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explaining that “ finding that any recording would amount to constructive notice would eliminate the test of reasonableness from the ‘should have known’ component of the statute.”
Summary of this case from Fuqua v. United StatesOpinion
No. 8:00CV552
January 23, 2002
Richard K. Watts, Stephanie A. Payne, WATTS LAW FIRM, Lincoln, NE., for Plaintiffs
Ellyn Grant, ASSISTANT UNITED STATES ATTORNEY, Omaha, NE., for Defendants
MEMORANDUM AND ORDER
This matter is before the court on defendant's ("the government's") motion for partial summary judgment, Filing No. 23. This is a quiet title action against the United States pursuant to 28 U.S.C. § 2409a. At issue is title to certain tracts of land purchased by the government in connection with the Calamus Dam project. Plaintiffs assert that they are entitled to ownership of the land by adverse possession. The government asserts that the action is barred by a twelve-year statute of limitations. 28 U.S.C. § 2409a(g).
The government moves under both Rule 12(b)(1) and Rule 56 of the Federal Rules of Civil Procedure. The evidence submitted by the government relates only to the limitations issue. Accordingly, the motion will be construed as both a motion to dismiss for lack of subject matter jurisdiction and as a motion for summary judgment on the limitations issue.
I. Background
The uncontroverted evidence establishes that Donald and Jeanne Cain purchased certain real property in Garfield County, Nebraska, from Herman and Hazel Hood in 1959 (the "Cain property"). That property was abutted to the south and east by a 798-acre tract of land, then owned by the Harold and Joan Charron, known as Tract CR 10. At the time the Cains purchased the property, a fence separated the Cains' property from the Charrons' property. Plaintiffs have shown that the fence line, although repaired from time to time, has never been removed or relocated and has continuously existed in its present location. Filing 27, Affidavits of Donald Cain and Richard Watts. Plaintiffs have further shown by affidavit that the Cains recognized these fence lines as the eastern and southern boundaries of their property and maintained open, notorious and exclusive possession of the land inside that fence line until 1987 and that the property was used for pasture, haying, and recreational purposes. Filing No. 27, Affidavit of Donald Cain.
The legal descriptions of this property and other tracts at issue are adequately set forth in the pretrial order, Filing No. 34, and need not be repeated here.
In the Pretrial Order (Filing No. 34), the parties label the issues of possession and the placement of the fence as "controverted issues." However, the government has not submitted any evidence that refutes plaintiffs' evidence in this regard. Accordingly, the Court credits the testimony contained in the affidavits submitted by plaintiffs. Additionally, the placement of the fence line as of June 2000 is established by the survey of the property submitted in support of the government's motion. Filing no. 24, Exhibit 1.
In 1987, the Cains entered into a contract for installment sale of the property to the plaintiffs, Richard and Delores Watts. The Wattses took possession of the property and maintained open and exclusive possession of the property, similarly recognizing the fence line as the eastern and southern boundaries of the property. Filing No. 27, Affidavit of Richard Watts. Since 1987, the land has been used by Richard and Delores Watts for pasture, haying, storage and recreation, including hunting and use as a target range, and a portion has been developed as a trailer park and housing development.
The United States purchased various parcels of land during the latter part of 1978 in anticipation of construction of the Calamus Dam and consequent creation of the Calamus Reservoir. In 1978, Harold and Joan Charron conveyed Tract CR10 to the United States by warranty deed. The warranty deed was duly recorded in Garfield County, Nebraska, on August 18, 1978. The Cains had also conveyed a ten-acre tract of their property, known as Tract CR 12, to the United States in 1978. (The property conveyed from the Cains to the Richard and Delores Watts in 1987 did not include this parcel.) In preparation for the purchase of Tract 12, the United States conducted a survey of the tract. Filing No. 27, Affidavit of Donald Cain. The United States did not inform the Cains of any irregularity with respect to the placement of fence lines. Id. The affidavit of Eugene Schiltz, who surveyed the property in June 2000, establishes that "assuming the fence line separating the property being purchased by the Watts' and Tract CR 10 was in its present location when the parcel known as Tract CR 12 was surveyed by the United States of America, it would have been obvious to said surveyor that said fence line was off of the legal boundary and on to Tract 12 by some 85 feet where the same joins Tract CR 12 at its Southeast Corner." Filing No. 27, Affidavit of Eugene Schiltz.
