Category: Property law

Documents insufficient to extend HOA covenants beyond 21 years

Gary Taylor

by Gary Taylor

Chipman’s Subdivision HOA v. Carney and Carney
(Iowa Court of Appeals, February 29, 2012)

In the 1960s, Carroll and Daisy Chipman developed fifteen lots (Chipman’s Subdivision) in rural Johnson County.  E.R. Carney and Kathy Mickalson Carney purchased three lots located in the subdivision in December 1997. In 2010, Chipman’s Subdivision Homeowners Association, Inc. (HOA) commenced a small claims action against the Carneys, claiming the Carneys owed association dues in the amount of $1820 pursuant to covenants originally recorded in 1969 and revised in 1986 and 2003. A member of the HOA board of directors testified that the HOA sought to recover dues under the 1969 covenants, which were amended in 1986 and again in 2003. The document entitled “Protective Covenants and Restrictions” was recorded on April 8, 1969, and specified that any change to the covenants required a majority vote by current lot owners. A document entitled “Covenant” was recorded on January 27, 1986, and stated the intent to establish a homeowners association for the express purpose of “maintenance, repair, upkeep and management of the roads within the Chipman’s Subdivision.”  Further, it set forth a “dues structure,” requiring a new resident to pay a one-time fee equal to one-half the annual dues and all residents to pay ten dollars per month. Five property owners signed the document. The document entitled “Revised and Restated Covenants and Restrictions” was recorded on May 22, 2003, and stated that pursuant to the 1969 covenants the majority of homeowners adopted the revised and restated covenants set forth. One provision extended the obligation to pay dues from only the owners who had a home in the subdivision to those who owned lots in the subdivision. The HOA director testified the Carneys owed dues for the maintenance and repair of the common road in the subdivision.  E.R. Carney testified he purchased the lots in 1997 from a real estate attorney who had informed him the 1969 covenants had expired and the HOA had no legal authority. Carney argued that the covenants recorded in 1969 had expired on April 8, 1990, pursuant to the twenty-one year limitations period set forth in Iowa Code 614.24, and that the document recorded in 1986 was insufficient to extend the covenants.  The district court found the 1986 document was valid and ruled in favor of the HOA.

The Court of Appeals, however, agreed with the Carneys that the 1986 document was inadequate to extend the limitations period.  Specifically the 1986 document did not meet the requirements of Iowa Code 614.24. It did not set forth the nature of the interest as a use restriction previously created, nor did it identify the 1969 covenants that created the use restriction or the date the 1969 covenants were recorded. The 1986 document was not indexed in the claimant’s book.  Finally, the 1986 document was not acknowledged or notarized. The district court found that because the documents were recorded, they were enforceable; however, the recording of a document does not demonstrate its validity.  As the covenants expired because of the invalidity of the 1986 document, the 2003 covenants could not extend the limitations period. The HOA was therefore precluded from recovering the dues it claimed were owed.

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Tear down your 9,000 sq. ft. mansion (and Happy Valentines Day!)

Gary Taylor

by Gary Taylor

Thom and Lockwood Hills HOA v. Palushaj
(Michigan Court of Appeals, February 14, 2012)

The Thoms live in the Lockwood Hills development in Macomb County. The Palushajs purchased the parcel of land adjacent to the Thoms. Several deed restrictions apply to the lots in Lockwood Hills. The relevant restrictions provide that any home built must be a minimum of 100 feet from any adjacent homes, and that any home built must be a minimum of 40 feet from the side lot line.
During construction of the Palushaj’s 9,000 square foot mansion, the Thoms approached them with concerns that the new home potentially violated these deed restrictions.  The Palushajs apparently sought the advice of counsel and concluded that the restrictions were no longer valid and did not apply to their planned construction. They proceeded with construction of their home as planned, which ended up located 80 feet from the Thom’s home and approximately 28 feet from the side lot line.  After litigation spanning years, the Court of Appeals in this case was faced with the question of the appropriate remedy for the violation of the deed restriction.  The court observed that

[D]eed restrictions are a form of a contractual agreement and create a valuable property right. If a deed restriction is unambiguous, we will enforce that deed restriction as written unless the restriction contravenes law or public policy, or has been waived by acquiescence to prior violations, because enforcement of such restrictions grants the people of Michigan the freedom ‘freely to arrange their affairs’ by the formation of contracts to determine the use of land.

