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Windel v. Mat-Su Title Ins. Agency, Inc.

Supreme Court of Alaska

July 12, 2013

Keven WINDEL and Marlene Windel, Appellants,
v.
MAT-SU TITLE INSURANCE AGENCY, INC. and Security Union Title Insurance Company, Appellees. Keven Windel and Marlene Windel, Appellants,
v.
Thomas Carnahan, Appellee.

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[Copyrighted Material Omitted]

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Keven Windel and Marlene Windel, pro se, Wasilla, Appellants (No. S-13793).

Kenneth P. Jacobus, Kenneth P. Jacobus, P.C., Anchorage, for Appellants (No. S14015).

David A. Devine, Groh Eggers, LLC, Anchorage, for Appellee Mat-Su Title Insurance Agency, Inc. James M. Gorski, Hughes Gorski Seedorf Odsen & Tervooren, LLC, Anchorage, for Appellee Security Union Title Insurance Company.

Chris D. Gronning, Bankston Gronning O'Hara, P.C., Anchorage, for Appellee Thomas Carnahan.

Before: CARPENETI, Chief Justice, FABE, WINFREE, and STOWERS, Justices.

OPINION

WINFREE, Justice.

I. INTRODUCTION

The primary issue in this consolidated appeal is the validity and interpretation of a roadway easement granted to meet a borough's subdivision plat waiver requirements. The borough later approved a nearby subdivision project contingent on upgrading the easement roadway. The owners of the servient estate first insisted that the developer maintain his roadway upgrade within the original 50-foot easement. After the work was completed the owners sued the developer for trespass, alleging implicitly that the original easement grant was invalid because it was not properly executed and acknowledged, and asserting that there might be at most an approximately 14-foot wide public prescriptive easement across their property.

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The developer argued that the recorded documents created a valid 50-foot public easement.

The superior court granted summary judgment in favor of the developer on the validity of the 50-foot easement, holding that any acknowledgment deficiencies were cured under AS 34.25.010.[1] We agree with the landowners that the superior court misapplied the statute here, but we affirm the grant of summary judgment on other grounds. In light of this conclusion, we also affirm other relevant superior court rulings with one exception— we remand to the superior court for renewed consideration of its attorney's fees rulings in the litigation between the landowners and the developer.

II. FACTS AND PROCEEDINGS

A. Facts

1. Background

Keven and Marlene Windel own property near Wasilla, consisting of three contiguous parcels (W 1, W2, and W3) obtained in three separate transactions. The three parcels originally were part of a larger 160-acre tract owned by spouses Robert and Evelyn Davis as tenants by the entirety. Davis Road crosses W1 and W2.

The Windels purchased W1 directly from the Davises in 1986. The Windels were informed that the parcel was encumbered by a 50-foot wide public easement for Davis Road. The Windels purchased W2 and W3 in 1987 and 1998, respectively, from the Davises' successors in interest. These parcels are west of W1. When purchased by the Windels, W2 was encumbered by a 50-foot wide public easement for Davis Road firmly established by the Davises' successors-in-interest.

In 1996 Thomas Carnahan purchased property west of the Windel properties. The Carnahan and Windel properties are not adjacent— another parcel lies between them. Davis Road crosses W1, W2, and the intermediate parcel to provide access to the Carnahan property.

In May 2004 Carnahan applied to subdivide his property. The Matanuska-Susitna Borough voted to approve Carnahan's application subject to certain conditions, including upgrading Davis Road. Carnahan discussed with the Windels possibly straightening Davis Road curves located on their property. The Windels refused, insisting that the road upgrade stay within the original 50-foot wide easement area. Carnahan upgraded Davis Road, but before Carnahan obtained final approval of his subdivision application the Windels learned that the original Davis Road easement over W1— the parcel they purchased directly from the Davises— arguably was invalid.

2. The W1 Davis Road easement

In late 1974 the Davises applied for a Borough plat waiver to subdivide 80 acres into four 20-acre parcels, including W1. Both Davises were listed as owners of record and both signed the application form. They stated that all four parcels would be accessible to a public road system by way of Davis Road.

As part of the Davises' plat waiver application, Mr. Davis executed and recorded a form easement " for the benefit of all owners of property adjacent to said right of way hereinafter described, and to the public generally without limitation." Mr. Davis described the easement as running " [o]ver [the] existing road" — Davis Road— and granted it to " the owners of property adjacent to and adjoining said below-described right of way, and to the public in general, for unlimited public use." Mr. Davis did not expressly state the roadway easement width in this document, and it was not executed by Mrs. Davis.

The Borough sent Mr. Davis a letter informing him that regulations required a 50-foot wide right of way for the easement. The form easement was re-recorded two weeks later with three handwritten changes: (1) " A 50 FT EASEMENT" was written above " Over [the] existing road" ; (2) the initials " R.F.D." were written next to the interlineation; and (3) the phrase " Rerecorded to show easement footage" was written

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across the bottom of the first page. The document was stamped to show it was re recorded as requested by " R.F. Davis." The Borough platting board met later that day, noted the re-recorded easement, and approved the plat waiver.

The next day the Borough sent a letter notifying the Davises of the plat waiver approval. This notice contained the entire plat waiver application file, including the changes made to the application during the review process, the platting board meeting minutes discussing the easement, the re-recorded easement, and the notice requiring the 50-foot wide easement.

