Reed v. Bartlett Twp.

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Docket Number

A12-1569

Attorney(S)

Thomas H. Sellnow, Sellnow Law Office, P.A., Long Prairie, Minnesota; and Andrew M. Shaw, Shaw & Shaw, P.A., Deer River, Minnesota (for appellant) Samuel S. Rufer, Pemberton, Sorlie, Rufer & Kershner, P.L.L.P., Detroit Lakes, Minnesota (for respondents)

Judges

Michael L. Kirk

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Smart Summary

Factual and Procedural Background

In 1911, Bartlett Township and Germania Township received a petition to establish a new road along the town line. After a public hearing, both townships signed orders establishing the road, with the supervisors' road order designating the road width as four rods (66 feet), while the final road order did not specify a width. The final road order was recorded by a town clerk and filed with the Todd County auditor.

Between 1962 and 1968, appellant Raymond L. Reed acquired an ownership interest in land adjacent to this road, which was recognized as a public road, though the full four-rod right-of-way was not visibly apparent. In 1987, Germania Township recorded the 1911 supervisors' road order after passing a resolution to record all town roads.

In 2011, a landowner requested improvements to the road. The townships held a public meeting, where Reed, represented by counsel, argued that the townships may not hold the full four-rod right-of-way and that improvements should be limited to the road's current location. Despite this, the townships resolved that they had a full four-rod right-of-way and proceeded with improvements. Reed appealed this determination to the district court.

Both parties moved for summary judgment. On July 12, 2012, the district court granted summary judgment in favor of the townships and denied Reed's motion. Reed appealed this decision.

Legal Issues Presented

Whether the respondents' road was established by prescriptive-use dedication or by compliance with statutory road establishment procedures.
Whether the respondents established the possession exception to the Marketable Title Act (MTA), allowing them to maintain their interest despite failure to record under the MTA.
Whether appellant Reed qualifies as a purchaser in good faith under the Minnesota Recording Act, impacting the validity of the respondents’ asserted interest.

Arguments of the Parties

Appellant's Arguments

The road was not properly established because the townships failed to record the final road order with the county recorder as required by the current statute, thus the road should be treated as established by statutory prescriptive-use dedication limited to its actual use width.
The possession exception to the Marketable Title Act does not apply to the full four-rod width because the townships did not record documentation establishing their interest, and no inquiry would reveal a right-of-way wider than two rods.
Reed is a purchaser in good faith entitled to protection under the Minnesota Recording Act because the townships failed to record their interest prior to his acquisition and recording of his land interest.

Respondents' Arguments

The townships properly established the road in 1911 by complying with the applicable statutory requirements at that time, thus the road was validly established and not subject to the prescriptive-use dedication limitation.
The possession exception to the Marketable Title Act applies because the townships’ continuous use of the road was sufficient to put a prudent person on notice of their interest, and reasonable inquiry would have revealed the road’s four-rod width.
Reed is not a purchaser in good faith because he had knowledge of the road’s existence and the townships’ interest, placing him on inquiry notice under the Recording Act, thereby voiding his claim to protection as a good faith purchaser.

Table of Precedents Cited

Precedent	Rule or Principle Cited For	Application by the Court
Sphere Drake Ins. Co. v. Tremco, Inc., 513 N.W.2d 473 (Minn. App. 1994)	Standard for granting summary judgment: no genuine issue of material fact and entitlement to judgment as a matter of law.	Applied to confirm summary judgment was proper as no genuine dispute of material fact existed.
STAR Ctrs., Inc. v. Faegre & Benson, L.L.P., 644 N.W.2d 72 (Minn. 2002)	Standard of review on appeal from summary judgment: de novo review of legal issues and genuine issues of fact.	Applied to frame appellate review of the district court’s summary judgment decision.
Fabio v. Bellomo, 504 N.W.2d 758 (Minn. 1993)	Viewing evidence in the light most favorable to the non-moving party on summary judgment.	Applied to ensure proper evidentiary perspective on appeal.
Twp. of Sterling v. Griffin, 309 Minn. 230, 244 N.W.2d 129 (1976)	Requirement that a town road order be recorded with the county recorder; use of possession as notice under the Marketable Title Act.	Used to establish statutory requirements for road establishment and the application of possession exception.
Twp. of Villard v. Hoting, 442 N.W.2d 826 (Minn. App. 1989)	Definition and effect of common law dedication; possession exception to Marketable Title Act.	Referenced to explain common law dedication and possession exception applicability.
Sampair v. Village of Birchwood, 784 N.W.2d 65 (Minn. 2010)	Use sufficient to put a prudent person on notice for possession exception under Marketable Title Act.	Applied to determine sufficiency of township’s use to invoke possession exception.
Claflin v. Commercial State Bank of Two Harbors, 487 N.W.2d 242 (Minn. App. 1992)	Actual possession as notice to the world of rights and title; knowledge of easement as factor in possession.	Used to support that possession places others on inquiry notice under the Recording Act.

