Towsley v. Stanzak

11/01/2022
DA 21-0514
Case Number: DA 21-0514
IN THE SUPREME COURT OF THE STATE OF MONTANA
2022 MT 217JIM L. TOWSLEY and BETTY SMITH TOWSLEY,
Plaintiffs and Appellees,
v.
DAVID P. STANZAK, MARGO L. STANZAK, CRAIG FITCH,
CARYN MISKE, LAURENCE B, MILLER, JR., STEPHEN M. ZANDI,
KARIN M. ZANDI, and all persons, known or unknown, claiming or
who might claim any right, title, interest in or lien or encumbrance
upon the personal property described in the Complaint below which
is adverse to the Plaintiff’s ownership or a cloud upon Plaintiff’s title
thereto, whether such a claim or possible claim may be present or contingent,
Defendants and Appellants.
APPEAL FROM: District Court of the Fourth Judicial District,
In and For the County of Missoula, Cause No. DV-20-18
Honorable Jason Marks, Presiding Judge
COUNSEL OF RECORD:
For Appellants:
Jesse Kodadek, Elizabeth Erickson, Worden Thane P.C., Missoula,
Montana
For Appellees:
Whitney M. Kolivas, Gregory G. Schultz, Crowley Fleck PLLP,
Missoula, Montana
Submitted on Briefs: August 10, 2022
Decided: November 1, 2022
Filed:
ir,-6‘A•-if
__________________________________________
Clerk
2
Justice Jim Rice delivered the Opinion of the Court.
¶1 Defendants David P. Stanzak, Margo L. Stanzak, Craig Fitch, Caryn Miske,
Laurence B. Miller, Jr., Stephen M. Zandi, and Karin M. Zandi (collectively Stanzak)
appeal the decision of the Fourth Judicial District Court, Missoula County, granting
summary judgment to Appellee Rose Family Trust (Rose)1 and quieting title to the claimed
easement in Rose’s favor.
¶2 We affirm and address the following issue:
Did the District Court err by determining the Notice of Purchaser’s Interest did not
convey title to the easement at issue?
FACTUAL AND PROCEDURAL BACKGROUND
¶3 Margaret Rose owned a parcel of land located in the eastern half of Section 18,
Township 15, Range 21, Missoula County, just northwest of Frenchtown, Montana. In
April 1975, she recorded Certificate of Survey 569 (COS 569), which created a new
23.24-acre parcel (Parcel 1) from a remaining tract from Rose’s original parcel of land.
COS 569 depicted a “private road easement” about a quarter-mile long and thirty foot wide,
connecting Parcel 1 to Houle Creek Road, which we refer to herein as the Claimed
Easement. The Claimed Easement began at a point on the western boundary of Parcel 1
1
Appellees Jim L. Towsley and Betty Towsley appear in place of Rose Family Trust after
acquiring the subject real property from the Trust following entry of the District Court’s quiet title
judgment.
3
just above the southwest corner and ran a straight, southwesterly course across Rose’s
remaining tract until it connected with Houle Creek Road (see map, below).2
i ttATc't
Rose
Trust
North
Parcel
¶4 In July 1975, Rose recorded COS 648. This COS divided Rose’s remaining tract
into a 59.15-acre tract lying south and southwest of Parcel 1 (Parcel E), and a northern tract
(Rose Trust North Parcel) lying along the western boundary of Parcel 1. COS 648 indicated
2
The maps herein were adapted from the record by the Court solely for purposes of this opinion.
They are intended only to illustrate the features of the disputed property interest and the
progression of related property transactions, and have no bearing on the outcome. The location of
the Claimed Easement approximates the path traveled according to the coordinates given in COS
569. The COS 648 Easement is also an approximation adapted from COS 648.
4
an easement for Parcel 1 (COS 648 Easement) that traced the northern-most boundary of
Parcel E, running northwesterly from a point near the southwest corner of Parcel 1 to Houle
Creek Road (see above map). The metes and bounds description for the new COS 648
Easement stated, “REPLACEMENT EASEMENT FOR C.S. #569 PARCEL.”
¶5 In November 1977, Rose, as Seller, and Kenneth and Teri Benjamin (Benjamins),3
as Buyers, recorded a Notice of Purchaser’s Interest (NPI) as part of their transaction for
the contractual sale and purchase of Parcel 1. In pertinent part, the NPI stated:
WITNESSETH: That the Seller on the date hereof, entered into a written
agreement for the sale to the Buyers of the following described real property,
situated in the County of Missoula, State of Montana, to-wit:
A parcel of land located in the East ½ of Section 18, T. 15 N., R. 21 W.,
P.M.M., Missoula County, Montana . . . [Coordinates defining Parcel 1].
