Opinion
No. 30659-0-II
Filed: December 7, 2004 UNPUBLISHED OPINION
Appeal from Superior Court of Clark County. Docket No: 00-2-03715-9. Judgment or order under review. Date filed: 06/24/2003. Judge signing: Hon. John F. Nichols.
Counsel for Appellant(s), Douglas O. Whitlock, Attorney at Law, 405 W 13th St, PO Box 748, Vancouver, WA 98666-0748.
Mark G. Passannante, Johnson Broer Passannante PS, 650 Pioneer Tower, 888 SW 5th Ave, Portland, OR 97204-2012.
Counsel for Respondent(s), Derek Jay Vanderwood, Attorney at Law, 12204 SE Mill Plain Blvd Ste 200, Vancouver, WA 98684-6026.
In this quiet title action, Douglas O. Whitlock and Janice P. Thompson appeal the trial court's conclusion that they failed to extinguish Randolph Johnson's joint ownership interest in real property that Whitlock attempted to sell to Thompson and her former husband. They argue that they proved ownership through adverse possession and ouster. Additionally, they argue that (1) Johnson was precluded from challenging the real estate contract, (2) the trial court erred in finding Thompson liable to Johnson for rents for the period prior to Johnson's request for rents, (3) the trial court erred in finding Whitlock liable for rents, and (4) the trial court erred when it excluded certain testimony. We affirm.
FACTS
These facts are based primarily on the trial court's unchallenged findings of fact. Robel v. Roundup Corp., 148 Wn.2d 35, 42, 59 P.3d 611 (2002) (we consider unchallenged findings of fact verities on appeal).
In 1975, Johnson and Whitlock, who were both practicing attorneys at the time, purchased a single-family home in Battle Ground, Washington, for approximately $12,500. Each party contributed a maximum of $1,000 in cash and then assumed an existing mortgage. On June 13, 1975, they filed a warranty deed identifying them as joint owners of the property.
Johnson and Whitlock agreed that they would rent the property and use the rents to pay the mortgage and expenses related to the property. They opened a bank account in both their names, intending to use this account to pay the mortgage and expenses and to accumulate any excess funds.
Whitlock acted as the manager of the property and rented it out. The rents were at least sufficient to cover the mortgage and other expenses, such as the minimal repairs performed.
From 1975 until Johnson moved to Oregon in 1984, Johnson and Whitlock `periodically discussed the status' of the property. Clerk's Papers at 55. But after 1978 or 1979, Johnson did not claim any income, expenses, depreciation, or otherwise mention the property on his tax returns. Starting in early 1980, Johnson was not involved with the property.
Whitlock subsequently closed the joint bank account and kept all the funds received from the property. Although Whitlock paid off the original mortgage and received the reconveyance deed in 1989, he did not record the reconveyance deed for approximately 10 years.
In 1982, Whitlock rented the property to Thompson and her former husband for $200 a month. He did not inform Johnson of this transaction, there was no written rental agreement, and Whitlock did not raise the rent at any time during the Thompsons' occupancy.
In 1989, the Thompsons and Whitlock entered into a written real estate contact for the purchase and sale of the property. The real estate contract required the Thompsons to make monthly payments of $200 and a final balloon payment in 1999. The contract also stated that the property was subject to encumbrances, including `listed tenancies, easements, restrictions and reservations in addition to the obligations assumed by Buyer and the obligations being paid by Seller,' that were `of record' at the time of the agreement. Exhibit 1 at 2.
Despite Johnson having recorded a mortgage in favor of his mother against the property in 1987, Whitlock did not attempt to contact Johnson about the sale and did not inform the Thompsons that Johnson might have an interest in the property or that there was a mortgage recorded against the property. Instead, he told the Thompsons that he had acquired his silent partner's interest in the property. The Thompsons did not conduct a title search prior to signing the real estate contract, and Whitlock never recorded the real estate contract or paid the excise taxes on the transaction. After signing the real estate contract, the Thompsons replaced the roof on the home.
