Bonnell v. Cotner
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After Tom Bonnell bought a strip of land from the Pulaski County Board of Commissioners, Ruby and Douglas Cotner filed this suit to quiet title, claiming that they had previously acquired ownership of a second of that land via adverse possession. The trial court (1) concluded that the prior sale of the strip by tax deed extinguished any interest the Cotners may have had, but (2) awarded the Cotners a prescriptive easement on certain outbuildings encroaching onto the strip. Both parties appealed. The Supreme Court (1) affirmed the denial of the Cotners’ adverse possession claim, holding that the tax sales of the strip defeated the Cotners’ claim of ownership by adverse possession; but (2) reversed the grant of a prescriptive easement in the Cotners’ encroaching outbuildings, holding that the sale of the strip by tax deed extinguished any and all interest the Cotners previously possessed.
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ATTORNEY FOR APPELLANT ATTORNEY FOR APPELLEES Jim Bonnell Indianapolis, Indiana Travis J. J. Brugh Logansport, Indiana the 3511 Feb 16 2016, 9:27 am Santana émpreme Qtuurt No. 66503-1509—PL-530 TOM BONNELL, Appellant (Defendant below), RUBY A. COTNER, DOUGLAS WAYNE COTNER, ARTHUR J. JOHNSON, JIMMY J. JOHNSON, and JERRY L. JOHNSON, Appellees (Plaintzf v below). Appeal from the Pulaski County Circuit Court, No. 66C01-1208—PL-11 The Honorable Patrick B. Blankenship, Special Judge On Petition to Transfer from the Indiana Court of Appeals, No. 66A03-1410-PL-372 February 16, 2016 Massa, Justice. Tom Bonnell purchased a 35-foot-wide strip of land from the Pulaski County Board of Commissioners, and Ruby and Douglas Cotner brought this action to quiet title, claiming that they had previously acquired ownership of a section of that land via adverse possession. The disagreed, nding that the prior sale of the Strip trial court by tax deed extinguished any interest the Cotners may have had. Nevertheless, the trial court awarded the Cotners a prescriptive easement on certain outbuildings erected on the Strip, and both parties appealed. We af rm the denial of the Cotners’ adverse possession claim, and reverse the grant of a prescriptive easement, nding that the sale of the Strip by tax deed extinguished any and all interest the Cotners previously possessed. Facts and Procedural History In 1948, Leo and Ruth Cottingham subdivided Indiana into eleven residential lots. parcel, while the remaining ten lots (100) feet were 1 The 2. 119, and it right of way. There right of way. There original survey all equal half-acre rectangles, (2141/2) feet.” is also an ancient farm fence as “One hundred Plaintiff s EX. 214 lots as feet being at G at 20; for State the center of the State’s from the eastern edge of the State’s thus a 35-foot gap in between the edge of the parcels and the fence on the eastern edge (“the Strip”), owners of Lots 2 through which was not a part of the of cial parcel 11 treated their respective portions The previous owners of Lot division; nevertheless, the of the Strip as part of their property, and they believed the ancient farm fence marked the property in 1997.1 de ned accompanying the subdivision also accounts marks the western boundary of these is County, consisted of a two—acre block on the south end of the by Two hundred Fourteen and One-half Defendant’s Ex. Highway Lot their seven~acre parcel in Pulaski line. Ruby Cotner purchased Lot 8 constructed a barn in 1968, 8 and the Cotners expanded upon it with a lean—to in 2010; a portion of these buildings encroaches some distance onto the Strip. Shirley Johnson purchased Lot 9 in 1990, from whom the Johnson Plaintiffs (her sons) obtained title in 2009. Although the Johnsons were initially plaintiffs in this case, they quitclaimed their interest in Lot 9 to the Cotners during the pendency of this action; therefore, the Cotners are the only interested party on appeal. 1 The Strip was originally included was divided off Via quitclaim deed sale; the rst in Commissioners, the Strip by title with The in 1985. the larger farm eld to the east; however, it State subsequently sold the Strip twice Via tax 1993 to Jeff Kopkey, and the second in 2011 to the Pulaski County Board of who then When he bought it, Bonnell believed sold the Strip to Bonnell in 2012. was located on the eastern side of the ancient fence. Upon a subsequent survey, however, he discovered the Strip was located effectively in the backyards of the Cottingham Subdivision owners. Bonnell then proposed a sale of each section of the Strip to the property owner been occupying the land, at $890 apiece. All Bonnell except the Johnsons and the Cotners, by adverse possession, and led the who had owners eventually reached an agreement with who asserted ownership of their section of the Strip this suit to quiet title. Bonnell defended on the grounds the Cotners had not demonstrated they paid taxes on the disputed portion of the Strip and thus could not perfect their adverse possession