This opinion will be unpublished and

may not be cited except as provided by

Minn. Stat. § 480A.08, subd. 3 (2002).

 

STATE OF MINNESOTA

IN COURT OF APPEALS

C9-02-1026

 

In the Matter of the Petition of Itasca County Regional
Railroad Authority for certain relief in connection with
Certificate of Title No. 19757.

 

Filed January 14, 2003

Reversed and remanded

Minge, Judge

 

Itasca County District Court

File No. C4012044

 

Kent E. Nyberg, Kent E. Nyberg Law Office, Ltd., 20 N.E. Fourth Street, Suite 101, Grand Rapids, MN 55744 (for appellant)

 

Laura J. Schacht, Johnson, Killen & Seiler, P.A., 800 Wells Fargo Center, 230 West Superior Street, Duluth, MN 55802 (for respondent)

 

            Considered and decided by Shumaker, Presiding Judge, Minge, Judge, and Mulally, Judge.*

 

U N P U B L I S H E D  O P I N I O N

 

MINGE, Judge

 

            Appellant Richard D. Myrum, the current record owner of certain registered land, appeals from the district court’s determination that his objection to a certificate of title that included a memorial for a recreational trail easement in favor of respondent Itasca County Regional Railroad Authority is time barred by Minn. Stat. § 508.28 (2002) and that respondent rightfully holds the easement.  We reverse and remand. 

FACTS

 

Respondent Itasca County Regional Railroad Authority (Itasca) is a political subdivision of the state of Minnesota.  It is developing the Mesabi Trail as a bicycle and multi-purpose recreational trail across the Iron Range for the general public’s use.  The trail follows the path of and connects former railroad rights of way.  Appellant Richard Myrum is the owner of a 40-acre parcel of land located in Itasca County.  A former 150-foot wide railroad right of way that crosses appellant’s land is part of the trail system respondent is developing. 

Myrum purchased his parcel from Edward Oquist by warranty deed dated March 28, 2001.  Following the legal description, the deed recited that the conveyance was “[s]ubject to mineral reservations, restrictions and easements as they appear of record.”  Joyce Oquist joined in the deed as Edward’s wife.  The notary public attesting to the signature listed the signatory’s name as Janet Oquist.  The Oquist to Myrum deed was filed with the Itasca County Registrar of Titles on April 9, 2001.  An ambiguity regarding the deed’s date exists because Edward’s signature was acknowledged on August 21, 2000, and the document appears to have originally been dated August 21, 2000.  However, that date is stricken and replaced with the date of March 28, 2001, which is the date Joyce (Janet) Oquist’s signature was acknowledged. 

Myrum was issued certificate of title number 19,757 for the parcel.  The certificate is dated April 9, 2001.  Among other qualifications, this certificate states on its face that it is

subject to all existing easements for public highways and roadways and to all railroad rights of way occupied or granted upon, over or across the above described premises, or any part thereof.

 

Also, a memorial appears on Myrum’s certificate reciting that there is a recreational trail easement in favor of Itasca, that the trail easement was established in a document dated December 14, 1999, and that the easement was registered on September 15, 2000.

The registration of title to this parcel and the location of Itasca’s recreational trail easement on that parcel have a long history.  The land was initially registered as of August 14, 1914.  The recreational trail easement tracks a prior easement in favor of the Duluth, Mesabi & Northern Railway recorded in December 1908.  This railroad easement appeared on the face of the original certificate of title when the land was first registered as a third railroad easement to which the land was subject.  It appears all three were excluded interests in the title registration process.  These same exclusions were carried forward to certificate of title number 10,971, which was registered on July 16, 1973 in the name of Edward Oquist.  The Duluth, Mesabi & Northern Railway quitclaimed its interest in this land to Edward Oquist by a deed dated January 28, 1985 and filed 16 years later on April 9, 2001.  As a result of filing this railroad conveyance, the county registrar of titles deleted the interest of the railroad as an exception on the face of appellant’s certificate. 

