Allred Ex Rel. Jensen v. Allred

2008 UT 22, 182 P.3d 337, 599 Utah Adv. Rep. 3, 2008 Utah LEXIS 27, 2008 WL 564644
CourtUtah Supreme Court
DecidedMarch 4, 2008
Docket20051049, 20060171
StatusPublished
Cited by22 cases

This text of 2008 UT 22 (Allred Ex Rel. Jensen v. Allred) is published on Counsel Stack Legal Research, covering Utah Supreme Court primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Allred Ex Rel. Jensen v. Allred, 2008 UT 22, 182 P.3d 337, 599 Utah Adv. Rep. 3, 2008 Utah LEXIS 27, 2008 WL 564644 (Utah 2008).

Opinion

DURRANT, Justice:

INTRODUCTION

T1 In this case we are called upon to decide whether a claimant to property by adverse possession may satisfy the actual possession requirement through a tenant. We conclude that placing a tenant on property and collecting the rent for one's own benefit may constitute actual possession and use of the property adverse to the legal title holder, which, if hostile, open and notorious, and continuous for the statutory period, may ripen into legal title. Accordingly, we reverse the district court's order granting summary judgment to the legal title holder in this case. Further, we reverse the district court's order denying summary judgment for the claimants in this case and remand with instructions to enter summary judgment in their favor and for other proceedings consistent with this opinion.

BACKGROUND

12 The material facts presented in this appeal are not in dispute. Plaintiffs David and Inez Allred (the "Parents") acquired commercial property in Provo, Utah, (the "Property") in approximately 1972 and leased the Property shortly thereafter to Mountain States Telephone & Telegraph Company, a predecessor of Qwest Communications. Qwest Communications or its predecessors (collectively, "Qwest") have remained in possession of the Property as tenants from 1974 to the present.

13 In 1982, the Parents' son Richard, an attorney, prepared nine trust documents on behalf of the Parents for the benefit of himself, his brother Stephen, and their spouses and children. The documents named Richard as trustee of eight of the trusts and Richard's wife, Mary Lee Allred, as trustee of the trust for the benefit of Richard. In December 1982, the Parents signed the trust *340 documents along with a quitclaim deed conveying a fifty-percent interest in the Property to the nine trusts. In early 1988, the Parents signed another quitclaim deed conveying the remaining fifty-percent interest to the nine trusts.

14 Despite the conveyance to the trusts, the Parents continued to act as landlords of the Property. They collected rent from Qwest and reported it as income on their tax returns, which were sometimes prepared by Richard. They made alterations and repairs on the Property at Qwest's request. They personally negotiated and signed lease modifications and renewals with Qwest in 1987, 1994, and 1999, always designating themselves as "owner" in the lease agreements. They paid taxes on the Property and, in accordance with the terms of the leases, received reimbursements from Qwest. In the 1987 lease modification, they arranged for Q@west to pay the taxes directly.

5 In 1991, the Parents decided to donate the Property to their church. They contacted Richard and asked him to convey the Property back to them. Richard refused. Over the next several years, the Parents repeatedly made requests for the return of the property both in person and through a series of letters to Richard. In one letter, they set a deadline by which, if the Property had not been returned, they would "have to proceed with such action as [they] deem necessary."

T6 Although Richard steadfastly refused to reconvey the Property, he did not take any action to prevent the Parents from managing the Property and receiving the rent until 2000-nine years after the Parents first requested that the Property be returned. In 2000, Richard contacted Qwest and executed a new lease agreement that directed Qwest to pay rent to the trusts. The new lease agreement purported to incorporate and ratify the conditions and terms of all previous lease agreements executed by the Parents.

T7 In February 2001, the Parents filed suit against the nine trusts, Richard Allred individually and as trustee, and Mary Lee Allred as trustee (collectively, the "Trusts"), alleging causes of action for fraud, breach of fiduciary duty, and adverse possession. The Trusts' Answer included assertions that the claims for fraud and breach of fiduciary duty were barred by the statutes of limitations. The Trusts counterclaimed for an accounting and return of trust funds received as rent.

T 8 The Parents and Qwest moved to inter-plead the rent from the Property. Although the district court had not yet ruled on the Parents' adverse possession claim, it denied the motion to interplead the rent, holding as follows:

[The documents provided by Richard All-red demonstrate that the property leased by QWEST is owned by the trusts, David and Inez Allred having conveyed it to the trusts in 1982. Though plaintiffs assert that they have a colorable claim to the lease rents, I don't see it. Rather, on the face of the documents provided by the parties, the property is owned by the trusts and the lease rents should be paid to the trusts.

Thereafter, Qwest paid rent to the Trusts.

T9 The parties filed eross-motions for summary judgment on the issue of adverse possession. The Trusts argued that, as a matter of law, the Parents could not adversely possess the Property through a tenant. Furthermore, they argued that any actions by the Parents in administering the Property as landlord were taken on behalf of and with the permission of the Trusts. The district court denied both motions for summary judgment on the adverse possession issue, citing unresolved issues of material fact.

110 The Trusts filed a motion for summary judgment on the issues of fraud and breach of fiduciary duty, claiming the causes of action were barred by the applicable statutes of limitations. In their reply, the Parents argued that Richard Allred's relationship to the Parents as son and occasional tax preparer tolled the statutes of limitations. The district court granted summary judgment for the Trusts on the Parents' claims for fraud and breach of fiduciary duty, holding that the claims were barred by the statutes of limitations. The district court found that, at the very latest, the Parents were aware of their cause of action in 1998 when *341 they wrote the letters demanding that Richard return the Property.

{11 Before a scheduled trial on the Parents' adverse possession claim and the Trusts' accounting counterclaim, the Trusts filed a motion in limine seeking to exclude any evidence that the Parents had obtained title by adverse possession through their ten-: ant. The Trusts argued that the Parents never had actual possession of the property and cited Pender v. Jackson 1 for the proposition that a lease is not a "use" of the property by which a claimant can satisfy the requirement of actual possession. The district court granted the Trusts' motion in limine, excluding any evidence of the Parents' adverse possession through a tenant. Because the Parents' claim for adverse possession relied solely on the theory that they had used the Property as landlord, the order effectively granted summary judgment to the Trusts on the adverse possession claim.

112 Thus, the only remaining claim was the Trusts' accounting counterclaim for the rent paid by Qwest to the Parents. The district court ruled that the statute of limitations for the accounting claim limited the reach-back period of the accounting claim to three years and awarded the Trusts $127,800, the gross rents for that period. Before any order was entered, Judge Scho-field replaced Judge Stott, who had to that point presided over the litigation.

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Bluebook (online)
2008 UT 22, 182 P.3d 337, 599 Utah Adv. Rep. 3, 2008 Utah LEXIS 27, 2008 WL 564644, Counsel Stack Legal Research, https://law.counselstack.com/opinion/allred-ex-rel-jensen-v-allred-utah-2008.