In 1992, the Cains and the Wattses amended their contract for sale, reducing the acreage conveyed from 230 acres to 70 acres. Filing No 27, Affidavits of Donald Cain and Richard Watts. Pursuant to an addendum to the contract for sale, a survey of the property was conducted to ascertain the amended legal description of the property to be purchased by the plaintiffs. Id. The survey revealed that the fence line on the eastern edge of the property was not constructed on the boundaries of the property as set forth in the legal description. Id. The affidavits of Donald V. Cain and Richard B. Watts establish that this was the first time either of them knew the fence on the eastern boundary of the property was not constructed on the eastern property line. Filing 27, Affidavits of Donald Cain and Richard Watts.
In 2000, Eugene Schiltz surveyed the property at issue. Filing No. 24, Exhibit 2. He identified the tracts of land that were within the fence line but outside of the boundaries of the legal descriptions of the property that is the subject of the sale from the Cains to the Watts as two parcels, one amounting to approximately .9 acres and one amounting to 5.4 acres. Id. The affidavit of Richard Watts establishes that this was the first time he knew the fence on the southern boundary of the property was not constructed on the southern property line. The .9 acre parcel and the 5.4 acre parcel identified in the survey are the subject of this action.
II. Discussion
A. Subject matter jurisdiction
Because jurisdiction is a threshold issue for the court, the district court has broader power to decide its own right to hear the case than it has when the merits of the case are reached. Bellecourt v. United States, 994 F.2d 427, 430 (8th Cir. 1993). For the court to dismiss for lack of subject matter jurisdiction under Federal Rule of Civil Procedure 12(b)(1), the complaint must be successfully challenged either on its face or on the factual truthfulness of its averments. Titus v. Sullivan, 4 F.3d 590, 593 (8th Cir. 1993). In a facial challenge to jurisdiction, all of the factual allegations regarding jurisdiction would be presumed true and the motion could succeed only if the plaintiff had failed to allege an element necessary for subject matter jurisdiction. Id. In a factual attack on the jurisdictional allegations of the complaint, however, the court can consider competent evidence such as affidavits, deposition testimony, and the like in order to determine the factual dispute. Id. Because the parties have submitted evidence in support of their respective positions, this case presents a factual jurisdictional challenge. In such a challenge, this court is "free to weigh the evidence and satisfy itself as to the existence of its power to hear the case." Osborn v. United States, 918 F.2d 724, 729 (8th Cir. 1990). No presumptive truthfulness attaches to the plaintiff's allegations, and the existence of disputed material facts will not preclude the court from evaluating for itself the merits of jurisdictional claims. Id. The plaintiff has the burden of proving that jurisdiction does in fact exist. Id. at 730.
Jurisdiction is premised on the Quiet Title Act, 28 U.S.C. § 2409a ("QTA"). The QTA authorizes lawsuits against the federal government "to adjudicate a disputed title to real property in which the United States claims an interest." 28 U.S.C. § 2409a(a). The QTA is the exclusive means by which an adverse claimant can challenge the United States' title to real property. Block v. North Dakota ex rel. Bd. of Univ. Sch. Lands, 461 U.S. 273, 286 (1983) (Block I). The QTA bars any action that is not commenced within twelve years of the date it accrued. 28 U.S.C. § 2409 (g). An action is "deemed to have accrued on the date the plaintiff or his predecessor in interest knew or should have known of the claim of the United States." 28 U.S.C. § 2409a(g). Because the QTA waives the government's sovereign immunity from suit, a challenge based on the statute of limitations is jurisdictional — a plaintiff must comply with the limitations period to effectuate that waiver. Spirit Lake Tribe v. North Dakota, 262 F.3d 732, 737 (8th Cir. 2001). In addition, the QTA's statute of limitations is to be strictly construed. Block I, 461 U.S. at 286.
The twelve-year limitations period begins when a plaintiff or his predecessor knew or should have known of the government's adverse land claim. Id. Whether a party "should have known" about the government's claim is subject to a test of reasonableness. Patterson v. Buffalo National River, 76 F.3d 221, 224 (8th Cir. 1996). This standard does not require the government to provide explicit notice of its claim, nor is knowledge of the full contours of the government's claim required — all that is necessary is a reasonable awareness that the government claims some interest adverse to the plaintiffs. Spirit Lake, 262 F.3d at 738. "Simply put, the limitations period is triggered when a landowner has reason to know that the government claims some type of adverse interest in that land." Id.
