Petersen v. McCormic
| Decision Date | 09 July 2019 |
| Docket Number | No. 51357-9-II,51357-9-II |
| Parties | ADRIEN PETERSEN, Respondent, v. ROBERT K. McCORMIC, JR., a married man as his separate estate, as to defenses to Plaintiff's complaint to quiet title and First Counterclaim (Quiet Title), Appellant, And WILLIAM OMAITS, a single man, as the successor in interest to ROBERT K. McCORMIC, JR., as to Counterclaims 2, 3 and 4 (Trespass, Ejectment and Waste or Injury to Land, Counterclaim Defendant. |
| Court | Washington Court of Appeals |
GLASGOW, J. — Robert McCormic owned two residential lots of waterfront property. Adjacent to McCormic's two lots was another piece of land called the Portway. McCormic adversely possessed and then obtained title to the north half of the Portway, adding to his property waterfront footage that was equal to each of his other two lots.
McCormic obtained a loan, borrowing against his original two residential lots. While the lender was aware of McCormic's claim of ownership of the north half of the Portway, the lender's deed of trust did not describe the additional Portway property in its legal description of the property encumbered by the loan. Some years later, McCormic received and recorded a quitclaim deed that conveyed to him title to the north half of the Portway. McCormic eventually defaulted on his loan, and a trustee instituted a nonjudicial foreclosure against the original two residential lots. Adrien Petersen bought the two residential lots at the trustee's sale.
A dispute then arose about whether the north half of the Portway should have been included in the trustee's deed that conveyed to Petersen the residential lots. The trustee's deed did not include or otherwise describe the adjacent Portway land in the legal description. The trial court granted summary judgment and quieted title in Petersen's favor. McCormic appeals.
McCormic contends that a trustee can convey title only to property described in a deed of trust and, therefore, title to the north half of the Portway was not conveyed to Petersen. Petersen argues that we should apply the after-acquired property doctrine to reform his deed to include the north half of the Portway. Alternatively, Petersen argues that the omission of the north half of the Portway was a scrivener's error, that a mutual mistake supports reformation of the deed, or judicial estoppel precludes McCormic from claiming ownership of the disputed land.
We agree with McCormic that the trustee conveyed to Petersen only the land described in the deed of trust, and none of Petersen's arguments warrant reformation of the deed. We therefore reverse and remand for the trial court to enter summary judgment in McCormic's favor. Although McCormic also asks that we quiet title in his favor, we leave that request for the trial court to resolve on remand.
In 1974, McCormic bought a residential property consisting of two lots—Lot 1 and Lot 2—in the Port Madison community of Bainbridge Island. Adjacent to Lots 1 and 2 was another piece of land called the Portway. The Portway was a 100 foot wide parcel of platted real property on the south shore of Port Madison Bay. Historically, the Portway was an avenue likelyused for public access to the bay. For many years, McCormic landscaped, mowed, and maintained the north half of the Portway.
In 1994, McCormic planted three pine trees on the northern 50 feet of the Portway. In addition, McCormic obtained a commitment for title insurance that documented McCormic's purported fee ownership of the north 50 feet of the Portway and included a legal description of the property. Lots 1 and 2 totaled 100 frontage feet of waterfront, and the north half of the Portway totaled an additional 50 frontage feet of waterfront. So, the north half of the Portway amounted to about equal water frontage as each of the other two lots.
In 1995, the City of Bainbridge Island commissioned a survey of the Portway that was recorded with the Kitsap County Auditor in August 1996. The survey notes that McCormic's title insurance policy "vests ownership to adjoiners [the McCormics]." Clerk's Papers (CP) at 630.
In 2004, McCormic sued his uphill neighbors for timber trespass, outrage, and intentional infliction of emotional distress, alleging that they entered his part of the Portway and cut down the three pine trees he had planted in 1994. The complaint alleged that the "McCormics are the legal owners of . . . [t]he north 50 feet of a 100 foot waterfront Lot known as Portway which Lot is located immediately to the south of their home." CP at 320. The complaint also alleged that "[t]he Port Madison Company is the legal owner of the South 50 feet of the Portway." CP at 320.