In 1991 or 1992, the Thompsons divorced and attempted to sell the property, but they were unsuccessful. In 1996 or 1997, Thompson again listed the house with an agent. For approximately two years in the mid-1990s, `for sale' signs were periodically posted on the property.
While negotiating a sale with a potential buyer, Thompson discovered Johnson's interest in the property, the mortgage in favor of Johnson's mother, and several liens against the property. After Whitlock failed to clear the title, Thompson stopped making payments on the contract and did not pay the final balloon payment due in 1999. Despite this, Whitlock did not notify Thompson of default or forfeiture.
The trial court later found that: (1) Whitlock paid the property taxes from January 1982 through January 1989, (2) Thompson paid the property taxes from February 1989 through August 1999, and (3) Whitlock paid the property taxes from September 1999 through June 2003. Although Thompson paid the property taxes after executing the real estate contract, Whitlock testified that the tax statements continued to come to him and he personally delivered them to Thompson.
Between 1980 and 1998, Whitlock did not attempt to contact Johnson beyond occasionally checking the telephone book and talking with other attorneys. Additionally, he never provided Johnson with an accounting, nor did he notify Johnson that he had attempted to sell the property to the Thompsons. Whitlock finally contacted and met with Johnson to discuss the property in July 1998.
On September 12, 2000, Thompson brought this quiet title action claiming adverse possession against Johnson and his mother. Johnson cross-claimed against Whitlock, asserting that they owned the property as tenants in common and that Whitlock had failed to provide him with any financial information regarding the property. He asked for a full and complete accounting, requested partition of the property, and asserted that he was entitled to at least half of the proceeds from the sale. In response, Whitlock cross-claimed against Johnson, arguing adverse possession, ouster, abandonment, and equitable estoppel.
Thompson also filed a breach of contract claim against Whitlock, but the parties apparently came to an agreement on this claim and the trial court did not address it.
During the bench trial, Whitlock testified that he was aware that around the same time Johnson stopped being involved with their property, Johnson had forfeited his interest in another property he co-owned with another attorney, William Baumgartner. Whitlock testified that he believed Johnson had forfeited his interest in their jointly-owned property because of his absence and, among other things, his forfeiture to Baumgartner. Johnson later testified that in the mid-1980s he forfeited his interest in the property he owned jointly with Baumgartner.
Whitlock attempted to call Baumgartner to testify about Johnson's forfeiture, asserting that this testimony would establish that Johnson had engaged in a course of conduct indicating that he was abandoning his real estate interests and would support Whitlock's subjective belief that Johnson had abandoned his interest in their jointly-owned property. The trial court excluded this testimony, apparently under ER 404(b), but allowed Whitlock to present an offer of proof.
In the offer of proof, Baumgartner testified that he sued to quiet title on the property he had co-owned with Johnson after Johnson neglected to make the payments on the mortgage and the property nearly went into foreclosure; Johnson defaulted and forfeited his interest in the property. Baumgartner also testified that in addition to not making the mortgage payments, Johnson did not cash the checks he (Baumgartner) sent to cover his share of the mortgage payments and that Johnson later refused to reclaim any of the personal property he had left behind.
After hearing testimony and argument, the trial court concluded that Thompson and Whitlock had failed to establish adverse possession, acquiescence, waiver, abandonment, estoppel, ouster, or equitable estoppel. Central to the trial court's decision was its conclusion that the unrecorded real estate contract and Thompson's actions of living in the home, roofing the home, and then periodically posting for `sale signs' at the home, did not provide adequate notice that anyone was asserting exclusive ownership of the property.