The court emphasized that it was “not faced with a situation where by innocent mistake a house was built that slightly encroached into the setback zone. Rather, we have a substantial,
intentional and flagrant violation of the setback requirements…”  In light of this, the court determined that demolition of all or part of the home to bring it into compliance with the deed restrictions was the only adequate remedy available to be imposed by the courts.

OBSERVATION:  This is a case involving violation of home owners association covenants.  Would the court have been as merciless if it were a zoning violation?

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Landowner unable to claim adverse possession over land subject to street easement

Gary Taylor

by Victoria Heldt

Donald Hector, et al. v. Gary Hoffer, et al., City of Adrian
(Minnesota Court of Appeals, December 12, 2011)

This case involves an undeveloped street easement in the City of Adrian, Minnesota.  The easement was granted in 1891 in order to develop Second Street, but the street was not developed towards the western end.  The Hoffers and the Lonnemans own property on the southern edge of the easement while the Hectors own property to the immediate north and west of the easement.  The Hectors bought their property in 1995 and the Lonnemans and the Hoffers both acquired their properties between 2005 and 2006.  Neither of the deeds conveying the property contained rights to the land under the easement.  When the Hoffers and the Lonnemans purchased their properties, a wire fence and a row of volunteer trees ran through the middle of the easement.  Both the Hoffers and Lonnemans found them to be an eyesore and wanted them removed, but the Hectors disagreed.  Thinking that the fence and trees were on city property, Mark Hoffer asked the city zoning administrator if he could remove them.  The zoning administrator said yes because he believed they were on a city right of way, but the Hectors objected.  After receiving permission from the city administrator, the Hoffers and Lonnemans removed the fence and trees.

The Hectors filed suit in district court initially only making claims against the Hoffers and the Lonnemans.  The Hectors sought a declaration that they owned the property either by title or by adverse possession and requested damages from the Hoffers and Lonnemans for trespass and for the removal of the fence and trees.  The Hectors also claimed that a drain tile (installed by the Hoffers and the Lonnemans) caused drainage onto one of their driveways. Later, the complaint was amended to include counts of trespass and conversion against the City.  The City, the Hoffers, and the Lonnemans all sought summary judgment.  The court granted summary judgment to the City, noting that its advice had been “based on a negligent misrepresentation of law, which is not actionable.”  The court additionally found that the Hectors owned the Property underlying the easement up to and including the fence line but not the property south of the line.  It concluded that the Hoffers and Lonnemans had trespassed and awarded the Hectors $200 in damages for the loss of the fence.  The Hectors appealed.

In its analysis, the Court first noted that, pertaining to the underlying interest of a public easement for a street, any abutting landowner has an interest in the property up to the middle of the street.  Subsequently, under the general rule, the Hoffers, the Lonnemans, and the Hectors would own their respective property underlying the easement up to the center line of the easement.  The Hectors first argued that they own all of the land under the easement since they own two intersecting sides of the land underlying the easement.  The Court focused on the fact that the original platters of the land owned the land both to the north and to the south of the easement.  Due to this fact, when the land was platted into blocks and the title of the Hectors block passed to them, they only took title up to the center of the street line.