Court's Reasoning and Analysis

The court first examined whether the road was properly established. It found that the townships complied with the 1911 statutory requirements for establishing a town road, including filing and recording the final road order with the town clerk and county auditor, even though the order did not specify the width. The supervisors' road order, designating the road width as four rods, was also recorded later. Therefore, the court rejected the appellant’s argument that the road was established by statutory prescriptive-use dedication limited to actual use width.

Regarding the Marketable Title Act, the court acknowledged that the townships failed to comply with the MTA’s recording requirements, which would normally trigger a presumption of abandonment of the interest. However, the court held that the possession exception applied because the townships’ continuous use of the road was sufficient to put a prudent person on notice of their interest. Additionally, reasonable inquiry would have revealed documentation of the four-rod width in Bartlett Township’s records, undermining Reed’s contention that no such evidence was available.

Finally, under the Minnesota Recording Act, the court found that Reed was not a purchaser in good faith because he had knowledge of the road’s existence and the townships’ interest at the time he acquired his land. This knowledge imposed a duty to inquire, and the township records would have disclosed the road’s width. Consequently, the townships’ interest was not void as against Reed.

Holding and Implications

The court affirmed the district court’s grant of summary judgment in favor of the townships.

The direct effect of this decision is that the townships’ establishment of the road was valid under the applicable statutes, the possession exception to the Marketable Title Act applies, and the appellant is not a purchaser in good faith entitled to protection under the Recording Act. The opinion does not establish new precedent beyond applying existing statutory and case law principles to the facts of this dispute.

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Raymond L. Reed, Appellant, v. Bartlett Township, Todd County, Minnesota, et al., Respondents.

KIRK.

This opinion will be unpublished and may not be cited except as provided by Minn. Stat. § 480A.08, subd. 3 (2012).
Affirmed
Kirk, Judge
Todd County District Court
File No. 77-CV-11-911

Thomas H. Sellnow, Sellnow Law Office, P.A., Long Prairie, Minnesota; and Andrew M. Shaw, Shaw & Shaw, P.A., Deer River, Minnesota (for appellant) Samuel S. Rufer, Pemberton, Sorlie, Rufer & Kershner, P.L.L.P., Detroit Lakes, Minnesota (for respondents)

Considered and decided by Kirk, Presiding Judge; Stoneburner, Judge; and Hudson, Judge.

UNPUBLISHED OPINION

KIRK , Judge

Appellant-landowner challenges the district court's grant of summary judgment in favor of respondents-townships, arguing that the district court erroneously concluded that (1) respondents' road was not established by prescriptive-use dedication, (2) respondents established the possession exception to the Marketable Title Act, and (3) appellant is not a purchaser in good faith of the disputed land. We affirm.

FACTS

In 1911, respondents Bartlett Township and Germania Township (the townships) received a duly filed petition for a new road on the town line. Following a public hearing, the townships signed a "Final Road Order of Town Board" and a "Supervisors' Road Order," establishing the proposed road. The two orders are nearly identical, and both provide a space to designate the width of the new road. The supervisors' road order designates the road as four rods wide. But the final road order fails to designate a width. The final road order was recorded by a town clerk and filed by the Todd County auditor on June 19, 1911.

A rod is a unit of length equal to 16.5 feet. Four rods is 66 feet.

The record does not establish whether the final order was recorded by the town clerk of Bartlett Township or Germania Township.

Between 1962 and 1968, appellant Raymond L. Reed acquired an ownership interest in land adjacent to this road. At the time, the road was clearly a public road, but no road right-of-way use to the full extent of four rods was apparent.

In 1996, Reed conveyed a portion of his interest to other parties.

In 1987, after Germania Township passed a resolution to record all of its town roads, the Todd County Recorder filed the 1911 supervisors' road order. This order was obtained by the Bartlett Township Clerk from Book 3 (1905-1923) of Bartlett Township Road Order.

