David v. Paulsen , 2019 Ohio 2146 ( 2019 )

[Cite as David v. Paulsen, 2019-Ohio-2146.]
IN THE COURT OF APPEALS OF OHIO
SIXTH APPELLATE DISTRICT
OTTAWA COUNTY
Thomas P. David, et al. Court of Appeals No. OT-18-032
Appellants Trial Court No. 16CV367
v.
Nancy L. Paulsen, et al. DECISION AND JUDGMENT
Appellees Decided: May 31, 2019
*****
Jerome R. Parker, Bruce S. Schoenberger and Ali A. Nour,
for appellants.
John A. Coppeler, for appellees.
*****
MAYLE, P.J.
{¶ 1} Plaintiffs-appellants, Thomas P. David and Larry D. Sanders, appeal the
January 23, 2019 judgment of the Ottawa County Court of Common Pleas, granting
summary judgment in favor of defendants-appellees, Catherine A. Moore and Olen D.
Moore. For the reasons that follow, we affirm the trial court judgment.
I. Background
{¶ 2} Thomas P. David and Larry D. Sanders claim that they are the two members
of the building committee established for Woodland Estates subdivision in Clay
Township, Ottawa County, Ohio.1 Catherine A. Moore and Olen D. Moore (“the
Moores”) currently hold title to Lot 10 in that subdivision. The Moores erected a shed on
their property, allegedly in violation of restrictions contained within a Declaration of
Restrictions (“restrictions”) filed with the county’s deed records, purporting to encumber
all lots within the subdivision. The Moores did this without first seeking the approval of
the building committee. David and Sanders advised the Moores on October 16, 2016, to
remove the shed, but they failed to do so.
{¶ 3} David and Sanders filed a complaint against Nancy Paulsen, Catherine
Moore, and Carol Quillet, on December 14, 2016, alleging that they violated Woodland
Estates’ restrictions and requesting that the trial court order them to remove the shed from
their property. The Moores answered and counterclaimed, and moved to substitute party
defendants, indicating that Paulsen is deceased and Quillet transferred her 50 percent
ownership interest to Olen Moore. The Moores maintained that they lacked notice of the
restrictions and that David and Sanders are not authorized to file suit to enforce the
restrictions. They also claimed that the restrictions are vague and have not been enforced
uniformly.
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The parties dispute whether Sanders was properly appointed to the committee.
2.
{¶ 4} David and Sanders and the Moores filed cross-motions for summary
judgment. David and Sanders argued that (1) the Moores violated the restrictions when
they erected the storage shed; (2) they had notice of the restrictions because the
restrictions and amended restrictions were filed with the Ottawa County Recorder’s
office; and (3) their deed to the property made reference to “restrictions of record.”
{¶ 5} The Moores argued that the restrictions are unenforceable because they were
not part of the subdivision plat, have never been properly referenced in any deed or
transfer of title to the property, and are extinguished under Ohio’s Marketable Title Act
(“MTA”). They maintained that numerous violations of the restrictions have rendered
them unenforceable, and they insisted that the subdivision has no properly-appointed
building committee that may enforce the restrictions.
{¶ 6} The trial court granted summary judgment to the Moores and denied
summary judgment to David and Sanders. It held that the restrictions are not noted on
the plat for the subdivision or referenced in the deeds and transfers of Lot 10 dating back
through 1969, therefore, they have been extinguished by the MTA. David and Sanders
appealed and assign the following errors for our review:
First Assignment of Error: The Trial Court Committed Reversible
Error in Finding That Ohio’s Marketable Title Act, R.C. 5301.47 to
5301.56, Extinguished That Certain Declaration of Restrictions
(“Declaration”) Recorded at the Ottawa County, Ohio Deed Records on
July 30, 1964 at Vol. 11 Pg. 353, as Thereafter Amended on July 30, 1968
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(“Amendment”), Both Referencing Woodland Estates, a Sub-Division in
Clay Township, Ottawa County, Ohio.
Second Assignment of Error: The Declaration Contains a Self-
Perpetuating Renewal Provision Which Avoids the Applicability of Ohio’s
Marketable Title Act (“Act”) and the Trial Court Ignored Its Existence and
Effect.
II. Standard of Review
{¶ 7} Appellate review of a summary judgment is de novo, Grafton v. Ohio
Edison Co., 77 Ohio St. 3d 102, 105, 671 N.E.2d 241 (1996), employing the same
standard as trial courts. Lorain Natl. Bank v. Saratoga Apts., 61 Ohio App. 3d 127, 129,
572 N.E.2d 198 (9th Dist.1989). The motion may be granted only when it is
demonstrated:
(1) that there is no genuine issue as to any material fact; (2) that the moving
party is entitled to judgment as a matter of law; and (3) that reasonable
minds can come to but one conclusion, and that conclusion is adverse to the
party against whom the motion for summary judgment is made, who is
entitled to have the evidence construed most strongly in his favor.
