Westcott v. Malli, No. 3-1165 / 13-0491, 2014 Iowa. App. LEXIS 202 (Iowa Ct. App. Mar. 12, 2014)
The Iowa Court of Appeals has affirmed a Winneshiek County District Court ruling, finding that purchasers of an 80-acre tract of land established title to a connected 2.9 acre disputed parcel through adverse possession.
In 1988, the plaintiffs entered into a real estate contract with the defendant to buy “80 acres, more or less, and buildings on land.” The defendant had listed the property for sale with a real estate agent, and the agent informed the plaintiffs that the property encompassed everything within the fence line, including that which would become a disputed 2.9 acre parcel of land. No survey was completed, but the real estate agent gave the plaintiffs a plat mat, highlighted to include the 2.9 acre parcel. The legal description of the property purchased by the plaintiffs, however, did not include the 2.9 acre tract.
After purchasing the property, the plaintiffs made many improvements, including replacing and repairing fence, constructing new gates, grading an unimproved road, and putting gravel on its surface. The also used the land for grazing their cattle and horses. They cut down trees, removed a dilapidated shed, and mowed and sprayed the grass on the property. Between 1989 and 2010, the plaintiffs leased out their land, including the 2.9 acre parcel. They also used the parcel to access other pastures on the property. A pole barn constructed by the defendant in 1978 and specifically sold to the plaintiffs by the defendant sat 46 inches onto the 2.9 acre parcel. This encroachment was not described in the deed the defendant gave the plaintiffs. The plaintiffs continuously used this barn, as well as a corral located on the 2.9 acre parcel, from the time of the purchase. The plaintiffs’ tax statement indicated that they were paying taxes for 82.3 acres. They testified that they believed they owned the disputed parcel.
Unbeknownst to the plaintiffs, the 2.9 acre parcel was the subject of title correction work after they took possession of the property. Defendant’s predecessors had conveyed the 2.9 acre parcel to him in the mid-1980s. The predecessors later sold a larger tract (mistakenly including the disputed 2.9 acres) to a second buyer, who attempted to convey the property to a third buyer. Upon discovering the error, the second buyer granted a quit claim deed to the 2.9 acres to the defendant in 1993. The defendant recorded the deed in 1994. After that time, the defendant began paying property taxes for the parcel.
In 2011, the Farm Service Agency told the plaintiffs that they did not have legal title to the 2.9 acres. The plaintiffs promptly filed suit to obtain title through adverse possession. The defendant resisted, filing counterclaims alleging trespass and conversion. At trial, the district court found that the plaintiffs had established legal title to the property through adverse possession. The defendant appealed.
In affirming the district court’s order, the court of appeals found that the plaintiffs had established (1) hostile, (2) actual, (3) open, (4) exclusive, and (5) continuous possession under (6) a claim of right for at least 10 years.
The court found that the plaintiffs had maintained the land and improved the land, in contrast to the defendant who never used, maintained, or even entered the property until after the action was filed. The district court found that the defendant had then only set foot on the property twice. The defendant’s deed to the plaintiffs did not describe the pole barn’s encroachment upon his property, indicating, the court reasoned, that the defendant believed he was selling the property to the plaintiffs.
The court relied on the district court’s credibility determination to find that the defendant did not (as he argued) give the plaintiffs permission to freely use the 2.9 acres. The plaintiffs denied that any such permission was given, in fact contending that they had no knowledge that they did not own the property.
The court found that the plaintiffs had proven the elements of their adverse possession claim by clear and convincing evidence and that the district court properly found that title of the 2.9 acres was with the plaintiffs.
The court also found that the district court did not err in allowing one of the plaintiffs to testify that the real estate agent (who was deceased at the time of the trial) had told him that the 2.9 acres was included in the property for sale. The court found that the district court properly found that the statement was not hearsay because it was not being used to prove the truth of the matter asserted. Rather, it was merely offered to show that the plaintiffs believed that the 2.9 acre parcel was included in the sale. Nor was the testimony admitted for the purpose of interpreting the real estate contract. As such, the statute of frauds and the parol evidence rule did not apply.
From the facts set forth in the case, it appears that adverse possession provided an equitable result in this instance. This case does highlight, however, the importance of land surveys and careful title work. Before purchasing property, potential buyers should enlist the professional assistance they need to ensure that the property they think they are purchasing matches the legal description.
Although the issue was not addressed, this case provided the model scenario for adverse possession in Iowa. Contrary to most jurisdictions, Iowa requires a good faith belief of ownership as an essential element for adverse possession under a claim of right. Because the district court found that these purchasers believed they owned title to the property, good faith was not in question, and the court did not even address it. However, had the purchasers known of their lack of title, they could not have established a good faith claim of right, and they would not have prevailed in their action. The majority of other American jurisdictions embrace an objective standard, one under which the intent of the possessor is irrelevant. A third approach, sometimes called the Maine rule, has been essentially eliminated in American jurisprudence. Under this approach, courts required persons claiming title through adverse possession to show an intent to dispossess the true owner. Under this approach—which has been eliminated because it was thought to reward wrongdoers—a mistaken occupation of land under a belief of good title could not give rise to adverse possession.