The government contends that the recording of the deed of the sale of Tract CR10 from the Charrons to the government in August 1978 triggered the statute of limitations and that any action to quiet title after August 1990 is thus barred. Plaintiffs contend that title to the disputed tracts of land had already passed to the Cains by adverse possession before the conveyance to the government and that the Charrons could not convey land over which they held no title. The relevant inquiry for purposes of this motion is not whether the deed in fact conveyed title to the United States, but whether recording of the deed conveyed sufficient notice of the government's claim to the disputed tracts. See, e.g., United States v. Mottaz, 476 U.S. 834, 843-44 (1986) (identifying crucial showing as "knowledge that the government did not recognize [the plaintiff's] title."). Resolution of the jurisdictional issue, however, requires some discussion of the underlying adverse possession claim.
Plaintiffs may not claim adverse possession against the United States. 28 U.S.C. § 2409a(n); United States v. California, 332 U.S. 19, 40 (1947). In order to prevail in their quiet title action, Richard and Delores Watts must prove adverse possession against the Charrons before the Charrons sold their interest in the disputed property to the United States. See, e.g., Tadlock v. United States, 774 F. Supp. 1035, 1038 (S.D. Miss. 1990) (acknowledging claim but finding facts did not support a claim of adverse possession); Brewer v. United States, 562 F. Supp. 128, 133 (E.D. Mo. 1983) (quieting title in favor of plaintiffs upon finding that sellers had been divested of title by adverse possession prior to transfer of title to United States). Federal law governs the interpretation of the QTA, although state law may be invoked in the application of statutory language to specific facts. State of North Dakota v. Block, 789 F.2d 1308, 1312 (8th Cir. 1986) (Block II). State law has traditionally been applied in resolving federal claims to real estate. Id.
Under Nebraska law, a party claiming title through adverse possession must prove by a preponderance of the evidence that the adverse possessor has been in actual, continuous, exclusive, notorious, and adverse possession for the statutory period of ten years. Wanha v. Long, 587 N.W.2d 531, 857 (Neb. 1998). Title cannot be acquired without the simultaneous and continuous existence of each element of adverse possession for the required period. Id. Acts that amount to "actual possession" will depend on the character of the land and the use that can reasonably be made of it. Id. It is not necessary that a party prove a complete enclosure or that he remain continuously on the land for the statutory period, but only that the land be used continuously for the purposes to which it was by its nature adapted. Id. If the occupier shared possession with the title owner, the occupier may not obtain title by adverse possession. Id. at 858.
The acts of dominion over land must be "so open, notorious, and hostile as to put an ordinarily prudent person on notice of the fact that the lands are in the adverse possession of another." Id. Visible and conspicuous evidence of possession and use of the land will generally be sufficient to establish that possession was notorious. Id. Enclosure of land renders the possession of land open and notorious, and tends to show that it is exclusive, but it is not the only way by which possession may be rendered open and notorious; nonenclosing improvements to land, such as erecting buildings or planting groves or trees, which show an intention to appropriate the land to some useful purpose, are sufficient. Id. Pasturing cattle can supply evidence of possession necessary to sustain an adverse possession claim. State Nat'l Bank Tr. Co. v. Jacobsen, 358 N.W.2d 743, 745 (Neb. 1984).
Possession that is "adverse," or "hostile," means possession under a claim of ownership. Id. The word "hostile," when applied to the possession of an occupant of real estate holding adversely, is not to be construed as showing ill will, or that the occupant is an enemy of the person holding the legal title, but means an occupant who holds and is in possession as owner and therefore against all other claimants of the land. Id. Thus, title may be acquired by adverse possession though the claim of ownership was invalid and the occupant believed he was asserting legal rights only. Id. Intent, even though mistaken, is sufficient where the claimant occupies to the wrong line believing it to be true and even though he does not intend to claim more than that described in the deed. Id. "The possession of the occupant is not less adverse because he took and had possession innocently and through mistake; it is the visible and exclusive possession with intention to possess the land occupied under the belief that it belongs to him that constitutes its adverse character." Id. at 860.
