Cmty. Credit Union v. Amerititle & Abstract, Inc.

• Citation: 2012 WI App 118,822 N.W.2d 737,344 Wis.2d 519
• Decision Date: 11 September 2012
• Docket Number: No. 2011AP2294.,2011AP2294.
• Court: Court of Appeals of Wisconsin
• Parties: COMMUNITY CREDIT UNION, Plaintiff–Appellant, v. AMERITITLE & ABSTRACT, INC. and First American Title Insurance Company, Defendants–Respondents.

344 Wis.2d 519
822 N.W.2d 737
2012 WI App 118

COMMUNITY CREDIT UNION, Plaintiff–Appellant,
v.
AMERITITLE & ABSTRACT, INC. and First American Title Insurance Company, Defendants–Respondents.

No. 2011AP2294.

Court of Appeals of Wisconsin.

Sept. 11, 2012.

Appeal from a judgment of the circuit court for Forest County: Leon D. Stenz, Judge. Affirmed.
Before HOOVER, P.J., PETERSON and MANGERSON, JJ.¶ 1PER CURIAM.

Community Credit Union appeals a summary judgment dismissing its claims against AmeriTitle & Abstract, Inc. and First American Title Insurance Company. Community Credit sued AmeriTitle and First American after being denied access by adjacent landowners to a parcel it had foreclosed upon. Against AmeriTitle, Community Credit sought damages for alleged negligence in drafting a title commitment that included a temporary access easement in the property's legal description. Community Credit also sought coverage for lack of access to the property under the title policy issued by First American.

¶ 2 We conclude the circuit court properly granted summary judgment to AmeriTitle and First American. Because the easement passed by law to subsequent property owners, AmeriTitle was not negligent in including the easement in its title commitment. The easement would have provided Community Credit access as of the date of the title policy, which is all First American insured. Accordingly, we affirm.

BACKGROUND

¶ 3 Melvin and Kathy Flannery, along with Zachary Mullins, jointly owned real estate in Forest County. In September 2004, the Flannerys transferred their interests in the property to Mullins, who became the sole owner.

¶ 4 On December 15, 2004, Ron Seils granted Mullins an access easement. The agreement stated the easement was for ingress and egress to the parcel. After setting forth the easement's dimensions, the agreement stated: “SAID EASEMENT IS INTENDED TO BE A TEMPORARY EASEMENT FOR A PERIOD OF FIVE (5) YEARS TERMINATING ON 12/5/09.”

¶ 5 On December 16, 2004, Mullins transferred his property to Jamie Flannery by quit claim deed. The deed did not explicitly mention the easement, but included boilerplate language that the transfer includes “all appurtenant rights, title and interests.”

¶ 6 In early 2008, Community Credit agreed to refinance Flannery's loan. On May 9, Community Credit obtained a title commitment from AmeriTitle.¹ The legal description of the insured property identified the easement and the fact that it was temporary and would terminate on December 5, 2009. A mortgage was drafted using the same legal description.

¶ 7 The title policy, issued on May 20, 2008 by First American, provided coverage for lack of access subject to numerous exclusions, including an exclusion for defects, liens, encumbrances, or other matters “attaching or created subsequent to Date of Policy....” It also used the same legal description as the commitment identifying the temporary easement.

¶ 8 Community Credit foreclosed on the mortgage and became titled owner of the property on June 8, 2009. Eventually, the surrounding landowners informed Community Credit that it did not have access to the premises.

¶ 9 Community Credit filed suit against AmeriTitle and First American. Community Credit proceeded on a negligence theory against AmeriTitle, asserting that AmeriTitle was “negligent in providing ... a commitment showing an access easement to the premises when one did not exist in the name of the owner, Jamie Flannery.” Against First American, Community Credit sought indemnification for lack of access under the title policy.

¶ 10 AmeriTitle filed a motion for summary judgment and First American filed a motion to dismiss, which the circuit court later converted to a motion for summary judgment. SeeWis. Stat. § 802.06(2)(b), (3).² The court concluded the easement had passed from Mullins to Flannery by operation of law and AmeriTitle was therefore not negligent by including the easement in the title commitment. With respect to First American, the court concluded the policy merely insured access as of the date of the policy, May 20, 2008. Because the lack of access was a condition created subsequent to that date and known to Community Credit, First American was not obligated to provide coverage.