Harless v. Willis Day Warehousing Co., 54 Ohio St. 2d 64, 67, 375 N.E.2d 46 (1978),
Civ.R. 56(C).
{¶ 8} When seeking summary judgment, a party must specifically delineate the
basis upon which the motion is brought, Mitseff v. Wheeler, 38 Ohio St. 3d 112, 526
4.
N.E.2d 798 (1988), syllabus, and identify those portions of the record that demonstrate
the absence of a genuine issue of material fact. Dresher v. Burt, 75 Ohio St. 3d 280, 293,
662 N.E.2d 264 (1996). When a properly supported motion for summary judgment is
made, an adverse party may not rest on mere allegations or denials in the pleadings, but
must respond with specific facts showing that there is a genuine issue of material fact.
Civ.R. 56(E); Riley v. Montgomery, 11 Ohio St. 3d 75, 79, 463 N.E.2d 1246 (1984). A
“material” fact is one which would affect the outcome of the suit under the applicable
substantive law. Russell v. Interim Personnel, Inc., 135 Ohio App. 3d 301, 304, 733
N.E.2d 1186 (6th Dist.1999); Needham v. Provident Bank, 110 Ohio App. 3d 817, 826,
675 N.E.2d 514 (8th Dist.1996), citing Anderson v. Liberty Lobby, Inc., 477 U.S. 242,
248, 106 S. Ct. 2505, 91 L. Ed. 2d 201 (1986).
III. Law and Analysis
{¶ 9} David and Sanders argue in their first assignment of error that the trial court
erred when it concluded that the restrictions were extinguished under the MTA. In their
second assignment of error, they argue that the trial court erred by failing to recognize
that the Declaration of Restrictions includes a self-perpetuating provision rendering the
MTA inapplicable.
A. First Assignment of Error
{¶ 10} In support of their first assignment of error, David and Sanders claim that
in finding that the restrictions were extinguished under the MTA, the trial court used the
wrong deed to determine the “root of title.” The Moores maintain that David and Sanders
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seek to apply an incorrect date from which to determine marketability of title for
purposes of establishing root of title, and that, in doing so, they rely on evidence not
contained in the trial court record.
{¶ 11} The MTA is codified in R.C. 5301.47 through 5301.63. It was enacted “to
simplify and facilitate land title transactions by allowing persons to rely on a record chain
of title * * *.” Semachko v. Hopko, 35 Ohio App. 2d 205, 209, 301 N.E.2d 560, 563 (8th
Dist.1973), citing R.C. 5301.55. The MTA provides that “[a]ny person * * * who has an
unbroken chain of title of record to any interest in land for forty years or more, has a
marketable record title to such interest * * * subject to the matters stated in [R.C.]
5301.49 * * *.” R.C. 5301.48.
{¶ 12} “Marketable record title” is defined by the MTA to mean “a title of record,
as indicated in section 5301.48 of the Revised Code, which operates to extinguish such
interests and claims, existing prior to the effective date of the root of title, as are stated in
section 5301.50 of the Revised Code.” R.C. 5301.47(A). “Root of title” is “that
conveyance or other title transaction in the chain of title of a person, purporting to create
the interest claimed by such person, upon which he relies as a basis for the marketability
of his title, and which was the most recent to be recorded as of a date forty years prior to
the time when marketability is being determined.” R.C. 5301.47(E).
{¶ 13} “[I]n order to preserve an interest in land in existence before the root of
title[,] such interest must be specifically stated or identified in the root of title or
specifically stated or identified in one of the muniments of the chain of record title within
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forty years after the root of title, or be recorded pursuant to R.C. 5301.51 and 5301.52
within forty years after the root of title.” Semachko at 211. This is true where, as here,
the interest at issue is a subdivision use restriction. Id. at 211-12. A general reference in
a deed of title indicating that title is subject to easements and restrictions of record is
inadequate to preserve a restriction. Id. at 210, citing R.C. 5301.51(A). Rather, the
statute requires specific identification of the recording of any such restrictions. Id.
{¶ 14} Here, the Declaration of Restrictions for the Woodland Estates subdivision
was recorded with the Ottawa County Recorder at volume 11, page 353, on February 18,
1964. An amendment was recorded at volume 12, page 133, on July 30, 1968.
According to the title documents that were properly made part of the record in this case,
the following transfers took place with respect to Lot 10, none of which specifically
reference the restrictions:
 May 13, 1969: The Estate of Robert Cashen transferred title to Lot 10 to Edna
Cashen, recorded at volume 242, page 168.
 September 19, 1972: Edna Cashen transferred title to Lot 10 to Blue Ridge
Homes, Inc., recorded at volume 254, page 776.