In a declaration filed in the timber trespass case, the President of the Port Madison Water Company, a homeowners association for the Port Madison community, stated that the Port Madison community was the legal owner of the south 50 feet of the Portway, and the PortMadison Company did not dispute McCormic's claim that he owned the north half of the Portway. The jury in that case returned a verdict in McCormic's favor.
Later that year, McCormic looked into obtaining a loan from Quality Express Mortgage, which then commissioned an appraisal of his property. This appraisal noted that "[t]he subject enjoys 150 F[rontage] F[eet] of medium to low bank waterfront located in the prestigious neighborhood of Port Madison." CP at 416. The appraiser combined McCormic's portion of the Portway with Lots 1 and 2 when valuing his property at $2.4 million.
McCormic also looked into obtaining a loan from another lender, MortgageIT, which also commissioned an appraisal of his property. That appraisal valued McCormic's property at $1.9 million. The appraiser similarly noted that CP at 444.
In 2006, McCormic borrowed $1.33 million from MortgageIT, which it secured with a deed of trust against his property. The deed of trust included Lots 1 and 2 in its legal description of the property, but it did not include or describe any portion of the Portway.
In 2013, William Omaits, obtained two judgments against McCormic. As part of the associated collection action, Omaits obtained a copy of a 1994 insurance policy McCormic obtained for the Portway.
In 2014, McCormic visited the Kitsap County Assessor's Office to inquire why the county had not taxed him separately for his ownership of the north half of the Portway. He provided the assessor with a copy of his 1994 title insurance policy. Based on that policy, the assessor added the description of the 50 foot strip of property to the tax description of theadjoining property. Later that year, Port Madison Water Company executed a quitclaim deed, for the sole purpose of clearing title, which conveyed to McCormic, as his separate property, title to the north 50 feet of the Portway. In return, McCormic executed a quitclaim deed that conveyed to Port Madison Water Company title to the south 50 feet of the Portway.
In 2015, McCormic filed a declaration inventorying his real property as a part of the Omaits collection action. In his declaration, McCormic listed his properties with their assessed values and encumbrances, including Lots 1 and 2, but he omitted any reference to his ownership of the north half of the Portway. Later that year, the court ordered McCormic to appear at a deposition and provide testimony, records, and documents concerning his assets. When asked under oath whether he had provided all the required records and documents, McCormic answered: "Yes." CP at 361, 374, 576. However, McCormic did not produce the 2014 quitclaim deed or any other documents related to his ownership of the north half of the Portway. Omaits also asked McCormic: "Other than the two rental properties and your personal residence, do you own any other real property?" CP at 578. McCormic answered: "No." CP at 578.
In 2016, the trustee for McCormic's loan with MorgageIT provided him with a written notice of default and then notice of nonjudicial foreclosure. It also published a notice of trustee's sale in the newspaper. The notice included Lots 1 and 2 in its legal description, but it did not include or describe any part of the Portway. The trustee sold the property at auction to Petersen for $1.051 million.
The trustee's deed granted and conveyed title to Petersen "without representations or warranties of any kind, expressed or implied." CP at 99. Petersen "acknowledge[d] and agree[d]that the Property was purchased in the context of a foreclosure, that the current Trustee made no representations to" him "concerning the Property and that the current Trustee owed no duty to make disclosures . . . concerning the Property." CP at 99. Peterson also "acknowledge[d] and agree[d]" he relied solely upon his own due diligence investigation before electing to bid for the property. CP at 99.
The trustee's deed upon sale again included Lots 1 and 2 in its legal description, but, in accord with the deed of trust and the notice of trustee's sale, it did not include or describe any part of the Portway.
In February 2017, the Kitsap County Treasurer levied a new property tax on the north half of the Portway separate from the tax assessed on Lots 1 and 2. Because the trustee's deed upon sale did not include the Portway in the legal description, the assessor created a parcel number for the Portway separate from the one for Lots 1 and 2.
In March, McCormic proposed to Petersen a rental agreement for Petersen's use of McCormic's portion of the Portway to facilitate remodeling on Lots 1 and 2. Over the next several days, McCormic also put orange tape between the Portway and Lots 1 and 2, spray painted the boundary line between the properties, placed construction material on the ground at the boundary line, removed sections of fencing...
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