Wayne Holtsclaw v. Darrell Johnson

IN THE COURT OF APPEALS OF TENNESSEE
AT KNOXVILLE
July 24, 2015 Session
WAYNE HOLTSCLAW ET AL. v. DARRELL JOHNSON ET AL.
Appeal from the Chancery Court for Carter County
No. 28411 John C. Rambo, Chancellor
No. E2015-00081-COA-R3-CV-FILED-SEPTEMBER 28, 2015
This is a dispute over a narrow strip of real property adjacent to the boundary line of
tracts of land owned by plaintiffs Wayne Holtsclaw and Willie Holtsclaw and defendants
Darrell Johnson and Brenda Johnson. The Holtsclaws brought this action seeking
ejectment and a declaration that they owned the disputed property. The Johnsons
asserted, among other things, that they were entitled to the property because of their
many years of adverse possession. The Holtsclaws responded by arguing that Tenn.
Code Ann. § 28-2-110 (2000 & Supp. 2015) bars the Johnsons‟ adverse possession claim
because, for more than twenty years, the Johnsons had not paid property taxes on the
disputed property. The Johnsons responded that the Supreme Court‟s opinion in
Cumulus Broadcasting, Inc. v. Shim, 226 S.W.3d 366, 381 (Tenn. 2007), which held
that § 28-2-110 is not applicable “when the tracts are contiguous, a relatively small area
is at issue, and the adjacent owners making claims of ownership have paid their
respective real estate taxes,” applied in this case. The trial court ruled that the Johnsons
established ownership by adverse possession and that the “Cumulus exception” applies.
We affirm.
Tenn. R. App. P. 3 Appeal as of Right; Judgment of the Chancery Court
Affirmed; Case Remanded
CHARLES D. SUSANO, JR., C.J., delivered the opinion of the Court, in which D. MICHAEL
SWINEY and JOHN W. MCCLARTY, JJ., joined.
Christopher D. Owens, Johnson City, Tennessee, for the appellants, Wayne Holtsclaw
and Willie Holtsclaw.
Arthur M. Fowler and Arthur M. Fowler, III, Johnson City, Tennessee, for the appellees,
Darrell Johnson and Brenda Johnson.
1
OPINION
I.
The Holtsclaws own a parcel of real estate approximately thirteen acres in size in
Carter County. The Johnsons own a tract of about eleven acres to the northwest of the
Holtsclaws. The boundary line, although disputed at trial, was held by the trial court to
be state Highway 143. The Doe River runs generally parallel to and just south of
Highway 143. The disputed property is a strip of land, roughly one and a half acres, that
lies between Highway 143 and the Doe River. The Johnsons claim that the boundary line
was marked by the Doe River. Alternatively, they claimed, as an affirmative defense,
that they and their predecessors in title had adversely possessed the disputed property
since 1940, and thus were entitled to it by operation of the common law doctrine of
adverse possession. At trial, a tax map with markers showing the general location of the
parties‟ properties and pertinent landmarks was introduced as Exhibit 29. As a visual aid,
we have reproduced Trial Exhibit 29 exactly as proffered and entered into evidence
below:1
1
The only difference between this reproduction and the original Exhibit 29 is that the
latter had certain boundary lines in color and the disputed property was highlighted in yellow.
2
After a non-jury trial, the trial court made extensive findings of fact, none of
which have been challenged by either party on appeal. Accordingly, we extensively cite
the court‟s memorandum opinion:
Mr. Holtsclaw asserts that, not only does his property go to
the south bank of Doe River, it incorporates Doe River and it
goes all the way to the state right-of-way for Highway 143.
Now, the Johnsons are on the other side of Highway 143.
That is their main tract of property. In response, they assert
that the Johnson family . . . has had this property since 1940.
Returning to what the Johnson family believe they own, of
course, there‟s no dispute that they owned all the way to
Highway 143, but they assert that their deeds bring them
across Highway 143 into the disputed property which lies
south of 143 and north of the banks of [the] Doe River. The
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acreage there, based on what the surveyors have told us, is
more or less an acre and a half.