3. The Windels' purchase of W1 from the Davises

In 1986 the Davises sold W1 to the Windels. The Windels contracted for title insurance with Mat-Su Title Insurance Company which in turn obtained a policy from Security Union Title Insurance Company. Both the preliminary commitment to extend title insurance and the title insurance policy noted a 50-foot wide public use easement across the parcel as " recorded ... and re-recorded." Mat-Su Title had annotated its copy of the 1974 recorded easement with handwriting in the margins, adding " SEE CORRECTION DEED— BK 92 PG 753. A 50' EASEMENT." Mat-Su Title did not annotate or otherwise mark its copy of the re-recorded easement. The title companies' copies of both the December 1974 and January 1975 recordings were provided to the Windels with the final title policy.

B. Proceedings

1. The Carnahan litigation

In June 2005 the Windels filed suit against Carnahan, alleging trespass to land, foliage, and chattels of W1 and requesting declaratory judgment regarding the width and nature of the Davis Road easement across the parcel. The Windels alleged that the Davis Road easement was publicly dedicated at a 50-foot width only where it touched and ran across W2. The Windels alleged that if there were a W1 easement, then " [a]t most, the public may have a prescriptive easement 14 feet in width." Carnahan answered, asserting counterclaims seeking validation of the 50-foot public easement across W1 under a variety of theories, and requesting attorney's fees.

Carnahan gave the Windels an Alaska Civil Rule 68 offer of judgment containing four provisions: (1) judgment that the 50-foot wide Davis Road easement over W1 was valid; (2) judgment for the Windels for $10,000 on all of their damages claims; (3) judgment for the Windels for attorney's fees and costs; and (4) dismissal of Carnahan's counterclaims. The Windels did not accept this offer of judgment.

Carnahan subsequently amended his answer and raised an additional counterclaim, asserting that the Windels had interfered with his access over Davis Road and seeking damages in excess of $20,000.

Carnahan then moved for summary judgment to establish the Davis Road easement's validity and 50-foot width over W1. Superior Court Judge Vanessa White granted summary judgment in Carnahan's favor on that issue.

2. The title insurance litigation

A year after Judge White's summary judgment ruling in the Carnahan litigation, the Windels, proceeding pro se, filed a separate action against Mat-Su Title and Security Union Title, asserting that the title companies were liable for the Windels' inability to invalidate the W1 Davis Road easement. The Windels claimed the title companies committed fraud or intentional or negligent misrepresentation by adding handwritten annotations to the copy of the 1974 easement provided with their title policy. The Windels also advanced a professional negligence theory, claiming the title companies owed them a duty not only to disclose the easement, but also to evaluate its potential invalidity. The Windels claimed breach of contract for failure of both asserted duties.

Security Union Title moved for summary judgment on all counts, arguing that: (1) the Windels enjoyed fee simple title, which was all the title insurance policy covered; (2) Security Union Title effectively notified the Windels of the easement's existence; and (3)

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the easement was expressly excluded from coverage, negating liability. Mat-Su Title joined in the motion, adding that the easement's validity as a matter of law negated the Windels' claims.

The Windels responded that title insurers owe legal duties beyond the scope of their insurance policies, and that whether the annotations to the 1974 recorded document were fraudulent or misrepresentations was a question of fact. The Windels also moved for partial summary judgment on whether Mat-Su Title's annotations to its copy of the 1974 easement constituted misrepresentation, fraud, or professional malpractice, and on whether Mat-Su Title and Security Union Title owed a duty to assess the easement's legal validity. Mat-Su Title and Security Union Title then directed the court to Judge White's order validating the easement in the Windels' action against Carnahan.

In January 2010 Superior Court Judge Eric Smith granted summary judgment in favor of Mat-Su Title and Security Union Title and denied the Windels' cross-motion for partial summary judgment. Judge Smith ruled that the title companies' only applicable duty was reporting the easement's existence, not assessing its legal validity, and that the title companies had fulfilled this duty. Judge Smith ruled alternatively that Mat-Su Title and Security Union Title had the right to conspicuously exclude the easement from coverage, discharging any potential liability. Judge Smith also ruled that the Windels' fraud and misrepresentation claims failed because the handwritten annotation " did not misrepresent the facts but rather clearly indicated ... a first recording that was modified." Finally, Judge Smith ruled that because the Windels' professional negligence and fraud theories failed, they could not sustain a breach of contract claim.

Judge Smith entered final judgment in favor of the title insurance companies in February 2010.

3. Further proceedings in the Carnahan litigation

In early 2009, while the Windels still were pursuing their claims against Mat-Su Title and Security Union Title, the Windels raised a nuisance claim against Carnahan, contending that his road improvements had caused ponding on their property during the 2007 spring breakup. The parties filed a partial settlement agreement addressing all of their previous damages claims— dismissing without prejudice the Windels' damages claims mooted by Judge White's summary judgment ruling and dismissing with prejudice both the Windels' and Carnahan's damages claims surviving the summary judgment ruling. The settlement agreement also addressed the nuisance claim, requiring that the parties hire an independent engineer to determine whether the road improvements had caused or exacerbated ponding and to make recommendations to eliminate the ponding. The agreement ...


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