Q-2 L.L.C. v. Hughes

• Decision Date: 16 February 2016
• Docket Number: No. 20140131.,20140131.
• Citation: 368 P.3d 86
• Parties: Q–2 L.L.C., Petitioner, v. Wayne L. HUGHES, Sr. and Patricia L. Hampton–Hughes, Respondent.
• Court: Utah Supreme Court

368 P.3d 86

Q–2 L.L.C., Petitioner,

v.Wayne L. HUGHES, Sr. and Patricia L. Hampton–Hughes, Respondent.

No. 20140131.

Supreme Court of Utah.

Feb. 16, 2016.

David J. Shaffer, Bountiful, for petitioner.

John M. Webster, Riverdale, for respondents.

Kenji Kawa, Riverdale, for respondent Wayne L. Hampton.

Anthony W. Schofield, Peter C. Schofield, Justin W. Star, Salt Lake City, amicus curiae, for Attorney's Title Guaranty Fund, First American Title Company, Old Republic National Title Company, Stewart Title Guaranty Company, and Westcor Land Title Company.

Chief Justice DURRANT authored the opinion of the Court, in which Associate Chief Justice LEE, Justice DURHAM, and Justice HIMONAS joined. Justice JOHN A. PEARCE became a member of the Court on December 17, 2015, after oral argument in this matter, and accordingly did not participate.

Chief Justice DURRANT, opinion of the Court:

Introduction

¶ 1 We are asked to decide only one issue in this case: how and when does a party acquire title to property under the doctrine of boundary by acquiescence? Does title transfer by operation of law at the time the elements of boundary by acquiescence are met or by judicial decree at the time the trial court enters its order? This case arises out of a boundary dispute involving Wayne Hughes and Patricia Hampton–Hughes (collectively, Hugheses) and their neighbor, Q–2, L.L.C. and its predecessors-in-interest (collectively, Q–2). Although the Hugheses agree that Q–2 properly obtained title to the property at issue under the doctrine of boundary by acquiescence, they argue that it did so at the time the elements of the doctrine were satisfied, allowing the Hugheses to subsequently reacquire the property through adverse possession. Q–2 disputes the Hugheses' claim and argues that it did not obtain title until the trial court ruled in its favor, preventing the Hugheses' adverse possession claim. After reviewing our prior boundary by acquiescence cases, the related doctrine of adverse possession, and the policy rationales underpinning these doctrines, we hold that a party obtains title under the doctrine of boundary by acquiescence by operation of law at the time the elements of the doctrine are satisfied. Accordingly, we affirm the decision of the court of appeals.

Background

¶ 2 This case is based on a boundary dispute between owners of neighboring properties in Syracuse, Utah. The parties, or their predecessors-in-interest, had used an old fence line running north to south as the boundary between the parcels from 1927 to 1971. The fence had been erected on the eastern parcel of property, effectively depriving the owners of the eastern parcel of a portion of their record property. The Hugheses acquired the eastern parcel in 1998. By the time the Hugheses acquired the property, the old fence had deteriorated to the point it was no longer visible. The Hugheses proceeded to use the purchased property up to the record boundary line, which included the property west of the old fence line. This meant that the Hugheses were occupying property that the parties or their predecessors-in-interest had considered part of the western parcels for decades.

¶ 3 In 2001, one of the Hugheses' neighbors, Dahl Investment Company (Dahl), brought a quiet title action, claiming that Dahl had acquired the disputed property—property lying west of the old fence line up to the record boundary—under the doctrine of boundary by acquiescence. The trial court ruled in favor of Dahl, and the Hugheses appealed. The court of appeals upheld the trial court's order in 2004, rejecting the Hugheses' arguments that the deterioration of the fence and their nonacquiescence to the fence line defeated Dahl's claim.¹

¶ 4 After the Dahl claim had been litigated and appealed, Q–2, whose property bordered the Hugheses' along the same fence line at issue in the Dahl litigation, notified the Hugheses by letter in 2005 that Q–2 considered their continued use of the disputed property as trespassing on Q–2's property and demanded that they cease and desist their use. After the Hugheses continued to use the property, Q–2 brought an action in 2008 to quiet title to the disputed property under the theory of boundary by acquiescence. Q–2 relied on the same evidence that had been presented in the Dahl litigation to establish its claim. The Hugheses counterclaimed, asserting that even if Q–2 had acquired the property through boundary by acquiescence, the Hugheses had reacquired the property by adverse possession. The trial court dismissed the Hugheses' counterclaim by way of summary judgment² and then quieted title to the property in Q–2 after a bench trial. The Hugheses appealed.