Alternatively, the Hectors argued that they owned the entirety of the property under the easement due to adverse possession.  In order to claim property by adverse possession, a party must prove that it has used the property exclusively and continuously for 15 years.  The Hectors argued that Leander Ruffing, the previous owner of their property, had used the land exclusively for over 15 years.  The Court acknowledged that it is not necessary for the current owner to prove continuous ownership for 15 years and that the previous owner’s use could be accounted for in determining adverse ownership.  However, the Court still found that the Hectors failed to prove adverse ownership of the property to the south of the fence since that was not claimed to be used by Ruffing.  The Hectors’ warranty deed was dated October 1995 and they could not prove 15 years of use before the Court’s order in April 2010.  In addition, Victoria Hector herself admitted that the Hoffers and the Lonnemans used a portion of the easement to the south of the fence for a utility trailer.  This fact shows the Hectors did not maintain exclusive use of the property, and therefore the claim for title by adverse possession failed.

The Hectors also challenged the $200 in damages and the court’s failure to assign damages for the loss of trees.  Historically, the amount of damages due for a loss of trees has been measured by the difference in the value of the land before and after the removal of the trees.  The Hectors failed to prove that the value of the land had changed due to the loss of the trees.  Additionally, there was no evidence to show that the trees served an aesthetic purpose.  The Court affirmed the district court’s measure of damages.

The Hectors further argued for punitive damages.  In order for punitive damages to be appropriate, a showing must be made that the defendant “showed deliberate disregard for the rights or safety of others.”  Since the Hoffers and Lonnemans did not think the Hectors owned the trees or the fence (based on comments from the city zoning administrator) they did not show a “deliberate disregard” for the Hectors’ rights.  Consequently, the Court found punitive damages to be inappropriate.

In regards to the claim against the City, the Court found that, even if the district court’s summary judgment were reversed, it would have a minimal affect on the lawsuit since the Hectors were already awarded $200 in damages.  The Court affirmed the district court’s decision.

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County establishes easement for road by adverse posession across livestock ranch (ND)

Gary Taylor

by Gary Taylor

McKenzie County v. Reichman
(North Dakota Supreme Court, January 24, 2012)

In 2006, McKenzie County sued Reichman, alleging a road that “Flat Rock Road” which crosses her ranch  had been used by the public in an open, general, continuous, and uninterrupted manner for at least 20 successive years and seeking a prescriptive easement and formal declaration as a public road.  According to Reichman, the public’s use of the road through her ranch significantly increased after she purchased the ranch in 2000, including an increase in traffic attributable to the oil industry. As a result, she sought to restrict public use of the road, including placing gates or cattle guards across the road as part of her livestock operation.  She claimed any public use of the road was permissive, and there had been no continuous, adverse, hostile, and uninterrupted use of the road for the prescriptive 20-year period. She counterclaimed for damages for inverse condemnation. After a trial, the district court declared a prescriptive easement in favor of McKenzie County, and Reichman appealed.

The North Dakota Supreme Court began by noting that a party claiming a road by prescription must establish by clear and convincing evidence the general, continuous, uninterrupted, and adverse use of the road by the public under a claim of right for 20 years.  The court then recited the extensive presentation of the history of the land and the road dating back to 1920 presented at the trial court.  Important to the court was the fact that the County constructed a graded road in the 1950s with the knowledge and consent of the adjacent landowners, including the then-owner of the Reichman property.  The County provided maintenance for the road, including grading, plowing snow, placing scoria on the road, and installing culverts and bridges. Testimony was presented that the road was only blocked for short periods when ranchers moved livestock.  According to the court, the 20-year period for measuring a prescriptive use begins when a burden is placed on the land and relates back to the inception of the adverse use which, in this case, was the point in time in the 1950s when the County first constructed a graded road.  “The expenditure of public funds for construction and maintenance of a road is evidence of an adverse use….Gates across roads are indicative of permissive (contrasting to an adverse) use, but gates for working livestock which do not deny access or interfere with public traffic do not mandate a permissive use.”  Therefore. the court determined that McKenzie County had, in fact, established a prescriptive easement and the right to a formal declaration of Flat Rock Road as a public road.

