COUNTY OF CLATSOP v. Ehler

203 P.3d 322, 226 Or. App. 305, 2009 Ore. App. LEXIS 125
CourtCourt of Appeals of Oregon
DecidedMarch 4, 2009
Docket052300, A134627
StatusPublished

This text of 203 P.3d 322 (COUNTY OF CLATSOP v. Ehler) is published on Counsel Stack Legal Research, covering Court of Appeals of Oregon primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
COUNTY OF CLATSOP v. Ehler, 203 P.3d 322, 226 Or. App. 305, 2009 Ore. App. LEXIS 125 (Or. Ct. App. 2009).

Opinion

*307 LANDAU, P. J.

At issue in this case is who owns certain real property located in Seaside, Oregon. Originally, Clatsop County owned the property. The county conveyed several parcels to the City of Seaside, subject to reversionary clauses requiring the property to be used for municipal purposes. The city later conveyed the property to a private citizen for the construction of a nursing home. Some 20 years later, the property was sold to defendant, who refurbished the property and converted it to apartments. The county, meanwhile, invoked the reversionary clause and initiated this action for ejectment. Defendant counterclaimed to quiet title and for unjust enrichment, alleging, as well, defenses of waiver and estoppel. The trial court entered judgment for the county on the basis of the reversionary clause, ruling that, when the property ceased to be used for the required municipal purposes, it reverted to the county by operation of law. The court also required the county to pay for the value of improvements that defendant made to the property. Defendant now appeals, arguing that the trial court erred in concluding that ownership of the property reverted to the county. We affirm.

The parties have stipulated to the following facts. The property in dispute consists of nine parcels in the City of Seaside to the west of Necanicum Drive, between Eighth and Ninth Avenues. The county acquired the parcels through tax foreclosure in 1927 and 1941.

In 1939, the county conveyed one of those parcels, “Lot 6,” to the city, subject to the following reversionary clause:

“[T]he * * * property * * * shall be used * * * by the City of Seaside * * * for municipal purposes and for no other purpose, and in the event that the same shall not be so used or continue to be so used, then said real property and the whole thereof shall revert to and revest in said Clatsop County, without any act of or by said Clatsop County.”

In 1961, the county conveyed the remaining eight parcels to the city. At the time, those parcels were mostly under the water of the Necanicum River. The plan was to *308 drain the water and use the land for street access. Accordingly, at the time of conveyance, the county issued an order that the subject property is

“to be used solely for the construction of access streets to the River Boulevard and other municipal purposes relating to the use of said Boulevard and streets and if not so used to revert to Clatsop County and the City to reconvey accordingly.”

The deed referred to the order and provided that the subject property is

“to be used solely for the purposes set forth in said order * * *. If said property is not so used same shall revert to Clatsop County and the City of Seaside shall reconvey accordingly.”

The effect of that provision was to create in the city a fee simple determinable, with a possible reverter to the county. Winters v. County of Clatsop, 210 Or App 417, 420, 150 P3d 1104 (2007).

The city constructed access streets to River Boulevard — now Necanicum Boulevard — and also constructed a municipal pumping station on Lot 6, the parcel that had been conveyed to the city in 1939.

In November 1967, the city conveyed all nine lots— which, with the exception of the pump station, were still unimproved — to GSL Corporation and Gene E. Lynn. The deed required the grantees to construct a nursing home within two years from the date of conveyance, or the property would revert to the city. Within two years, the property was developed as a nursing home, satisfying the condition of the 1967 deed, and the nursing home operated from 1970 to 1989.

In September 1993, defendant purchased the subject property for $300,000. Within one year of the purchase, defendant invested approximately $375,000 to renovate and improve the structure and convert it to apartments, which he has managed and lived in since that time (while also running a Seaside candy store as the “Candy Man”). It is estimated by the county that, since 1968, it has received ad valorem *309 property taxes of $466,382.65 from defendant and his predecessors.

In July 2004, the county notified defendant that it had recently discovered that the subject property belongs to the county, having reverted pursuant to the terms of the 1961 deed. The county brought this proceeding in August 2005, seeking to eject defendant and to recover damages of $480,000 in lost rents. The county offered to compensate defendant for the value of the improvements, which a commercial appraisal shows have a fair market value of $925,000.

Defendant filed his answer asserting a number of affirmative defenses, as well as counterclaims to quiet title and for unjust enrichment. Among other things, defendant argued that the county waived the reversionary clause by taking no action after learning of the conveyance of the property to defendant’s predecessor. He also asserted that, because the county took no action after learning of the conveyance, the county should be estopped from claiming the effect of the reversionary clause. In any event, defendant asserted, the use of the property for a nursing home and for housing satisfied the requirement that the property be used for “municipal purposes,” and so the county has no basis for claiming that ownership of the property has reverted. And he asserted that, if nothing else, he should be refunded the property taxes that he paid to the county during his possession of the property.

The trial court determined that the subject property had reverted to the county by virtue of the reversionary clause of the 1961 deed. It rejected defendant’s counterclaims and affirmative defenses and ordered defendant to surrender the property and tender to the court a quitclaim deed conveying it to the county. The court also ordered the county to pay defendant $925,000 for the fair market value of the improvements, less costs of $266 and the fair market rental value of the land, which it found to be $92,550.21, for net judgment of $832,183.79.

In his first assignment of error, defendant contends that the trial comb erred in rejecting his affirmative defense of waiver. He asserts that evidence concerning the Clatsop *310 County Commission’s action after it learned of the city’s transfer of the subject property to GSL and Lynn requires the conclusion that the county waived the reversionary clause in the 1961 deed. The county responds that there is no evidence that the county intentionally waived its reversionary interest in the property. We conclude that, when the property was put to a use other than the specific municipal purpose of constructing and maintaining access streets, the reverter was triggered by operation of law. Accordingly, by the time that the alleged waiver had occurred, the reversion already had occurred, and there was nothing for the county to waive.

The county’s authority to transfer public lands is governed by ORS 271.300 through 271.445. ORS 271.310

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City of Molalla v. COOVER ET UX.
235 P.2d 142 (Oregon Supreme Court, 1951)
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734 P.2d 1348 (Oregon Supreme Court, 1987)
City of Mosier v. Hood River Sand, Gravel & Ready-Mix, Inc.
136 P.3d 1160 (Court of Appeals of Oregon, 2006)
Winters v. County of Clatsop
150 P.3d 1104 (Court of Appeals of Oregon, 2007)
School District No. 1 v. Multnomah County
101 P.2d 408 (Oregon Supreme Court, 1940)

Cite This Page — Counsel Stack

Bluebook (online)
203 P.3d 322, 226 Or. App. 305, 2009 Ore. App. LEXIS 125, Counsel Stack Legal Research, https://law.counselstack.com/opinion/county-of-clatsop-v-ehler-orctapp-2009.