Oquist conveyed an easement over the same strip of land that had been the subject of the Duluth, Mesabi & Northern Railway easement to Itasca as a recreational trail easement.  The easement recites that Oquist was a single person at that time.  This document was memorialized on both the Oquist certificate of title (number 10,971) and the Myrum certificate of title (number 19,757).  There is uncertainty as to when Itasca first presented the recreational easement to the county registrar of titles for filing.  Although the filing date on the document is September 15, 2000, Itasca’s attorney states in an affidavit that after the document’s execution and delivery on December 14, 1999, it was submitted immediately for filing with the registrar of titles. 

            It appears both parties paid for the interests that they hold in the land.  Myrum’s deed states that $82.50 was paid in state of Minnesota deed tax.  Itasca’s easement recites payment of $450.

            The record is silent about whether Itasca knew of the deed from the Duluth, Mesabi & Northern Railway to Oquist or the conveyance from Oquist to Myrum prior to the recording of those two instruments.  The record is also silent as to when the easement from Oquist to Itasca was memorialized on the Oquist certificate of title or whether or when Myrum first inspected the Oquist certificate of title and whether Itasca’s easement was then memorialized on the certificate of title.

            Itasca initiated this proceeding in October 2001 by filing a petition with the district court.  The petition requested a declaration that Myrum’s certificate of title (number 19,757) was properly issued and that Itasca’s easement dated December 14, 1999, memorialized on appellant’s certificate of title, is valid.  On November 9, 2001, the district court signed an order directing Myrum to show cause why the requested relief should not be granted and setting a hearing for December 17, 2001. 

By a notice of objection dated December 14, 2001, Myrum contested the relief sought and the order to show cause.  Myrum claimed that when he purchased the parcel of land, he inquired about the status of the Duluth, Mesabi & Northern Railway easement.  He stated the railroad told him that it had deeded its interest to Oquist in 1985, that Oquist then owned both the underlying parcel and the easement in question under the unrecorded deed, that he (Myrum) had no knowledge that Oquist had executed a recreational easement in favor of Itasca, that Oquist denied granting any easements to anyone, that Itasca’s recreational trail was not a visible or conspicuous use of the land, that he (Myrum) occupied the premises at the time the easement to Itasca was recorded, that the easement interest of the railroad was never a registered (Torrens) interest in the real estate in question, but that the easement was instead abstract property by the terms of the original decree registering the land.  Myrum also pointed out that only Edward Oquist signed the deed to Itasca, and that his wife did not.  There is nothing in the record that indicates the date Oquist was married.

On December 19, 2001, the district court referred the matter to the deputy examiner of titles for Itasca County.  In a report dated January 22, 2002, the deputy examiner of titles concluded in relevant part that until the railroad’s deed to Edward Oquist was recorded on April 9, 2001, it did not remove the railroad’s interest from the title, that Itasca has a valid easement, that the deed to Myrum was executed August 21, 2000 and was subject to easements of record, that the railroad easement in favor of the Duluth, Mesabi & Northern Railway was then of record, that Myrum knew of the easement in favor of Itasca because the easement was memorialized on the certificate of title, and that Myrum, by failing to object to this memorial on his certificate of title until after October 9, 2001, was time barred by the six-month limitation period of Minn. Stat.  § 508.28 (2002) from contesting this interest by Itasca in the real estate.

            On March 15, 2002, a hearing was held before the district court to consider Myrum’s objections to the deputy examiner’s report.  In an order dated April 24, 2002, the district court adopted the report of the deputy examiner in its entirety, and ruled that Myrum’s objection dated December 14, 2001 was untimely because it was filed more than six months after the April 9, 2001 date when the certificate of title had been issued to Myrum.  The court further found that the certificate of title number 19,757 was properly issued and that Itasca was the rightful and proper holder of a recreational trail easement.  The district court ordered that its order be memorialized on the Myrum certificate of title. 

            Myrum appealed to this court claiming that his right to challenge the new certificate of title and the interests of Itasca were not time barred.

D E C I S I O N

            We will not set aside a district court’s findings of fact unless they are clearly erroneous.  Minn. R. Civ. P. 52.01.  We review de novo a district court’s conclusions of law.  See Hubred v. Control Data Corp., 442 N.W.2d 308, 310 (Minn. 1989). 

I.

