Utah and Wild Deeds

The Utah Supreme Court has held that purchaser of land through a "wild deed" is not entitled to protected status as a "bona fide purchaser," under Utah's Recording Statute.



The case is Salt Lake County v. Metro West Ready Mix, Inc., 89 P.3d 155 (2004). Believe it or not, here's what happened.



The disputed property is a fifteen-acre parcel located in Utah County near the border between Utah and Salt Lake Counties.



In 1878 the U.S. Government conveyed the property by land patent to one William Turner. That same year Turner conveyed to Salt Lake County by warranty deed. This deed was promptly (if mistakenly) recorded in Salt Lake County.



Sometime later, the property became occupied by the Tingey family. In fact, descendants Darhl and Roena Tingey claimed use and possession of the land by Tingeys since 1900.



In 1989, a company known as "Lamona Farms" approached the Tingeys about purchasing the property. The Tingeys said that they owned the property, even though a search of the recorder's office disclosed no evidence of their claims to title. On the other hand, there was nothing in the land records to discount the Tingeys' claims.



In April 1989, the Tingeys conveyed the property to Lamona Farms by quitclaim deed, for $25,000. This deed was promptly recorded in Utah County. Lamona Farms later conveyed to Monterra Rock Products, which in turn merged with Metro West Ready Mix.



In 1998, Salt Lake County re-recorded its 1878 deed in Utah County--where it should have been in the first place. Then the County filed suit against Metro West, seeking to quiet title.



Metro West filed a motion for summary judgment arguing, among other things, that it was a bona fide purchaser under Utah's Recording Statute, and that it was entitled to ownership of the property under Utah's Adverse Possession Statute.



The trial court ruled in favor of Metro West, finding it was a bona fide purchaser and had "purchased (the property) for valuable consideration and in good faith, and recorded its deed in Utah County prior to any recording there by (Salt Lake County)." The County appealed.



The Court of Appeals affirmed, announcing a new "apparent title rule" whereby a purchaser may claim bona fide purchaser status where the land records were silent as to ownership, "if the grantor had apparent legal title, even if he or she did not have perfect legal title." Again, the County appealed.



Alas, the Supreme Court reversed, putting the kibosh on the so-called "apparent title rule" by saying that (a) one without record title to land is a "stranger to title," (b) a deed given by a stranger to title is a "wild deed," and (c) a purchaser acquiring land through a wild deed is chargeable with actual and/or constructive notice "that his grantor had no record title to the property purportedly being conveyed."



Such a purchaser, the Court said, is not entitled to protection as a bona fide purchaser under Utah's Recording Statute (Utah Code section 57-3-103). The statute provides:



"Each document not recorded as provided in this



title is void as against any subsequent purchaser



of the same real property, or any portion of it, if:



(1) the subsequent purchaser purchased the property



in good faith and for a valuable consideration; and



(2) the subsequent purchaser's document is first duly



recorded."



In this case, Metro West was not in "good faith" because it purported to acquire title through a wild deed.



Having so held, the Court acknowledged that even without bona fide purchaser status Metro West might be able to claim superior title on other grounds, such as adverse possession.



In Utah, one claiming status as an adverse possessor must show (a) continuous occupancy and claim to the property for seven years; (b) payment of all property taxes by the occupant or his predecessor(s); and (c) the property was "cultivated," "improved," "protected by a substantial inclosure," or "used" by the occupant to the exclusion of others (Utah Code section 78-12-9).



In this case, the Court found insufficient evidence of Metro West's continuous use and payment of taxes to support the award of summary judgment. So, the case was remanded for further proceedings. The Court did not decide the County's alternative argument that the property was immune from adverse possession as "designated for public use" under Utah Code section 78-12-13.



The Court of Appeals decision, and its "apparent title rule," has bothered me since it was first announced in August 2002. One of those things you put on a far corner of your desk and hope will go away. Now it has.



The Supreme's decision is recommended reading for the clarity it brings to state recording acts, constructive notice, and the notion of "bona fide purchaser."