Bloom v. Hendricks

• Decision Date: 14 January 1991
• Docket Number: No. 18910,18910
• Citation: 1991 NMSC 5,111 N.M. 250,804 P.2d 1069
• Parties: Mary Lou BLOOM and Kenneth D. Bloom, her husband, and Harry J. Schofield and Carol Schofield, his wife, Plaintiffs-Appellants, v. James C. HENDRICKS and Constance Hendricks, his wife, James C. Hendricks, Jr. and Rebecca L. Hendricks, his wife, Debra Hendricks Larowe and Keith Larowe, her husband, and James Hendricks, Personal Representative of the Estate of P.B. Hendricks and Frances Hendricks, Defendants-Appellees.
• Court: New Mexico Supreme Court

Page 1069

804 P.2d 1069

111 N.M. 250

Mary Lou BLOOM and Kenneth D. Bloom, her husband, and Harry J. Schofield and Carol Schofield, his wifePlaintiffs-Appellants, v.James C. HENDRICKS and Constance Hendricks, his wife, James C. Hendricks, Jr. and Rebecca L. Hendricks, his wife, Debra Hendricks Larowe and Keith Larowe, her husband, and James Hendricks, Personal Representative of the Estate of P.B Hendricks and Frances Hendricks, Defendants-Appellees.

No. 18910.

Supreme Court of New Mexico.

Jan. 14, 1991.

[111 N.M. 251] Civerolo, Hansen & Wolf, Peter V. Domenici, Jr., Albuquerque, for plaintiffs-appellants.

S. Thomas Overstreet, Alamogordo, for defendants-appellees.

OPINION

RANSOM, Justice.

The grantees of a tract of land sued the grantors for breach of warranty covenants to appear and defend fee simple title against "the lawful claims and demands of all persons."Plaintiffs also claimed the grantors made collateral negligent misrepresentations that the use of a certain roadway by adjacent property owners was permissive and would cease upon request.As discussed below, we do not deem the misrepresentation claim to be an issue.We consider only the circumstances under which the grantors, under a general warranty deed, are responsible for the attorney fees expended by the grantee in a successful defense of the title conveyed.

On rationale we develop in this opinion that identifies the party who has assumed the risk of mounting or declining to mount a defense, we decide that when the grantor neither bears responsibility for the substance of an adverse claim nor had actual or constructive knowledge of a potential adverse claim when he made the conveyance, the grantee can recover the costs of a defense against that claim only when he first made a demand on the grantor to appear and defend and the grantee's own defense of the title was unsuccessful.Alternatively, when the grantor bears some responsibility for the substance of an adverse claim or had actual or constructive knowledge of a potential adverse claim when he warranted his title and agreed to defend it, the grantee can recover the costs of a defense, including reasonable attorney fees, except when the grantee made no demand on the grantor to appear and defend and the grantee's own defense of the title was unsuccessful.

The complaint in this case was filed by Mary and Kenneth Bloom, purchasers of a forty-acre tract of land in Otero County, New Mexico.The Blooms purchased the property in 1981 and obtained from the sellers a warranty deed to the tract.The first group of defendants are P.B. and Constance Hendricks, who were the remote grantors of the tract.In 1976they conveyed the tract by warranty deed to their children and their children's spouses.The children and their spouses are the second group of defendants and are the immediate grantors who gave the warranty deed to the Blooms in 1981.

At the time they purchased the property the Blooms were concerned over the neighbors' use of a portion of the tract.Apparently, P.B. Hendricks had an oral agreement with the neighbors, Rex and Gracie Lane, that they were free to use part of the tract for equipment storage and access to their home until such time as Hendricks might dispose of the property.The Blooms stated they received assurances from both the immediate and remote grantors that the neighbors' use was permissive and would cease upon request.

In 1985 the Blooms wrote to the Lanes revoking permission for their use of the tract.The Lanes responded through counsel and claimed fee title to a portion of the tract under several theories.The parties were unable to resolve the dispute, and the Lanes filed suit in September 1985 claiming fee title by virtue of a boundary by acquiescence and, alternatively, claiming a prescriptive easement.

The Lanes' claim to a boundary by acquiescence relied in large part upon an affidavit signed by P.B. Hendricks in August 1985.The affidavit stated:

At the time the Lanes purchased their property and for many years thereafter, I was unaware of the exact location of the North boundary of their property and South boundary of my property because I had never had my property surveyed.* * * In the vicinity of the northern boundary of the Lanes' property is an arroyo running roughly east and west.For many years, the Lanes and I recognized and treated this arroyo as the northern boundary of their tract and the southern boundary of the property which I owned.

