Hoose v. Doody , 2008 Ind. App. LEXIS 1027 ( 2008 )

BAILEY, Judge,

dissenting.

I respectfully dissent because I believe that the language of the Warranty Deed conveyed the Disputed Area to Michael Hoose’s parents in fee simple. The construction of the terms of a written contract is a pure question of law for the court, reviewed de novo. Harrison v. Thomas, 761 N.E.2d 816, 818 (Ind.2002). Under de novo review, no deference is owed to the conclusion of the trial court. Tankersley v. Parkview Hosp., Inc., 791 N.E.2d 201, 204 (Ind.2003).

The goal of construing a deed is to ascertain the intent of the parties. Clark v. CSX Transp., Inc., 737 N.E.2d 752, 757 (Ind.Ct.App.2000), trans. denied. The intent of the parties to a real estate transaction is formed at the consummation of their agreement. This intent governs the extent of the interest conveyed. Richard S. Brunt Trust v. Plantz, 458 N.E.2d 251, 252 (Ind.Ct.App.1983).

In construing a deed, we do not venture outside of the four corners of the deed to discern the intent of the parties unless the language creates an ambiguity. Poznic v. Porter County Dev. Corp., 779 N.E.2d 1185, 1190 (Ind.Ct.App.2002). If ambiguity exists, then we may resort to extrinsic evidence, sources of information other than the language of the deed, to ascertain the intent of the parties. Kopetsky v. Crews, 838 N.E.2d 1118, 1124 (Ind.Ct.App.2005). If the terms of the deed are not ambiguous, we apply them according to their clear and ordinary meaning. Keene v. Elkhart County Park and Recreation Bd., 740 N.E.2d 893, 897 (Ind.Ct.App.2000). In construing a deed, we presume that the parties intended every part of a deed to have some meaning, and we favor a construction that reconciles and harmonizes the entire deed. Parkison v. McCue, 831 N.E.2d 118, 128 (Ind.Ct.App.2005), trans. denied.

In uncovering the intent of parties to a deed, we utilize a variety of tools not the least of which is grammatical construction. Nevertheless, in some instances the intent of the parties cannot be ascertained merely by the mechanical application of grammatical rules. Rather, in examining the document as a whole, we look for other clues that are readily apparent for our consideration. Thus, in addition to employing rules of grammar, we also consider the language chosen in its historical context because a word’s meaning can change over time. When construing older documents, we should be wary of assigning a contemporary meaning to a word or dismissing it entirely. Moreover, the character of the land that is the subject of the transaction may also serve as a basis for the selection of a particular term by the parties. Ultimately, in discerning the intent of the parties by construing the deed, no particular rule predominates over another, rather, these rules should be thoughtfully used so as to reconcile and harmonize the entire deed.

The Warranty Deed reads in relevant part:

This Indenture Witnesseth, that William E. Osborn, Donna A. Osborn, Garrett A. Osborn and Margaret F. Osborn ... Convey and Warrant to F. Dan and Floma M. Hoose ... the following described Real Estate in Kosciusko County in the State of Indiana, to wit:

Lot No. Eight(8) of Osborns Subdivision of Big Chapman Lake.

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The grantors convey to the above grantees, the proprietorship of the land directly between said lot and lake and agrees [sic] that no buildings or occupancy will be allowed thereon, subject to the Laws of the State of Indiana governing bodies of water. If said strip of land is ever vacated, owners of lot no. Eight(8) shall have priority of purchase.

The construction of the last paragraph is crucial in determining whether the Hooses have record title to the Disputed Area. In utilizing the various rules of construction to discern the intent of the parties, I believe that this language unambiguously conveys Lot 8, the Disputed Area with a restrictive covenant, and provides for a right of first refusal for the purchase upon the vacation of the only strip of land between Lot 8 and the lake not otherwise conveyed to the Hooses, i.e., the alley in between the two lots.