* * *
The Court finds that the chain of title, the deeds, show that
the disputed property, by way of deed, is Holtsclaw property.
* * *
The Court finds that this case has to be decided based on
whether the Johnsons have adversely possessed the property.
Now, they certainly believe, and the Court finds, that . . . the
whole Johnson family, thought they owned this property to
the Doe River and they thought that their 1940 deed gave it to
them.
* * *
What is material is really the 20-year period, under the
common law, adverse possession prior to 2011, 1981 forward.
. . . The property, before Mr. Johnson made any effort in it,
was basically swamp-like. The level of the property was at or
near the river. It would flood frequently and it was
significantly below the grade of the road. It was of no
valuable purpose to anyone except when the river left its
banks it would wash out.
* * *
The Court finds the following facts: Mr. Darrell Johnson,
since at least 1980 ‒ and again, this is a fact that the Court
believes has been proven by clear and convincing evidence,
that since at least 1980, he has set about for a long period of
time, up to and through at least 2006, on a process of taking
essentially a worthless piece of property for any productive
use, except at one point a small portion of it was suitable for a
sawmill structure and then the storage of some logs and some
sawdust below the grade and also subject to the potential of
being washed out by the Doe River.
4
Mr. Johnson went about a process of filling that swamp area,
that low grade. It was not a minor project, it was a
significant, ongoing, open and notorious effort by him. At
least three to four hundred loads, dumptruck loads, of fill
were placed in this property. The Holtsclaws knew that.
They are long-time residents of Roan Mountain and they had
been by this property hundreds, if not thousands, of times
over the years and certainly scores upon scores during the
period when the fill was occurring.
What was their reaction to that? That is telling. They knew,
just like every other contractor in Roan Mountain, Newland,
and the area that had fill, that Mr. Johnson was the man to go
to to place fill in that area. That was community-known
knowledge. And these people, none of them ever went to Mr.
or Mrs. Holtsclaw and sought out and received permission.
Now, they did go to Mr. Johnson and Mr. Johnson never said,
“Well, you need to go see the Holtsclaws, that‟s not me;” he
held it out as his property. The evidence that he was holding
it out as his property was he was granting permission left and
right to different people to dump their fill there. He was
hiring people in the community, friends, neighbors, co-
workers to move the dirt on that. He did it.
Now, if the Holtsclaws truly believed that this was their
property, they certainly never brought it up to Mr. Johnson;
and they had reason to do so.
* * *
Now, there was no sawmill operation in the 20 years prior to
2011. There were vehicles, not just someone parking their
car, a residential car or pulling off on the side of the road; it
was a continuous location for bulldozers, dumptrucks, heavy
pieces of equipment that are of value; and they were there, the
Court so finds, essentially all the time. Everybody in Roan
Mountain knew that those were the Johnson vehicles, even
one vehicle had his name on it. No one questioned whether
that was Johnson vehicles and certainly the Holtsclaws didn‟t
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question if that was Johnson equipment. This was kind of a
base of operations in the disputed property for the Johnsons.
They had folks that are mechanics that worked for them. One
of the witnesses, he did maintenance and mechanical work,
worked on these trucks, right there within the disputed
property.
Now, was the fill that was going on [an] operation, where
they come in and move 500 loads of dirt within a month and
then fix it up and leave? No, this was something that went on
for well over 20 years but it was obvious to anybody that
drove by that this was going on and it was obvious to Mr. and
Mrs. Holtsclaw.
* * *
Now, what does all that mean, especially when you talk about
who was paying the taxes on it? The Johnson family believed
they owned this property because of their deed from 1940.
They‟re not attorneys, and they were wrong in their belief,
but they were not wrong in their integrity, or believing the
truthfulness, that this was their property. They had some
language that they hung their hat on; they just made a
mistake. But they thought it was their property.
This gave them no reason to go down to the assessor of
property and look at tax maps. This is not a piece of property
on down the road that they‟ve been using and they didn‟t pay
their taxes on it. They had no reason to believe that they were
using a separate tract of property that carries its own separate
taxes that need to be paid.