After concluding that Johnson had retained his interest in the property, the trial court ordered a partition sale and further ordered Whitlock to provide Johnson with a full accounting. Johnson subsequently moved for an order requiring payment of rent and taxes and to require listing of the property. The trial court concluded that because Whitlock had failed to establish ouster, Johnson was entitled to half the profits generated by the property from the time of its acquisition until the time of its sale, including rents at market value from the time of Thompson's default on the real estate contract, less property taxes paid. The trial court entered a judgment in favor of Johnson against Whitlock and Thompson for $24,296.39, plus fees and costs, allocating $13,601.34 of the liability to Whitlock and $10,695.05 of the liability to Thompson. Thompson's share reflected half the reasonable rent of $500 per month from September 1999 to June 2003, less the taxes she had paid. Whitlock and Thompson appeal.
The court also recognized that Whitlock and Thompson had entered into a stipulation agreeing to hold Thompson harmless from any claims by Johnson.
ANALYSIS Adverse Possession
Whitlock contends that the trial court erred when it found that Johnson still had an interest in the property, arguing that he proved adverse possession through ouster. Thompson contends that the trial court erred when it found that she failed to establish adverse possession.
Whitlock's Adverse Possession/Ouster Claim
`A cotenant claiming adverse possession as to another cotenant must prove `ouster.'' Thor v. McDearmid, 63 Wn. App. 193, 207, 817 P.2d 1380 (1991). Proof of ouster `requires proof which is `stronger and more convincing than that necessary to sustain an ordinary claim of adverse possession.'' Thor, 63 Wn. App. at 207 (quoting Silver Surprize, Inc. v. Sunshine Mining Co., 88 Wn.2d 64, 66, 558 P.2d 186 (1977)). Thus, `[t]o establish title in one cotenant as against the others, by adverse possession, there must be such outward acts of exclusive ownership of such an unequivocal character as to impart notice to the cotenant that adverse possession is intended to be asserted against them.' Nicholas v. Cousins, 1 Wn. App. 133, 137, 459 P.2d 970, review denied, 77 Wn.2d 961 (1969). Although actual notice is not required, the evidence of exclusive ownership must be `of such a nature as to preclude the idea of a joint ownership brought home to the cotenant, or so open and public a character that a reasonable man would discover it.' Nicholas, 1 Wn. App. at 137 (citations omitted).
Whitlock claims that the following evidence was sufficient to establish notice of his claim of exclusive ownership: (1) his subjective belief that Johnson had abandoned his interest in the property, (2) the unrecorded real estate contract, (3) a new roof being installed on the house, (4) Thompson's continued presence in the home after executing the real estate contract, and (5) periodic posting of `for sale' signs on the property in the mid-1990s. We hold that these facts did not provide substantial, much less clear, unequivocal, or convincing evidence establishing that Whitlock was asserting exclusive ownership of the property.
First, Whitlock's subjective belief that he had sole ownership and the unrecorded real estate contract provided no notice to the outside world of Whitlock's claim to sole possession of the property. Whitlock's subjective beliefs were his own and, because Whitlock never recorded the contract, this manifestation of sole ownership was not so open and public that a reasonable person would discover it.
Second, the appearance of the new roof was not inconsistent with joint ownership. Whitlock, who had traditionally managed the property for the cotenancy, could easily have decided to replace the roof in order to maintain the property as a rental for the benefit of the cotenancy until it was advantageous to sell the property. Further, nothing in the record indicated there was any observable evidence that Thompson, rather than Whitlock, paid for the new roof.
Third, Thompson's continued presence in the home did not suggest actions inconsistent with co-ownership. Whitlock had consistently rented out the property to third parties for the benefit of the cotenancy, the Thompsons were originally renters, and there were no outward indications that their status as renters had changed.
Fourth, the trial court found that Thompson had only periodically posted `for sale' signs on the property in the mid-1990s. Not only was it reasonable for the trial court to conclude that this was not sufficient to establish notice, there was always the possibility that Whitlock was attempting to sell only his own interest in the property.
Additionally, we note that although the trial court found that Thompson paid the taxes on the property for several years, the tax notices were sent to Whitlock, not Thompson. This, combined with the fact Whitlock never recorded the real estate contract, suggests that the tax records were still in Whitlock's name and not Thompson's name.