The court further stated that the width of a prescriptive easement for a road is not limited to that portion of the road actually traveled, but may include the shoulders and ditches that are needed and have actually been used to support and maintain the traveled portion of the road during the prescriptive period.  Considering the district court declared the road to be a public road “as it presently exists,” the Supreme Court remanded the case for a determination of the prescriptive road either by width, by metes and bounds, or by other suitable description as the road existed at the commencement of the action.

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Surface water permit holders not entitled to a predeprivation hearing when DNR issues notices to cease witdrawals

Gary Taylor

by Gary Taylor

Keating v. Nebraska Public Power District, Nebraska Department of Resources, et al.
(Federal 8th Circuit Court of Appeals, November 8, 2011)

Due to a decrease in water levels in the Niobrara watershed, in 2006 the Nebraska Public Power District (NPPD) requested that the Nebraska Department of Natural Resources (DNR) issue Closing Notices (notices to cease water withdrawals) to hundreds of farmers and ranchers who held surface water appropriation permits that were junior to those permits held by NPPD. In the summer of 2007, the DNR issued such Closing Notices to junior permit holders without providing them notice or a hearing prior to the issuance of the Closing Notices. The appellants filed suit, arguing that the Closing Notices effected a property deprivation, and accordingly they were entitled to the procedural due process protections of a predeprivation hearing. The district court dismissed the suit, holding that the claim was not ripe and that appellants had not exhausted administrative remedies prior to filing the complaint.  After an initial decision, an appeal to the 8th circuit and a remand, district court determined that although the appellants held a property right that entitled them to use the surface waters of the Niobrara River, that right was qualified and subject to the DNR’s administration of the appropriation system. Also, the district court held that the DNR’s administration of the system did not cause the appellants to suffer a deprivation of their property rights. Accordingly, the district court granted summary judgment in favor of the appellees.

In this case the appellants argue they are entitled to a predeprivation hearing prior to the DNR conducting its administration of the Niobrara Watershed and issuing Closing Notices. Specifically, appellants seek a predeprivation hearing to challenge the validity of the NPPD’s permits on the grounds that the NPPD was not beneficially using its appropriation to produce power and to challenge the DNR’s determination of water scarcity.  In addressing the right to a hearing – due process question – a court must first determine whether state action has deprived an individual of a protected property interest, and only after finding such a deprivation does the court consider whether available procedures for challenging the deprivation satisfy the requirements of due process. The US Supreme Court “usually has held that the Constitution requires some kind of hearing before the State deprives a person of liberty or property.”  The 8th Circuit noted that the parties agreed that a water permit entitling the holder to use surface water within the capacity limits of the Niobrara Watershed represents a property right under Nebraska law. That right, however, is not one of ownership of the surface water prior to capture. Instead, the holder of a permit acquires the rights granted by the permit, and is subject to constraints articulated by the permit. Here, the appellants’ permits allows them to use specific amounts of surface water so long as there is sufficient capacity, subject to the rights of senior appropriators and subject to regulation by the State through the DNR.  Appellants argued that when the DNR administers the Niobrara in a manner that requires permit holders to stop taking water, the state should conduct a hearing to give permit holders an opportunity to challenge the DNR’s determination that there is a scarcity.  The 8th Circuit rejected this argument. On the face of the permits, permit holders are warned that there are periods of time when water supply on the Niobrara River is insufficient to meet the demands of all appropriators and that permit holders are “hereby given notice that [they] may be denied the use of water during times of scarcity.” Thus, when the DNR determines that the watershed no longer has the capacity to supply all permit holders, appellants no longer have a legitimate claim of entitlement to use the surface water and thus do not suffer a deprivation of a property right.  The 8th Circuit affirmed the determination of the district court that appellants did not suffer a deprivation of their property rights by the DNR’s actions.