Subject to a 30 foot access easement being 15 feet each side of the following
described centerline; beginning at a point N.01°30’53” W., 63.02 feet from
the Southwest Corner of the above described parcel; thence S.76°17’07” W.,
54.60 feet; thence S.58°28’52” W., 1174.75 feet to an intersection with the
centerline of an existing U.S. Forest Service Road, according to the official
map or plat certificate of Survey No. 569, thereof on file and of record in the
office of the County Clerk and Recorder, Missoula County, Montana.4
. . .
That said agreement has been escrowed in the Western Montana National
Bank, of Missoula, Montana, together with a Warranty Deed from the Seller
to the Buyers. That said agreement requires payments to be made by the
Buyers in amortization of the balance due on the purchase price, and upon
3
The Benjamins are predecessors in interest to the Appellants.
4
The coordinates stated here are identical to those used in COS 569. They describe a road roughly
1,200 foot long, running in a southwesterly direction from a point near the southwest corner of
Parcel 1, in the location of the “Claimed Easement” as depicted on the maps herein.
5
payment in full of the purchase price, the said Western Montana National
Bank of Missoula, as the escrow agent, is instructed to deliver the said
Warranty Deed to the Buyers. A copy of said agreement may be obtained
from the Buyers at the above address.
(Emphasis added.) It is undisputed that the escrowed Warranty Deed referenced in the NPI
was never delivered to the Benjamins or recorded.
¶6 In December 1979, Benjamins recorded Certificate of Survey 2233 (COS 2233),
which reflected division of Parcel 1 into smaller parcels, Parcels A, B, and C. COS 2233
did not depict or describe the Claimed Easement, consistent with the statement on COS
648 that the Claimed Easement had been replaced. Instead, COS 2233 depicts Easements
A and C connecting the newly subdivided parcels to Houle Creek Road. On the same day,
deeds of easement were recorded wherein Rose granted those access easements to the
Benjamins for the benefit of Parcels A, B, and C. Parcel C was further subdivided by COS
2276 into Parcel C-1 and the remainder of Parcel C. By warranty deeds recorded in 1980
and 1984, Rose deeded Parcels A, B, C, and C-1 to the Benjamins. Each of these parcels
are now owned by an individual Appellant, and have access from Houle Creek Road by
the above-described easements, as indicated in the map below. Thus, the Claimed
Easement would provide additional access to these parcels.
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¶7 In January 2020, Rose filed this action to quiet title to and enjoin use of the Claimed
Easement by the Stanzak Appellants, to resolve the issue ahead of an intended sale of Rose
property to the Towsleys. Stanzak claimed an interest in the Claimed Easement based on
COS 569 and the 1977 NPI. Rose contended the 1977 NPI did not transfer the Claimed
Easement to the Appellants, and, alternatively, the subsequent adjustment of the easements
by COS 648 and COS 2233 extinguished the Claimed Easement. Following cross-motions
for summary judgment, the District Court ruled in favor of Rose, holding the 1977 NPI did
not constitute a valid instrument of conveyance, and therefore did not transfer any easement
7
rights to Stanzak. Accordingly, the District Court issued a decree quieting Rose’s title to
the Claimed Easement. Stanzak appeals.
STANDARD OF REVIEW
¶8 In accordance with M. R. Civ. P. 56, we review district court grants and denials of
summary judgment de novo. O’Keefe v. Mustang Ranches HOA, 2019 MT 179, ¶ 14, 396
Mont. 454, 446 P.3d 509. Summary judgment “should be rendered if the pleadings, the
discovery and disclosure materials on file, and any affidavits show that there is no genuine
issue as to any material fact and that the movant is entitled to judgment as a matter of law.”
M. R. Civ. P. 56(c)(3).
DISCUSSION
¶9 Did the District Court err by determining the Notice of Purchaser’s Interest did not
convey title to the easement at issue?
¶10 Stanzak argues that the 1977 NPI created and transferred to their predecessors an
easement by reference to COS 569 and the easement depicted therein, thus contending that
the NPI was itself an instrument of conveyance. Alternatively, Stanzak argues, premised
upon their reading of a sequence of recording statutes, the NPI was not itself an instrument
of conveyance but functioned as an abstract of an instrument of conveyance—the 1977
contract for deed.5 As such, they contend the NPI properly granted the Claimed Easement
to the Benjamins, Stanzak’s predecessors in interest.
5
Specifically, Stanzak sequences § 70-20-115(1), MCA (“purchaser under contract for deed” and
“abstract”), § 70-21-101, MCA (“instrument”), § 70-21-301, MCA (“conveyance”), § 70-21-201,
8
¶11 In response, Rose argues the 1977 NPI is not an instrument of conveyance because
it contained no “language of conveyance,” and therefore effectuated no transfer in title.