            The district court adopted the findings and conclusions in the deputy examiner’s report.  That report states, among other things, that Myrum’s December 14, 2001 challenge to the certificate of title issued to Myrum on April 9, 2001 was untimely under Minn. Stat. § 508.28 (2002).  Myrum appeals from this statute-of-limitations determination.  We review de novo a district court’s application of a statue to undisputed facts.  Lefto v. Hoggsbreath Enters., Inc., 581 N.W.2d 855, 856 (Minn. 1998). 

            The limitation cited by the deputy examiner, the district court, and the parties is Minn. Stat. § 508.28, which provides in relevant part that (a) no decree of registration and no original certificate of title can be invalidated unless the decree or the original certificate of title is challenged within six months from the date of such decree; and (b) no action to recover any interest in registered land adverse to the title established by any original decree of registration can be maintained, unless it is brought within six months from the date of the original decree.  The “decree of registration” mentioned in the statute is a court-issued decree that grants a party’s application to register title to land.  See Minn. Stat. § 508.22 (2002) (stating that if, after a hearing in a title-registration proceeding, the district court finds that applicant has a title proper for registration, the court “shall make and file its decree * * * confirming the title of the applicant and ordering its registration”). 

Here, the decree registering the title to Myrum’s property was issued in 1914 and the six-month period for challenging that decree or the original certificate of title issued pursuant thereto, has long passed.  See Park Elm Homeowner’s Ass’n v. Mooney, 398 N.W.2d 643, 646 (Minn. App. 1987) (holding that since title to land at issue was registered via a 1975 decree, a 1986 challenge to the registered title would have been untimely even if the challenging party had complied with the Torrens Act).

            However, the actual dispute in this appeal is not the status of the original decree of registration but whether Myrum’s ownership interest in the parcel of land is subject to Itasca’s recreational easement and whether the memorial reference to that easement should appear on Myrum’s certificate of title.  We view Myrum’s appeal as challenging the application of the statute-of-limitations period set forth in Minn. Stat. § 508.28 to this controversy.  Indeed, the district court’s order applies the statute to Myrum’s challenge.  Since that limitations period does not apply on its face to this contemporary dispute, we reverse the determination of the district court as it applies section 508.28 to the contemporary dispute over the status of the recreational trail easement.

II.

The statute-of-limitations question is a threshold issue.  Both the deputy examiner’s recommendation and the district court’s order conclude that Myrum’s challenge is barred by the statute.  Although it appears that the district court also reached the merits of the dispute, based on the record, it is awkward for us to do so.  First, it is unclear whether the district court’s decision is primarily based on the merits of the underlying dispute or the statute of limitations.  Second, on appeal Myrum does not clearly raise the issue of the merits.  Third, there are several questions that may be relevant to the merits of the parties’ dispute that have not been considered by the district court and may not be adequately presented on the record before us.  These include but are not limited to the following questions:

1.  “Public Highways”:  There is an exception in the certificate of title for “public highways and roadways.”  To an extent, this is an exception created by statute.  See Minn. Stat. § 508.25(4) (2002).  On remand the district court should determine whether a recreational trail easement held by a political subdivision of the state of Minnesota is such a public highway or roadway and whether the easement in this case had such a status before the appellant acquired title.

2.  Date of Registration of Interests:  When dealing with registered land, “[t]he act of registration shall be the operative act to convey or affect the land.”  Minn. Stat. § 508.47, subd. 1 (2002); see also Scanlan v. Nielsen, 561 N.W.2d 917, 919 (Minn. App. 1997) (addressing whether an interest in registered land was effective before filing or registering a document and stating that this court had previously stated that “[t]he answer is * * * unequivocally no * * * because the act of registration shall be the operative act to convey or affect the land” (quoting Fingerhut Corp. v. Suburban Nat’l Bank, 460 N.W.2d 63, 66 (Minn. App. 1990) (quotation omitted))), review denied (Minn. June 11, 1997).  In both the Scanlan and Fingerhut cases, the party that first registered its interest prevailed.  Here, the record indicates that (a) the Duluth, Mesabi & Northern Railway Company’s deed quitclaiming its easement to Oquist is dated in 1985; (b) Oquist granted the disputed easement to Itasca in December 1999; and (c) the 1985 deed in which the Duluth, Mesabi & Northern Railway Company quitclaimed the easement to Oquist was not registered until September 2000.  The district court should determine whether conveyance of the easement interest by Oquist to either Myrum or Itasca could be effective before the Railway quitclaim deed was filed for record and, if so, whether the priority as between Myrum and Itasca is then determined by the date they filed their conveyances.  In this regard we note there is a claim that the Duluth, Mesabi & Northern Railway easement was an abstract, not registered, interest in the property.  The district court should determine if this is correct, and, if so, the affect on the outcome of this case.

