Opinion
No. 58139-2-I, 58386-7-I.
August 27, 2007.
The Western Washington Corporation of Seventh Day Adventists (WWCSDA) brought an action to quiet title against Loretta Rasmussen, regarding a property in Renton, Washington. WWCSDA claimed equitable title to the property via payment of a real estate contract and alternatively, under the vacant and unoccupied land statute, RCW 7.28.080. The trial court granted summary judgment in favor of WWCSDA. We reverse and remand.
Facts
In 1966, Joseph Smet and WWCSDA entered into a real estate contract (the Contract) governing the sale of property (the Property) to WWCSDA. WWCSDA agreed to pay $15,800.00 for the Property by paying $2,200 down and $140.00 each month until the purchase price was paid in full. Smet agreed to deliver to WWCSDA a statutory warranty deed to the Property, but only upon receiving full payment of the purchase price. The Contract provided that should WWCSDA fail to make payments for taxes Smet and his assigns were entitled to make such payments and receive reimbursement from WWCSDA. The Contract stated that WWCSDA would receive possession of the Property on the closing date, May 1, 1966, and could retain possession unless it defaulted. Events of default included failure to make timely payments.
Joseph Smet was Loretta Rasmussen's grandfather.
Smet died shortly after executing the Contract. In his will, he bequeathed "the real estate presently being sold on contract" to his daughter, Alice Welch. In the schedule of assets, Smet's probate specifically classified his interest in the Property as personal property, rather than real property. This became Welch's interest in 1967.
WWCSDA paid taxes on the property from 1966-1986. In 1972, WWCSDA reimbursed the City of Seattle for its costs associated with a 1969 demolition of a structure on the Property. James Boyd, a deacon with WWCSDA, served as the treasurer from 1974-1979, during the time the contract payments were scheduled to come to an end. He testified that "[w]hile I served as treasurer I made regular monthly payments to People's National Bank, satisfying this contract." He also testified that whenever he issued a check for a church expense, he would complete a corresponding stub in WWCSDA's check register. However, the only documentary proof of monthly payments shows that a local church made seven payments of $140 six in 1974, and one in January 1975. In a letter dated June 15, 1978, WWCSDA noted that it owed multiple payments to Welch, and that Welch was threatening foreclosure proceedings as a result. The record does not show that any forfeiture proceedings occurred. According to the record, WWCSDA never received a statutory warranty deed for paying the purchase price in full.
Welch died in 1989. In her will, she made specific bequests to certain family members, and "bequeath[ed] all the rest, residue, and remainder of [her] property, real, personal, and mixed, of whatsoever kind and nature and wheresoever situate, unto [her] daughter LORETTA RASMUSSEN." Her will did not specifically describe the Property in question. Rasmussen served as the personal representative of her mother's estate. She did not list the Property or the Contract on the inventory and appraisement of her mother's estate. She served her declaration of completion of probate of Welch's estate on December 18, 1989. When asked "[i]sn't it fair to say that at the time that you signed this document in 1989 that you were telling the court that the only assets that were passing through your mom's estate with respect to real property was the 2217 South home?" Rasmussen replied: "To the best of my knowledge at that time, yes."
This is not the Property at issue.
So to her surprise, on September 19, 1990, Rasmussen received notice from the King County Finance Division (KCFD) advising her that taxes on the Property were due and owing. This letter was based on a title report that KCFD had obtained from Lawyers Title Company indicating that Rasmussen was the owner of the Property. Rasmussen testified that she had not paid taxes before then, and had been unaware that she had an interest in the Property until she was contacted by KCFD. She paid the back taxes for 1987-1990 and then regularly paid all of the real estate taxes due on the Property until 2003. Neither the local church nor WWCSDA paid the real estate taxes on the Property from 1987-2003.
In her declaration, Rasmussen asserts that "[o]ver the years, I have been at the Property many times." She acknowledges in her deposition that she would visit only to observe the Property. Several of her neighbors provided descriptions of the Property in their depositions. They described a lot with fruit trees, blackberry bushes, and other wild vegetation in earlier years, which had subsequently, became "a dumping ground, occasional place for prostitution, and a place where homeless people have occasionally briefly camped out." One neighbor recounted his request to the "church to clean up the property and trim the vegetation," and others recalled a bulldozer that cleared the lot sometime in the 1980s.