Rose argues the statutes cited by Stanzak neither define “instrument of conveyance” for
purposes of the incorporation-by-reference doctrine, nor encompass the application of that
doctrine. Lastly, Rose contends the easements granting access to all the existing parcels,
established by her subsequent deeding of those easements in reference to COS 648 and
COS 2233, effectively vacated the Claimed Easement.
¶12 “An easement is a nonpossessory interest in the land,” providing the holder a right
to use another’s property for a specified purpose. Blazer v. Wall, 2008 MT 145, ¶ 24, 343
Mont. 173, 183 P.3d 84. “Easements arise by express grant or reservation in a written
instrument of conveyance, written declaration of covenant, operation of law (implication
from necessity or prior use), or prescription.” O’Keefe, ¶ 16 (citing Blazer, ¶ 26). An
expressly granted appurtenant easement, as claimed here, requires the grantor to hold title
to both the dominant and servient estates, and the severance of those estates must be made
in “a written instrument of conveyance that is substantively sufficient to convey the severed
estate, grant or reserve the intended easement, identify the dominant and servient estates,
and indicate the nature and scope of the right reciprocally burdening and benefitting the
servient and dominant estates.” O’Keefe, ¶ 17; see also O’Keefe, ¶ 18 (non-possessory
et. seq., MCA (recording procedures), and § 70-21-305, MCA (effect of recording an “abstract of
conveyance”).
9
easements generally must include language sufficient to describe the “lesser interest
conveyed or reserved and effect the conveyance.”).
¶13 In the absence of language expressly granting an easement, an express easement
may nevertheless be established by a reference within “an instrument of conveyance to a
recorded plat or certificate of survey on which the easement is adequately described.”
Yorlum Props. v. Lincoln County, 2013 MT 298, ¶ 16, 372 Mont. 159, 311 P.3d 748(quoting Blazer, ¶ 41). Reference to a certificate of survey, subdivision plat, or attached
map incorporates that document in its entirety within the referencing instrument of
conveyance. O’Keefe, ¶ 18 (citing § 76-3-304, MCA). The instrument of conveyance and
the referenced document(s) “must be sufficient together to express clear and unambiguous
grantor intent to grant or reserve an easement in a manner that clearly and unambiguously
describes or otherwise manifests with reasonable certainty the intended dominant and
servient estates, use, and location of the easement.” O’Keefe, ¶ 18 (emphasis added).
Additionally, to constitute a valid conveyance, the instrument must, “(1) identify the
grantor and the grantee, (2) adequately describe what is being conveyed, (3) contain
language of conveyance, and (4) be signed.” Broadwater Dev., L.L.C. v. Nelson, 2009 MT
317, ¶ 27, 352 Mont. 401, 219 P.3d 492 (emphasis added); see also O’Keefe, ¶ 18. An
instrument lacking language of conveyance may nonetheless create an interest in an
easement if the instrument constitutes an abstract of a separate, valid instrument of
conveyance. Section 70-21-305, MCA (an abstract of a conveyance or encumbrance of
10
real property must be “acknowledged or proved and certified and recorded as prescribed
by law.”).
¶14 The dispute here arises from application of the latter two principles: whether the
1977 NPI contains the requisite language to itself constitute an instrument of conveyance
that referenced the Claimed Easement; or whether, alternatively, the NPI constitutes an
abstract of an instrument of conveyance of the Claimed Easement—that being the 1977
contract for deed that referenced the Claimed Easement. We conclude the NPI here fails
to convey the Claimed Easement under either principle.
¶15 We have explained that “language of conveyance” is language whereby an interest
in real property can be “created, granted, assigned, surrendered, or declared.” Broadwater
Dev., ¶ 31 (citing § 70-20-101, MCA). In Broadwater, we found that the phrase, “‘We the
undersigned property owners, hereby create this 60 foot emergency public access and
utility easement,’” constituted “language of conveyance” because the grantor’s “intent to
convey a property interest over their properties is clear and unmistakable.” Broadwater
Dev., ¶ 31 (emphasis added). We have also analyzed language of conveyance as the
language that effectuates the grantor’s intended purpose for that instrument; that is, in the
case of an easement, whether the instrument’s purpose expressly included an intention to
grant the easement. See O’Keefe, ¶¶ 18-20 (assessing whether a series of deeds and
referenced subdivision plats conveyed an intention by the grantor to create a common
roadway plan burdening each subdivision plot bordering a common roadway, even after
severance of the plots from the subdivision). In O’Keefe, deeds severing a pair of plots
11
from a subdivision referenced the subdivision plat with the phrase “subject to easement
and . . . reservation of record.” This Court deemed that language as an unambiguous
manifestation of the grantor’s intent to burden the severed lots with an easement benefitting
the remaining subdivision plots. O’Keefe, ¶¶ 20-21.
