This opinion will be unpublished and
may not be cited except as provided by
Minn. Stat. § 480A.08, subd. 3 (2004).
IN COURT OF APPEALS
In the Matter of the Petition of Barry Walther for the removal of
Easement Document No. 3785 from Lincoln County,
MN Certificate of Title No. 1422
Lincoln County District Court
File No. C30456
Arvid Wendland, Wendland Law Office, 825 East Second Street, Blue Earth, MN 56013 (for appellant Karen Hays)
Paul E. Stoneberg, Stoneberg, Giles & Stroup, P.A.,
Considered and decided by Klaphake, Presiding Judge; Stoneburner, Judge; and Wright, Judge.
In this action to remove memorialization of an easement from a certificate of title, appellant challenges the district court’s order granting the relief requested, arguing that respondent had actual notice of the easement. Because the easement was not memorialized on the certificate of title when respondent purchased the property and the record supports the district court’s finding that respondent did not have actual knowledge that the easement existed, we affirm.
This case involves an action under Minn. Stat. § 508.71, subd. 2 (2004), to remove memorialization of an easement that the registrar of titles erroneously omitted from respondent’s predecessor’s certificate of title and later added to respondent’s certificate of title. The underlying facts are not in dispute, and the case was submitted to the district court on depositions, affidavits, and documentary exhibits.
In 1996, appellant Karen Hays sold part of a 400-acre parcel to Rachel and Larry Clausen, reserving an easement over the property she sold (the servient property) for ingress/egress to the land that she retained (the dominant property) and for maintenance of a drainage tile on the servient property. This easement was created by a written document that Hays and the Clausens signed. The document was registered in the county registrar’s office as Easement No. 3785. The easement was memorialized on the Clausens’ certificate of title, and a similar notation was entered on Hays’s residual certificate issued after the closing documents were registered. When the Clausens later sold the servient property to Jerry and Joan Jagt, however, the county recorder, due to “human error” failed to memorialize the easement on the Jagts’ certificate of title.
The Jagts owned the property for about a year but never lived on it. The Jagts both testified in depositions that they were given a copy of the written easement agreement when they purchased the property. They also testified that during the time they owned the property, they were aware that Hays, or Hays’s tenants, who farmed the dominant property, were accessing the property based on easement rights. When the Jagts sold the servient property to respondent Barry Walther, they did not disclose or show the copy of the easement to Walther or to anyone else involved in the sale.
Walther and his girlfriend had possession of the servient property as renters for a short time prior to Walther’s purchase of the property from the Jagts. The district court found that although Walther was given walking tours of the land by Jerry Jagt and the Jagts’ real-estate agent, neither Jagt nor the agent mentioned an easement during these tours. This finding is supported by the agent’s affidavit stating that he did not mention an easement because the Jagts had not informed him of an easement. The finding is also not inconsistent with Jerry Jagt’s deposition testimony that he could not recall if he mentioned an easement and Walther’s testimony that neither man told him of an easement during the walking tour(s).
The district court also found that, shortly before Walther closed on the purchase of the servient property, Walther’s girlfriend saw Hays’s tenant drive a truck over the servient property. She spoke with the tenant, who stated that he was allowed to do so because of an “agreement” between Hays and the previous owners. The district court also found that around this time:
Mrs. Joan Jagt . . . had a telephone conversation with [Walther’s girlfriend] . . . about the level of privacy the Jagts enjoyed . . . as it related to . . . Hays’ tenants coming on to the [servient] property to access the [dominant] property. Mrs. Jagt . . . assumed . . . Hays used the property for such a purpose because of some inquiries . . . Hays had made of her, in the past. Mrs. Jagt could not recall[ ] . . . using the word ‘easement’ or referring [the girlfriend] to any instrument that defined a memorialized agreement.
The district court further found that, at the closing, Walther asked about an encumbrance on the property and his attorney advised him that any encumbrance not memorialized on the certificate of title was per se invalid because the land was registered. The court also found that, at the closing, Jerry Jagt stated something about an “easement in favor of Karen Hays.” The court found that several people present at the closing, including the mortgage-company representative and the real-estate agent for the Jagts, stated that there was no further discussion at the closing about the mentioned “easement,” such as what rights it granted or when or how it was created.
Several months after the closing, Walther saw Hays’s tenant using the servient property to access Hays’s property and asked him to stop. Shortly thereafter Walther received a call from Hays’s land manager informing him that Walther’s property was subject to an access easement. Walther then spoke with the registrar of titles, who told him the easement had been registered and memorialized previously and stated her belief that it was her clerical error that led to the easement’s omission from his predecessors’ certificate of title. The registrar of titles then memorialized the easement on Walther’s certificate of title.
