Crotwell v. T & W Homes, No. 2020-CA-00331-SCT

• Docket Number: No. 2020-CA-00331-SCT
• Decision Date: 20 May 2021
• Citation: 318 So.3d 1117
• Parties: James Kendall CROTWELL and Terry Crotwell v. T & W HOMES, etc, LLC
• Court: Mississippi Supreme Court

318 So.3d 1117

James Kendall CROTWELL and Terry Crotwell

v.T & W HOMES, etc, LLC

No. 2020-CA-00331-SCT

Supreme Court of Mississippi.

May 20, 2021

ATTORNEY FOR APPELLANTS: RICHARD M. LINGLE

ATTORNEY FOR APPELLEE: THOMAS D. LEE

BEFORE KITCHENS, P.J., COLEMAN AND MAXWELL, JJ.

KITCHENS, PRESIDING JUSTICE, FOR THE COURT:

¶1. This dispute concerns an acre of land in Scott County, Mississippi. This case previously was before the Court on interlocutory appeal regarding another issue. See T & W Homes v. Crotwell , 235 So. 3d 66 (Miss. 2017). Now it is before us concerning a counterclaim of T & W Homes Etc, LLC (T & W), which asserts that T & W acquired the disputed real property by adverse possession. At the trial level, James and Terry Crotwell (the Crotwells) contended that T & W did not acquire the property by adverse possession or quitclaim deed, arguing that T & W could not satisfy the requirements for tacking its time to that of its predecessor, Richard Prestage. The Crotwells took this position, claiming that the foreclosure sale by which T & W had acquired the property was void. After a hearing, the chancellor concluded that Prestage had satisfied the adverse possession elements and that, even if the foreclosure sale were void, the quitclaim deed, which was executed seven years after the foreclosure, conveyed title to T & W. The Crotwells appeal.

¶2. The Crotwells argue that T & W did not acquire the property by adverse possession because T & W cannot "tack" its time with its predecessor's time because "the deed of trust was void at the time of the foreclosure." The Crotwells argue also that the quitclaim deed failed to give T & W title to the property because "[w]hen the Quit-Claim deed was solicited from Prestage seven (7) years after his abandonment, he had no interest to convey, and the purported deed left a time gap of over seven (7) years."

¶3. T & W avers that "adverse possession vested title to Prestage on June 20, 2008" and that, even "if the deed to Prestage and the foreclosure by Wells Fargo [are] void, adverse possession under color of title prevails." T & W argues also that "Prestage acquired title to the one acre by adverse possession on June 8, 2008, which has in effect closed the door on Appellant's argument to the Court."

¶4. We find that even though the 2006 deed of trust was void ab initio and the foreclosure sale likewise was void, Prestage acquired title to the property in 2008 through adverse possession for the requisite ten years. Further, we find that Prestage did not lose the title until he conveyed it to T & W by means of a quitclaim deed in 2018. Therefore, we affirm the chancellor's decision. Title to the real property belongs to T & W.

FACTS

A) Case History

¶5. Gilbert Lum owned land in Scott County, Mississippi. In 1973, "Lum conveyed, by warranty deed, a forty-acre tract of land to his daughter, Lucille Crotwell." Crotwell , 235 So. 3d at 68. The warranty deed contained the following relevant language: "Grantor, [Lum,] however, does hereby expressly RESERVE unto himself a life estate in the foregoing lands coupled with a full and absolute disposition to be exercised by him as though he were the fee simple owner thereof[ ] also RESERVING unto himself all mineral interest owned by him in said lands for his lifetime." Id. (second alteration in original).

¶6. "On June 8, 1998, Lum executed a warranty deed for one acre of the forty-acre tract to Richard Prestage, [his grandson,] subject to his life estate for the mineral interests of that one acre, in addition to excepting all prior mineral rights." Id. Gilbert Lum died on June 29, 1998. A month after his grandfather's death, Prestage executed a promissory note to First Family Financial Services Inc., ostensibly secured by a deed of trust on the acre of land. Prestage executed another deed of trust with First Family Financial Services Inc. in February 1999. On January 5, 2000, Prestage executed a deed of trust on the acre of land to Affordable Mortgage Corporation. In August of 2002, by special warranty deed, Prestage deeded the one acre of land "from himself to himself and his wife, Sheri, as an estate by the entirety with full rights of survivorship." Id. On September 25, 2006, "[t]he Prestages ... executed a deed of trust in favor of American Title Company, Inc., as trustee for Hurricane Mortgage Company, Inc.[,]" which was recorded on October 2, 2006. Id. The following then occurred:

This deed of trust ultimately was assigned to HSBC Bank, USA, N.A., as trustee for Wells Fargo Asset Securities Corporation Home Equity-Backed Certificates. On August 10, 2011, Emily Courteau, as Substituted Trustee, conducted a foreclosure sale of this deed of trust. T & W Homes, Etc, LLC ("T & W") was the successful bidder and received a Substitute Trustee's Deed.