The tax records, of course, are imprecise. Even in this case
we learned from the Assessor of Property that he had to
modify the acreage on the applicable parcels from time to
time simply because the acreage amounts were wrong. So
neither Mr. Holtsclaw [n]or the Johnson family were relying
on the tax cards to determine where their property was. The
Johnsons thought they were paying taxes on it and the
Holtsclaws thought that they were paying taxes on it.
6
This is simply not a situation where a piece of property was
being used and the person who was using it had no intention
of fulfilling their citizen‟s duty to pay their real property
taxes. That‟s why we have [Tenn. Code Ann. § 28-2-110]
that you have to pay the taxes or you can‟t claim adverse
possession. You don‟t get to use it free of charge and not pay
your taxes. They thought they were paying their taxes on a
small piece of the overall tract that they owned. These are
two competing tracts that are essentially adjacent. There are
state highways, county roads, right-of-ways that split parcels
in Carter County and probably every county in the State of
Tennessee. That is not helpful in deciding this case, the fact
that there is a state road that traverses the property.
* * *
The Court finds that Mr. Johnson‟s testimony is credible and
is true. The property is improved. There‟s three to four
hundred loads. That‟s an expensive process, to fill. It was
swamp property and now ‒ it was swamp property at river
level; now it is road frontage at road level.
There was no boundary dispute in this case. Both property
owners, certainly the Johnsons, believed that they owned it.
This is not a case where there was an adversarial relationship,
but an adversarial relationship is not required for advers[e]
possession. It just means that Mr. Johnson and his father held
this property out to everybody in Roan Mountain that it was
theirs, to the exclusion of others. It was open and notorious.
Everybody knew whose equipment was on that property.
Everybody knew that it was the Johnsons or their agents, their
employees, that was moving dirt and filling the dirt, and they
were doing this at least since 1980, and they were certainly
claiming it against the world since 1940.
* * *
Now, the Johnsons‟ mistake in their reliance on their deeds, a
mistake that they‟ve had since 1940, does not make their
possession something other than adverse. It was still adverse.
That does not control. This property was used by the
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Johnsons, and the Holtsclaws had constructive knowledge of
it the entire time it was being filled because what they were
doing was open and notorious. All you had to do was go to
the Roan Mountain State Park and the people who traversed
that highway, they knew it. And if all of them knew it, the
Court finds that the Holtsclaws had to have known it, too,
because it was so open and notorious that presumption is
established clearly and convincingly to the Court.
They have possessed it exclusively, no one else was using this
property, continuously, the moving was for years, the
equipment, it was there for over – almost 30 years if not
longer[.]
So the Court finds that by common law adverse possession
that the Johnsons have proven clearly and convincingly that
they have used this property to the exclusion of all others.
The Holtsclaws were never even on the property since 1980;
there was no proof or evidence of that that convinced the
Court otherwise.
The Johnsons have adversely possessed all of that property
that is to the north of the north bank of the Doe River to
Highway 143, which is approximately 600 feet more or less.
The Holtsclaws filed a motion to alter or amend, arguing that (1) it was undisputed
that the Johnsons had not paid taxes on the disputed property for more than 20 years; (2)
“the Cumulus exception to T.C.A. § 28-2-110 does not apply to the specific facts in this
case because the disputed property does not qualify as a „slight overlap‟ and because the
disputed property was a separately conveyed tract of land;” and (3) therefore the
Johnsons should be barred from asserting a claim of title by adverse possession. The trial
court denied the motion, saying:
Cumulus stands for the proposition that 28-2-110 is not a
complete bar. As the Supreme Court stated in Cumulus,
Tennessee Code Annotated Section 28-2-110, “should not
serve as a bar to a claim of adverse possession when the tracts
are contiguous, a relatively small area is at issue, and the
adjacent owner that is making claim of ownership has paid
his respective real estate taxes. To hold otherwise would
effectively eliminate that adverse possession of any part of an
8
adjoining tract.” . . . [T]his one and a half acres, which was
the property in dispute, constituted a relatively small area of
the undisputed property. Essentially it‟s somewhere between
three and a half to five percent of the overall property
between the two adjacent tracts. . . . The Court found that the
properties were adjacent. The parties had stipulated they had
paid their respective real property taxes.