First, the ordinary meaning of “convey” is to transfer or deliver something, usually a right or property, to another. See Black’s Law Dictionary 357 (8th ed. 2004). A “restrictive covenant” is not a right or property but a promise to restrict the use or occupancy of real property. See Black’s Law Dictionary 393 (8th ed. 2004). Utilizing these definitions, the majority’s conclusion, adopting the trial court’s interpretation, implies that the Warranty Deed transfers a restrictive covenant to the grantees.⁶ However, a conveyance of an interest in real estate is necessary before one has a right to be upon the property. The restrictive covenant without the conveyance of a right to be upon the property in the first instance does not make sense, and as discussed infra, the word “proprietorship” conveys an interest in land greater than a mere license or easement. Therefore, I believe that the conclusion that the Warranty Deed conveys a restrictive covenant does not comport with the generally understood terminology used in property law. Rather, based on the use of the terms “convey” and “proprietorship,” I am convinced that the more fitting conclusion is that the Warranty Deed transferred the Disputed Area to the grantees in fee simple.

The term proprietorship and its derivations are synonymous with ownership. See 26A C.J.S. Deeds § 8 (2001) (“Proprietary and Owner”: The word “proprietary” is consistent with the word “owner.”); Black’s Law Dictionary 1256 (8th ed. 2004) (“Proprietary” — 1. Of or relating to a proprietor. 2. Of, relating to, or holding as property, “Proprietor” — An owner, esp. one who runs a business. — proprietorship); Parkison, 831 N.E.2d at 130 (“Where lands are overflowed and submerged, and within a reasonable time the waters retire and the land reappears, the title of the owner is not disturbed, and the proprietorship remains in the original owner.” (emphasis added) Quoting Payne v. Hall, 192 Iowa 780, 185 N.W. 912 (1921), in addressing the issue of whether a fee holder regains his title after his original land has eroded away and then reappears through accretion.); Reinking v. Metro. Bd. of Zoning Appeals of Marion County, 671 N.E.2d 137, 141 (Ind.Ct.App.1996) (‘We are not determining that subsequent owners of tax sale property are not entitled to raise constitutional issues that arise during their proprietorship.” (emphasis added)). Moreover, the term proprietor is commonly used in the area of riparian rights, including the time period when the Warranty Deed was drafted. See City of Elkhart v. Christiana Hydraulics, 223 Ind. 242, 256, 59 N.E.2d 353, 358 (1945) (“An upper riparian owner may not use or divert water from a stream in such a way as to destroy or render it unavailable for the use of a lower riparian proprietor.” [Note the interchanging use of the terms owner and proprietor]); Millspaugh v. NIPSCO, 104 Ind.App. 540, 12 N.E.2d 396, 400 (1938) (“It has been held that the fact that a private stream has been stocked by the state does not give others than riparian proprietors any right to take fish from the water.”); Tolleston Club of Chicago v. Carson, 188 Ind. 642, 123 N.E. 169, 174 (1919) (“In cases where it appeared that lakes or other nonnavigable waters of circular or irregular shapes were meandered, and bordering lots on all sides were owned by different persons, it became manifest that the title of each adjoining proprietor could not extend to the center of the body of water without overlapping.”); State v. Ohio Oil Co., 150 Ind. 21, 49 N.E. 809, 814 (1898) (“While the right of fishery upon his own land is exclusively in the riparian proprietor, this does not imply or carry the right to destroy what he does not take.”). These definitions and usage of the term in the common law further support the conclusion that the language of the Warranty Deed constitutes the conveyance of the Disputed Area, because such a conveyance would include riparian rights based on the lot’s proximity to the lake. In my opinion, the topographic characteristics of the lots explain the choice of the differing terms used to convey these lots to the Hooses.

Thus, taking the document as a whole, the term “proprietorship,” meaning ownership, is in harmony with the Warranty Deed’s usage of the term “convey,” meaning to transfer a right or property and the subsequent language establishing a “restrictive covenant,” i.e., a reservation on the owner’s right restricting the use and quiet enjoyment of the property to which the promisor would otherwise be permitted. Clearly, it does not follow that there would be a restriction in the use of the Disputed Area without first having a right or interest therein. I am satisfied that there is no ambiguity in this conveyance, and the clear and ordinary meaning of the language demonstrates the intention of the parties to convey ownership of the Disputed Area, “the land between said lot [8] and [the] lake,” along with a restrictive covenant as to the use of the land.