DISCUSSION

¶ 11 We review a grant of summary judgment de novo. Borek Cranberry Marsh, Inc. v. Jackson Cnty., 2010 WI 95, ¶ 11, 328 Wis.2d 613, 785 N.W.2d 615. Summary judgment is appropriate if there are no genuine issues of material fact and the moving party is entitled to judgment as a matter of law. Wis. Stat. § 802.08. We address Community Credit's claims against AmeriTitle and First American separately.

AmeriTitle

¶ 12 Community Credit first claims the circuit court erred by finding AmeriTitle not negligent under Wis. Stat. § 706.10(3). This requires us to interpret and apply that statute, which are questions of law. See Racine Harley–Davidson, Inc. v. State Div. of Hearings & Appeals, 2006 WI 86, ¶ 14, 292 Wis.2d 549, 717 N.W.2d 184.

¶ 13 Community Credit's negligence claim is based on its allegation that AmeriTitle provided “a commitment showing an access easement to the premises when one did not exist in the name of the owner, Jamie Flannery.” Thus, Community Credit's claim rests on the premise that Mullins' easement was not transferred to Flannery, either by deed or operation of law.

¶ 14 AmeriTitle asserts its title commitment was accurate because the easement passed to Flannery under Wis. Stat. § 706.10(3). That statute provides:

In conveyances of lands words of inheritance shall not be necessary to create or convey a fee, and every conveyance shall pass all the estate or interest of the grantor unless a different intent shall appear expressly or by necessary implication in the terms of such conveyance.

Id.

¶ 15 AmeriTitle contends that our supreme court's decision in Borek is dispositive and holds that an easement always follows the dominant estate under Wis. Stat. § 706.10(3). That is not entirely accurate. In Borek, Carl Nemitz purchased an easement from Jackson County giving him water flowage and sand removal rights to adjacent land. Borek, 328 Wis.2d 613, ¶ 4, 785 N.W.2d 615. When Nemitz later sold his adjacent property, the deed also purported to transfer the easement. Id., ¶ 6. The County later objected, arguing that certain rights were nontransferable because they had been granted to Nemitz alone and not his “heirs, and assigns.” Id., ¶ 2. The issue in Borek was whether the absence of such words of inheritance was intended to impose restrictions on the transferability of Nemitz's easement. The issue was not whether an easement is presumed to follow the dominant estate.

¶ 16 Nonetheless, we now conclude that Wis. Stat. § 706.10(3) codifies the well-established rule that when an owner conveys the dominant estate, he or she is also presumed to have conveyed any appurtenant interests in the servient estate. “Where an easement is appurtenant to an estate, it follows every part of the estate into the hands of those who purchase or inherit the estate, as long as the burden on the servient estate is not increased.” Gojmerac v. Mahn, 2002 WI App 22, ¶ 25, 250 Wis.2d 1, 640 N.W.2d 178. An easement passes by subsequent conveyance of the dominant estate, even without express mention in the conveyance. Id. (citing Krepel v. Darnell, 165 Wis.2d 235, 245, 477 N.W.2d 333 (Ct.App.1991)). Subsection 706.10(3)'s presumption—that “every conveyance shall pass all the estate or interest of the grantor unless a different intent shall appear expressly or by necessary implication in the terms of such conveyance”—is fully consistent with these principles.³

¶ 17 Thus, the remaining question is whether the easement here was appurtenant. An appurtenant easement ties the rights and obligations of the servitude to the ownership and occupancy of a particular unit or parcel of land. Gojmerac, 250 Wis.2d 1, ¶ 18, 640 N.W.2d 178. In contrast, an easement held in gross does not run with the land and is either personal to an individual, or may be transferred by assignment or delegation. Id., ¶ 18 n. 5, 640 N.W.2d 178. The language of the easement is key. Id., ¶ 24, 640 N.W.2d 178. Here, the agreement states that the easement was to provide ingress and egress to what was Mullins' parcel. Although the easement was temporary, nothing in the agreement suggested it was for Mullins' benefit alone.⁴ We conclude the easement was appurtenant and passed from Mullins to Flannery. ...