claim under Indiana law. Deed Statutes, Ind. tax deed severs The all trial Code chs. 6-1.1-24 and —25 (2014), mandate court agreed with Bonnell, nding since and thus had not perfected their claim as a matter of rst impression, that even in any event, the Indiana Tax that the sale prior claims of ownership, including ownership times, the Cotners could not reasonably believe they Strip, And title to by adverse possession. the Strip ran separately at were paying taxes on of adverse possession. The if the of any property by trial their portion court of the went on to nd, Cotners’ adverse possession claim perfected, the subsequent tax sales of the Strip divested the Cotners of their interest. trial all had been However, the court also determined sua sponte that the Cotners should receive a prescriptive easement for use of their outbuildings encroaching onto the Strip. Both parties appealed, remanded. Bonnell v. and a unanimous panel of our Court of Appeals reversed and Cotner, 35 N.E.3d 275, 284 (Ind. Ct. App. 2015). The panel found the Cotners showed they paid taxes on the outbuildings that encroached upon the Strip, which was suf cient to establish good faith, and the subsequent tax sales could not divest an adverse possessor of their interest, because otherwise “vested adverse holders may become divested of their property for failing to pay taxes despite reasonably believing appropriate taxes due.” & at 283 (emphasis good in faith that they are paying the in original). We granted transfer, thus vacating the Court of Appeals opinion below. Bonnell V. Cotner, 37 N.E.3d 493 (Ind. 2015) (table); Ind. Appellate Rule 58(A). We now af rm the trial court with respect to the denial of title to the Cotners by adverse possession, but reverse as to granting them a prescriptive easement. Standard of Review The parties’ claims were tried without a jury; therefore, we “shall not set aside the ndings or judgment unless clearly erroneous.” Ind. Trial Rule 52(A). “Findings of fact are only clearly erroneous if there is inference.” erroneous if no factual support for them Johnson it in the record whatsoever, either directly or Wysocki, 990 N.E.2d 456, 460 v. applies the wrong legal standard to properly “A judgment (Ind. 2013). found facts.” Woodmffv. by is clearly Ind. Family & Soc, Servs. Admin, 964 N.E.2d 784, 790 (Ind. 2012) (quoting Nichols v. Minnick, 885 N.E.2d 1, 3 (Ind. 2008)). The Cotners Established Their Claim of Adverse Possession of the Disputed Portion of the Strip. As we explained in great detail in Fraley v. Minger, there are four traditional elements to adverse possession (Ind. 2005). at common Bonnell does not dispute that the Cotners have established respect to the disputed portion of the Strip. Rather, Bonnell relies pursuant to Indiana Code on the property claimed all of these elements with on our holding section 32-21-7-1 (2008), an adverse possessor m 829 N.E.2d 476, 486 law: control, intent, notice, and duration. is in that, required to pay taxes in order to perfect his or her interest, although substantial compliance is suf cient, so long as “the adverse claimant has a reasonable and is good faith belief that the claimant paying the taxes during the period of adverse possession.” Fraley, 829 N.E.2d at 493.2 Bonnell claims the Cotners did not satisfy this requirement because they paid taxes on the encroaching outbuildings only, and not on the entire disputed portion of the Strip. We nd the Cotners have satis ed the adverse possession tax statute. In Fraley we expressly upheld our prior interpretation of this statutory adverse possession requirement from Echterling V. Kalvaitis, including the following hypothetical where substantial compliance with the adverse possession tax statute would exist: An example might be where one has record title to Lot No. l and has erected a building on that lot, which, twenty years later, is found by some surveyor to be one foot over on an adjoining lot, No. the fact that the owner of Lot No. l was assessed for improvements (the building) and real estate (Lot No. 1) would be suf cient to comply with the statute as to payment of taxes. 2— Fraley, 829 N.E.2d at 490 (quoting Echterling v. Kalvaitis, 575—76 (1955)). That precise scenario has occurred were assessed tax on the barn beginning in upon the disputed portion of the That Strip. 235 Ind. 141, 147, here: the Cotners’ predecessors-in-interest 1968, and at least a portion of that building encroaches is complied with tax of their E lot E suf cient to establish the Cotners perfected their adverse possessory interest in the disputed area of the Strip as of 1978. Ctr. Inc. v. Tucker, 126 N.E.2d 573, Celebration Worship 35 N.E.3d 251, 255 (Ind. 2015) ( nding adverse possessor had substantially statute “because they believed the disputed real estate to be part of the side yard 4ifor which they actually paid taxes.” (emphasis in original». Our General Assembly subsequently incorporated the holding of Fraley into Indiana Code section 32-217-1. 