Rowe v. Klein

• Decision Date: 29 January 2018
• Docket Number: No. 74724-0-I,74724-0-I
• Citation: 409 P.3d 1152
• Parties: Jeffrey T. ROWE and Rebecca L. Rowe, husband and wife and the marital community comprised thereof, Respondents, v. Joel K. KLEIN and Karen L. Klein, husband and wife and the marital community comprised thereof, Defendants. Jeffrey T. Rowe and Rebecca L. Rowe, husband and wife and the marital community comprised thereof, Respondents, v. Trent R. Adams and Melissa J. Adams, husband and wife and the marital community comprised thereof, Petitioners
• Court: Washington Court of Appeals

409 P.3d 1152

Jeffrey T. ROWE and Rebecca L. Rowe, husband and wife and the marital community comprised thereof, Respondents,

v.Joel K. KLEIN and Karen L. Klein, husband and wife and the marital community comprised thereof, Defendants.

Jeffrey T. Rowe and Rebecca L. Rowe, husband and wife and the marital community comprised thereof, Respondents,

v.Trent R. Adams and Melissa J. Adams, husband and wife and the marital community comprised thereof, Petitioners,

No. 74724-0-I

Court of Appeals of Washington, Division 1.

FILED: January 29, 2018

Christopher William Pirnke, Mark S. Leen, Po Box 90016, Inslee Best Doezie & Ryder PS, 10900 Ne 4th St. Ste. 1500, Bellevue, WA, 98004-5144 for Petitioners

John Hughes O'Rourke, Law Office of John O'Rourke, 2101 4th Ave. Ste. 2200, Seattle, WA, 98121-2332 for Respondents

PUBLISHED OPINION

Spearman, J.¶ 1 A statutory warranty deed includes both present and future covenants. The present covenants guarantee conditions at the time the deed is executed. These covenants are breached, if at all, at conveyance. The future covenants protect a buyer's future right to the land. These covenants are generally breached after conveyance, when a third party asserts a claim to the property.

¶ 2 Jeffrey and Rebecca Rowe (Rowe) bought property from Trent and Melissa Adams (Adams) via statutory warranty deed in 2008. In 2014, a neighbor, Klein, sought to quiet title in a portion of the property by adverse possession. Six years and three months after Rowe bought the land, he sued Adams for breach of warranties and covenants. Adams moved to dismiss on the theory that Rowe's claims were barred by the six year statute of limitations. The trial court denied Adams' motion to dismiss but certified for review, the question of when the statute of limitations began to run.

¶ 3 The statute of limitations on the covenant of seisin, a present covenant, began to run at conveyance, because a present covenant, if breached at all, is breached at the time of conveyance.¹ The statute of limitations on the warranty to defend, a future covenant, began to run when Adams refused Rowe's tender of defense. The statute of limitations on the warranty of quiet possession, the other future covenant, began to run when Rowe was actually or constructively evicted from the land claimed by Klein.

¶ 4 The trial court erred in denying Adams' motion to dismiss as to the present covenants. The trial court did not err in denying Adams' motion to dismiss the claim for breach of the warranty to defend. As to the warranty of quiet possession, the trial court did not err in denying Adams' motion to dismiss except as to that portion of the land occupied by Klein's greenhouse at the time of conveyance.

FACTS

¶ 5 Rowe bought lot 4 from Adams in August 2008 by statutory warranty deed. Lot 4 is adjacent to and south of lot 3, the Klein property. The boundary between lots 3 and 4 is about 140 feet long and runs from east to west.

¶ 6 The 10 foot strip on the northern boundary of lot 4 has patches of grass, cedar trees, rhododendrons, and blackberry bushes. Part of the area is a leach field for a septic system. Towards the front of the lots, a crushed rock parking strip on lot 3 abuts the surveyed boundary line. At the back of the lots, a greenhouse on lot 3 extends over the property line. About 10 feet south of the boundary, on lot 4, a chain link fence runs from east to west for about 30 feet. The fence is attached to Rowe's back porch. Rowe believed the fence was part of a previous owner's dog run.

¶ 7 Rowe had lot 4 surveyed in 2010. The survey showed that Klein's greenhouse encroached onto lot 4. Klein's parking strip was on lot 3, but vehicles parked on the strip encroached a few feet onto Rowe's property.

¶ 8 Rowe intended to terrace the northern boundary of lot 4 and began this work in 2013. Klein objected. Klein asserted that he had maintained the northern 10 feet of lot 4 as his own since buying lot 3 in 1974. Klein contended the chain link fence marked the property line.

¶ 9 In 2014, Rowe filed a complaint to eject Klein and quiet title. Klein counterclaimed for adverse possession. Klein asserted that he had exclusively possessed and maintained the property from 1974 to 1984 and had thus acquired the land by adverse possession before either Adams or Rowe bought lot 4. Because his claim to the property was based on his possession from 1974 to 1984, Klein argued that he had no burden to show that he continued to hold the property after 1984 and any evidence of how the property was used after 1984 was irrelevant. The trial court granted Klein's motion for summary judgment and quieted title in him.