Boyd, a deacon of an individual WWCSDA church from 1978 until the present, testified that he would accompany other deacons to the Property for annual maintenance work in the 1970s and 1980s. He indicated that during those visits, which were "on a fairly regular basis, annual basis almost," they would "go out and clear the property" using hand held tools and a motorized weedeater. In the late 1990s, he became head deacon, and again visited the Property to check on its condition. He recalls visiting the Property two to three times a year in the 2000s. Another deacon, Willie Wilson, testified that in response to one neighbor's complaint that a large pile of dirt had been dumped on the Property, the church hired a bulldozer to level the nearly 500 cubic yards of soil. Wilson testified to three to four maintenance visits to the Property during the "first part of the 1980s". David McClelland, yet another deacon, recalls visiting the Property more than once in the 1970s and 1980s, going "regularly with work crews." But he is "real vague" about any work occurring there in the 1990s.
On September 28, 2004, WWCSDA brought an action to quiet title "pursuant to RCW 7.08.010." In its complaint, it asserted that "[a]ll payment owed under the Contract were [sic] paid by Plaintiff." WWCSDA paid real estate taxes on the Property from 1966 through approximately 1986. However, WWCSDA acknowledged that it did not receive a statutory warranty deed from Smet's estate.
RCW 7.08.010 governs assignments for benefit of all creditors. We assume a typo, and that WWCSDA intended to make a claim pursuant to RCW 7.28.080.
In March 2006, WWCSDA brought a motion for summary judgment to quiet title pursuant to the Contract. Alternatively, they claimed legal title to the Property under the vacant and unoccupied land statute, RCW 7.28.080. In that motion, WWCSDA noted its members' annual maintenance visits to the Property. On March 31, 2006, the trial court, referring to its review of the pleadings and oral argument, ordered summary judgment in whole to WWCSDA.
Subsequent to the summary judgment order, and before filing a notice of appeal, Rasmussen filed a lis pendens. The trial court denied WWCSDA's motion to strike the lis pendens, noting that Rasmussen had filed an appeal.
In her appeal, Rasmussen assigns error to the order granting summary judgment to WWCSDA. She also claims that the trial court erred when it dismissed her quiet title counterclaims because issues of material fact exist regarding whether she owns the Property by devise or descent and/or adverse possession. WWCSDA cross-appeals the trial court's denial of their motion to strike the lis pendens, and seeks attorney fees for that motion.
Analysis
1. Standard of Review
This court reviews a grant of summary judgment de novo, applying the same standard as the trial court. Shields v. Morgan Fin. Inc., 130 Wn. App. 750, 755, 125 P.3d 164 (2005). Summary judgment is appropriate if the pleadings, depositions, answers to interrogatories and admissions on file, together with the affidavits, show no issues of material fact exist and that the moving party is entitled to judgment as a matter of law. CR 56(c). "A material fact is one upon which the outcome of the litigation depends, in whole or in part." Hisle v. Todd Pacific Shipyards, 151 Wn.2d 853, 861, 93 P.3d 108 (2004). To determine whether summary judgment is appropriate, the court must construe all facts and reasonable inferences in favor of the nonmoving party. Wood v. Seattle, 57 Wn.2d 469, 473, 358 P.2d 140 (1960).
However, "[a]fter the moving party has submitted adequate affidavits, the nonmoving party must set forth specific facts rebutting the moving party's contentions and disclosing the existence of issues of material fact." Marshall v. Bally's Pacwest, Inc., 94 Wn. App. 372, 377, 972 P.2d 475 (1999) (emphasis added) (citing Young v. Key Pharm. Inc., 112 Wn.2d 216, 225, 770 P.2d 182 (1989)). "The non-moving party may not rely on speculation or argumentative assertions that unresolved factual issues remain." Id. (citing Vacova Co. v. Farrell, 62 Wn. App. 386, 395, 814 P.2d 255 (1991). "The motion should be granted only if, from all the evidence, reasonable persons could reach but one conclusion." Id. (citing Morris v. McNicol, 83 Wn.2d 491, 494-95, 519 P.2d 7 (1974)). As such, all inferences are construed in Rasmussen's favor, and she must set forth specific facts to show that WWCSDA's motion should not have been granted because, based on a preponderance of the evidence, reasonable people could reach a different conclusion.
2. The Real Estate Contract
On appeal, Rasmussen first argues that WWCSDA abandoned the Contract. However, that doctrine requires proof of actual intent to relinquish the rights claimed. Schoneman v. Wilson, 56 Wn. App. 776, 777, 785 P.2d 845 (1990). "[R]ealizing the existence of mutual intent to discontinue performance is dispositive." Id. at 785 (quoting Martinson, 11 Wn. App. 42, 50, 521 P.2d 233 (1974)). Because Rasmussen does not point to evidence of actual mutual intent to discontinue performance, and because we do not have a ruling on abandonment from the trial court, we do not reach that issue here.