¶16 Turning to the 1977 NPI, we note preliminarily that the intent of the parties is to be
gleaned from the “four corners of the document.” Richman v. Gehring Ranch Corp., 2001
MT 293, ¶ 18, 307 Mont. 443, 37 P.3d 732. Here, there is no language in the NPI
establishing an intention by Rose to grant title to the Claimed Easement by way of that
document. The NPI does not “contain language of conveyance,” Broadwater Dev., ¶ 27,
or other language that would “effect the conveyance” of the easement. O’Keefe, ¶ 18. It
did not “create[], grant[], assign[], surrender[], or declare[]” a property interest,
Broadwater Dev., ¶ 27, or sever and “convey the severed estate.” O’Keefe, ¶ 17. Rather,
as set forth herein, the NPI explained that Rose and the Benjamins “entered into a written
agreement for the sale” of the property, with the ultimate transfer of the property by deed
conditioned upon completion of the contract (“. . . .upon payment in full of the purchase
price . . . the escrow agent, is instructed to deliver the said Warranty Deed to the Buyers.”).
Thus, by its language, the NPI merely provided notice of a potential grant of the property,
to be effectuated by deed upon future performance of the contract. While, as the District
Court noted, the NPI referenced the Claimed Easement described within COS 569, it did
not itself constitute an instrument of conveyance of that easement. Even if individual
words used in the property description were read as consistent with the language of
12
conveyance, it is clear from the four corners of the document that reference was being made
to a future conveyance of that interest, and was not effectuated by the NPI itself.
¶17 Stanzak alternatively argues the NPI nonetheless functioned as an instrument of
conveyance pursuant to § 70-21-305, MCA, because it is an abstract of an instrument of
conveyance, which they contend is the referenced contract for deed entered between Rose
and the Benjamins in 1977. Section 70-21-305, MCA, provides:
An abstract of a conveyance or encumbrance of real property, which abstract
is acknowledged or proved and certified and recorded as prescribed by law,
shall have the same effect for all purposes of this part as if the conveyance
or encumbrance of real property had been acknowledged or proved and
certified and recorded as prescribed by law.
(Emphasis added.) Under this provision, a recorded abstract must be an abstract of an
instrument of conveyance to effectuate the transfer of property.
¶18 We have recognized the general distinction between a warranty deed, which
immediately transfers a property interest, and an executory contract for sale and purchase
of property, which states conditions precedent to a transfer of property. Dobitz v. Oakland,
172 Mont. 126, 130, 561 P.2d 441, 443 (1977) (“legal title does not pass until the
conveyance is actually made”). “A contract for deed is, by definition, an executory
contract. It is an agreement by a seller to deliver the deed to property when certain
conditions have been met. . . .” Tungsten Holdings v. Olson, 2002 MT 158, ¶ 16, 310 Mont.
374, 50 P.3d 1086 (citing Dobitz, 172 Mont. 126, 561 P. 2d 441) (internal citation omitted).
This general distinction undermines a claim that a contract for deed, executory in nature,
13
conveyed a property interest, because it generally would not pass title before satisfaction
of the contract conditions and the recording of a deed.
¶19 It is upon this distinction that the doctrine of merger by deed is premised. Following
performance of the contract, and upon execution of a deed, the provisions of the contract
for sale merge into the deed and any non-collateral terms are extinguished. Urquhart v.
Teller, 1998 MT 119, ¶ 28, 288 Mont. 497, 958 P.2d 714. “Thus, when a deed has been
executed, the purchaser’s rights are generally found in the deed covenants, not the executed
contract.” Richman, ¶ 21 (citing Urquhart, ¶ 28). Consequently, the executory contract
for deed entered by the parties would not have served as the instrument of conveyance for
the transaction; conveyance would have occurred by way of the contracted warranty deed.
But here, that deed, transferring the Claimed Easement as provided in the contract, was
never recorded, and Stanzak’s predecessors did not obtain that property interest. Instead,
Rose subsequently delivered deeds conveying property interests by reference to COS 2233
and COS 2276, neither of which referenced the Claimed Easement. These deficiencies are
not overcome by Stanzak’s sequential statutory argument under the recording statutes. See
also Blakely v. Kelstrup, 218 Mont. 304, 305, 708 P.2d 253, 254 (“Recordation is a device
to establish priority, but has nothing to do with conveying title. The purpose of recording
instruments is to give notice to subsequent purchasers and encumbrancers. Unless it is the
intention of the parties that recording the deed passes title it does not do so.”).
¶20 Stanzak’s sole claim for title to the Claimed Easement is based on the NPI and its
reference to COS 569. However, neither the NPI, nor the abstracted contract for deed
14
effectuated title transfer. There was, therefore, no actual conveyance on which Stanzak
can base their claim.
¶21 Affirmed.
/S/ JIM RICE
We concur:
/S/ MIKE McGRATH
/S/ BETH BAKER
/S/ LAURIE McKINNON
/S/ JAMES JEREMIAH SHEA
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