City of Deadwood v. Summit, Inc.

• Citation: 2000 SD 29,607 N.W.2d 22
• Decision Date: 23 February 2000
• Docket Number: No. 21028.,21028.
• Parties: CITY OF DEADWOOD, a South Dakota municipal corporation, and Deadwood Historic Preservation Commission, Plaintiffs and Appellees, v. SUMMIT, INC., Defendant, Third-Party Plaintiff and Appellant, v. D.D. Industries, a corporation, and G.E. Derosier and Yvonne L. Derosier, Third-Party Defendants.
• Court: Supreme Court of South Dakota

607 N.W.2d 22

2000 SD 29

CITY OF DEADWOOD, a South Dakota municipal corporation, and Deadwood Historic Preservation Commission, Plaintiffs and Appellees, v. SUMMIT, INC., Defendant, Third-Party Plaintiff and Appellant, v. D.D. Industries, a corporation, and G.E. Derosier and Yvonne L. Derosier, Third-Party Defendants.

No. 21028.

Supreme Court of South Dakota.

Argued January 12, 2000.

Decided February 23, 2000.

Jon W. Mattson, Deadwood, South Dakota, Attorney for plaintiffs and appellees.

Veronica Bowen and Joseph M. Butler of Bangs, McCullen, Butler, Foye and Simmons, Rapid City, South Dakota, Attorneys for defendant, third-party plaintiff and appellant.

GILBERTSON, Justice

[¶ 1.] This appeal stems from a quiet title action initiated by City of Deadwood and Deadwood Historic Preservation Commission (City) against Summit, Inc. (Summit). The circuit court entered judgment in favor of City and found it had established ownership by (a) adverse possession; (b) boundaries by acquiescence; and (c) reformation of the deeds by which Summit acquired the disputed four lots of property. Summit appeals. We affirm in part and reverse in part.

FACTS AND PROCEDURE

[¶ 2.] The disputed property in this case involves four lots in Deadwood, South Dakota. The historic Adams house is located on Lots 11, 12, 13 and 14, Block 41, Original Townsite, Deadwood, Lawrence County, South Dakota. City is the current record owner of these lots. Summit is the current record owner of Lots A, B, C and D, Block 41, and other property which adjoins the Adams house. The eastern portion of Lots A, B, C and D are the focus of this dispute. (See attached exhibit showing the real property involved and the shaded area in dispute).

[¶ 3.] The Adams house was originally built in 1892. The house, along with its Lots 11 through 14 and adjoining Lots A through D were conveyed to W.E. Adams in 1920. Lots 11 through 14 and the east portion of Lots A through D are separated from the west part of Lots A, B, C and D by a ten to twelve foot high rock wall which generally runs east and west. According to a 1903 map of the City of Deadwood, the wall appears to have been built in 1903 originally to serve as a retaining wall.

[¶ 4.] In 1948 Lots A and B were transferred from the Adams family to Donald Derosier's father. Donald Derosier (Derosier) received title to these lots when his father conveyed them to him. At the time Lots A and B were conveyed to Derosier's father, he used the building located on the western portion of Lots A and B in connection with his automobile dealership. In 1991, Derosier conveyed Lots A and B to Summit.

[¶ 5.] The Adams house was built on Lots 11 through 14, with the garage, patio and a section of the porch of the house extending onto the east portion of Lots A and B. A small section of the porch extends onto Lot C as well. The Adams family continuously used and maintained these areas from 1920 until 1987. In September of 1987 Mary Adams conveyed Lots 11 through 14 to Bruce Crosswait. In 1992, Crosswait transferred his interest in the lots to City. From 1987 until he sold the property to City, Crosswait continued to use the garage, patio and porch. City has maintained Lots 11 through 14 and beginning in the fall of 1998 commenced a restoration and renovation project of the Adams house.

[¶ 6.] Lots C and D were owned by the Adams family until 1989 when the property was sold to D.D. Industries, a corporation solely owned by Derosier. These two lots had previously been leased to the Derosier family beginning in 1949. The Derosiers operated an automobile dealership on Lots A, B, C and D from 1948 until 1989, when it was sold to Jerry Mitchell and Andy Knott under a Contract for Deed. Summit took possession of the property in 1990 after it purchased Mitchell and Knott's interest and agreed to purchase Lots C and D from Derosier, which had been leased to Mitchell and Knott. On October 3, 1991, Derosier conveyed Lots C and D to Summit by warranty deed which included the area east of the rock wall. Summit converted the automobile dealership into a casino and restaurant.

[¶ 7.] Since acquiring the lots in October of 1991, Summit has been the record owner of Lots A, B, C and D. In 1993, Summit had a survey performed of the boundary line between Lots A, B, C and D and Lots 11 through 14. The survey established that an area east of the rock wall was within the boundaries of Lots A, B, C, and D. The survey showed the true boundary to include a portion of Lots A, B, C and D containing approximately .06 acres east of the rock wall. Since 1989, both Summit, its predecessors and City's predecessors in title have paid real estate taxes on portions of the disputed area.