Rasmussen next argues that WWCSDA failed to prove payment in full. The burden of proving payment is upon the party asserting it had made payments. Creditors Ass'n v. Fry, 179 Wash. 339, 37 P.2d 688 (1934); Ford v. Hagel, 83 Wn. App. 318, 323-24, 920 P.2d 260 (1996). WWCSDA claims that because Boyd testified that he made the monthly payments to satisfy the contract, there is no question that they fulfilled their payment obligations. However, the documentary proof of monthly payments shows only seven monthly payments from 1974 though January 1975. Boyd did not say he remembered paying all of the payments or the final payment or otherwise knew that the final payments had been made. Further, WWCSDA's own internal correspondence shows that Welch was threatening forfeiture proceedings as a result of multiple overdue payments. Lastly, WWCSDA acknowledges that it did not receive a statutory deed of warranty from Smet. All of the above evidence raises a question of fact as to whether WWCSDA paid the full purchase price.
In light of the evidence presented, and with inferences drawn in her favor, Ramussen presents specific facts to rebut WWCSDA's claim that it fulfilled the terms of the Contract. Based on the evidence, reasonable people could reach different conclusions. We conclude that the trial court erred when it found that there were no issues of material fact as to whether WWCSDA fulfilled its payment obligations.
3. WWCSDA's Claim Under the Vacant and Unoccupied Lands Statute
As a threshold issue, Rasmussen argues that because WWCSDA did not specifically plead "adverse possession" in its complaint or answer to counterclaims, it cannot plead the theory on summary judgment. This argument is not well taken. Because WWCSDA's complaint stated the facts it believed entitled it to ownership of the Property, it was allowed to argue a theory of "adverse possession" on summary judgment. We will examine the merits here.
WWCSDA claimed ownership under RCW 7.28.080, the "vacant and unoccupied" lands statute. This is not "adverse possession" by its terms. Moreover, as long as "a complaint states facts entitling the plaintiff to some relief, it is immaterial by what name the action is called." State v. Adams, 107 Wn.2d 611, 620, 732 P.2d 149 (1987) (citing Simpson v. State, 26 Wn. App. 687, 691, 615 P.2d 1297 (1980)). Lastly, "[t]he allegation of ownership in fee entitle[s] the respondents to introduce proof of any title including that acquired by adverse possession." Rogers v. Miller, 13 Wash. 82, 84, 42 P.525 (1895).
As an alternative to ownership under the Contract, WWCSDA cites RCW 7.28.080 to support its claim of adverse possession. WWCSDA's use of this law is inaccurate. Claims under RCW 7.28.080 are by definition not adverse possession claims because the statute allows a claimant to gain title without possession. 18 William B. Stoebuck § John W. Weaver, Washington Practice: Real Estate: Property Law § 8.2, at 508 (2d ed. 2004). It requires the claimant to show (1) color of title; (2) good faith; (3) payment of taxes for seven successive years; and (4) that the land has remained "vacant and unoccupied." Id. If the claimant is in possession of the land, application of the statute is precluded. Id. At least three Washington cases have held that "any use of the questioned land, however temporary, consistent with its general nature, would appear to be sufficient to preclude application of the statute." Wilson v. Howard, 5 Wn. App. 169, 172, 486 P.2d 1172 (1971) (finding that occasional recreational use of the land, which was wild beachfront property, was consistent with its general nature and sufficient to remove it from the category of "vacant and unoccupied."); see also McCoy v. Lowrie, 42 Wn.2d 24, 253 P.2d 415 (1953) (finding that temporary use of timber lands by "cedar makers," employed by the party claiming title and working but not living on the land, was deemed to be sufficient to categorize the land as neither vacant nor unoccupied); see also Drumheller v. Nasburg, 3 Wn. App. 519, 522-23, 475 P.2d 908 (1970) (finding that the plaintiff's claim of reacquisition of title by payment of taxes pursuant to the vacant lands statute was precluded due to the defendant's extensive improvements in connection with a fish hatchery on the land).
The threshold issue is whether the land was truly vacant and unoccupied to the extent necessary for WWCSDA to use RCW 7.28.080. According to the record, WWCSDA paid taxes on the property from 1966-1986. Several WWCSDA deacons testified that during that time, they and other church members would "on a fairly regular basis, annual basis almost[,] go out and clear the property." One maintenance visit involved the hiring of a bulldozer to level approximately 500 cubic yards of soil. This visit was corroborated by one of Rasmussen's neighbors who stated that "[i]n the early 1980s, an unidentified person brought out a bulldozer and cleared the property in one day."
Under WWCSDA's own assertions, they used the land that they are claiming was vacant and unoccupied, during the period that they paid taxes. WWCSDA's annual maintenance visits, consistent with the general nature of a property that required maintenance of overgrowth and removal of debris, removed the Property from the vacant and unoccupied lands category. Their response to the neighbors' complaints regarding weeds also showed use of a property that required cleaning and clearing. WWCSDA is precluded from claiming ownership under RCW 7.28.080. The trial court erred when it found as a matter of law that the land belonged to WWCSDA under RCW 7.28.080.