2006 Ind. Acts 3606 (clarifying that the adverse possessor need only pay that tax “that the adverse possessor or claimant reasonably believes in good faith to be due”). 2 The Subsequent Tax Sales of the Strip Defeat the Cotners’ Claim of Ownership by Adverse Possession. Perfecting an adverse possessory interest, however, does not automatically entitle the Cotners to judgment in their favor. “[T]he doctrine of adverse possession entitles a person without title to obtain notice, ownership to a parcel of land upon clear and convincing proof of control, and duration . . . .” My, 829 N.E.2d adverse possession does not render operative holder; indeed, as demonstrated succeed E in property. an action to quiet App. at 22—26; by the title in facts type of plaintiff entitled to bring a quiet judgment in a quiet title action shall all 486 (emphasis added). Acquiring ownership by the rights and responsibilities of the record become title action); Ind. acknowledged owner of the the legally 32-30-2-20 (2014) § (listing Code § an adverse possessor as one 32-30—3-17 (stating that the nal be entered by the county recorder in the “Quiet Title Record”). Moreover, although the Cotners’ predecessors-in-interest had a good paying taxes on the disputed portion of the Strip, those taxes. Accordingly, since the record taxes, the entire Strip was title subject to tax sale it is for the entire certi cate is amount issued.” paid. faith belief that they undisputed that they were not & in fact were paying holder also failed to pay the requisite property by Pulaski County. (C) “A purchaser at a tax title of this case, the adverse possessor would rst have to order to Code Ind. at intent, Ind. Code § 6-1.1-24-1(a), sale receives a tax certi cate evidencing a lien against the property The Calhoun lien is superior to all other liens v. Jennings, §6-1.1-24-9) (emphasis omitted). Any 512 N.E.2d 178, 181 person may “redeem” which exist at the time the (Ind. 1987) (citing Ind. Code the property within a statutory period of up to one year after the date of sale.3 Ind. period expires, the tax certi cate holder Code § 6—1.1-25-4.6(a). Code § 6—1.1—25-1, —4(a). may petition the court for a tax deed to the property. Our General Assembly has also twice stated that the tax the grantee an estate in fee simple absolute, free and clear of or suffered before or after the tax sale number of ways to defeat a tax . . Once the redemption . .” Ind. Code all liens Ind. deed “vests in and encumbrances created § 6-1.1-25-4(f), -4.6(g). There are a nite deed by appeal; claim of title by adverse possession is not among them.4 E The redemption amount is determined based on, among other things, the date of redemption, the amount of outstanding taxes and penalties, the initial minimum bid of the sale, and the ultimate purchase price. 3 Ind. 4 Code & Ind, § 6-1.1-25-2. Code § 6-1.1-25-16 (“A person may, upon appeal, defeat the title conveyed by a tax deed executed under this chapter only if: (1) the tract or real property described in the taxes for which it was deed was not subject to the sold; (2) the delinquent taxes or special assessments for which the tract or real property was sold were paid before the sale; (3) the tract or real property was not assessed for the taxes and special assessments for which it was sold; (4) the tract or real property was redeemed before the expiration period of redemption (as speci ed in section 4 of this chapter); of the (5) the proper county of cers issued a certi cate, within the time limited by law for paying taxes or for redeeming the tract or real property, which states either that no taxes were due at the time the sale was made or that the tract or real property was not subject to taxation; (6) the description of the tract or real property to describe it with reasonable certainty; or was so imperfect as to fail Because of the relative strength of a tax deed, there are also several layers of statutory notice of the tax sale proceedings (and each such notice contains no less than fourteen mandatory components). Ind. Code to post a sale, § 6-1.1-24-2; Ind. copy of the rst notice in the publish the notice at least once a and further send a copy to “the Code county courthouse week The county § 6-1.1-25-4.5. at least for three consecutive owner of record.” Ind. Code auditor is 21 days prior to the weeks, Ind. Code § 6—1.1—24—4(a) required initial tax § 6-1.1-24-3, (emphasis added). Second, prior to the issuance of a tax deed, the purchaser must provide actual notice “to the owner of record at the time of the and any person with a substantial property sale in the tract or real property.” Ind. Code § 6-1.1-25-4.5(a) interest ofpublic record (emphasis added). Here, although the Cotners’ predecessors-in-interest acquired ownership of the disputed portion of the Strip in 1978, they did not seek to quiet by statute, the Cotners 1993 and 2011. And the very of the notice given Code were not issuance of those tax deeds (“The deed is simple in the is prima facie evidence grantee of the deed”). There is of: (l) the regularity no evidence Moreover, the statutory text w is