Now the issue is even more focused as it has been raised in
the Motion to Alter or Amend or set aside [t]he Court‟s
Judgment. [The Holtsclaws‟ argument] is that the disputed
property, based on the time of acquisition in 1963 was a
separate tract, and that it should stand on its own. It is
separate from the adjacent Holtsclaw property and the
adjacent Johnson property. . . .[A]s [t]he Court has previously
held, by [d]eed this middle tract of one and a half acres, by
[d]eed, was Holtsclaw property. . . . Cumulus and subsequent
cases have yet to hold that adjacent property is considered
separate tracts if they were acquired at different times. Prior
to the beginning of adverse possession by Johnson, all the
Holtsclaw property had been acquired. The . . . assessment
by Carter County did not assess at any time for three tracts.
They assessed for two tracts. . . . So the public records
indicate that this, as far as Carter County is concerned, they
taxed not three but two tracts of property regardless of the
date of acquisition of the Holtsclaws. So all of the Holtsclaw
property in Carter County, for tax purposes, of which 28-2-
110 is designed to make sure that these taxes are collected,
includes all Holtsclaw property together regardless of when it
was acquired . . . . [W]hen the adverse possession began the
records of Carter County were that these were two tracts that
were contiguous. And if they are, and [t]he Court so finds
that they were two contiguous tracts, this acre and a half was
a relatively small area of those two tracts, somewhere
between three and five percent. The parties had stipulated
that both sides had paid their taxes on the two tracts. For tax
purposes, and that is the purpose of 28-2-110, there was no
third tract. Now, Carter County‟s tax records, not unlike
other counties in upper East Tennessee and mountainous
property, the acreage varies, the boundary lines are not
always accurate on those tax cards and tax maps. But there
9
was never . . . three parcels and three tax cards. It was two
properties regardless of when the Holtsclaws acquired their
property. It was never treated as three and the acre and a half
was never, in the public records, a separate tract. Therefore
[t]he Court ultimately finds that [the] Cumulus exception for
adverse possession when the properties are two tracts
between neighbors involving a relatively small area with
competing claims of ownership, and both respective real
property taxes have been paid by the competing owners, 28-
2-110 does not serve as a bar to eliminate the adverse
possession claim of part of the adjoining tract.
The Holtsclaws timely filed a notice of appeal.
II.
The issue on appeal is whether the trial court erred in holding that the exception to
Tenn. Code Ann. § 28-2-110 recognized by the Supreme Court in Cumulus Broad., Inc.
v. Shim, 226 S.W.3d 366, 381 (Tenn. 2007), applies in this case, and therefore that the
Johnsons established their claim of adverse possession of the disputed property.
III.
“Our review of this judgment entered after a bench trial is de novo upon the record
with a presumption of correctness as to the trial court‟s findings of fact.” Heaton v.
Steffen, No. E2008-01564-COA-R3-CV, 2009 WL 2633050, at *5 (Tenn. Ct. App. E.S.,
filed Aug. 27, 2009) (citing Tenn. R. App. P. 13(d)). “A trial court‟s conclusions of law
are subject to a de novo review with no presumption of correctness.” Dye v. Waldo, No.
E2012-01433-COA-R3-CV, 2013 WL 718780, at *4 (Tenn. Ct. App. E.S., filed Feb. 26,
2013).
IV.
Regarding the common law doctrine of adverse possession, the Supreme Court in
Cumulus set forth the pertinent governing principles, stating as follows:
The doctrine of adverse possession is often described as a
limitation on the recovery of real property; the limitation
period may operate not only as a bar to recover adversely
possessed property but it may also vest the adverse holder
with title. Generally, acquisition by adverse possession for
10
the requisite period of time, whether statutory or under
common law, must be (a) actual and exclusive; (b) open,
visible, and notorious; (c) continuous and peaceable; and (d)
hostile and adverse. The adverse possession of real estate is
not only inconsistent with the right of the title holder but may,
when all elements of the doctrine are present, create an actual
ownership interest.