Furthermore, these provisions can be harmonized with the subsequent sentence regarding the right to priority of purchase. It is undisputed that there is a ten-foot alley set off from the Disputed Area and adjacent to Lot 8, as indicated on the plat. The term “vacate” in reference to a thoroughfare signifies the statutory procedure of privatizing a public street or alley. See Ind.Code § 36-7-3-12; Smith v. City of Shelbyville, 462 N.E.2d 1052, 1055 (Ind.Ct.App.1984) (“Vacation of public ways is an integral part of planning and development.”). The character of this narrow portion of land “between the lot and the lake” easily fits the description “strip of land.” As it was dedicated to public use when the subdivision was platted, the grantors could not convey the alley. Thus, I believe that the sentence should be interpreted to mean that if the public alley between the Disputed Area and Lot 8 is released from public ownership, the owners of Lot 8 have priority in purchasing that strip of land.⁷

I acknowledge the majority’s application of grammatical rules would indicate that the phrase “said strip of land” refers back to the phrase “the land directly between said lot and lake.” Relying upon this single phrase and its placement within the Warranty Deed, the majority reaches its conclusion regarding the intent of the parties despite all of the other indicators of intent. Nevertheless, I do not believe there is such a connection between these phrases because there is no commonality-in their reference to the land. The first phrase simply refers to “the land,” and the second, supposed antecedent phrase, says, “said strip of land” (emphasis added). Furthermore, we cannot be so myopic in the interpretation of a deed that we exclude the other terms employed. It is my view that the mechanical application of this grammatical principle does not evidence the intent of the parties but simply establishes that the sentence was poorly drafted. If the sentences were a part of an English composition assignment, the scrivener would not receive a passing grade. However, the aim in interpreting contracts and deeds is greater than just applying rules of grammar to the words in the document before us. Thus, we must take a step back to view the entire document and seek to harmonize all of the terms and phrases used rather than honing in on one phrase in the deed to determine the result in this case.

It is our duty to discern the intent of the parties in construing the Warranty Deed. Though certain sentences cause me pause and could have been better written, the clues found elsewhere in the document leave me satisfied that the parties intended to convey to the grantees Lot 8, the Disputed Area with a restrictive covenant, and a right of first refusal provision as to the alley in between the two lots.⁸ This construction gives meaning and effect to all of the terms and phrases employed as well as reconciling and harmonizing the entire deed. Because the trial court’s interpretation fails to do this, I would reverse the trial court. For these reasons, I respectfully dissent.

6 . In supporting its conclusion that the Warranty Deed conveys a restrictive covenant and the right of priority of purchase of the Disputed Area, the trial court concludes that the evidence of payments made towards the Disputed Area “may be understood to be a purchase of the restrictions of no buildings, and the option to honor 'priority of purchase’ if vacated.’’ Appellant's Appendix at 8. Even assuming we needed to look beyond the four corners of the Warranty Deed, it belies logic that a person would pay for the opportunity to restrict himself from building any structures on a property in which he has no interest. Furthermore, the checks made as “payment on Lot # 7” provide no clue as to whether the Warranty Deed conveyed a priority of purchase as to Lot 7 or the conveyance of Lot 7 with the priority of purchase for the alley. See Plaintiff's Exhibits 10 and 11. The checks simply provide no indication as to exactly what interest in Lot 7 Dan Hoose was supposed to receive in return for the payments.

7 . Today, there is a presumption that when a street is vacated or abandoned the title to the land reverts to the abutting property owners. See Gorby v. McEndarfer, 135 Ind.App. 74, 82, 191 N.E.2d 786, 791 (1963).

8 . This construction also eliminates the need to concern ourselves with the payment of taxes on the Disputed Area because the issue of taxes is relevant only in the context of a claim for adverse possession. Where, as here, the property was purchased and the deed recorded, it is up to the county to determine the property values, and therefore, the tax to be paid. Whether this was done and whether the tax was paid would be of no consequence in these proceedings.