Smida v. Isanti Pines Tree Farm, LLC
| Decision Date | 30 November 2015 |
| Docket Number | A15-0437 |
| Parties | Charles Smida, et al., Respondents, v. Isanti Pines Tree Farm, LLC, defendant and third party plaintiff, Appellant, v. John F. Vande Waa, et al., third party defendants, Respondents, Arthur J. Swanson, third party defendant, Respondent, Julie A. Swanson, third party defendant, Respondent, Registered Abstractors, Inc., third party defendant. |
| Court | Court of Appeals of Minnesota |
This opinion will be unpublished and may not be cited except as provided by Minn. Stat. § 480A.08, subd. 3 (2014).
Affirmed
*
Isanti County District Court
File No. 30-CV-13-901Thomas B. Olson, Katherine L. Wahlberg, Olson & Lucas, P.A., Edina, Minnesota (for respondents Smidas)
John G. Westrick, Westrick & McDowall-Nix, PLLP, St. Paul, Minnesota (for appellant)
Grant W. Lindberg, Lindberg Law Office, P.A., Cambridge, Minnesota (for respondents Vande Waas)
Arthur J. Swanson, Julie A. Swanson, Princeton, Minnesota (pro se respondents)
Considered and decided by Cleary, Chief Judge; Schellhas, Judge; and Klaphake, Judge.
UNPUBLISHED OPINION
Appellant Isanti Pines Tree Farm, LLC, (Isanti Pines) challenges the district court's summary judgment in favor of respondents Charles and Judith Smida (the Smidas), John and Diane Vande Waa (the Vande Waas), and Arthur and Julie Swanson (the Swansons), recognizing the Smidas' claim to an easement and dismissing its counterclaims and defenses. Isanti Pines argues that the district court erred by granting summary judgment on: (1) its breach of warranty and misrepresentation claims; (2) its claim of adverse possession; (3) its trespass claim; (4) its affirmative defense of equitable estoppel; and (5) its affirmative defense of abandonment. Isanti Pines also claims that the district court erred by denying its motion to compel discovery. We affirm.
On appeal from summary judgment, we review de novo whether there are any genuine issues of material fact and whether the district court erred in applying the law.Ruiz v. 1st Fid. Loan Servicing, LLC, 829 N.W.2d 53, 56 (Minn. 2013). "We view the evidence in the light most favorable to the party against whom summary judgment was granted." STAR Centers, Inc. v. Faegre & Benson, L.L.P., 644 N.W.2d 72, 76-77 (Minn. 2002). A genuine issue of material fact exists when there is sufficient evidence that could lead a rational trier of fact to find for the nonmoving party. DLH, Inc. v. Russ, 566 N.W.2d 60, 69 (Minn. 1997).
The Vande Waas owned two adjacent parcels of land. In 1997, pursuant to a contract for deed, the Vande Waas sold the eastern parcel (the Isanti Pines property) to the Swansons. The contract for deed reserved "a non-exclusive easement for ingress, egress and utility purposes" over the Isanti Pines property (the easement) to allow access to the western parcel (the Smida property). The Vande Waas later delivered a warranty deed for the Isanti Pines property to the Swansons, again reserving the easement. In October of 1998, the Swansons conveyed the Isanti Pines property to LSM Companies LLC (LSM) by a warranty deed that did not mention the easement. The property was later conveyed to Isanti Pines, LSM's successor in interest. In 2012, the Vande Waas sold the Smida property to the Smidas.
Isanti Pines claims that by failing to include the easement in the warranty deed, the Swansons breached the covenants contained in the deed and intentionally misrepresentedthat there would be no easement on the property.1 The district court dismissed these claims on statute of limitations grounds. See Minn. Stat. § 541.05, subd. 1(1), (6) (2014) (). The district court concluded that the statute of limitations began to run in 1998, when the Swansons delivered the warranty deed. Isanti Pines argues that it did not begin to run until 2013, when the Smidas filed suit to establish their interest in the easement.
Isanti Pines bases its argument on Brooks v. Mohl, in which our supreme court held that if, on the "date of the covenant, there is a superior title in a third person, whenever that title is actually asserted against the covenantee, and the premises are claimed under it, and the covenantee is obliged to yield and does yield his claim to the superior title, the covenant is broken." 104 Minn. 404, 406, 116 N.W. 931, 931 (1908) (quotations omitted). Isanti Pines argues that it had no cause of action until the Smidas filed suit in 2013 because the covenants in the warranty deed were not yet broken and it had no damages.