Walther brought this action to remove the easement from his certificate of title. The district court ruled in his favor, concluding that: 1) Hays had not demonstrated by a preponderance of the evidence that Walther had actual notice of the easement when he acquired the property and 2) Walther had no obligation to inquire beyond the face of his predecessors’ certificate of title to discover the existence of the easement. The district court ordered that memorialization of the easement be removed from Walther’s certificate of title, and this appeal followed.
The parties do not argue that any of
the court’s findings of underlying facts are clearly erroneous. They dispute whether, under these facts, the
district court erred by concluding that Walther did not have actual notice or
knowledge of the existence of the easement despite its omission from the Jagts’
certificate of title. In a case
involving issues of whether “actual and constructive notice” existed with
Hays argues that the district court clearly erred in finding that she did not prove that Walther had “actual notice” of her easement prior to purchasing the servient land because the district court relied on distinguishable cases and applied an overly stringent standard as to what constitutes “actual notice.”
[e]very person receiving a certificate of title pursuant to a decree of registration and every subsequent purchaser of registered land who receives a certificate of title in good faith and for a valuable consideration shall hold it free from all encumbrances and adverse claims, excepting only the estates, mortgages, liens, charges, and interests as may be noted in the last certificate of title in the office of the registrar . . . .
In addition to the exceptions listed
in the statute, the supreme court has recognized that “actual notice” of an
interest in registered land also creates an exception to the general rule that
purchasers of registered land are not bound by any interest not listed on the certificate
of title issued to their predecessor. “The
Torrens Act ‘abrogates the doctrine of constructive notice except as to matters
noted on the certificate of title. . . .[I]t does not do away with the effect
of actual notice, although it undoubtedly imposes the burden of proving such
notice upon the one asserting it.’” In re the Petition of Willmus, 568
N.W.2d 722, 725 (Minn. App. 1997) (Willmus)
(quoting In re Juran, 178
Appellant argues that two cases that
the district court relied on, Comstock
& Davis, Inc. v. G.D.S. & Assocs., 481 N.W.2d 82 (
Appellant also contends that the district
court applied a stricter “actual notice” standard in this case than was applied
in Juran. In Juran,
the supreme court held that, prior to his registration of a judgment lien on
Appellant argues that under the
reasoning in Juran,Joan Jagt’s conversation with Walther’s
live-in girlfriend about Hays’s tenant using the driveway and the reference to
an easement by Jerry Jagt at closing constituted sufficient notice to require
Walther to inquire about the existence of an easement, and that the district
court erred by limiting actual notice to either the instrument itself or an
articulation of the rights the instrument encompassed such as uses permitted,
location, or duration. But an easement
created by express grant generally requires a signed writing to be
Furthermore, the Torrens law
explicitly requires that an interest in land less than an estate in fee simple
(such as an easement) “shall be registered by filing with the registrar the
instrument which creates, transfers, or claims the interest, and by brief
memorandum or memorial of it made and signed by the registrar upon the
certificate of title.”
“The purpose of the
In Kane [v. State, 237 Minn. 261, 55 N.W.2d 333 (1952)], the supreme court analyzed facts and an argument similar to those here and ruled that the Torrens Act protects a good faith purchaser for value from those encumbrances mentioned in a descriptive document, but not explicitly noted on the certificate of title. In Kane, a restrictive covenant was noted on a recorded plat and the certificate of title referred to the plat. The supreme court determined that because the land was registered and, thus, governed by the Torrens Act, the subsequent good faith purchaser for value was not required to go to the plat to ascertain whether encumbrances were noted thereon. Here, while [the registered-land survey] was mentioned on the certificate of title, the easement was not. Therefore, under Kane, the mere mention of [the registered-land survey] on the certificate of title did not “note” the easement on the certificate of title for purposes of the Torrens Act. We conclude the trial court did not err by recognizing that no duty on the part of the [purchasers] existed to research [the registered-land survey] to discover the easement.
Hays argues that “actual notice”
is a common-law concept not expressly defined in the Torrens law and then
suggests that the statements at the closing should have prompted Walther to
make further inquiry into the existence of an easement. Hays is correct that in cases involving nonregistered
land, a doctrine of “implied notice” has been applied to hold that certain
purchasers or claimants lacked good-faith purchaser status and therefore were
not protected by the recording system, even if they did not have actual or
constructive knowledge. See Miller v. Hennen, 438 N.W.2d 366,
But, as discussed above,
also argues that the district court erred by not granting her relief based on C.S. McCrossan, Inc. v. Builders Finance Co.,
304 Minn. 538, 232 N.W.2d 15 (1975). In McCrossan, a registrar failed to
memorialize an existing mortgage on some new title certificates that were
created when a certificate with the mortgage memorialized was canceled and
split into multiple certificates.
a mortgage properly registered and memorialized under the Torrens Act . . . retains its priority over the instant mechanic’s lien, where [omission of the memorial on a subsequent certificate of title] occurred subsequent to the furnishing of the first and last items of labor and materials by the lienholder, who did not rely on the record title in furnishing such labor prior to the date the omission occurred.