Thus, none of the evidence Whitlock presented established any outward manifestations suggesting that he was claiming sole ownership in the property, and the trial court properly found that he failed to establish adverse possession through ouster against Johnson.
Thompson's Adverse Possession Claim
Generally, to establish adverse possession, the party claiming ownership through adverse possession must establish that her possession was (1) open and notorious, (2) actual and uninterrupted, (3) exclusive, (4) hostile, and (5) continuous for the statutorily-prescribed period of 10 years. Chaplin v. Sanders, 100 Wn.2d 853, 857, 676 P.2d 431 (1984). To be open and notorious, the claimant's possession `must be visible and known or discoverable to the true owner.' Lloyd v. Montecucco, 83 Wn. App. 846, 853, 924 P.2d 927 (1996), review denied, 131 Wn.2d 1025 (1997). This element is met if (1) the true owner has actual notice of the adverse use throughout the statutory period, or (2) if the claimant uses the land such that any reasonable person would assume he owned it. Chaplin, 100 Wn.2d at 862. But where the adverse possession claimant's use is initially permissive, the permissive use is presumed to continue unless the claimant makes a distinct and positive assertion of a hostile claim. Granston v. Callahan, 52 Wn. App. 288, 294, 759 P.2d 462 (1988); see also Miller v. Anderson, 91 Wn. App. 822, 830, 964 P.2d 365 (1998) (`[W]hen use is permissive at the outset, an adverse claim cannot lie unless the true owner has some notice that an adverse claim is being made.'), review denied, 137 Wn.2d 1028 (1999).
Just as Whitlock failed to present evidence that would have put Johnson on notice that he was claiming sole ownership of the property, Thompson failed to present evidence showing a distinct and positive assertion of a hostile claim. At most, she remained in the home, she entered into an unrecorded real estate contract with Whitlock, someone roofed the home, and there were periodically `for sale' signs outside the home. Apart from the real estate contract, none of this activity was observably inconsistent with her continued tenancy as a renter. And because Whitlock never recorded the contract, it never provided notice of actions hostile to Johnson's ownership rights.
Thompson also claims that she established adverse possession under good faith claim or color of title, as described in RCW 7.28.070. This argument also fails.
RCW 7.28.070 provides:
Every person in actual, open and notorious possession of lands or tenements under claim and color of title, made in good faith, and who shall for seven successive years continue in possession, and shall also during said time pay all taxes legally assessed on such lands or tenements, shall be held and adjudged to be the legal owner of said lands or tenements, to the extent and according to the purport of his or her paper title. All persons holding under such possession, by purchase, devise or descent, before said seven years shall have expired, and who shall continue such possession and continue to pay the taxes as aforesaid, so as to complete the possession and payment of taxes for the term aforesaid, shall be entitled to the benefit of this section.
(Emphasis added.)
First, as discussed above, Thompson failed to establish `open and notorious possession' as required under RCW 7.28.070. Second, presuming that an executory real estate contract is sufficient to establish claim or color of title, it may do so only `to the extent and according to the purport of [the claimant's] paper title.' RCW 7.28.070. Here, the real estate contract clearly stated that the property was subject to encumbrances, including tenancies and other obligations, `of record.' The record shows that at the time the real estate contract was executed, Johnson's interest as a cotenant and the mortgage in favor of his mother were recorded. Thus, to the extent the real estate contract purported to pass title to Thompson, it excluded these interests and Thompson's color of title argument fails.
Finally, quoting Nicholas, 1 Wn. App. at 141, Thompson also appears to argue that Johnson could not avoid the adverse possession claim by merely staying uninformed about the status of the property. But the Nicholas court did not automatically charge the defendants in that case with knowledge of the plaintiff's claim; instead, it found that there were sufficient facts to establish constructive notice that another party was claiming sole ownership of the property and that the defendants could not claim ignorance in light of those facts. Nicholas, 1 Wn. App. at 140-41. Here, there were no such facts, and the trial court did not err in concluding that Thomas failed to prove adverse possession.