[¶ 8.] City brought an action in Lawrence County circuit court to quiet title to the eastern parts of Lots A, B, C and D.¹ City based its quiet title action on claims of (1) adverse possession; (2) implied easement; (3) acquiescence in boundaries; and (4) the right to reform the deed conveying the property to Summit. The circuit court entered findings, conclusions and judgment in favor of the City, thus quieting title to the eastern portion of Lots A, B, C and D in the City. Summit now appeals raising the following issues for our consideration:

1. Did the assessment and collection of real property taxes by City preclude it from claiming title by adverse possession to Lots A, B, C and D.

2. Did the circuit court err in granting City's adverse possession claim as to Lots C and D.

3. Did the circuit court err in reforming the deed from Derosier to Summit.

STANDARD OF REVIEW

[¶ 9.] "Proof of the individual elements of adverse possession present questions of fact for the trial court, while the ultimate conclusion of whether they are sufficient to constitute adverse possession is a question of law." Lewis v. Moorhead, 522 N.W.2d 1, 3 (S.D.1994) (citing Lien v. Beard, 478 N.W.2d 578, 580 (S.D.1991)). We review the circuit court's findings of fact under the clearly erroneous standard. New Era Mining Co. v. Dakota Placers, Inc., 1999 SD 153, ¶ 7, 603 N.W.2d 202, 204 (citing Rabenberg v. Rigney, 1999 SD 71, ¶ 4, 597 N.W.2d 424, 425 (citing In re Estate of O'Keefe, 1998 SD 92, ¶ 7, 583 N.W.2d 138, 139)). "Clear error is shown only when, after a review of all the evidence, `we are left with a definite and firm conviction that a mistake has been made.'" Id. "The trial court's findings of fact are presumed correct and we defer to those findings unless the evidence clearly preponderates against them." Lewis, 522 N.W.2d at 3 (citing Cuka v. Jamesville Hutterian Mut. Soc., 294 N.W.2d 419, 421 (S.D.1980)). Conclusions of law are reviewed under a de novo standard, giving no deference to the circuit court's conclusions of law. Sherburn v. Patterson Farms, Inc., 1999 SD 47, ¶ 4, 593 N.W.2d 414, 416 (citing City of Colton v. Schwebach, 1997 SD 4, ¶ 8, 557 N.W.2d 769, 771).

ANALYSIS AND DECISION

[¶ 10.] 1. Did the assessment and collection of real property taxes by City preclude it from claiming title by adverse possession to Lots A, B, C and D.

[¶ 11.] The only issue which applies to Lots A and B in this appeal is the assessment and collection of taxes.² Summit argues since the City collected real property taxes on Lots A, B, C and D it cannot now claim title to these lots by adverse possession. The record indicates both Summit and City's predecessors were paying taxes on some portions of the disputed property. The circuit court found neither Derosier nor Summit had paid any taxes on the garage located east of the rock wall. The circuit court also found Summit has been paying taxes to a greater portion of Lots A, B, C and D than that west of the rock wall.

[¶ 12.] This Court's decision in Lusk v. City of Yankton, 40 S.D. 498, 168 N.W. 375 (1918), controls this issue. In Lusk, the disputed land was assessed for taxes by the taxing officers of the city. Id. at 378. The plaintiff company, which had paid all of the taxes, challenged the city's adverse possession claim because of its receipt of taxes. Id. We held the assessment and collection of taxes by the taxing officers of the city in no way precluded it from claiming or having title to the land by prescription based upon its adverse possession for more than twenty years. Id. Thus, City is not estopped from bringing a quiet title action by adverse possession in this case.

[¶ 13.] We affirm the circuit court's judgment as to Lots A and B. Therefore, we will only address the subsequent issues as they relate to the disputed portions of Lots C and D.

[¶ 14.] 2. Did the circuit court err in granting City's adverse possession claim as to lots C and D.

[¶ 15.] SDCL ch. 15-3 contains the statutes dealing with adverse possession. Summit is the record owner of the disputed portions of Lots C and D. Under SDCL 15-3-7, Summit is presumed to have been possessed of the property within the time required by statute (twenty years) unless someone else can prove adverse possession for that period of time prior to the commencement of the action. Cuka, 294 N.W.2d at 421-22. "The burden of proving title by adverse possession is upon the one who asserts it." Id. at 422 (citing Broadhurst v. American Colloid Co., 85 S.D. 65, 74, 177 N.W.2d 261, 266 (1970)). City, therefore, must prove it adversely possessed the land for at least twenty years so as to obtain title. "In such an action ... where the objective of the litigant is to establish an interest in land that is inconsistent with the record title, his proof must be stronger, more intense or of a higher degree than is required in ordinary litigation...." Id. (citing Lenker v. Musilek, 75 S.D. 60, 62, 59 N.W.2d 417, 418 (1953)). Thus, "[p]roof of adverse possession must be supported by `clear and convincing' evidence." Lewis, 522 N.W.2d at 3 (citing Lien, 478 N.W.2d at 579).

[¶ 16.] In South Dakota, property is subject to adverse possession when it has been actually and continuously occupied under a...