From a point fifty to 100 feet north of the southwest corner, the arroyo referred to in the affidavit ran east by northeast in the area at issue and then due northeast to the far northeast corner of the forty-acre tract conveyed by warranty deed to the Blooms.Ken Bloom testified that when he learned of the affidavit he went directly to Jimmy Hendricks, one of the immediate grantors, to discuss the situation and to request that something be done about the affidavit his father had signed.Bloom stated that the general impression he received from Hendricks was that the matter was not his problem.

In a bench trial the court ruled in favor of the Lanes in their suit against Blooms.The court quieted title to 1.474 acres of the tract in the Lanes and evicted the Blooms from the property.The decision was appealed to the New Mexico Court of Appeals which, in Lane v. Bloom, Ct.App.No. 9266(filed Oct. 16, 1987), reversed the trial court's decision.The court of appeals quieted title to the forty-acre tract in the Blooms except for a prescriptive easement across 0.302 acres used as a roadway and parking area by the Lanes.

Misrepresentations not an issue.In Lane v. Bloom the order of the court of appeals for the entry of a judgment on remand regarding the prescriptive easement was based on an unchallenged finding of the trial court concerning the purported easement that lay within the 1.474 acres.On appeal, the Blooms addressed only the boundary and title question.When the court of appeals reversed on the title question it stated that because "the parties do not dispute that plaintiff established a prescriptive easement over the 0.302 acre tract,"the trial court would enter such a judgment in favor of the Lanes on remand.The complete trial court findings of fact have not been made available in this appeal.

In the instant case, at oral argument and in their reply brief, the Blooms have maintained that the Lanes did not have a claim for a prescriptive easement in 1981.They concede that until 1981 the use by the Lanes was permissive and according to the terms of the acknowledged longstanding agreement with P.B. Hendricks.The statement about no claim existing in 1981 is made by the Blooms to rebut the charge that they should have been aware of the Lanes' adverse use of the property in 1981, and that for that reason the negligent misrepresentation claim is barred by the four-year statute of limitations.Counsel for the Hendricks states at several points that the Blooms "were advised of the Lanes' interest" in the tract shortly after the Blooms made the purchase.¹In reply, the Blooms state they had no awareness whatsoever of any of the Lanes' claims until 1985 when they first saw the affidavit signed by P.B. Hendricks and, shortly thereafter, received a demand letter from the Lanes' attorney raising directly the various claims of the Lanes.Since neither claim nor issue preclusion applies to Hendricks on the resolution of the prescriptive easement question decided in Lane v. Bloom,²" we are compelled by the Blooms' concession in this case to hold there was no ten-year prescriptive easement in 1985, seeHester v. Sawyers, 41 N.M. 497, 71 P.2d 646(1937)(prescriptive easement is acquired when the use is open, uninterrupted, peaceable, notorious, adverse, under a claim of right, and continuous for a period of ten years), and no misrepresentation when Hendricks said the use by the Lanes of the 0.302 acre roadway area was permissive and would cease upon request.

Warranty covenants.In the suit now before us the Blooms seek reimbursement from both their remote and immediate grantors for the cost of defending against the Lanes' adverse title claim to the 1.474 acres at the trial and appellate levels, approximately $15,532.49.The parties filed cross motions for summary judgment and the trial court granted judgment in favor of the Hendricks.For the reasons stated above in connection with the claim of negligent misrepresentation, we decide only the issue of warranty covenants to defend fee simple title to the 1.474 acres.

The deeds from both the immediate and remote grantors were prepared on standard general warranty deed forms that included "warranty covenants" with the conveyance.Pursuant to NMSA 1978, Section 47-1-37(Orig.Pamp.), the words "warranty covenants" in a conveyance of real estate have the following meaning and effect:

the grantor for himself, his heirs, executors, administrators and successors, covenants with the grantee, his heirs, successors and assigns, that he is lawfully seized in fee simple of the granted premises; * * * and that he will, and his heirs, executors, administrators and successors shall warrant and defend the same to the grantee and his heirs, successors and assigns forever against the lawful claims and demands of all persons.[Emphasis added.]

This affirmative general warranty covenant runs with the land in favor of remote grantees and may be enforced against the immediate grantors, the remote grantors, or both.Beecher v. Tinnin, 26 N.M. 59, 189 P. 44(1920).

Adverse title suit under doctrine of acquiescence implicates warranty covenant regardless of open and obvious encroachment.The parties have argued at some length over how the outcome of this case should be affected by our decision in Tabet Lumber Co. v. Golightly, 80 N.M. 442, 457 P.2d 374(1969)(open and obvious prescriptive easement does not breach warranty deed covenant against encumbrances).First, it is...