¶ 10 In July 2014, while the action with Klein was in progress, Rowe tendered defense of Klein's adverse possession claim to Adams. Adams did not respond and in December 2014, Rowe filed a third party complaint asserting breach of the covenants of seisin, encumbrances, quiet possession, and the covenant to defend.

¶ 11 Adams moved to dismiss under CR 12(c), asserting that Rowe's claims were time barred. Adams contended the statute of limitations on the covenants in the warranty deed began to run at conveyance. Rowe opposed the motion and asserted that the statute of limitations did not begin to run until Klein established paramount title.

¶ 12 Although Adams' motion to dismiss presented a purely legal issue, the court recited the underlying facts for context. The court stated that, at the time of conveyance, neither Adams nor Rowe was aware that Klein had adversely possessed a portion of lot 4. The court ruled that the statute of limitations did not begin to run until Klein perfected title in the disputed land and, thus, Rowe's claims were not time barred. The court denied Adams' motion to dismiss.

¶ 13 The trial court denied Adams' motion for reconsideration but granted his motion to certify the question of when the statute of limitations began to run. This court granted discretionary review.

DISCUSSION

¶ 14 The question before us is when the statute of limitations for breaches of the warranties in a statutory deed begins to run. Certified questions are questions of law that we review de novo. Allen v. Dameron, 187 Wash.2d 692, 701, 389 P.3d 487 (2017). We also review the trial court's ruling on a motion to dismiss de novo. Cutler v. Phillips Petroleum Co., 124 Wash.2d 749, 755, 881 P.2d 216 (1994). A motion to dismiss should only be granted "if it appears beyond a reasonable doubt that no facts exist that would justify recovery." Id. This is the case when " ‘there is some insuperable bar to relief.’ " Id. (quoting Hoffer v. State, 110 Wash.2d 415, 420, 755 P.2d 781 (1988) ).

¶ 15 The statute of limitations begins to run when a cause of action accrues. 1000 Virginia Ltd. Partnership v. Vertecs Corp., 158 Wash.2d 566, 575, 146 P.3d 423 (2006) (citing RCW 4.16.005 ). A cause of action accrues when a party has the right to apply to a court for relief. Id. Claims for breach of a statutory warranty accrue when the warranty is breached. Erickson v. Chase, 156 Wash. App. 151, 157, 231 P.3d 1261 (2010) (citing Whatcom Timber Co. v. Wright, 102 Wash. 566, 568, 173 P. 724 (1918) ).

A statutory warranty deed provides five guarantees against title defects: ‘(1) that the grantor was seised of an estate in fee simple (warranty of seisin); (2) that he had a good right to convey that estate (warranty of right to convey); (3) that title was free of encumbrances (warranty against encumbrances); (4) that the grantee, his heirs and assigns, will have quiet possession (warranty of quiet possession); and (5) that the grantor will defend the grantee's title (warranty to defend).’

Mastro v. Kumakichi Corp., 90 Wash. App. 157, 162, 951 P.2d 817 (1998) (quoting 17 WILLIAM B. STOEBUCK, WASHINGTON PRACTICE, REAL ESTATE: PROPERTY LAW § 7.2, at 447 (1995)). Rowe's complaint asserted that Adams breached each of these except the warranty of right to convey.

¶ 16 Rowe first asserts that Adams breached the warranty of seisin. The warranty of seisin is also known as the covenant of ownership in fee simple. Double L. Properties, Inc., v. Crandall, 51 Wash. App. 149, 152, 751 P.2d 1208 (1988) (citing Whatcom Timber, 102 Wash, at 567, 173 P. 724 ). This covenant guarantees that the grantor is lawfully seized of an indefeasible estate in fee simple in the described property. Id. at 152, 751 P.2d 1208 (citing RCW 64.04.030). The warranty of seisin is a present covenant and is broken the moment it is made if the grantor does not have the possession, right of possession, and complete legal title of the property. Id. A grantor has possession if he claims the right of exclusive occupation and no third party opposing his claim is occupying the land. Id. at 153, 751 P.2d 1208 (citing 1 H. Tiffany, Real Property § 20, at 27 (3d ed. 1939)). See also Mastro, 90 Wash. App. at 163, 951 P.2d 817 (discussing the warranty of seisin).

¶ 17 This warranty was at issue in Double L. Properties. In that case, at the time the seller conveyed acreage to the buyer, a neighbor was occupying about 10 acres of the property. Double L. Properties, 51 Wash. App. at 150, 751 P.2d 1208. The buyer successfully ejected the neighbor and brought an action against the seller for indemnification. Id. As to the warranty of seisin, the issue was whether a seller breaches the warranty when a third party asserts a claim to the property or only when a third party asserts a valid claim that actually affects title. Id. at 152-53, 751 P.2d 1208.

¶ 18 In the circumstances of Double L. Properties, that question was resolved by possession. Id. at 156, 751 P.2d 1208. The warranty of seisin guarantees that the seller has possession of the land, that is, that he claims the right of exclusive occupation and no third party opposing his claim is occupying the land. Id. at 153, 751 P.2d 1208. Where, as in Double L. Properties, a third party is occupying the land at the time of sale "the covenant of seisin is broken no matter whether the claim...