Saturday, August 30, 2014

Technical Tolling Trouble

Mahoney v. Tara, LLC, 2014 VT 90

By Andrew Delaney

As Yogi Berra is rumored to have said, this case is “like déjà vu all over again.”

Back in 2011, the SCOV sent this case back to the trial court for factual development. Plaintiffs’ family had been renting a lakeside property since 1949 and bought it in 1979. From 1958 until 2006 Vermont Catholic Charities (VCC) owned the adjacent lot. In 2006 defendant Tara LLC bought the VCC lot. When Tara decided to subdivide its lot, it included a survey that purported to cut plaintiffs’ beach in half.

Plaintiffs filed to quiet title in late 2007, arguing that they had adversely possessed the at-issue land, and defendant moved to dismiss in early 2008, arguing that the statutory-based charitable-use exemption to adverse possession applied while VCC owned the property, so plaintiffs couldn’t adversely possess the property. The trial court granted the motion and plaintiffs appealed. You know how that story ends.

So, back to the trial court the parties go. This time, “the trial court made factual findings as to both plaintiffs’ and VCC’s usage of the disputed property, the time period that any period of acquiescence or adverse possession had run, and whether plaintiffs’ use of the property was permissive.”

First, the trial court found that plaintiffs had acted as though they owned the disputed portion of the property with “great enthusiasm”—swimming, storing boats, camping, lighting bonfires, walking, visiting, and playing. VCC and its predecessor in interest “never appeared to dispute plaintiffs’ usage, and by 1950 had placed a ‘private beach’ sign consistent with plaintiffs’ understanding of the boundary.” Thus, the trial court concluded that plaintiffs’ use of the disputed portion of the property was consistent with the “continuous, open, hostile, and exclusive” requirements for adverse possession from 1949 on.

But then along came VCC, which the trial court found from 1958 until 2004 used the property as a camp for poor children. The trial court held that during that time period, the statutory-based charitable-use exemption applied and excluded that period of time from plaintiffs’ adverse possession.  Or "tolled" the statute of limitations for that period if you like.

The trial court further concluded that plaintiffs’ period of hostile use came to an end when they filed suit to quiet title, and that regardless, defendant had given plaintiffs permission to use the land once the suit was active. Thus, between July 1949 to February 1958 and March 2004 to January 2008, plaintiffs’ grand total of adverse-possession time totaled less than 13 of the 15 required years to obtain title by adverse possession. The court also ruled against plaintiffs on their acquiescence claims for similar reasons, reasoning that the statutory-based charitable-use exemption also applied to that claim. Plaintiffs appeal.

Plaintiffs argue that their filing suit and defendant’s subsequent grant of permission shouldn’t have tolled the statute of limitations. They also argue that the charitable-use exemption doesn’t apply to acquiescence claims, that the trial court messed up by deciding that plaintiffs’ predecessors didn’t acquire the property by acquiescence before 1949, and that the trial court screwed up the factual findings resulting in an incorrect determination of the statute-of-limitations applicable to plaintiffs’ adverse-possession run.

The SCOV starts with plaintiffs’ objection to the trial court’s filing-suit-ends-the-adverse-possession-period-as-a-matter-of-law conclusion. The SCOV reviews this de novo.

The trial court reasoned that the majority rule is that the adverse-possession period ends once suit to quiet title is commenced whether or not it’s commenced by the adverse possessor or the adversely possessed landowner.

Though the trial court’s conclusion was plausible, the SCOV doesn’t think it jibes well with the “nature of adverse possession claims as defined in Vermont law.” Adverse possession is kind of a “reverse” proceeding—only if the requirements (use or possession in an open, notorious, hostile, and continuous manner) are met and the statute of limitations runs does title vest. Essentially, adverse possession actions ask the courts to recognize that title, which has vested independently of the court’s judgment.

Because the filing of a quiet-title action theoretically interrupts the continuity requirement, the trial court followed a California Court of Appeals decision that followed that reasoning. Here, the SCOV declines to follow that logic, concluding “that only claims to possession by the title owner and against the adverse possessor will toll the statute of limitations.” This is because the statute of limitations runs against the title owner, not the adverse possessor.

But defendant argues that its motion to dismiss effectively tolled the statute because it affirmatively asserted defendant’s claim to the disputed property. This reasoning persuades the SCOV and it holds “that defendant’s motion to dismiss provided adequate notice” of its claim to ownership. The SCOV thus affirms “the trial court’s ruling that plaintiffs did not fulfill the requirements of adverse possession, albeit with slightly different reasoning.”  This is probably the part of the opinion where plaintiffs are saying, "Oh.  Gee.  Thanks, SCOV.  That's, uh, awesome."

The SCOV then turns to plaintiffs’ claims that the trial court’s fact finding was insufficient and the adverse-possession-period calculations were wrong. You might be thinking these claims don’t have much of a chance. You might be right.

The SCOV notes that it “cannot say that the trial court’s factual findings here were clearly erroneous as to either of plaintiffs’ arguments.” Though there’s some evidence that could support plaintiffs’ claim—their deed, a “private beach” sign, and such—it’s not, in the SCOV’s eyes, conclusive. Because the factual findings aren’t clearly erroneous, the SCOV won’t disturb them.

Plaintiffs’ issues with the trial court’s time calculations fare about the same. Plaintiffs argue that the camp was actually operated from July 1959 to August 2003, and while this is technically correct as to actual operation of the camp itself, it’s not enough to depart from the trial court’s general view of VCC’s charitable use—that when title vested the charitable use began, even if it took the camp several months to get up and running, and this the SCOV so holds.

When you think about it, plaintiffs’ family has been using that beach for 65 years now. No wonder they feel strongly about it. Alas, it looks like they’re going to have to give half the beach up.

No comments:

Post a Comment