In 2011, a landowner asked the townships "to improve the [road] to make it more passable and safer for those who rely on it to access their properties." The townships held a public meeting on August 3, 2011. Reed attended with counsel and suggested that the townships "may not have the full [four-rod] right-of-way," and thus the road "should [only] be improved to its present location." Despite Reed's arguments, the townships concluded that they had "a full [four-rod] wide right-of-way easement" and adopted a joint resolution to cut and remove trees along a portion of the road within the alleged easement. After receiving notice of this determination, Reed appealed the townships' determination to the district court. Both parties moved for summary judgment. On July 12, 2012, the district court granted the townships' motion and denied Reed's motion for summary judgment. This appeal followed.

DECISION

Summary judgment shall be granted when "the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that either party is entitled to a judgment as a matter of law." Minn. R. Civ. P. 56.03. Mere averments set forth in the pleadings are insufficient to defeat a motion for summary judgment. Minn. R. Civ. P. 56.05. Rather, a party opposing summary judgment "must demonstrate that there are specific fact issues in existence which create a genuine issue for trial." Sphere Drake Ins. Co. v. Tremco, Inc., 513 N.W.2d 473, 477 (Minn. App. 1994), review denied (Minn. Apr. 28, 1994).

On appeal from summary judgment, we review de novo whether there are any genuine issues of material fact and whether the district court erred in its application of the law. STAR Ctrs., Inc. v. Faegre & Benson, L.L.P., 644 N.W.2d 72, 77 (Minn. 2002). In doing so, we view the evidence in the light most favorable to the party against whom summary judgment was granted. Fabio v. Bellomo, 504 N.W.2d 758, 761 (Minn. 1993).

I. Establishment.

Under Minnesota law, land may be established as a public road in multiple ways. First, upon receipt of a qualified petition, a town board may establish a new road. In 1911, the applicable statute required an order establishing a town road to be filed with and recorded by the town clerk, and filed with the county auditor. Minn. Rev. Laws § 1176 (1905). Since 1973, the statute, now numbered section 164.07, has also required the order to be recorded with the county recorder or registrar of titles. Minn. Stat. § 164.07, subd. 11 (2012) (amended 1973); Twp. of Sterling v. Griffin, 309 Minn. 230, 233-34, 244 N.W.2d 129, 132 (1976). Second, a road may be established by statutory prescriptive-use dedication:

The 1905 codification of Minnesota's statutes was known as the Revised Laws of Minnesota and "was the first codification of Minnesota's statutes since 1894 and the first official complete revision since 1866." Molde v. CitiMortgage, Inc., 781 N.W.2d 36, 40 (Minn. App. 2010).

When any road or portion of a road has been used and kept in repair and worked for at least six years continuously as a public highway by a road authority, it shall be deemed dedicated to the public to the width of the actual use and be and remain, until lawfully vacated, a public highway whether it has ever been established as a public highway or not.

Minn. Stat. § 160.05, subd. 1 (2012). Third, a road may be established by common law dedication when a landowner intends (expressly or by implication) "to have his land appropriated and devoted to a public use," and the public accepts that use. Twp. of Villard v. Hoting, 442 N.W.2d 826, 828 (Minn. App. 1989). A common law dedication is "instantly effective and irrevocable." Id.

Reed does not dispute that, in establishing the road, the townships complied with the requirements of Minn. Rev. Laws §§ 1171-85 (1905 & Supp. 1909). But he argues that because the townships did not record the order with the county recorder, as Minn. Stat. § 164.07 now requires, the road was in fact established by statutory prescriptive-use dedication and is thus subject to the provisions of Minn. Stat. § 160.05. Therefore, Reed asserts, the road at issue is limited "to the width of the actual use." See Minn. Stat. § 160.05, subd. 1. But because the town boards complied with the applicable statute, they successfully established the road at issue and Minn. Stat. § 160.05 is not applicable.

The parties do not raise the possibility of common law dedication.

II. Marketable Title Act.

The Marketable Title Act (MTA) provides:

As against a claim of title based upon a source of title, which source has then been of record at least 40 years, no action affecting the possession or title of any real estate shall be commenced . . . to enforce any right, claim, interest, incumbrance, or lien founded upon any instrument, event or transaction which was executed or occurred more than 40 years prior to the commencement of such action, unless within 40 years after such execution or occurrence there has been recorded in the office of the county recorder in the county in which the real estate affected is situated, a notice . . . setting forth the name of the claimant, a description of the real estate affected and of the instrument, event or transaction on which such claim is founded, and stating whether the right, claim, interest, incumbrance, or lien is mature or immature.