3.  Notice:  Oquist’s certificate of title refers to an easement in favor of the Duluth, Mesabi & Northern Railway Company.  The record indicates that Myrum knew of the Duluth, Mesabi & Northern Railway Company easement.  Itasca’s easement apparently tracks this railroad easement and had been filed for registration before the final date on the deed from Oquist to Myrum.  Cf. Nolan v. Stuebner, 429 N.W.2d 918, 922-23 (Minn. App. 1988) (ruling that when certificates of title of servient landowner and servient owner’s predecessor showed the land subject to an easement, the servient owner did not purchase the land in good faith and without notice), review denied (Minn. Dec. 16, 1988).  At least with respect to abstract property, Minnesota is a race-notice state.  Minn. Stat. § 507.34 (2002).  Therefore, a purchaser who has actual, implied, or constructive notice of inconsistent outstanding rights of others is not a bona fide purchaser entitled to protection under Minnesota’s Recording Act.  See Miller v. Hennen, 438 N.W.2d 366, 369 (Minn. 1989) (stating that “[a] purchaser in good faith is one who gives valuable consideration without actual, implied or constructive notice of inconsistent outstanding rights of others”).  While the Torrens Act abrogates the doctrine of constructive notice (except for matters listed on the certificate of title), it does not eliminate the effect of actual notice.  In re Juran, 178 Minn. 55, 60, 226 N.W. 201, 202 (1929); see Petition of Willmus, 568 N.W.2d 722, 725 (Minn. App. 1997) (applying Juran), review denied (Minn. Oct. 21, 1997).  Actual notice requires actual knowledge.  See In re Alchemedes/Brookwood, Ltd. Partnership, 546 N.W.2d 41, 42 (Minn. App. 1996) (holding that, when dealing with registered property, “actual notice means actual knowledge”), review denied (Minn. June 7, 1996).  On remand, the district court should determine (a) whether the easement interest had been an abstract interest and if so, when it lost that character; (b) when Myrum acquired his interest; and (c) whether he is a bona fide purchaser and whether he had notice that the property might have been subject to the disputed Itasca easement at the time he acquired title.

            4. Marital Status:In Minnesota, a married person can convey non-homestead property without his spouse’s signature, but the recipient takes subject to the statutory rights of the non-signing spouse.  Minn. Stat. § 507.02 (2002).  The current record does not indicate when Oquist married.  The conveyance to Itasca indicates he was single.  Myrum appears to claim Oquist was married when he conveyed to Itasca.  However, Myrum presented no evidence of this.  Because his marital status could impact the validity or extent of the easement granted to Itasca and the status of the parties’ interests, on remand the district court should acquire information on and address Oquist’s marital status at the time of the relevant transactions.  

III.

One of the goals of the registered-land system is that people dealing with registered land need not look further than the certificate of title to identify “any transactions that might affect the land.”  Mill City Heating & Air Conditioning Co. v. Nelson,351 N.W.2d 362, 364-65 (Minn. 1984); see also Kane v. State, 237 Minn. 261, 268-69, 55 N.W.2d 333, 338 (1952) (stating the Torrens Act puts into place a registered-land ownership system allowing a purchaser to accept a certificate of title for registered land as “truly stating the title, and may disregard any claim not so appearing” (quotation omitted)).  But see Minn. Stat. § 508.25 (2002) (listing interests that retain their effect even when not memorialized on a certificate of title).  The factual and legal problems presented by this case emphasize the importance of a smoothly functioning system for dealing with registered land.  In considering the foregoing and any other matters the district court determines relevant to this proceeding, the district court may proceed on the present record or open the record to receive additional evidence.  This opinion and remand do not confine the district court’s discretion in that regard or its further use of the deputy title examiner.

            Reversed and remanded.

 



* Retired judge of the district court, serving as judge of the Minnesota Court of Appeals by appointment pursuant to Minn. Const. art. VI, § 10.