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Knowledge that fence was not on boundary not necessary to establish boundary by acquiescence

by Melanie Thwing

Georgia Pacific Gypsum v. National Gypsum Company
(Iowa Court of Appeals, February 9, 2011)

Georgia-Pacific, L.L.C. (GP) and National Gypsum Company own adjoining properties in Webster County, IA. Since the 1950’s a wire fence had separated the south property, owned by National, and the north property, owned by Georgia-Pacific. In 2000 National had the property surveyed and found the  fence was encroaching on their property.  In 2007 National removed the fence even though GP objected. Then, in 2009 GP filed a petition under Iowa Code chapter 650 to establish the fence line as the boundary line between the properties.  In support of its position GP cited Iowa Code 650.14 which states:

If it is found that the boundaries and corners alleged to have been recognized and acquiesced in for ten years have been so recognized and acquiesced in, such recognized boundaries and corners shall be permanently established.

In response to GP’s petition National submitted an affidavit stating: (1) there was never any knowledge that GP was claiming the fence as a boundary, (2) there was no consent to the treatment of the fence as a boundary line. Finding that from 1952 to 2000 both parties recognized the fence line as a boundary, the district court granted summary judgment for GP.  National then filed a motion to modify findings, but after the district court denied the motion National appealed to the Iowa Court of Appeals.

The Court of Appeals observed that under 650.14, acquiescence has always been defined as adjoining landowners having mutual recognition for more than ten years of a line dividing them. This line is clearly marked by a fence or in some other manner. Landowners do not need to have specific knowledge that the fence is not located on the legally defined boundary line.  When the mutual recognition of the boundary persists for more than ten years that line becomes the true boundary even if a survey shows otherwise.

National argued that GP did not prove acquiescence because in its affidavits GP never claimed the fence to be anywhere other than the legal boundary line. The Court of Appeals rejects this claim. Both GP and National demonstrated maintenance and usage of only land on their respective sides of the fence.

Secondly, National argued that their affidavits created an issue of material fact. National had paid property taxes and insured the legally defined propertu. The Court of Appeals rejected this argument. The court states that, “tax and insurance bills are typically based on legal descriptions; if that consideration were dispositive, it would be difficult to conceive any case where acquiescence could be found.” Further, even though National recognized the legal boundary line in 2000, it does not preclude that National acquiesced in the fence-line boundary before 2000.

National then argues that it never agreed to treat the fence as a boundary line. The Court of Appeals rejects this claim as well. The claim does not set forth, “specific facts showing that there is a genuine issue for trial.” It is undisputed that GP exclusively maintained and used the land to the north, and that National was fully aware of this usage and never objected to it.

Finally, National argues that the claim of acquiescence is barred by the statutes of limitations in Iowa Code §614.1(5) and §614.17A.  §614.1(5) states that actions for recovering real property must be brought within 10 years after their cause accrues. §614.17A holds, “providing that an action shall not be maintained to recover or establish an interest in or claim to real estate if the action is based upon a claim arising more than ten years earlier.”

The Court of Appeals dismisses this claim as well. Chapter 650 is a special action to establish lines or corners, and that prior caselaw has settled that the statutes of limitations cited by National do not apply to any actions under chapter 650. The district court’s decision in favor of GP was affirmed.

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Right of first refusal in real estate contract is personal to buyer

Gary Taylor

by Gary Taylor

Malone et al. v. Flattery et al.
(Iowa Court of Appeals, February 9, 2011)