Quoting In re Broderick's Will, 21 Wall. 503, 519, 88 U.S. 503, 22 L. Ed. 2d 599 (1874), the Nicholas court stated:
Parties cannot, by their seclusion from the means of information, claim exemption from the laws that control human affairs, and set up a right to open up all transactions of the past. The world must move on, and those who claim an interest in persons and things, must be charged with the knowledge of their status and condition, and of the vicissitudes to which they are subject.
Nicholas, 1 Wn. App. at 141.
Abandonment, Waiver, Acquiescence, and Estoppel
Whitlock next argues that, by failing to inquire about the property from the early 1980s on, Johnson either abandoned or waived his right to object to the sale, acquiesced to the sale, or is estopped from objecting to the sale. In effect, he is arguing that by leaving Whitlock to manage the property and not participating in its management for a substantial period of time, he is bound by Whitlock's decision to sell the property to the Thompsons. But Whitlock fails to cite any law supporting these arguments. Accordingly, we decline to address them. RAP 10.3(a)(3); Smith v. King, 106 Wn.2d 443, 451-52, 722 P.2d 796 (1986) (assignment of error is waived when party fails to support argument with legal authority).
Income and Rents Thompson's Liability for Rents to Johnson
Citing Cummings v. Anderson, 94 Wn.2d 135, 145, 614 P.2d 1283 (1980), Thompson contends that she is not liable to Johnson for rents from September 1999 until November 2000, because he did not request rents until he filed his answer to her complaint in November 2000. But Cummings addressed the issue of whether a cotenant in possession was liable for rents; here, we have the tenancy of a third party and Cummings does not apply. Accordingly, Thompson's argument fails.
Whitlock's Liability for Rents to Johnson
Whitlock further argues that the statute of limitations or the doctrines of abandonment, estoppel, acquiescence, laches, and waiver preclude Johnson from recovering rents back to 1982. Again, Whitlock fails to cite any authority in support of these arguments; accordingly, we decline to address them. RAP 10.3(a)(3); Smith, 106 Wn.2d at 451-52.
We further note that Whitlock's statute of limitation and laches arguments have no merit. Silver Surprize, Inc. v. Sunshine Mining Co., 88 Wn.2d 64, 67, 558 P.2d 186 (1977) (in an action for accounting between two cotenants, cotenant could not claim defenses of statute of limitations and laches unless it first established ouster).
Exclusion of Baumgartner's Testimony
Finally, Whitlock contends that the trial court erred in excluding Baumgartner's testimony. We disagree.
Whitlock testified that he knew Johnson had forfeited his interest in the property he co-owned with Baumgartner, and Johnson confirmed the forfeiture. Therefore, even if Johnson's forfeiture to Baumgartner was admissible to show that Whitlock's subjective belief that Johnson was abandoning his real estate interests was reasonable and that this subjective belief was relevant, Baumgartner's testimony on the same subject would have merely been cumulative, and the trial court did not err in excluding it. ER 403 (`Although relevant, evidence may be excluded if its probative value is substantially outweighed by the danger of unfair prejudice, confusion of the issues, or misleading the jury, or by considerations of undue delay, waste of time, or needless presentation of cumulative evidence.' (Emphasis added)).
Attorney Fees
Johnson requests fees and costs, apparently under CR 11 or RAP 18.9(a), asserting that Whitlock's arguments related to (1) whether Johnson abandoned, waived, or acquiesced to Whitlock's sale of the house to the Thompsons; and (2) Baumgartner's testimony were frivolous. Because these assignments of error presented debatable issues, they were not frivolous and we decline to award fees and costs.
We affirm.
A majority of the panel having determined that this opinion will not be printed in the Washington Appellate Reports, but will be filed for public record pursuant to RCW 2.06.040, it is so ordered.
HOUGHTON, J. and BRIDGEWATER, J., Concur.