uncompromising: Commissioners obtained “fee simple absolute” encumbrances. Ind. Code § 6—1.1-25-4.6(g); instrument does not affect the plaintiff’s title Ind. Code as established by § (3) valid title Cotners by Indiana Code section County Board of 2011, free and clear of any 6-1.1—25-14 (“An unrecorded the court’s [tax deed] decree”). (7) the notices required by 1C 6-1.1-24-2, IC 6-1.1-24-4, and sections 4.5 and 4.6 of this chapter were not in substantial compliance with the manner prescribed in those sections”) Ind. in the record that the the Pulaski in the Strip in E of the sale of the of all proper proceedings; and also in prima facie evidence of the validity or anyone else contested the validity of those tax sales, as permitted 6-1.1-25-16. that ownership. Thus, evidence that has not been rebutted by the Cotners. real property described in the deed; (2) the regularity in fee and formalize any more than publication notice of the two tax sales entitled to in those tax sales, § 6-1.1-25-4.6(g) title Accordingly, under the plain text of the Tax were divested of their ownership interest Deed Statutes, in 1993 and again in 2011, the Cotners based on adverse possession of the disputed section of the Strip. The Trial Court’s Award to the Cotners of a Prescriptive Easement in the Barn was Clearly Erroneous. We now turn to the trial court’s sua sponte award of a prescriptive easement to the Cotners for their continued use of the outbuildings, based on the court’s conclusion that the cost of their removal would “far exceed the value of the Defendant’s entire parcel, not just the portion upon which the building encroaches.” App. We begin by noting that the prescriptive easement sua sponte. at 20. trial was within court its authority to consider awarding a The Cotners pleaded with particularity in the elements of adverse possession, and “[t]he my and easements.” TLlcer, 35 N.E.3d 257 is easement vested. Code § 32-23-1-1. by all of the differences between (internal quotations omitted). the requisite statutory period of adverse relevant difference here Ind. at complaint formulation for adverse possession also applies to prescriptive easements, save for those differences required fee interests their The Cotners The only use—20 years—before the also speci cally pleaded that the outbuilding was erected in 1968, and that they and their predecessors-in-interest had exercised exclusive control over the entire disputed portion of the Strip since that time. Moreover, in their prayer for relief, the the circumstances.” Cotners included the familiar catch-all of “all other relief appropriate under App. at 26. Therefore, there was suf cient evidence before the trial court to determine the Cotners’ predecessors-in—interest had perfected a prescriptive easement in the outbuilding as of 1988. Unfortunately, this attempt by the as a matter of law, again trial court to craft an equitable by operation of the Tax Deed remedy was unavailable Statutes. Indiana Code section 6-1.1-25- 4(f)(l) states unequivocally that for a prior the easement must be “shown by public records.”5 deed executed under M easement over property this chapter for real Ind. to survive its sale Code property sold in a tax sale: by tax deed, § 6-1.1-25-4(g) (1) (“A tax does not operate to extinguish an easement recorded before the date of the tax sale in the office of the recorder of the county in which the real property is located . . . .” (emphasis added)). Thus, as with the Cotners’ claim of adverse possession, they cannot claim a prescriptive easement in the outbuilding because that easement was never recorded, and was therefore extinguished with the first tax sale in 1993.6 Conclusion After more than three years of litigation and two vigorous appeals, Mr. Bonnell now owns a 35—foot—by—100—foot section of land in the Cotners’ backyard, predominately covered with a pole barn, which Bonnell values at approximately $890. We affirm the denial of the Cotners’ claim of adverse possession in the disputed portion of the Strip, and reverse the grant of a prescriptive easement in the Cotners’ encroaching outbuildings. Rush, C.J., and Dickson, Rucker, David, J ., did not participate. JJ., concur. We note that a counterpart of this provision appears in Indiana Code section 6-1.1-25-4.6(g), and it does not specify that prior easements must be recorded in order to survive a tax sale of the property; however, given that the scope of the two provisions is virtually identical, we are bound to read the two sections Klotz v. Hog, 900 N.E.2d l, 5 (Ind. 2009) (“Statutes relating to the same general subject consistently. matter are in part materia on the same subject and should be construed together so as to produce a harmonious statutory scheme.” (internal quotations and alterations omitted». 5 E 6 Since the second tax deed was issued in 2011, the Cotners did not acquire a second prescriptive easement second tax sale, as the requisite 20 years of use had not accrued. in the outbuildings prior to the 10
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