In 1993, the Flatterys entered into a contract to sell their farmland to Stanek Cattle Company.  Under the terms of the contract, the Flatterys retained the acre of land on which the house was located, and Stanek acquired a right of first refusal to that one-acre tract.  In 1996 the Flatterys executed a warranty deed to Stanek transferring title in satisfaction of the real estate contract.  One year later, in March 1997, Stanek transferred the farmland William and Sharon Malone.  Stanek’s warranty deed stated the farmland was being transferred, along with the “right of first refusal to purchase the [homestead] on the terms provided in the contract [between the Flattery’s and Stanek].”  The Flatterys eventually transferred the one-acre homestead by warranty deed to the Cralls in 2004.  Then on May 14, 2009, the Malones filed a petition against the Flatterys, their children, and the Cralls. Their petition sought to rescind the deeds transferring the homestead, to quiet title to the homestead, and to enforce the right of first refusal through specific performance by allowing them to purchase the homestead.  Following a hearing and briefing, the district court granted summary judgment in favor of the Flatterys, their children, and the Cralls. The court held that rights of first refusal were presumed personal unless express language confirmed an intent to the contrary. Referencing language that had been included in the original contract  that gave Stanek an easement over the one-acre parcel, and made that easement “binding on the Sellers’ and Buyer’s personal representatives, distributes, heirs, successors, transferees and assigns.” the court determined “these parties were aware of what language to use in order to make the right of first refusal transferable to a subsequent … owner.”

“Is a right of first refusal in a real estate contract freely assignable, or is it personal to the party who contracts for it unless stated otherwise?”  The Court of Appeals recognized the issue as one never before addressed by Iowa courts. After consulting legal treatises and judicial opinions from other states, the Court of Appeals agreed with the district court and concluded that the right of first refusal is presumed to be personal and is not ordinarily construed as assignable unless there is clear language in the contract showing the parties intended the right be assignable.  The court drew a distinction between a right of first refusal and an option to purchase (which may be assigned absent specific language to the contrary).  “Options generally have a value that can be ascertained; rights of first refusal may not. Because [a right of first refusal’s] very indefiniteness can impede the marketability of real estate, it is logical to construe them narrowly.”

The court could not construe the contract between the Flatterys and the Staneks as containing an intent to permit the assignment of the the right of first refusal.  Accordingly, the Court of Appeals affirmed the district court’s grant of summary judgment in favor of the Flatterys.

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Wisconsin landowner not permitted to contest presumption of highway ROW width

Gary Taylor

by Melanie Thwing

Joyce Affeldt, et. al. v. Green Lake County
(Wisconsin Court of Appeals, July 28, 2010)

Since the 1920’s, the Affeldts have owned, and resided in two farms in Green Lake County, Wisconsin. Highway B runs along the property line of these farms, a highway that has existed and has been maintained by the County for more than 20 years. In 2008, the county scheduled a project to increase Highway B to the full right-of-way width of four rods (sixty-six feet). During this time, all property owners along the line of the Highway were allowed to discuss the project. All approved except the Affeldts.  The Affeldts repeatedly notified the County that the fence line and trees that were on the Affeldts’ property were not in the right-of-way and could not be removed.  The Affeldts claimed that any removal, cutting, damaging, or destroying of the fence line or trees on the property would violate their rights as landowners.

The Affeldts, in Circuit Court, filed a temporary restraining order and permanent injunction, arguing if the project continued it would be an, “unconstitutional taking of their property without compensation.” The County countered that because Highway B is a public highway, and that they had the authority to maintain it, it can be increased to the standard of a full sixty-six feet. During this discussion a land surveyor was brought to the Court and testified that Highway B has been a major road way since the 1800’s, and that “the best determination” of the right-of-way was four rods, because the ‘ancient fences’ were inconsistent with a three-rod road.” The trial court ultimately ruled for the continuation of the project on Highway B, stating that if every property owner had a different fence line, the highway system would end in chaos.

The Affeldts then appealed to the Court of Appeals. The question under review was whether Highway B constituted a recorded highway, which if it did, would allow for a four-rod right-of-way. 

 Wis. Stat. § 82.50(1) defines a recorded highway as:
A highway for which the order laying out or altering the highway… has been recorded in the office of the register of deeds in the county in which the highway is situated or, for highways that were laid out or altered before January 1, 2005, in the office of the clerk of the town or the county in which the highway is situated.

Using this standard, the Court of Appeals refers to County Resolution No. 38, passed in 1939, which states the exact location of Highway B and certifies it as a recorded highway.