 July 3, 1973: Blue Ridge transferred title to Lot 10 to Eugene and Nancy
Paulsen, recorded at volume 257, page 064.
 February 9, 2009: Nancy Paulsen acquired title to Lot 10, recorded at volume
1262, page 674, following the death of her husband.
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 February 9, 2009: Nancy Paulsen quitclaimed Lot 10 to her daughters,
Catherine Moore and Carol Quillet, recorded at volume 1262, page 676, but
maintained a life estate.
 February 17, 2017: Catherine Moore and Carol Quillet quitclaimed Lot 10 to
Catherine Moore and Olen Moore, recorded at volume 1622, page 187.
{¶ 15} Our initial task in resolving David and Sanders’s first assignment of error is
to identify the root of the Moores’ title. This requires us to establish (1) “the time when
marketability is being determined”; and (2) which “title transaction” was “the most recent
to be recorded” as of a date 40 years before that time.
{¶ 16} David and Sanders argue that the time when marketability is being
determined is February 9, 2009—when Paulsen quitclaimed the lot to her two daughters.
David and Sanders explain that using February 9, 2009, as the start date, we must look
back 40 years—to February 9, 1969—and consider the transfer that took place most
recently before that date. They argue that the deed recorded most recently before that
date was an October 8, 1963 deed, pursuant to which Arthur C. James and Isabelle E.
James transferred title to this lot to Robert Cashen. They claim that because the
restrictions and the amendment were filed after this October 8, 1963 transaction, “they
are both not extinguished under the Act because they were recorded AFTER the James
Deed and fall within Appellees’ unbroken chain of title.”
{¶ 17} The Moores point out that the James deed does not appear in the trial-court
record and may not be considered, and they argue that even if it did, the time when
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marketability is being determined is the date that David and Sanders filed their summary-
judgment motion—not the date that Paulsen quitclaimed the property to her daughters.
Their motion was filed February 20, 2018. Looking back 40 years, the most recent title
transaction before February 20, 1978, occurred on July 3, 1973, when Blue Ridge
transferred title to Lot 10 to Eugene and Nancy Paulsen. Because the restrictions did not
appear in this title transaction or in any conveyance or title transaction following July 3,
1973, the Moores insist that the MTA extinguishes the restrictions.
{¶ 18} David and Sanders rely on the Ohio Supreme Court’s decision in Heifner v.
Bradford, 4 Ohio St. 3d 49, 446 N.E.2d 440 (1983), in support of their argument that “the
time when marketability is being determined” is the date the property was conveyed to
Moore and Quillet. In Heifner, the court specified which deeds served as the roots of title
for each party, but it provided no analysis from which we may conclude that it used a
conveyance date—as opposed to the trial date or some other date—as the time when
marketability was being determined. David and Sanders acknowledge that this issue was
not analyzed in Heifner. Given the absence of analysis, we decline to draw any
inferences from the decision in this regard.
{¶ 19} The Moores rely on Semachko, 35 Ohio App. 2d at 211-12, 301 N.E.2d 560,
in support of their position that “the time when marketability is being determined” is the
date that David and Sanders filed their summary-judgment motion. In Semachko, the
trial court found that marketability was being determined as of the trial date. We,
however, find this approach to be problematic. By using the trial date as the starting
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point for the marketability determination, the root of title could potentially change while
the case is pending before the trial court. Defendant-property owners would therefore
have an incentive to strategically delay the proceedings in the hopes of extinguishing the
plaintiff’s superior claim before trial.
{¶ 20} We think it more appropriate to determine marketability as of the date that
David and Sanders sought to enforce a purportedly-superior right to the property-which,
in this case, was the date that they filed an action to enforce the Declaration of
Restrictions against the Moores.2 David and Sanders filed the complaint on
December 14, 2016. Forty years before this date would be December 14, 1976. The
July 3, 1973 conveyance of Lot 10 from Blue Ridge to Eugene and Nancy Paulsen is the
most recent title transaction before December 14, 1976, and is therefore the root of title.
{¶ 21} The restrictions are not specifically stated or identified in the deed recorded
on July 3, 1973, or in one of the muniments of the chain of record title within forty years
after the root of title. There is also no evidence that the restrictions were recorded
pursuant to R.C. 5301.51 and 5301.52 within forty years after the July 3, 1973 title
2
This is consistent with the position taken in a number of other jurisdictions. See, e.g.,
Nature Conservancy of Connecticut, Inc. v. Three Feathers, LLC, Super.Ct. No. FST CV
10 6003509 S, 2013 Conn. Super. LEXIS 3052, *24 (Apr. 3, 2013), fn. 12 (“[T]he date of
marketability is when a party seeks to determine the superiority of their claimed title.”).