Thus, where a fence is created as a boundary line, and a party claims ownership of land up to that fence for the statutory period, that party gains title to that land by adverse possession. McCain v. Cook, 165 N.W.2d 734, 737 (Neb. 1969). See also Jacobsen, 358 N.W.2d at 745 (quieting title in fence-line dispute); Abood v. Johnson, 200 N.W.2d 20, 22 (Neb. 1972) ("[i]t is the established law of this state that, when a fence is constructed as a boundary line between two properties, and parties claim ownership of land up to the fence for the full statutory period and are not interrupted in their possession or control during that time, they will, by adverse possession, gain title to such land as may have been improperly enclosed with their own"). Although the fence line must be recognized as the boundary, it is not necessary for both parties to consider the fence a boundary, "rather, it is the adverse possessor's intent that is relevant." Wanha, 587 N.W.2d at 541 (citation omitted). However, mere "placement of a fence within one's boundary line does not lead to the relinquishment of ownership of lands outside the fence through adverse possession without an additional showing that those lands outside the fence have been used by the neighboring landowner under a claim of ownership for the requisite period of time." Id. (emphasis in original).
The title of the adverse possessor is not derived from anything in the nature of a transfer or grant by operation of law from the former title holder, but is independent and "relates back" to the very beginning of such possession. Id. at 542. The adverse possessor's possession is the source of his title. Id. Thus, there is nothing left for the adverse possessor to do to gain title. Id. Moreover, title by adverse possession is not affected by recording statutes. Hendrickson v. Glaser, 283 N.W.2d 41, 43 (Neb. 1979). Adverse title, "`once obtained is good even against those holding a title recorded as provided by statute . . . without regard to whether or not the adverse holder continued in actual possession after having perfected his title by adverse possession.'" Id. (quoting 3 Am. Jur.2d, Adverse Possession, § 243, p. 342).
Moreover, the recording statute protects only "good faith purchasers without notice." Neb. Rev. Stat. § 76-238 (Reissue 1996). A good faith purchaser of land is one who purchases for valuable consideration without notice of any suspicious circumstances which would put a prudent person on inquiry. Mader v. Kallos, 365 N.W.2d 408, 410 (1985). The burden of proof is on a litigant who alleges that he or she is a good faith purchaser to prove that he or she purchased the property for value and without notice. Mader, 365 N.W.2d at 410. This burden includes proving that the litigant was without notice, actual or constructive, of another's rights or interest in the land. Id. Evidence that another is in possession of the property can be constructive notice of an interest in the property. Id. Similarly, a purchaser is charged with notice of an easement if the easement is open, visible or apparent from inspection. Kimco Addition, Inc. v. Lower Platte S. Natural Res. Dist., 440 N.W.2d 456, 462 (Neb. 1989).
The recording statute provides:
All deeds, mortgages and other instruments of writing which are required to be or which under the laws of this state may be recorded, shall take effect and be in force from and after the time of delivering the same to the register of deeds for recording, and not before, as to all creditors and subsequent purchasers in good faith without notice; and all such deeds, mortgages and other instruments shall be adjudged void as to all such creditors and subsequent purchasers without notice whose deeds, mortgages or other instruments shall be first recorded; provided, that such deeds, mortgages and other instruments shall be valid between the parties.
Neb. Rev. Stat. § 76-238 (Reissue 1996).
The evidence shows that the Cains' possession of the tracts within the fence line were open and notorious. Moreover, the evidence establishes that the government, pursuant to its own survey, had notice that the fence line with respect to Tract 12 (which abuts the property it purchased from the Charrons) did not match the legal description of the parcel. The evidence before the court establishes that the Cains' possession of the disputed land was actual, continuous, open, notorious and hostile under a claim of ownership for a period of at least ten years before the land was conveyed to the government in 1978. Given the fact that the Cains' possession of the subject tracts was notorious and predated the transfer of the property by the Charrons to the government, the government cannot claim the protection of the recording statute. The government has not shown that it purchased the Charrons' property without constructive notice of the Cain's adverse possession. See, e.g., Caruso v. Parkos, 2002 WL 10239, *7 (Neb. Jan. 4, 2002) (finding failure of proof that litigant was without actual or constructive notice of another's rights or interest in the land).