The Affeldts nevertheless contended that Wis. Stat. § 82.31(2) creates rebuttable presumption of a four-rod right of way.  The Court of Appeals agreed that Wis. Stat. § 82.31(2) creates rebuttable presumption of a four-rod right of way, but pointed out that that code provision addressed unrecorded highways only.  Given that Highway B is a recorded highway, the Affeldts have no ground to rebut the presumption of a four-rod wide road that § 82.50(1) provides. The Court of Appeals affirmed the decision of the circuit court.

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Forty-Year Act used to extinguish city’s interest in land

Gary Taylor

by Allison Arends

City Of Lake View vs. Patrick L. Houston (link to case here)
(Unpublished opinion, Iowa Court of Appeals, December 31, 2008)

Landowner uses Marketable Record Title Act to extinguish city’s claimed interest in roadway identified on plats.

In 1964 Houston was conveyed by warranty deed a half interest to property in Sac County. This property included the disputed property: a 33-foot by 110-foot strip of undeveloped land identified by Sac County in 1874 for a county road that was never built.  Although the deed did include the disputed property, Houston was not assessed property taxes on it until 1998 when the Sac County assessor received a title opinion that Houson was the owner. In 2006 the city of Lake View filed a petition to quiet title to the disputed property, arguing that its ownership was superior to any interest of Houston’s.

Lake View’s claim of ownership over the disputed property was based on two recorded plats.  The first – the Dension Beach Plat of 1916, replatted in 1932 – included lines depicting the disputed property as “north-south roadway,”  but the the property itself was not platted.  The second – the Lakewood Park Plat in 1933 – depicted the disputed area as part of  “Government Lot 1,” but Government Lot 1 was not a part of the platted area of Lakewood Park.  The city’s expert witness testified that because Houston’s deed referred to “Government Lots 1 and 2″ a title examiner was obligated to consider plats identifying Government Lots 1 and 2, although the expert also acknowledged that Houson’s deed did not specifically refer to either the Denison Beach Plat nor the Lakewood Park Plat.  The district court ruled in favor of Lake View, stating that “the recorded plats clearly identify the road and all plats involved were recorded prior to the deed transferring the disputed lot to Houston.”  

Houston appealed to the Iowa Court of Appeals, claiming that Lake View’s petition to quiet title was barred by Iowa’s Marketable Record Title Act (found at Iowa Code 614.29 to 614.38) (commonly known as the “forty-year act”).   Intended to simplify land title transactions, the Act states that “subject to certain exceptions… a person is deemed to have a marketable record title to any interest in land if that person has an unbroken chain of title of record to such interest for forty years or more.” It was undisputed that Houston has had a forty-year unbroken chain of record title to the disputed property.  Therefore, in order for Lake View to avoid having its interest in the property extinguished by the Act it must prove that it falls within one of the identified exceptions. 

The exception to the Act relevant to this case is set out in Iowa Code 614.32(1).  In a previous case the Iowa Supreme Court determined that the applicability of the exception depends on the answers to three questions:  (1) whether the interest in the disputed property is inherent in the “muniments of title” (the legal instruments through which title to land passes)  forming the landowner’s chain of record title;  (2) whether the interest was created prior to the landowner’s root of title; and  (3) whether the deeds specifically identify the record title transaction that created the interest. 

Lake View’s interest in the property arose prior to Houston’s 1964 warranty deed, thereby answering the second question in favor of the city.  However, the Court found that neither the first nor third questions could be resolved for the city.  The Court  found that because plats are not “deeds, wills or otherwise instruments through which title to land passes,” the city’s interest was not inherent in a minument of title.  Furthermore, because Houston’s 1964 deed did not specifically identify the plats upon which the city depended to illustrate the creation of its interest, neither was the third requirement of section 614.32 satisfied.  The Court concluded, therefore, that Lake View’s interest was extinguished under the Marketable Recort Title Act, and dismissed Lake View’s petition to quiet title.

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