Counsel: Husch Blackwell Sanders
Kansas City, Missouri
dirt@umkc.edu
EASEMENTS; TERMINATION; MERGER: Although existing recorded easement may be terminated by merger of the dominant and servient estate in the same owner, the easement may be revived by reference to the record in the documents related to the sale of one of the estates.
Shah v. Smith, 908 N.E. 2d 983 (Ohio App. 2009)This case is discussed under the heading “Vendor/Purchaser; Merger by Deed.”
VENDOR/PURCHASER; MERGER BY DEED: Although deed purports to transfer property subject to a stated easement, court will look both to the sales agreement and the deed to determine whether an easement was intended.
Shah v. Smith, 908 N.E. 2d 983 (Ohio App. 2009)
Shah owned two adjacent parcels served by a joint driveway on the border between them. The joint driveway was identified by a recorded easement that apparently predated Shah’s ownership of the two parcels.
Shah sold one of the parcels to Smith. The agreement (poorly written is an understatement) provided at one point that “Buyer will accept the Property subject to restrictions of record.” It also stated that seller would transfer marketable title “free of . . . easements.” Another part of the agreement said that the deed was to be delivered “free and clear of all liens and encumbrances except as otherwise provided herein.”
The deed that was delivered specifically stated that title was subject to the recorded easement.
For years, the neighbors quarreled about the use of the shared driveway, culminating with the Smiths erecting a fence on the property line in the middle of the driveway.
A magistrate found for Shah, holding that the easement existed, but the trial court reveresed.
The appeals court reversed the trial court and reinstatement the easement.
The case involves two separate merger doctrines, argued by the parties.
The first doctrine is “merger by deed.” Shah argued that since the deed referenced the easement, that was the final statement of the agreement of the parties, and thus the easement was valid. Certainly an easement of access is not a “collateral agreement” and, so far as the editor knows, does not fit within any other exception to the merger by deed doctrine. But the appeals court refused to apply it. The court properly referred to it as a canon of construction that is useful in resolving the intentions of the parties. But then it refused to apply the doctrine here.
It is virtually impossible to make out the court’s reasoning based on the opinion alone. Inferentially, it would appear that the court will “look behind” the merger doctrine to see if the sales agreements provides clues as to the parties’‘ intentions, and then, if it finds something, will use both the deed and the agreement in interpreting that intent. Here, the court concluded that the sum of all the language in the deed was that title was to be transferred subject to recorded encumbrances, including the easement in question. It chose to ignore, or view as qualified, the language stating that title would be free of easements. The fact that the parties in fact referred to the recorded easement in the deed sealed the deal for the court.
The second merger doctrine is “merger by ownership.” The court acknowledged that when Shah acquired the servient and dominant properties together, the easement between them disappeared. But the court held, essentially, that Shah had the power to revive the easement by referring to it in the deed, which Shah did.
Comment 1: The editor has little quarrel with what the court did, since the editor believes that the contractual intent of the parties ought to be the court’s “polestar” and when the contract conflicts with the deed, both documents ought to be evaluated. Obviously, BFP’s will cut off the argument and will be able to rely on the deed, but that was not the case here.
Having said the above, the editor believes that the court’s opinion denying application of the merger doctrine to credit the deed is not supported by the holdings to which it cites. Those cases involved collateral duties and did not related to the central issue of title contained in the conveyance documents. There is plenty of loose language in those cases, however, to support through dicta what the court did here.
Comment 2: The notion that a seller can revive a recorded easement upon retransfer strikes the editor as perfectly acceptable. Why not?
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