USLife Title Co. of Arizona v. Gutkin
| Citation | 152 Ariz. 349,732 P.2d 579 |
| Decision Date | 18 September 1986 |
| Docket Number | CA-CIV,No. 1,1 |
| Parties | USLIFE TITLE COMPANY OF ARIZONA, an Arizona corporation; USLife Title Insurance Company of Dallas, a Texas corporation, Plaintiffs-Appellees, v. Jerome S. GUTKIN and Anita F. Gutkin, husband and wife, Defendants-Appellants. 8252. |
| Court | Court of Appeals of Arizona |
The determinative issue in this appeal is whether the trial court improperly concluded that appellees, USLife Title Co. of Arizona and USLife Title Insurance Co. of Dallas (USLife), were entitled to an award of $17,000 on the basis of unjust enrichment.
The facts giving rise to the litigation are as follows. Prior to September, 1978, appellants, Jerome S. Gutkin and Anita F. Gutkin (Gutkin), owned real property located at the northwest corner of 19th Street and Greenway Road in Phoenix, Arizona. This property measured 330 feet east and west by 297 feet north and south, with 30 feet of the east-west dimension being subject to an easement to the City of Phoenix for the east one-half of 29th Street and 33 feet of the north-south dimension being subject to an easement to the City of Phoenix for the north one-half of Greenway Road. 1
Pursuant to escrow instructions dated September 26, 1978, Gutkin sold the above described property to Mark and Linda Faigus, husband and wife (Faigus), for the sum of $150,000, with $43,500 being payable in cash at the close of escrow and the deferred purchase price of $106,500 being in the form of a promissory note payable in the following manner: a) $31,500 on or before January 2, 1979; and b) $15,000 or more, plus interest at the rate of 9 1/2% per annum in annual installments on the 1st of November of each year beginning November 1, 1979.
USLife prepared the escrow instructions for the transaction. The instructions described the property being conveyed as follows:
SE 1/4SW 1/4SW 1/4 of Section 2, T3N, R3E, G & SRB & M, EXCEPT the South 33' and the East 30', also known as Assessor's Parcel 214-38-7F, the Northwest corner of 29th Street and Greenway Road, Phoenix, Arizona.
(Emphasis added.) Since the south 33 feet of the parcel consisted of one-half the width of Greenway Road, and the east 30 feet of the parcel consisted of one-half of the width of 29th Street, it is apparent that the escrow instructions contemplated the sale of a parcel exclusive of the roadways.
An addendum to the escrow instructions further provided in part:
46. When the principal amount of $75,000 has been paid on the purchase price, Buyers are to have released to them, free and clear of all liens and encumbrances, the east one-half of the property, being one net acre, or more.
At the close of escrow on November 3, 1978, Gutkin tendered a Joint Tenancy Deed to Faigus. In addition, Faigus executed a Deed of Trust and Assignment of Rents securing the payment of the purchase price, with USLife designated as trustee and Gutkin designated as beneficiary. Both of these documents were prepared by USLife and were recorded in the Office of the Maricopa County Recorder. The recorded documents described the property as follows:
The East 330 feet of the South 333 feet of the Southwest quarter of the Southwest quarter of the Southeast quarter of Section Two (2), township Three (3) North, Range Three (3) East.
These legal descriptions failed to exclude the south 33 feet of the property and the east 30 feet of the property where Greenway Road and 29th Street, respectively, were located.
In January, 1979, Faigus completed payment of one-half of the purchase price. Pursuant to paragraph 46 of the addendum to the escrow instructions, Faigus secured release of the east one-half of the property. This conveyance was evidenced by a Deed of Partial Release and Partial Reconveyance prepared by USLife. The deed was recorded in the Office of the Maricopa County Recorder with the following description:
The East half of the East 330 feet of the South 333 feet of the Southwest quarter of the Southwest quarter of the Southeast quarter of Section Two (2), Township three (3) North, Range Three (3) East.
This legal description, like the two previously recorded ones, also failed to exclude the roadways. Of consequence, the property was divided in half without first subtracting from its dimensions the roadways.
Faigus defaulted on the payment of the remainder of the purchase price on November 1, 1979. Accordingly, USLife, as trustee under the Deed of Trust and Assignment of Rents, forfeited Faigus' interest in the west half of the property by Notice and Sale. Following the forfeiture sale, USLife tendered a Trustee's Deed upon Sale to Gutkin dated May 21, 1980. The deed was recorded and it described the property as follows:
The West one-half ( 1/2) of the following described property:
The East 330 feet of the South 333 feet of the Southwest quarter of the Southwest quarter of the Southeast quarter of Section Two (2), Township Three (3) North, Range Three (3) East, G & SRB & M.