See also Heath v. Turner, 308 S.E.2d 244, 250 (N.C.1983) (using date action was
commenced as the time when marketability was being determined); Rocket Oil & Gas
Co. v. Donabar, 127 P.3d 625, 632 (Okla.2005) (explaining that “the time when
marketability is being determined,” was the date plaintiffs filed quiet title action).
10.
transaction. Accordingly, to the extent that the restrictions were referenced in any title
transactions that occurred before the root of title, they would have been extinguished by
the MTA.
{¶ 22} Here, the evidence indicates that none of the title transactions—either
before or after the root of title—reference the restrictions. According to an affidavit of a
title agent attached to the Moores’ summary-judgment motion, the restrictions are also
not referenced on the plat for the subdivision or incorporated into the deeds. And the
Moores made clear via affidavit and deposition testimony that they were unaware of the
restrictions until David and Sanders filed suit.
{¶ 23} “A court of equity will enforce the observance of valid restrictive
covenants as to the use of property against a grantee who has notice of such covenants.”
Carranor Woods Prop. Owners’ Assn. v. Driscoll, 106 Ohio App. 95, 99, 153 N.E.2d 681
(6th Dist.1957). “[A] grantee in a conveyance of land is deemed to have notice of
restrictive covenants when such covenants have been inserted in his deed, or where it
clearly appears that a plan of uniform development of an allotment with restrictive
covenants had been adopted by the filing and recording of a declaration of reservations
and restrictions incident to the platting, accompanied by substantially uniform
compliance with such restrictions or standards.” Id. Notice—either actual or
constructive—“is essential for enforcement.” Id.
{¶ 24} Because the restrictions are not identified in the deeds to the property or
referenced in the subdivision plat, and because the record evidence indicates that the
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Moores were unaware of the restrictions, we must conclude that they lacked either actual
or constructive notice and the restrictions may not be enforced against them. Thus, even
if the date for determining marketability of title was earlier, as David and Sanders argue,
the result here would be the same. Either way, the restrictions cannot be enforced against
the Moores in this case.
{¶ 25} Accordingly, we find David and Sanders’s first assignment of error not
well-taken.
B. Second Assignment of Error
{¶ 26} In their second assignment of error, David and Sanders argue that the
Declaration of Restrictions contains a self-perpetuating renewal provision preventing the
MTA from extinguishing the restrictions. That provision states, in pertinent part:
27. TERM. These covenants and restrictions are to run with the
land and shall be binding on the above named persons and all persons
claiming under or through them until the First day of October, A.D., 1989,
at which time said covenants and restrictions shall be automatically
extended for successive ten (10) years by a [m]ajority of the then owners of
said lots, it is agreed to change such restrictions and covenants in whole or
in part.
{¶ 27} The Moores claim that (1) David and Sanders waived this argument by
failing to raise it in the trial court, and (2) the argument lacks any legal basis. They
further contend that the Moores lacked actual notice of the restrictions, and because the
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restrictions were never in the chain of title for Lot 10, they also lacked constructive notice
of the restrictions.
{¶ 28} We agree with the Moores that this argument was not raised below and,
therefore, has been waived. We also agree with them that there is no legal authority for
David and Sanders’s position. And given our previous conclusion that the Moores lacked
actual or constructive notice of the restrictions, they cannot be enforced against them,
regardless of the purported “self-perpetuation” provision.
{¶ 29} Accordingly, we find David and Sanders’s second assignment of error not
well-taken.
IV. Conclusion
{¶ 30} We conclude that the subdivision restrictions are not specifically identified
in the Moores’ root of title, in the muniments of record chain of title, or recorded in
accordance with R.C. 5301.51 and 5301.52, and are, therefore, extinguished. We further
conclude that the Moores lacked actual or constructive notice of the restrictions because
they were not identified in the deeds to the property or referenced in the subdivision plat,
thus they cannot be enforced against them regardless of the purported “self-perpetuation”
provision. We, therefore, find David and Sanders’s two assignments of error not well-
taken. We affirm the January 23, 2019 judgment of the Ottawa County Court of
Common Pleas. David and Sanders are ordered to pay the costs of this appeal under
App.R. 24.
Judgment affirmed.
13.
David v. Paulsen
C.A. No. OT-18-032
A certified copy of this entry shall constitute the mandate pursuant to App.R. 27.
See also 6th Dist.Loc.App.R. 4.
Arlene Singer, J. _______________________________
JUDGE
Thomas J. Osowik, J.
_______________________________
Christine E. Mayle, P.J. JUDGE
CONCUR.
_______________________________
JUDGE
This decision is subject to further editing by the Supreme Court of
Ohio’s Reporter of Decisions. Parties interested in viewing the final reported
version are advised to visit the Ohio Supreme Court’s web site at:
http://www.supremecourt.ohio.gov/ROD/docs/.
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