Assuming that Richard and Delores Watts can claim title to the land by adverse possession, the issue is when they had notice that the government also claimed title to the land inside the fence line. Although state law may apply to real estate issues, constructive notice may be imputed under the QTA where such notice would not be imputed by state statute. Block II, 789 F.2d at 1312. The government apparently relies on the Eighth Circuit case of Spirit Lake Tribe v. North Dakota, 262 F.3d at 738-39, for its proposition that the recording of the deed from Charrons to the government provided the requisite notice to the Cains (plaintiffs' predecessors) and triggered the statute of limitations. The government's reliance is misplaced. In Spirit Lake, the Eighth Circuit Court of Appeals premised its finding that plaintiffs therein had notice of the government's claim on the recording of a deed, coupled with additional evidence showing that the plaintiffs "likely knew" of the government's claim. Id. This court is not aware of a case that would impute constructive notice in circumstances similar to these. Generally, more that mere recording, absent any actual knowledge or inquiry notice, is required. See, e.g., Mottaz, 476 U.S. at 844 n. 7 (involving actual knowledge of sale of some allotments to government); Long v. Bureau of Reclamation, 236 F.3d 910, 915 (8th Cir. 2001) (finding reasonable awareness of the government's claim because predecessor in interest had been party to the condemnation proceeding); Patterson v. Buffalo Nat'l R., 76 F.3d at 224 (finding ambiguous restrictions in a deed did not impart reasonable awareness that government would claim right to block access to land); Amoco Prod. Co. v. United States, 852 F.2d 1574, 1578 (10th Cir. 1988) (Amoco II) (involving actual knowledge of government claim); Amoco Prod. Co. v. United States, 619 F.2d 1383, 1388 (10th Cir. 1980) (finding constructive notice of "stray deed" not sufficient to satisfy reasonableness "should have known" prong of statute, noting "the doctrine of constructive notice, which creates a fiction and deals with hypothetical facts, is a harsh doctrine which should be resorted to reluctantly and construed strictly"); Mafrige v. United States, 893 F. Supp. 691, 701 (S.D. Tex. 1995) (finding execution of deed alone did not amount to constructive notice). A finding that any recording would amount to constructive notice would eliminate the test of reasonableness from the "should have known" component of the statute.
The statement that "[a]s a matter of law a quitclaim deed disgorging title to the United States places a landowner on notice and triggers the statute of limitations," Spirit Lake, 262 F.3d at 737-38, is accordingly dicta. Moreover, the case cited as authority for that statement, State of California v. Yuba Goldfields, Inc., 752 F.2d 393 (9th Cir. 1985), is similarly based on a finding of actual knowledge by plaintiffs therein. Id. at 396. In Yuba, while the court acknowledged that "constructive notice of recorded deeds may commence running of the limitations period" (emphasis added), it expressly declined to address the constructive notice issue. Id. at 396 ("the court need not mull over the issue of whether California `should have known' of the United States' claim, for California had actual knowledge of the claim") (emphasis in original).
The court finds that plaintiffs and their predecessors in interest had a reasonable awareness of the government's claim to property inside the fence line only after the property was surveyed and plaintiffs became aware that the fences were not constructed on the property line. The evidence shows that plaintiffs gained such awareness in 1992 at the earliest; consequently, this action was filed within the statutory period.
Interestingly, the court notes that the government filed a counter-claim for trespass. The court has jurisdiction over that claim under 28 U.S.C. § 1345 (granting original jurisdiction over "all civil actions . . . commenced by the United States"). The issues presented in the counterclaim involve resolution of the same issues as plaintiffs' complaint, i.e., adverse possession, the parties' entitlement to the disputed tracts, and applicability of the recording statute. Thus, because the government initiated its own action regarding the disputed tracts, this court would have jurisdiction over the issues presented in the counterclaim regardless of limitations issue under 28 U.S.C. § 2409(f). See Amoco II, 852 F.2d at 1579.
B. Summary Judgment
On a motion for summary judgment, the question before the court is whether the record, when viewed in the light most favorable to the nonmoving party, shows that there is no genuine issue as to any material fact and that the moving party is entitled to judgment as a matter of law. Fed.R.Civ.P. 56(C); Mansker v. TMG Life Ins. Co., 54 F.3d 1322, 1326 (8th Cir. 1995). Where unresolved issues are primarily legal rather than factual, summary judgment is particularly appropriate. Id.
The evidence submitted by the government in support of its motion related only to the limitations issue. As noted, the plaintiffs have satisfied the court that jurisdiction does exist under the QTA. Any remaining disputes should be resolved at trial.
IT IS HEREBY ORDERED that the government's motion for summary judgment or to dismiss for lack of subject matter jurisdiction, Filing No. 23, is denied.