Minn. Stat. § 541.023, subd. 1 (2012). Subject to certain exceptions, including possession, any potential claimant who has not filed the statutorily prescribed notice within 40 years of the creation of its interest "shall be conclusively presumed to have abandoned" any interest it might have had in the property. Minn. Stat. § 541.023, subds. 5, 6 (2012).

Pursuant to the MTA, "a township must comply with the requirement that it record properly its possessory interest in a public road within 40 years of the road's establishment or it will be presumed to have abandoned its right to the road." Twp. of Villard, 442 N.W.2d at 829. Here, it is undisputed that the townships did not comply with the recording procedures of the MTA. Thus, the "MTA's presumption of abandonment applies unless the 'possession' exception of the Act, subdivision 6, can be invoked." Id.

To invoke the possession exception, the townships must prove "use sufficient to put a prudent person on notice of the asserted interest in the land, giving due regard to" the fact that the interest at issue is a town road rather than a private easement. Sampair v. Village of Birchwood, 784 N.W.2d 65, 70 (Minn. 2010). In other words, the use must "put a prudent person on inquiry." Id. (quotation omitted); see also Sterling, 309 Minn. at 238, 244 N.W.2d at 134. "Actual possession of real property is notice to all the world of the title and rights of the person so in possession and also of all facts connected therewith which reasonable inquiry would have developed." Claflin v. Commercial State Bank of Two Harbors, 487 N.W.2d 242, 248 (Minn. App. 1992), review denied (Minn. Aug. 4, 1992). "[K]nowledge of the existence of the easement is a factor to be considered in determining possession." Sterling, 309 Minn. at 238, 244 N.W.2d at 134.

Reed concedes that the townships possess the less-than-four-rod-wide tract of land currently in use as a public road. But he argues that because "no documentation has been made of record establishing an interest in favor of [Bartlett Township]," the possession exception does not encompass the full width of the original easement. But Reed misconstrues the record. Although the townships' failure to record the order with the county recorder did not comply with the recording procedures of the MTA, documentation was made of record when the road was established in 1911. A copy of the supervisors' road order, which states the width of the road as four rods, is contained in Book 3 (1905-1923) of Bartlett Township Road Order; at a minimum, this document is available through the Bartlett Township Clerk. Thus, Reed incorrectly asserts that Bartlett Township did not have documentation establishing the width of the road and "there is nothing an inquiry into the facts . . . would have revealed demonstrating a [two-rod] right of way in Bartlett Township." Rather, a reasonable inquiry would have developed the fact that the townships established a road four rods in width.

At oral argument, Reed's counsel argued that it would have been futile for Reed to search the Bartlett Township records because, in general, town records are not organized. But because Reed failed to make any inquiry, the record contains no evidence to support this assertion. To the contrary, the record demonstrates that, in 1987, Germania Township successfully obtained the order from Bartlett Township.

It is undisputed that half of the alleged four-rod road is in Germania Township and half in Bartlett Township, thus the width of two rods in one township.
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Because the townships proved use sufficient to put a prudent person on notice, and a reasonable inquiry would have established the road's width, the townships are entitled to invoke the possession exception to the MTA and Reed is not entitled to relief on this ground.

III. Recording Act.

Under the Minnesota Recording Act,

Every conveyance of real estate shall be recorded in the office of the county recorder of the county where such real estate is situated; and every such conveyance not so recorded shall be void as against any subsequent purchaser in good faith and for a valuable consideration of the same real estate, or any part thereof, whose conveyance is first duly recorded . . . .

Minn. Stat. § 507.34 (2012). One is not a purchaser in good faith, and thus is not entitled to the protection of the recording act, "if one had knowledge of facts which ought to have put one on an inquiry that would have led to knowledge of a conveyance." Claflin, 487 N.W.2d at 248.

It is undisputed that the townships did not record their asserted land interest with the office of the county recorder before Reed acquired and properly recorded his land interest. Thus, the townships' interest is void as against Reed if Reed is a purchaser in good faith. See Minn. Stat. § 507.34. But, as discussed in section II, supra, Reed had knowledge of the road's existence when he purchased his interest in the land, thereby putting him on inquiry notice. And the records of Bartlett Township reflected the road's width of four rods. Thus, the district court correctly concluded that Reed is not a purchaser in good faith and he is not entitled to relief on this ground.

Affirmed.