* * *
In our state, common law adverse possession rests upon the
proposition “that, where one has remained in uninterrupted
and continuous possession of land for 20 years, a grant or
deed will be presumed.” Color (or assurance) of title is not
required. In order to establish adverse possession under this
theory, or in any statutorily based claim, the possession must
have been exclusive, actual, adverse, continuous, open, and
notorious for the requisite period of time. Adverse possession
is, of course, a question of fact. The burden of proof is on the
individual claiming ownership by adverse possession and the
quality of the evidence must be clear and convincing. The
actual owner must either have knowledge of the adverse
possession, or the possession must be so open and notorious
to imply a presumption of that fact. When an adverse
possessor holds the land for a period of twenty years, even
absent any assurance or color of title, the title vests in that
possessor.
236 S.W.3d at 375, 375-77 (internal citations omitted).
In this case, the trial court recognized and correctly applied these principles. As
already stated, the Holtsclaws have not challenged any of the trial court‟s factual
findings. Consequently, the Johnsons have established the factual basis for their claim of
common law adverse possession; namely, that their possession of the disputed property
was exclusive, actual, adverse, continuous, open, and notorious for over twenty years,
and further, that the Holtsclaws sat idly by while the Johnsons spent considerable effort
and resources for thirty years to improve the disputed property from essentially useless
swampland at river level to useable land at road level.
The issue presented here is one of law: whether Tenn. Code Ann. § 28-2-110 bars
the Johnsons‟ adverse possession claim. That statute provides in pertinent part:
11
Any person having any claim to real estate . . . the same
having been subject to assessment for state and county taxes,
who . . . ha[s] failed to have the same assessed and to pay any
state and county taxes thereon for a period of more than
twenty (20) years, shall be forever barred from bringing any
action in law or in equity to recover the same[.]
Tenn. Code Ann. § 28-2-110.
In Cumulus, the Court set forth an exception to section 28-2-110, stating in
pertinent part as follows:
Because tax maps are for the purpose of showing the plats
upon which parties have paid taxes rather than establishing
boundaries, a “slight overlap” would rarely have any effect on
an evaluation for tax purposes. Tennessee Code Annotated
section 28–2–110 was enacted in order to facilitate the
collection of property taxes based upon property evaluations.
. . . [S]ection 28–2–110 should not serve as a bar to a claim
of adverse possession when the tracts are contiguous, a
relatively small area is at issue, and the adjacent owners
making claims of ownership have paid their respective real
estate taxes. To hold otherwise would effectively eliminate
the adverse possession of any part of an adjoining tract. As a
matter of policy, possession of property for twenty or more
years, accompanied by all other elements of the doctrine, is a
basis for ownership.
236 S.W.3d at 381 (emphasis added; footnote and internal citation omitted).
Since Cumulus was decided in 2007, this Court has had several occasions to
consider the applicability of the exception. In Quarles v. Smith, No. W2009-00514-
COA-R3-CV, 2010 WL 653011, at *6 (Tenn. Ct. App. W.S., filed Feb. 24, 2010), we
found that the adverse possessor established the three elements of the exception, (1)
contiguous tracts, (2) “relatively small” disputed area, and (3) payment of taxes by the
contestants on their respective tracts, stating that “we find that the fourteen-acre disputed
property is „relatively small‟ as compared to the over 150 acres of undisputed property
owned by the parties.” In Sweeney v. Koehler, No. E2009-02306-COA-R3-CV, 2010
WL 4962888, at *4 (Tenn. Ct. App. E.S., filed Dec. 10, 2010), we stated:
12
The Sweeneys dispute the trial court‟s finding that 4.26 acres
amounts to “a relatively small area.” Although the Supreme
Court in Cumulus [did not] clarify what constitutes a “slight
overlap” or a “relatively small area,” Tennessee case law after
the Cumulus decision has helped to define this factor. In
Quarles v. Smith, for example, this court determined a 14–
acre disputed property to be “relatively small” compared to
the approximately 150 acres of undisputed property owned by
the parties. The disputed area in Quarles constituted about 9.3
percent of the total land. The 4.26 acres disputed by the
Sweeneys and Koehlers represents about 9.2 percent of their
collective acreage. We therefore find that the evidence
presented at trial does not preponderate against the trial
court‟s finding that the disputed land at issue is relatively
small.