¶ 5 The court of appeals affirmed the trial court's conclusion that Q–2 had obtained title to the disputed property through boundary by acquiescence but reversed the trial court's dismissal of the Hugheses' counterclaim after clarifying the applicable law.³ The court of appeals determined that in order "to evaluate the Hugheses' adverse possession claim[, the court] must first determine when legal title to the disputed property passed to Q–2 or its predecessor-in interest."⁴ Although the court of appeals noted that the issue "appear[ed] to be an issue of first impression for Utah Courts," it found "clear guidance in our ... boundary by acquiescence jurisprudence,"⁵ and held that "legal title to the disputed property passed to Q–2's predecessor-in-interest no later than 1971" by operation of law.⁶ Thus, "the Hugheses' predecessor-in-interest could convey only bare record title' to the disputed property to the Hugheses by the 1998 warranty deed, and legal title rested with Q–2."⁷

¶ 6 After ruling on this issue, the court of appeals also clarified that the adverse or hostile element of adverse possession can be satisfied when "a person in possession of the property ... possesses a written document purporting to convey title."⁸ "Thus, the Hugheses' possession of the entire property described by their warranty deed"—a deed that conveyed only "bare record title"—"was adverse to the legal title of the disputed property," which had vested in Q–2 decades ago.⁹ Having clarified the law that the trial court should apply, the court of appeals also held that "[o]n each element of their claim of adverse possession, the Hugheses introduced sufficient evidence to survive summary judgment" and remanded the case for further proceedings.¹⁰ Two of the three judges concurred separately, noting the potential problems that arise from allowing title to transfer by operation of law without judicial intervention and asking us to review the decision.¹¹ Q–2 petitioned for review, and its petition was accompanied by an amicus brief filed by a coalition of title companies (collectively, Title Companies) urging us to grant Q–2's petition, which we did.

Standard of Review

¶ 7 We granted certiorari in this case to review whether the court of appeals correctly held that property transfers by operation of law at the time the elements of boundary by acquisition are satisfied.¹² The determination of when title transfers under this doctrine requires an "interpretation[ ] of common law principles," which we review for correctness.¹³ We have jurisdiction pursuant to Utah Code section 78A–3–102(3)(a).

Analysis

¶ 8 The parties ask us to decide at what point in time a party obtains title under boundary by acquiescence. While we have not yet expressly resolved this issue, we have necessarily determined in our prior boundary by acquiescence cases that title transfers by operation of law at the time the elements are met and prior to judicial adjudication. This corresponds precisely with the way title is transferred under the related doctrine of adverse possession. Although Q–2 and the amici have invited us to deviate from this precedent on policy grounds, the policy goals they put forth likely cannot be achieved by our ruling in this case and, regardless, are outweighed by competing policy goals.

¶ 9 We discuss these issues in turn, beginning first with our prior caselaw related to the transfer of title in boundary by acquiescence cases, finding that in those cases we necessarily determined that title transferred by operation of law without judicial involvement. We then confirm our boundary by acquiescence jurisprudence on this issue by looking to the treatment of title transfer under the closely related doctrine of adverse possession. Finally, we address the policy considerations suggested by the parties.

I. The Weight of Legal Authority Instructs that Title Is Granted by Operation of Law

A. In Our Prior Boundary by Acquiescence Cases, We Have Held that Parties Obtain Title by Operation of Law and Not by Judicial Decree

¶ 10 Although our precedent on this issue is limited, it is unmistakable: title is obtained by operation of law at the time the elements of boundary by acquiescence are satisfied. The doctrine of boundary by acquiescence has been recognized in Utah since at least 1887.¹⁴ The elements are well established,¹⁵ and the parties do not dispute that Q–2 successfully proved its claim to the property under the doctrine before the trial court. The only issue is when, exactly, Q–2 should be deemed to have acquired title to the disputed property. We have previously determined that title under the doctrine of boundary by acquiescence transfers by operation of law, not by judicial order. Although our prior cases could have been more explicit in addressing this issue, the decisions' import is clear, and we take this opportunity to reaffirm our precedent.

¶ 11 In two cases, Brown v. Peterson Development Co.,¹⁶ and RHN Corp. v. Veibell,¹⁷ we necessarily determined that title is conferred by operation of law at the time the elements of boundary by acquiescence are satisfied.¹⁸ The court of appeals correctly noted that "a recognition that title had transferred by operation of law at the time the elements of the doctrine were met—and before a judicial ruling or order was...