But Brooks recognizes that "[u]ndoubtedly, for some purposes, the covenant for seisin is regarded as broken by failure of title as soon as the deed is delivered." Id.; see also Ethen v. Reed Masonry, Inc., 313 N.W.2d 19, 21 (Minn. 1981) (); Callaway v. Seaton, 156 Minn. 224, 227, 194 N.W. 622, 623 (1923) (); Allen v. Allen; 48 Minn. 462, 464, 51 N.W. 473, 473 (1892) (); Kimball v. Bryant, 25 Minn. 496, 498 (1879) (). The covenants in the warranty deed were broken as soon as the Swansons delivered the deed to LSM. Because an easement is a permanent encumbrance on the property that cannot be removed absent the agreement of a third party, there were immediate damages in the amount that the easement diminished the value of the land. See Mackey v. Harmon, 34 Minn. 168, 172-73, 24 N.W. 702, 704 (1885) ()
The purpose of the alternative rule announced in Brooks is to avoid the situations where "the covenantee, in unopposed possession for six years without notice of adverse claim of title, might be evicted and have no remedy against his grantor." Brooks, 104 Minn. at 406, 116 N.W. at 931-32. Isanti Pines admits that Nathan Meinhardt, a principal of LSM and Isanti Pines, had notice of the easement's existence through a title search and conversations with the Swansons and Vande Waas at the time the deed was delivered.
The six-year statute of limitations began to run on Isanti Pines's breach of warranty claims in October of 1998. Isanti Pines did not file its claims against theSwansons until 2014. Accordingly, we conclude that the district court did not err by granting summary judgment in favor of the Swansons and dismissing Isanti Pines's breach of warranty claims as untimely.
The statute of limitations on a fraud or misrepresentation action begins to run when the aggrieved party discovers the facts constituting fraud. Minn. Stat. § 541.05, subd. 1(6). Discovery of the fraud is judged under the "reasonable person standard." Doe v. Archdiocese of St. Paul, 817 N.W.2d 150, 172 (Minn. 2012). "The facts constituting the fraud are deemed to have been discovered when they were actually discovered or, by reasonable diligence, should have been discovered." Id. (quotation omitted).
Again, Meinhardt was aware of the existence of the easement in 1998, when the deed was delivered. We conclude that the district court did not err by granting summary judgment in favor of the Swansons because Isanti Pines's misrepresentation claim is barred by the six-year statute of limitations.
Isanti Pines next argues that the district court erred by dismissing its claim that the easement was eliminated by adverse possession. The district court granted summary judgment in favor of the Smidas because it found that Isanti Pines acknowledged the existence of the easement on multiple occasions prior to the Smidas' 2013 lawsuit. Isanti Pines agrees that acknowledgment of the easement would defeat its adverse possession claim, but argues that there is a fact question as to whether this occurred.
"To establish title by adverse possession, a disseizor must show, by clear and convincing evidence, an actual, open, hostile, continuous, and exclusive possession for the requisite period of time," which is fifteen years. SSM Invs. v. Siemers, 291 N.W.2d 383, 384 (Minn. 1980); Minn.Stat. § 541.02 (2014). "Failure to establish any one of the five essential[] [elements] is fatal to the validity of the claim." Johnson v. Raddohl, 226 Minn. 343, 345, 32 N.W.2d 860, 861 (1948). "Continuity is broken by an acknowledgement of the owner's title by the adverse possessor before the statute has run in his favor." Stanard v. Urban, 453 N.W.2d 733, 736 (Minn. App. 1990), review denied (Minn. June 15, 1990). An offer to buy the disputed property constitutes acknowledgement of the owner's title. Id.
The undisputed facts establish that Meinhardt, on behalf of Isanti Pines, acknowledged the Vande Waas' interest in the easement on several occasions. Meinhardt asked Jack Vande Waa to move the easement to a different part of the Isanti Pines property in a 1999 phone call. In the same phone call, Meinhardt attempted to purchase the Smida property. In a 2000 letter to Vande Waa, Meinhardt indicated that he only purchased the Isanti Pines property because he thought he could extinguish the easement by later buying the Smida property. In this letter, Meinhardt also recounted his 1999 attempt at "trading the easement on the North side of my property for an easement on the South side of my property." Meinhardt attempted to purchase the Smida Property again in 2006 and, as a bargaining tactic, listed the sale price of another "comparable[]" property "in close proximity with an...
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