Once again, this recorded deed did not exclude the roadways.
On March 16, 1981, pursuant to an escrow also established at USLife, Faigus sold his interest in the east half of the property to Fred and Joan Miones, husband and wife (Miones), and Carmelo and Mary T. Arena, husband and wife (Arena). The escrow instructions described the property to be conveyed as follows:
The East 180' feet of the South 333' of the southwest 1/4 of the southwest 1/4 of the southeast 1/4 of Section 2, T3N, R3E, EXCEPT the East 30' and the South 33' thereof, G & SRB & M
Also known as the East half of Assessor's parcel # 214-38-7F, being the northwest corner of 29th Street and Greenway.
(Emphasis added.) Thus, these escrow instructions, like the escrow instructions between Gutkin and Faigus, excluded the roadways.
A Warranty Deed, prepared by USLife with respect to the sale, was recorded in the Office of the Maricopa County Recorder on April 16, 1981. The property was described in the deed as follows:
The East 180' of the South 333' of the Southwest quarter of the Southwest quarter of the Southeast quarter of Section 2, Township Three (3) North, Range three (3) East of the Gila and Salt River Base and Meridian.
The legal description clearly did not exclude the roadways. USLife issued a title insurance policy to Miones and Arena.
In the later part of June, 1981, Miones and Arena contacted USLife to advise it that they were unable to secure construction financing and construct apartments on their property because the "usable" east-west dimension of the property to which they had obtained record title ownership was only 135 feet. Miones and Arena further advised USLife that the problem was costing them $5,000 per day, and they threatened to file a $1,500,000 lawsuit against USLife.
The conflict between USLife and Miones and Arena was whether USLife, in dividing the property originally sold by Gutkin to Faigus into an east half and a west half (at the time the Deed of Partial Release and Partial Reconveyance was prepared and at the time the Trustee's Deed upon Sale was prepared) should have excluded the roadways, thereby using an east-west dimension of 300 feet. If USLife had, Faigus and Gutkin each would have obtained a parcel with an east-west dimension of 150 feet, exclusive of roadways. USLife, however, did not exclude the roadways and instead used an east-west dimension of 330 feet. Faigus thus was conveyed a parcel with an east-west dimension of 165 feet, the east 30 feet of which was Greenway Road; Gutkin, by contrast, received a parcel with an east-west dimension of 165 feet, no part of which was a roadway. The result of USLife's use of an east-west dimension of 330 feet created a dispute over the ownership to the 15-foot wide strip of land which made up the east 15 feet of the land conveyed to Gutkin by the Trustee's Deed upon Sale.
In an attempt to determine ownership to the 15-foot parcel, Arthur Clifford, President of USLife, reviewed USLife's escrow and title files. From his review of the files, Clifford concluded that Faigus only intended to acquire, and Gutkin only intended to convey the "usable" property, exclusive of the roadways, as provided in the escrow instructions. Clifford determined that the title company erred when it prepared each of the recorded documents with legal descriptions which failed to except the roadways. Having found that a simple clerical error had been made, Clifford contacted Gutkin and requested that Gutkin execute a quitclaim deed to correct the problem. Gutkin initially stated that he wanted $25,000 in exchange for a quitclaim deed.
USLife thereafter entered into negotiations with Gutkin and ultimately agreed to pay Gutkin $17,000 for a quitclaim deed to the property. This agreement was embodied in a letter prepared by Gutkin, which provided in part:
This is to verify our communication this date relative to my sale to USLife Title Company of Arizona, a strip of property located on the north side of Greenway road 135 feet from the Northwest corner of 29th Street and Greenway, running a distance of 15 feet to the West and back, approximately 297 feet.
* * *
* * *
My wife and I are hereby Quit Claiming all interest and title to the 15 feet of land above described to those persons to whom you have guaranteed title on said property, and that I am receiving as consideration for the sale of said property the sum of $17,000, paid to me this date by U.S. Life Title Company of Arizona.
Larry Dale executed and signed the letter on behalf of USLife. Pursuant to the agreement USLife paid Gutkin $17,000 and Gutkin tendered a quitclaim deed to Miones and Arena. The quitclaim deed described the...
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