On December 13, 2011, the Crotwells filed a complaint to confirm title, remove cloud on the title, and for ejectment. The parties filed competing motions for summary judgment. The chancellor found that Lum had reserved a life estate only, and that a reservation of the right to reconvey fee simple title was "an illegal and void restraint upon alienation and repugnant to the granting clause of the deed." T & W filed an interlocutory appeal as to this one issue.

Id. at 68-69. The issue on interlocutory appeal was whether the language used by Lum in the deed "was an illegal and void restraint upon alienation and repugnant to the granting clause of the deed." Id. at 69. This Court determined that "[t]he Lum-Crotwell deed was not a gift; it was a completed transfer or conveyance of real property with no reference to a contingent remainder" and that "Lum could not subsequently convey to Prestage property he no longer owned." Id. at 71. Thus, this Court held:

Lum reserved unto himself a life estate only. During his lifetime, he could convey only what interest he owned, i.e. , his life estate. We affirm the judgment of the Chancery Court of Scott County and remand the case to that court for proceedings consistent with this opinion and disposition of the remaining claims.

Id. at 72.

B) Facts Regarding the Remand

¶7. One of the remaining claims was T & W's counterclaim, which alleged that T & W had acquired title to the property "by virtue of adverse possession." T & W argued that it and its "predecessor's [sic] in title, have since June 8, 1998, maintained an adverse, hostile, peaceable, actual, open, notorious, exclusive, and continuous possession of the one (1) acre tract ... for more than 10 years (13 years 6 months) prior to this cause of action being filed." The Crotwells claimed that "T & W took title as a purchaser in a void foreclosure and has no privity with a predecessor in title to which to tack the time of possession."

¶8. A hearing was set for October 3, 2018, to address T & W's counterclaim. The day before the hearing, T & W obtained a quitclaim deed from Prestage and his wife that conveyed "all of [the Prestages's] right, title, and interest in and to the land[.]"¹ This quitclaim deed was executed seven years after the date of the foreclosure sale.

¶9. After a hearing, the chancellor entered his final judgment on February 26, 2020. In that final judgment, the chancellor addressed each of "the six elements" needed to establish Richard Prestage's adverse possession claim and determined that:

First, did Richard claim ownership in the one acre? Without doubt he did as shown by his building the house and by the deed from his grandfather.

Second, was his use of the property actual or hostile? By clear and convincing evidence the [c]ourt finds same was actual as well as hostile as evidenced by the building of the home in which he resided and by arguing with Lucille in the presence of the surveyor.

Third, was his use of the property open, notorious and visible? Once again, the [c]ourt finds those elements established in this cause by clear and convincing evidence. One cannot be more clear in the use of the land than by living on same in open view.

Fourth, was Richard's use of the land continuous and uninterrupted for a period of ten years? He began building the home in 1997 and continued building same after his grandfather died in 1998.

He suffered the foreclosure in 2011. For over 13 years he used the property which has ben[sic] proven by clear and convincing evidence.

Fifth, was this use exclusive? It was as same was his residence and it has not been shown that any other person used any other part of the land.

Sixth, was the use peaceful[?] It was without question.

The chancellor concluded:

1) Clear and convincing evidence showed that Prestage adversely possessed the one acre tract of land. Therefore, "the one acre tract deeded to [Prestage] by Gilbert Lum became vested in him as the ‘... actual occupant or possessor ...’ of the said acre" and "the Crotwells no longer have interest in the one acre tract."

2) "Whether the foreclosure was valid and enforceable is of no moment here. Assuming it to be void, the Quitclaim Deed from Richard and wife, Sherry, to T & W, conveyed the interest of the Prestages to T & W. Therefore, the [c]ourt finds that the property is vested in T & W Homes."

¶10. The Crotwells appeal the chancellor's decision. The Prestages are not parties to this action, and neither party challenges the sufficiency of Richard Prestage's adverse possession, i.e. , whether he satisfied the necessary elements to establish adverse possession.

STANDARD OF REVIEW

¶11. "Questions of law are reviewed de novo." Browder v. Williams , 765 So. 2d 1281, 1284 (Miss. 2000) (citing Holliman v. Charles L. Cherry & Assocs. Inc. , 569 So. 2d 1139, 1145 (Miss. 1990) ). "The findings of a chancellor will not be disturbed on review unless the chancellor was manifestly wrong, clearly erroneous, or applied the wrong legal standard." Powell v. Campbell , 912 So. 2d 978, 981 (Miss. 2005) (citing McNeil v. Hester , 753 So. 2d 1057, 1063 (Miss. 2000) ). This Court "review[s] a chancellor's decision under an abuse of discretion...