(Internal citation omitted.)
This Court has also held the Cumulus exception inapplicable under certain
circumstances, most often when we have concluded that the disputed area was not
“relatively small.” See Gault v. Janoyan, No. E2014-00218-COA-R3-CV, 2014 WL
5492747, at *4 (Tenn. Ct. App. E.S., filed Oct. 30, 2014) (finding disputed area not
“relatively small” where the total acreage owned by both parties was “less than 2 acres in
all ‒ in a platted residential neighborhood”); Dye, 2013 WL 718780, at *5 (holding not a
“slight overlap” where plaintiff asserting adverse possession “is claiming double the
acreage assessed to her for tax purposes and contained in her deed”); Cass Rye & Assoc.
v. Coleman, No. M2011-01738-COA-R3-CV, 2012 WL 4044862, at *8 (Tenn. Ct. App.
M.S., filed Sept. 13, 2012) (“Unlike the dispute in Cumulus Broadcasting, the fifteen
acre tract at issue in this case is not an area which overlaps two adjoining properties; it is
a separately conveyed parcel distinctly assessed for tax purposes”); Heaton, 2009 WL
2633050, at *7 (distinguishing Cumulus where “[t]he Disputed area constitutes
approximately ½ of the property the defendant claimed and a significant portion of the
land the plaintiff claimed”).
In the present case, the Holtsclaws do not argue that the trial court incorrectly
found that the disputed area, about one and a half acres and “somewhere between three
and a half to five percent of the overall property between the two adjacent tracts,” was a
relatively small overlap. They argue that because the disputed property was apparently
once deeded to their predecessors in title as a “separate” tract, before the period of
adverse possession began, Cumulus should not apply. We agree with the trial court‟s
analysis of this issue, however. There was no showing that the disputed area was ever
13
treated as a separate and distinct tract for tax assessment purposes; on the tax maps
entered into evidence, it was included as part of the Holtsclaws‟ tract. Nor did the trial
court find any evidence that anyone considered the disputed property to be a separate and
distinct tract, for tax purposes or otherwise, at any time pertinent to this appeal. The
Johnsons mistakenly, but as the trial court found, in good faith, believed it was part of
their tract; and the Holtsclaws, when they finally looked into title after many years of
watching the Johnsons improve it, concluded that it was a part of their tract. The
Cumulus “contiguous tract” element has thus been established under these
circumstances.
Secondly, the Holtsclaws argue that, because the actual boundary line was
determined to be state Highway 143, a readily identifiable landmark, Cumulus should not
apply. They do not cite any authority for this proposed exception to the Cumulus rule,
however, and this Court is generally disinclined to create such an exception to the
principles clearly espoused in a Supreme Court opinion. The public right-of-way for a
roadway does not render the Holtsclaw and Johnson tracts non-contiguous. As the trial
court found, both the Holtsclaws and the Johnsons paid property taxes on their respective
parcels, and both thought they were paying taxes on the disputed strip of property
between Highway 143 and the Doe River. We affirm the trial court‟s ruling that because
“the tracts are contiguous, a relatively small area is at issue, and the adjacent owners
making claims of ownership have paid their respective real estate taxes,” Cumulus, 236
S.W.3d at 381, Tenn. Code Ann. § 28-2-110 does not apply.
V.
The judgment of the trial court that the Johnsons established their claim of adverse
possession is affirmed. Costs on appeal are assessed to the appellants, Wayne Holtsclaw
and Willie Holtsclaw. This case is remanded to the trial court for enforcement of its
judgment and for collection of costs assessed below.
_____________________________________
CHARLES D. SUSANO, JR., CHIEF JUDGE
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