While both parties briefed extensively the color of title issue, we need not reach this issue. The use of the property by WWCSDA was dispositive.
4. Cross-appeal: Filing of Lis Pendens
WWCSDA cross-appeals the denial of their motion to strike Rasmussen's lis pendens, arguing that because she filed it post-summary judgment, all of her claims to the Property were extinguished. The trial court denied WWCSDA's motion to strike, "having determined that a notice of appeal has been filed." WWCSDA cross-appeals.
RCW 4.28.320 grants the trial court discretion to cancel a lis pendens, on motion by the aggrieved party. A trial court abuses its discretion only when its decision is manifestly unreasonable or based on untenable grounds. State ex rel. Carroll v. Junker, 79 Wn.2d 12, 26, 482 P.2d 775 (1971).
"[T]he court in which the said action was commenced may, at its discretion, at any time after the action shall be settled, discontinued or abated, on application of any person aggrieved and on good cause shown and on such notice as shall be directed or approved by the court, order the notice authorized in this section to be canceled of record." RCW 4.28.320.
The statute governing lis pendens provides "[a]t any time after an action affecting title to real property has been commenced . . . the plaintiff, [or] the defendant . . . may file . . . a notice of the pendency of the action" RCW 4.28.320. "The purpose of [filing] a lis pendens is to give notice of pending litigation affecting the title to real property, and to give notice that anyone who subsequently deals with the affected property will be bound by the outcome of the action to the same extent as if he or she were a party to the action." United Sav. § Loan Bank v. Pallis, 107 Wn. App. 398, 405, 27 P.3d 629 (2001).
Generally, a motion for summary judgment results in a final judgment on the merits of the claim. Karl B. Tegland § Douglas J. Ende, Washington Practice: Handbook on Civil Procedure § 69.31, at 530 (2007). If a motion for summary judgment is granted as to all claims or defenses, the case is at an end, although the judgment is subject to appeal like any other final judgment. Id. (citing Seattle-First Nat'l Bank v. Marshall, 16 Wn. App. 503, 557 P.2d 352 (1976).
WWCSDA points to Washington Dredging § Improvement Co. v. Kinnear, to support their argument that filing a lis pendens after the final determination of claims is error. Kinnear 24 Wash. 405, 407, 64 P. 522 (1901). However, Kinnear is distinguishable. There, the plaintiff appealed a state land commissioners' decision to the King County Superior Court, and then to the Washington Supreme Court, which also rejected his appeal. He applied for a retrial in both courts; this was rejected, as was his appeal. He then filed a lis pendens. The court held that "[t]he matters in dispute having been finally determined, not only once, but twice, the filing of the lis pendens was without authority of law." Id. 24 Wash. at 406.
WWCSDA also contends that Cashmere State Bank v. Richardson stands for the same rule. Cashmere, 105 Wash. 105, 177 P. 727 (1919). But in Cashmere, the appellant had filed the lis pendens prior to the court's dismissing of the actions. While the court cleared the lis pendens as a cloud on the title, it did not find that it had been error to file the lis pendens. Its holding is inapposite.
Unlike Kinnear, Rasmussen's appeal has not been rejected — once summary judgment was ordered against her, she still had the right to appeal the decision. During the appeals period, title to the property would still be in dispute. By filing her lis pendens, she was giving notice of pending litigation affecting the title to real property, and notice that anyone who may subsequently deal with the affected property will be bound by the outcome of the action. United Sav., 107 Wn. App. at 405. While she filed the lis pendens before she actually filed her notice of appeal, the appeals period was still open, and the lis pendens was used for its intended purpose. The trial court did not abuse its discretion when it denied WWCSDA's motion to cancel Rasmussen's lis pendens.
Lastly, WWCSDA argues that because Rasmussen's lis pendens was without "substantial justification," it is entitled to attorney fees under RCW 4.28.328(3). In light of our above conclusion, RCW 4.28.328(3) does not apply — Rasmussen filed her lis pendens based on a reasonable legal basis, and as such, was "substantially justified."
RCW 4.28.328(3) provides attorney fees to an aggrieved party when the claimant lacks "substantial justification" for filing a lis pendens. To show a lack of substantial justification for filing a lis pendens, the aggrieved party must be able to prove that the claimant did not have a reasonable basis in fact or in law to file the lis pendens.
Having concluded that the summary judgment was improperly granted as to fulfillment of payments and RCW 7.28.080, Rasmussen's remaining assignments of error in this appeal need not be addressed. We reverse, reinstate all of the claims, which were dismissed, and remand for further proceedings.
WE CONCUR: